Financial weapons | The IMF as part of the East …

With Argentina, the IMF has returned as a direct lender from Latin America with the traditional method of launching a new cycle in the region of conditional loans. During this past week, Ecuador took out a $ 4,200 million credit, which amounts to $ 10 billion with contributions from other international financial organizations. Mexico and Colombia have a quota line, which is released before critical economic situations and which, for the moment, has not been triggered. The IMF thus recovers the role of auditor of economic policies in order to guarantee, fundamentally, the payment of interest and principal of the external debt. At the same time, it conditions countries in two ways: financial and economic, defining agreements providing for commercial relations with banks (pension reform), improving the rate of profitability of enterprises (flexibility of the labor force). implementation) and delimiting the areas of the State. privilege to the multinationals of American and European services (privatizations). The IMF has another role that is not much taken into account in the usual badyzes, that is, an important element in the sequencing of the US geopolitical issue, as the economic arm of the United States. intervention in areas that the economic power considers strategic for its interests.

Injection

The case of Venezuela leaves the case unresolved, as at the time when they were Iraq and other Arab countries. On May 2, the IMF sent Venezuela a declaration of censure for failing to implement the corrective measures or complying with Article VIII, Section 5 of its statute (providing the data required by the agency). In these days of great tension and open interference of the United States in Venezuela's internal political process, the head of the National Assembly and self-proclaimed President "in charge", Deputy Juan Guaidó, announced that He would seek financial support from the International Monetary Fund and other agencies. multilateral organizations such as the Inter-American Development Bank.

This is a situation similar to that which took place in Iraq when the United States embarked on the war and promoted the overthrow of Saddam Hussein. The latter took place in April 2003 and shortly thereafter, the IMF approved a loan of $ 436 million to Iraq, the first granted to this country in its history. The link between the oil country and the Fund continues, with a final outstanding credit agreed on July 7, 2016 for a three-year term, for a total amount of $ 5340 million.

In this conflict zone and sensitive to the geopolitical interests of the United States, the Fund has also negotiated credit lines with Tunisia, Morocco, Egypt and Jordan. It is no coincidence that adjustment plans have been applied in these countries since the so-called "Arab Spring" broke out in 2011 and that political and social revolts were encouraged by the United States. United.

The agreement with Jordan amounts to $ 723 million, Egypt to $ 12,000 million and Tunisia to $ 2,900 million. Morocco has received about $ 15 billion from three IMF loans since 2011, pledging to make the traditional adjustments to reform the pension system, reduce subsidies and deregulate the market.

Financial arm

Whiney Webb, a Minnesota-based "MintPress News" reporter, has published an illustrative article "WikiLeaks Reveals US Military Use by the IMF and the World Bank as an Unconventional Weapon". The leak is the document "The Unconventional War of the Special Forces of the Army", September 2008, which today, with the critical situation of Venezuela, becomes relevant.

The WikiLeaks Twitter account highlights a section of this 248-page document titled "Financial Instrument of US National Power and Unconventional Warfare" (see facsimiles). This text states that the United States Government applies "unilateral and indirect financial policies by exerting a persuasive influence on domestic and international financial institutions regarding the availability and conditions of loans, grants or other forms of financial badistance to in other countries. "He specifically mentions the World Bank, the IMF and the Organization for Economic Co-operation and Development (OECD), as well as the Bank for International Settlements (BIS), as" diplomatic places ". and the United States to achieve "such goals.

He explained that the United States could modify tariffs, interest rates and other legal and bureaucratic measures in the context of a unilateral financial action to facilitate, modify or halt financial flows to countries.

These would be direct measures, but it also highlights the indirect measures applied through these international financial institutions.

The document states that "if duly authorized and coordinated, Army Special Operations Forces (Arsof) may require the use of financial incentives to convince their adversaries". He explains that the intervention must fit into an integrated and coherent unconventional war plan. He notes that, like all other instruments of national power in the United States, the use and effects of "financial weapons" must be "closely" linked and coordinated. Order that "Arsof must work with the State Department (DOS) and intelligence services (CI) to determine which financial elements of unconventional warfare are the most appropriate". He indicates that the Treasury Department's Bureau of International Affairs and the Bureau of Terrorism and Financial Intelligence are ways to identify opportunities "to use financial weapons".

"Independent"

This unconventional warfare manual openly indicates that "independent" financial institutions, such as the World Bank and the IMF, are essentially extensions of the US government's power. Webb points out that these organizations have consistently defended the geopolitical goals of the United States abroad. He also points out that these "financial weapons" are influenced by the goals of the National Security Council (NSC), which currently heads Republican hawk John Bolton. The document indicates that the CNS "is the main responsible for the integration of the economic and military instruments of the national power abroad".

Webb says that for decades, these organizations have been covered by the myth of "independence," an aspect that "erodes quickly by simply observing the structure and funding of each institution."

In the case of the World Bank, it is located in Washington and the president has always been an American directly elected by the President of the United States. During the history of the World Bank, the board of governors of this institution has never rejected Washington's election. A few days ago, President Donald Trump appointed David Malpbad, a former Bear Stearns economist, to lead it. Bear Stearns was one of the entities behind the bankruptcy of the 2008 crisis. Webb speculates that Malpbad "probably limits the World Bank's lending to China and its allied countries, considering of his hawk status in the dispute against China ". .

The IMF also has its headquarters in Washington and the United States is the largest shareholder, with 17.46% of the capital. Although the United States does not choose the highest executive of the IMF (until now, it has always been European), they are using their privileged position as the main capital contributor of the institution to be controlled his politics.

Webb concludes that although published more than ten years ago, this "manual", now saved by WikiLeaks, is an important reminder that the "independence" of these financial institutions is an illusion and that they matter among the most "Financial Weapons" used by the US government to intervene in countries or even to overthrow governments that do not align with their interests.

Latin America

Latin America's relations with the IMF have evolved over the course of its history. Today, this financial institution, in addition to its primary role as financier to guarantee the payment of creditors, is an integral part of the US political, economic and military strategy.

In the 50s and 60s, it was not like that. The Fund financed the chronic external deficits of the economies, due to the fact that exports did not increase at the same rate as imports in the upward phase of the economic cycle. There was then a gap between the level of domestic activity, which was expanding, and the capacity of external payments, due to the relative inadequacy of foreign currencies, either to pay the external debt or to pay for the external debt. 39 increase in imports driven by economic growth.

This type of imbalance is called "stop & go model". This external deficit periodically defined a recession that implied a decline in activity and, consequently, imports. In this way, the external balance has been restored. To finance this process, the Latin American economies where the "stop & go" has prevailed have sought agreements with the IMF to obtain financing to make this adjustment. In return, they committed, for a determined period, to implement policies of contraction of expenses and, in particular, to devalue the currency.

These were short-term agreements with the IMF, after which governments regained some autonomy in the management of economic policy, whether it was coherent or not. This meant that they did not subordinate their development strategies in the long run. Now, the dynamics is very different.

In the 1980s and 1990s, IMF relations with the region changed. It did not land solely to finance a transient external imbalance caused by the "stop & go" of economic activity. It has also done to ensure that countries bear the growing burden of external debt. The obligation is growing and the interests of bank creditors, then large international investment funds that have accumulated in the debts of these countries, have begun to intervene.

The collapse of the neoliberal experience in most Latin American countries has changed the panorama. In the first years of the first decade of the new century, the United States had shifted its focus somewhat to Latin America, which had been affected by 9/11 and was occupied by the wars in Iraq and Afghanistan. This period coincided with the loosening of the links that united the IMF to several countries in the region. The most important event was the early cancellation, almost simultaneously, of credits from Brazil, Argentina and Uruguay for 26,000, 10,000 and 1,000 million dollars, respectively.

The IMF has only been monitoring economies as part of the annual Article IV consultation, a controversial task of the Kyrchner governments, because they did not accept this role as the auditor of the IMF. the national economy.

This cycle has culminated and the region has begun a new and traumatic historical relationship with the Fund. The Macri government is playing a leading role in launching the Argentine economy in the hands of the IMF, after widening the structural external deficit, bringing the debt burden to unsustainable levels. This is further exacerbated by the unrestricted opening of speculative capital, which makes the economy even more vulnerable.

This is not a cyclical imbalance of the external sector. The IMF has thus landed not only with a transitional program to avoid the default of the Argentine debt, but in order to promote structural reforms. But also with a geopolitical goal defined by the United States, which is to fund Macri's election campaign, with Argentina being the initial bridge to use the Fund as a "financial weapon" in Latin America.

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