From 9 to 15 October, the International Monetary Fund and the World Bank held their annual joint meeting in Marrakech (Morocco). The last time that these two Bretton Woods institutions met on African soil was in 1973, when the IMF-World Bank meeting was held in Nairobi (Kenya). Kenya’s then President Jomo Kenyatta (1897–1978) urged those gathered to find ‘an early cure to the monetary sickness of inflation and instability that has afflicted the world’. Kenyatta, who became Kenya’s first president in 1964, noted that, ‘[o]ver the last fifteen years, many developing countries have been losing, every year, a significant proportion of their annual income through deterioration of their terms of trade’.
International Monetary Fund
Washington, DC — A new report from the Center for Economic and Policy Research examines key indicators for Ecuador’s economy and finds that significant gains of the 2007–2017 period have been erased by subsequent governments that returned to the International Monetary Fund and slashed spending. As a result, poverty and economic inequality have increased, as have crime, insecurity, and worsened health outcomes. “The data make it clear: things have gotten much worse in Ecuador since 2017, with the return to the IMF and to destructive austerity,” CEPR Co-Director Mark Weisbrot said.
A recently published joint study conducted by Oxfam and Action Aid claims that the total windfall profit of the world’s 722 top companies crossed USD 1 trillion for the second consecutive year in 2022. The study notes that this figure, which is higher than the GDP of a majority of countries in the world, reflects an “obscene” and “immoral” quest for higher profits by the rich, who have exploited the global crisis of energy and food price inflation and higher interest rates in the last two years caused by multiple factors including the COVID-19 pandemic and the war in Ukraine.
Washington is well aware that the Tigray People's Liberation Front (TPLF) tried to regain power militarily and failed. The TPLF has essentially been Washington's proxy in the region. This was a two-year war, and in war, unfortunately, atrocities are committed, but most of the documentation that I have seen places the atrocities on the TPLF side of the fence, and they have been, quite frankly, horrific. Having failed to overthrow the Abiy government and bring the TPLF to power, the United States tried to control the outcome diplomatically, through the Pretoria peace agreement, which Washington orchestrated from the sidelines to save the TPLF from complete defeat. The pressure that is being put on them through this IMF agreement is an example of that.
Sudan is experiencing its fourth week of conflict between two military factions, which has caused the death of over 700 people. Sudanese civilians have fled the capital and the country altogether while the fighting continues with no end in sight. Commentators have so far focused on the military factions and ethnic conflicts. A reductive explanation has been given for the food crisis in Sudan, such as economic crisis, climate change, and the Ukraine war. The significance of macroeconomic policies and the institutions that promote them at the root of these crises tend to be overlooked. Toppling over the breadbasket The IMF imposed liberalization in Sudan, particularly in the agricultural sector, to promote exports.
Political Economist Grieve Chelwa explains the reasons why countries of the Global South are forced to go time and again to the International Monetary Fund for aid. He talks about how the IMF is essentially a tool of US imperialism and how its policies are designed to keep countries in debt. He also talks about the changing nature of debt and the role of private players such as BlackRock. Grieve Chelwa also explains some of the ways countries in Asia and Africa can get out of this situation, and the kind of international frameworks and policies that will have to be constructed. Grieve Chelwa is the Director of Research at the Institute on Race, Power and Political Economy of the The New School, a member of the Collective on African Political Economy, and one of the authors of the dossier, Life or Debt: The Stranglehold of Neocolonialism and Africa’s Search for Alternatives, published by Tricontinental: Institute for Social Research.
Who would have expected that the BRICS nations could rise as the potential rival of the G7 countries, the World Bank and the IMF combined? But that once seemingly distant possibility now has real prospects which could change the political equilibrium of world politics. BRICS is an acronym for Brazil, Russia, India, China and South Africa. It was supposedly coined by the Chief Economist of Goldman Sachs in 2001 as a reference to the world’s emerging economies. It was then known as BRIC, with the ‘S’ added later when South Africa formally joined the group in 2010. BRIC’s first official summit took place in 2009. T
Remarkably, during her visit to Ghana in late March 2023, US Vice President Kamala Harris announced that the US Treasury Department’s Office of Technical Assistance will ‘deploy a full-time resident advisor in 2023 to Accra to assist the Ministry of Finance in developing and executing medium- to long-term reforms needed to improve debt sustainability and support a competitive, dynamic government debt market’. Ghana certainly faces significant challenges in this arena, with its external debt standing at $36 billion and its debt to Gross Domestic Product ratio hovering over 100 percent.
Washington, DC — The International Monetary Fund is requiring that some of its most heavily indebted borrowers pay billions in unnecessary and counterproductive fees, new research from the Center for Economic and Policy Research (CEPR) shows. The new issue brief, “The Growing Burden of IMF Surcharges: An Updated Estimate,” by Francisco Amsler and Michael Galant, finds that the IMF will charge over $2 billion per year in surcharges through 2025, even as IMF Managing Director Kristalina Georgieva warns that “poverty and hunger could further increase,” and as the Fund notes that some 15 percent of countries are experiencing debt distress “and an additional 45 percent are at high risk of debt distress.”
What constitutes a crisis worthy of global attention? When a regional bank in the United States falls victim to the inversion of the yield curve (i.e., when short-term bond interest rates become higher than long-term rates), the Earth nearly stops spinning. The collapse of Silicon Valley Bank (SVB) – one of the most important financiers of technology start-ups in the United States – on 10 March presaged wider chaos in the Western financial world. In the days after the SVB debacle, Signature Bank, one of the few banks to accept cryptocurrency deposits, faced bankruptcy, and then Credit Suisse, an established European bank set up in 1856, fell due its longstanding poor management of risk.
The deuda (“debt” in Spanish) is one of the most persistent elements in the two centuries of Argentina’s history. It has conditioned the political life and the economy of the country like no other factor, for generations. But this should not be confused with just any debt. The word deuda normally refers to the external debt (both public and private), a debt owed to foreign creditors. Historically, the key aspect of the deuda is that it is based on a foreign currency, the world trade currency controlled by the ruling empire. It was once the British pound. Since 1944 it has largely been the US dollar. The United States can “print” dollars (and the Federal Reserve does so regularly), but Argentina cannot. The same is true of other countries in the Global South with large external debts denominated in foreign currencies.
The International Monetary Fund (IMF) has said a “wave of debt crises” may be coming in the Global South, and “the global economy is headed for stormy waters,” as the world faces a “geopolitical realignment” that will be “permanent.” The US-dominated financial institution warned “the worst is yet to come,” as the depreciation of most currencies against the dollar and rising interest rates make it hard for both governments and companies to service their dollar-denominated debt. The director of the IMF’s research department, Pierre‑Olivier Gourinchas, made these comments in a press briefing on October 11. Countries comprising a third of the entire global economy are expected to contract in 2022 or 2023, he prognosticated. “In short, the worst is yet to come; and for many people, 2023 will feel like a recession,” he said.
In its World Economic Outlook report issued yesterday, the IMF said global growth for this year would be 3.6 percent, down 0.8 percentage points from its estimate in January and 1.3 percentage points lower than the forecast six months ago. For 2021, it said growth would come in at 6.1 percent. These figures, however, only partially depict a picture of a rapidly worsening economic outlook amid continuing supply chain constrictions due to the COVID-19 pandemic and surging inflation, exacerbated by the war in Ukraine and tighter monetary policy, as central banks lift interest rates. The WEO report said “unusually high uncertainty” surrounded its forecasts and “downside risks to the global outlook dominate.”
The conditions of nearly 90% of the International Monetary Fund's pandemic-related loans are forcing developing nations suffering some of the world's worst humanitarian crises to implement austerity measures that fuel further impoverishment and inequality, an analysis published Tuesday by Oxfam International revealed. Oxfam found that "13 out of the 15 IMF loan programs negotiated during the second year of the pandemic require new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk." This stands in stark contrast with IMF managing director Kristalina Georgieva's admonition to the European Union last year that the wealthy bloc should not endanger its economic recovery with "the suffocating force of austerity."
On January 11, 2022, the United Nations (UN) Emergency Relief Coordinator Martin Griffiths appealed to the international community to help raise $4.4 billion for Afghanistan in humanitarian aid, calling this effort, “the largest ever appeal for a single country for humanitarian assistance.” This amount is required “in the hope of shoring up collapsing basic services there,” said the UN. If this appeal is not met, Griffiths said, then “next year  we’ll be asking for $10 billion.” The figure of $10 billion is significant. A few days after the Taliban took power in Afghanistan in mid-August 2021, the US government announced the seizure of $9.5 billion in Afghan assets that were being held in the US banking system. Under pressure from the United States government, the International Monetary Fund also denied Afghanistan access to $455 million of its share of special drawing rights, the international reserve asset that the IMF provides to its member countries to supplement their original reserves.