BLOOD SUCKERS of the POOR

The International Monetary Fund (IMF) and the World Bank are the major cause of poverty in African countries today. Despite claims that they will reduce poverty in Africa, it is widely accepted that most of the debts, as a cause of poverty in Africa, are due to the policies of the International Monetary Fund (IMF) and the World Bank.

Their programmes have been heavily criticized over the years because they most times result in poverty scenarios. The IMF and the World Bank's polices are very different now from what they were originally intended for. These two monetary institutions were first formed by 44 nations at the Bertton Woods Conference in 1944 with the goal of creating a stable framework for post war global economy.

The IMF in particular, was originally formed to promote steady growth and full employments by offering unconditional loans to economies in crises and establishing mechanisms to stabilize exchange rates and facilitate currency exchange.

Much of these visions never came to reality. Pressure from the US government made IMF started offering loan based on strict conditions. Critics have said that these policies have reduced the level of social safety and worsened labour and environmental standards in developing countries.

The World Bank, initially known as the International Bank for Reconstructions and Development, was formed to fund the rebuilding of infrastructure in nations ravaged by world war two. Its focus too, soon changed in the mid 1980's. The Bank turned its attention away from Europe to the third World countries, most of which are in Africa. It started funding massive industrial development projects in Africa, Asia, and Latin America.

Most Scholars and human rights activists contended with the Bank's aggressive dealings, with developing nations, which were often ruled by dictatorial regimes, exacerbated the developing world's growing debt crisis, devastated local ecologies and indigenous communities.

The World Bank and IMF adjustment programmes differ according to the role of each institution. IMF's loan conditions focus on monetary and fiscal issues. They emphasize programmes to address inflation and balance of payment problems, often requiring specific levels of cut backs in total government spending.

The adjustment programmes of the World Bank are wider in scope, with a more long term development focus.

They highlight market liberalizations, seen as promoting growth theory expanding exports particularly cash crops.

The IMF and World Bank are largely controlled and owned by the development nations such as USA, Germany, UK, Japan, amongst others. The US for example controls 17 to 18% of the voting right at the IMF. When an 85% majority is required for a decision, the US effectively has veto power at the IMF. In addition, the World Bank is 51% funded by the US treasury.

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