What You Should Know About the IMF

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 There is no doubt that we are living in times of serious economic precarity and by extension political controversy. Many governments have been forced to make very controversial decisions for the long-term economic and financial benefit of their countries. In Barbados, the most contentious was the increase in tuition fees paid by Barbadian students after decades of living under the ‘free education’ model established by their political hero Errol Barrow. In Saint Lucia, price ceilings were removed on commodities such as sugar, whilst civil servants were asked to take a 5% decrease in wages despite the 4% increase that they received only a couple of years before. The government’s decisions were obviously met with hostility and frustration, but also arguments of approval as some people believed that it was a necessary evil to cure our economic problems. However, throughout these discussions about the source of these decisions, whether in St Lucia, Barbados or any other Caribbean island, the name of one organisation always stands out…the International Monetary Fund (IMF).

Although the IMF has become somewhat of a household name, I highly doubt that many of us have taken the opportunity to educate ourselves on this organisation. Unfortunately, there is a habit of ignorance that still persists in our societies, despite the fact that information can be sourced from so many mediums in this day and age of technological advancements. Yet, if there is anything that we should concern ourselves about in the Caribbean are the workings of these three important organizations, the most important being: The World Trade Organization (WTO), The International Monetary Fund (IMF) and the World Bank (WB). In this article, our interests lie in the International Monetary Fund.

For the most part, what I have heard from my other compatriots about this organization is that our countries have NO CHOICE but to implement whatever decisions that are suggested by them. Why should this be a concern? Basically, the IMF believes that economic prosperity is one based on little government intervention and free trade policies.  So the governments that are found in the Caribbean, which provide employment, social welfare needs and programs, are often frowned upon by this organisation. When our countries borrow money from the IMF, they often come attached with conditions which we must comply to, some of which require: (i) the reduction of the civil service (ii) removal of price ceilings (iii) cutting back on social welfare programs and (iv) the devaluation of currency. Ponder on these measures for a moment. Can you think of any country in the Caribbean that has recently taken any such decisions? Was it the IMF or just national governmental policies? Furthermore, anyone with even meager knowledge of Caribbean society understands the conflict that these conditions create.

Unfortunately, many of our people still live in poverty, have little access to education and are unemployed; for decades our governments have intervened in our economies to provide support to these marginalised groups. So, what happens when they are more or less mandated to follow prescriptive measures which seem to contradict the needs of our societies? Many Caribbean political scientists and sociologists would tell you the product is poverty and further marginalisation of our disadvantaged sectors.

Hence my argument is this: if we remove government intervention, there might be a decrease in debt. Nevertheless, what measures will be put in place to deal with the jobs and services that we are no longer providing to our population? The fact remains that most, if not all of our countries are marked by gross economic and social inequality. In fact, I can say that some of us may not have been where we are today if we had to provide every single need and want completely on our own.

Another argument which completely bothers me is: “well, the government has no choice, they have to do it.” This, to me begs the most pertinent question, i.e. if our government has no choice, is it really our government? If we leave our homes, every five years, which is – most of the times – the ONLY time we participate in government and our political authorities, are forced to implement policies that might not be for the benefit of our country, what level of political representation do we really have? Can we really say that our Prime Ministers and ministers are independent and working for us and not for someone else? These are questions we must ask ourselves. Annually we raise our flags and dress in the colours of our nations, we sing anthems every Monday in schools, whilst we boast about CARICOM passports but IMF influence on our government’s decisions surely is proof that we are not as politically independent as we ought to be.

For decades now our region has been pushed into an abyss of debt. Ironically enough, money which we borrow to pay off our debts, have themselves created more debt. So, like hamsters in a cage, we are placed on a never ending wheel of indebtedness and dependency on foreign capital. We continue going to this global institution for help, since our volatile tourist and agricultural-centred economies desperately need external markets to survive.

Unfortunately, the light at the end of the tunnel is very far away. Recent global economic developments such as globalisation have pushed us closer to the IMF and its associates and simultaneously even deeper into economic insecurity. Hence, the time of ignorance and complacency needs to end! We need to educate ourselves about what is happening in the world so that when our governments are placed in tough situations we can make valuable contributions, instead of being hypnotized by the slander of petty party politics which characterises Caribbean society.

Here just a few books you could read:

  1. The Other side of Paradise by Tom Barry, Bet Wood and Deb Preusch
  2. Storm signals by Kathy McAffee
  3. The Debt Trap: The International Monetary Fund and the Third World by Cheryl Payer

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