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TechnoratiThe Scourge of the IMF
Tuberculosis, a treatable disease, kills 1.7 million people a year worldwide.
TB incidence, according to the World Health Organization seems to be correlated to broad social factors, like access to clean water and sanitation, HIV incidence and national health expenditures.
A just published study in the journal PLoS (Public Library of Science) Medicine investigates the role of different possible explanatory factor: the International Monetary Fund (IMF). The researchers' study focuses on the period 1991 to 2003 for the former Soviet Union and Eastern Europe, a region for which there is robust data.
The results: The researchers concluded "that IMF economic reform programs are strongly associated with rises in tuberculosis mortality rates in post-communist Eastern European and FSU [former Soviet Union] countries, even after correcting for potential selection bias, tuberculosis surveillance infrastructure, levels of economic development, urbanization, and HIV/AIDS."
"We estimated an increase in tuberculosis mortality rates when countries participate in an IMF program, which was much greater than the reduction that would have been expected had the countries not participated in an IMF program. On the other hand, we estimated a decrease in tuberculosis mortality rates associated with exiting an IMF program."
In other words: When countries entered IMF programs, TB rates went up. When the programs ended and countries escaped from IMF influence, TB rates went down.
OK, but the region was in chaos after the fall of the Soviet Union. Economies crashed and per capita income plummeted. Crime rose, incarceration rates jumped, HIV spread. Aren't these the real factors behind rising TB rates?
Explains Sanjay Basu of Yale University, one of the study authors: "First of all, not all of these countries in this region were dependent on the former Soviet Union. Many of them actually had an increase in GDP after the fall of the former Soviet Union. Several were not part of the trading bloc. And in some of the key countries where TB rates rose, we actually saw an increase in economic growth. So economic downturns could not explain, as the WHO itself has stated, the trends of tuberculosis in that regions. Something else was going on."
"The reason we use such heavy statistics is precisely to factor in these other issues -- incarceration, HIV, changes to the economy, changes to the healthcare infrastructure. We found a statistically independent effect of the IMF. That's not to say that the IMF was the only cause of TB in this region. The economy, incarceration, HIV -- these are all very important, but those factors could not fully explain TB in the region."
(An interview with Basu can be found here.)
The PLoS study found that participating in an IMF program correlated with increases in tuberculosis incidence of 13.9 percent and an increase in TB mortality rates of 16.6 percent. Basu says that, if the study results are valid, they suggest "we would have averted tens of thousands of deaths and hundreds of thousands of new cases" if countries in the region had never entered IMF programs.
The theory of the study authors is that IMF programs drive down healthcare spending, and this reduced investment in healthcare explains the rise in TB incidence and death. Basu emphasizes, correctly, that the issue is not so much the IMF directing countries to spend less on health. Rather, it imposes a set of policy constraints -- including overall limits on government spending, and needlessly low inflation targets -- that inevitably result in countries spending less on health.
There are always variations between regions, but there is nothing about the PLoS researchers' story that suggests things are any different in Africa, the region where the IMF now exerts the most influence.
Not surprisingly, the IMF has rejected the PLoS findings. "Severe methodological shortcomings limit the scope of these results and prevent any causal interpretation," asserts an IMF response that is much more subdued than comments from spokespeople. "The fundamental problem is that this study does not take properly into account that countries implement IMF-supported reforms in times of economic distress."
Says the IMF response: "The authors do not take into account that the economic and social instability following the collapse of Soviet Union may have had a direct impact on TB incidence in the 21 transition economies considered in the study."
The problem with this line of argument is that it is not true. The authors did take the economic and social instability into account.
Can anything be done about IMF policies with such harmful impacts?
Yes. The IMF is a human creation, not a force of nature.
The United States Congress will next year have a unique opportunity to influence IMF policy. The IMF needs approval from the Congress to go ahead with plans to sell some of the gold it controls. This gold would be used to fund the IMF's administrative costs -- a new income stream the IMF desperately needs. Interest payments from middle-income countries previously paid for administrative costs, but these countries have paid back their loans in order to escape from IMF influence.
As the U.S. Congress looks to approve gold sales to finance the IMF, it must insist that the IMF first end the mandates that effectively restrict countries' health spending, and force borrowing countries to implement a discredited market fundamentalist policy agenda.
Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and director of Essential Action.
(c) Robert Weissman
7 Comments so far
Show AllThe United Nations, unlike the US, has no "checks and balances." It doesn't even have elections! On questions of war, the Security Council simply decides when to use force based on its own judgment. It is mainly an alliance of the imperialist powers to stay out of each other's way as they exploit "underdeveloped" countries. (See, Charter of the United Nations, Articles 25, 39, 41-43 and 46. This is available on the web.) This is often done by its subsidiary agencies or "regional arrangements" such as NATO which are supposed to be completely under the control of the Security Council (see Articles 52-54). Loans from the International Monetary Fund ("IMF") and the World Bank (both of which are affiliated with the United Nations and heavily funded by U.S. taxes) are based on the judgment of those organizations alone. Its "aid" projects have been full of graft and mostly failures. All of the dividends on these loans go to the private banks that make up the investors of the IMF and World Bank. Tens of billions of dollars loaned to Russia during the 1990s were channeled to the Russian mafia (which is now full of former KGB agents, making it a virtual branch of the Russian government!). The U.N. will fall apart completely when world war breaks out between the western imperialists and the eastern imperialists.
This is the first study that empirically links the International Monetary Fund (IMF) to deaths and economic collapse. I have read Stiglitz's and many others, but this is the first study that links the policies with negative outcomes. It is an amazing breakthrough for all who are fighting against the IMF and American imperial influence around the globe. I hope that Naomi Klein and others will run with this.
Maybe the first step is stripping corporations of the status of personhood.
Voting Obama is the first step in getting a liberal US Government back in power.
What we have now is not a government but a gang of thieves who are busy stealing from the poor no matter where they live.
I agree with deepa "the United Nations (particularly the Security Council), International Criminal Court, IMF and the World Bank have become tools of the US and the Europe to perpetuate the modern world system based on genocidal violence"
The only quibble I could make is with the words "have become" which would imply that at one time these organizations were there to do good and have since changed. I think they always were "tools of the US and Europe" and have only changed by becoming worse.
World Bank and IMF - the world's greatest Loan Sharks and Vampires!
Plunder and murder of peoples in Africa, Asia, and Central and South America is the basis of the US' and Europe's wealth and world leadership. Commenting on the relationship between the Western European colonization around the world and the emergence of the modern world system, Nafeez Mosaddeq Ahmed says that the modern world system has emerged "through a process of systematic genocidal violence conducted across disparate continents, killing in total thousands of millions of indigenous peoples in Africa, Asia and America." He further notes that the modern world system "systematically generates genocidal violence against thousands of millions of people…and systematically finds ways to legitimize this violence as normal, functional, necessary...FOR US TO LIVE, BREATH AND PROSPER." In other words, the dominant political culture "mystifies and obscures the systematization and globalization of genocidal violence in the emergence, expansion and consolidation of the modern world system — not only since 1492, but even continuing past 1945 until now."
Some of the international institutions like the United Nations (particularly the Security Council), International Criminal Court, IMF and the World Bank have become tools of the US and the Europe to perpetuate the modern world system based on genocidal violence.
Though the research on the relationship between IMF loans and TB by the PLoS Study is to be appreciated, INTERESTINGLY THE IMPACT OF THE WORLD BANK LOANS IS MISSING. Is it because the president of the World Bank is an American???? The reason is: the World Bank gives a loan, called Water Resources Structural Adjustment Loan, to change the law on water to a new law protecting transnational corporations to control the water resources. This paves the way for water privatization. This deprives the poor access to pure water.
The US and the Europe-controlled International Monetary Fund (IMF) and the World Bank that lend money to the poorer countries believe strongly in the principles of free market: unfettered free trade, privatization of local economies, and decreased spending on social services in exchange for lending money. The debtor countries are also made to cut back on subsidies for health, education, transportation and food, spending less on their people in order to have more money to meet debt payments. Instead of helping in the economic development in the receiving country, these loans worsen the existing poverty, health and debt situation.
Thus, investments, loans, and most forms of aid from the economically rich countries and the international loan agencies (IMF, World Bank) are designed not to improve the living conditions of the economically poor countries (contrary to the claims of the leaders of the economically rich countries, the transnational corporations, and the corporate-controlled media) but to enhance the wealth of transnational companies at the expense of life of the local populations. Evil is always parasitic of the good and must masquerade as good in order to continue to maintain the order of exploitation and oppression. General welfare is not the objective and the highest social good of the greed-based capitalistic system. Profit is no longer the means, but the ultimate goal. The purpose is to serve the interests of global capital accumulation, to take over the lands and local economies of the economically poor peoples, monopolize their markets, LOWER THE QUALITY OF THEIR LIVING CONDITIONS, DENY ACCESS TO THEIR OWN NATURAL RESOURCES, lower their wages, indenture their labor with enormous debts, privatize their public service sector, and prevent these countries from emerging as trade competitors by strangulating the local economy. In essence they are aimed at solidifying the feudal system, forcing the poor countries into a perpetual bondage to the rich.
The US and the Europe are rich through not only spilling but also sucking the life-blood of the peoples in Africa, Asia, and Central and South America.
"Throughout the twentieth century and into the beginning of the twenty-first, the United States repeatedly used its military power, and that of its clandestine services, to overthrow governments that refused to protect American interests. Each time, it cloaked its intervention in the rhetoric of national security and liberation. In most cases, however, it acted mainly for economic reasons-specifically to establish, promote and defend the right of Americans to do business around the world without interference."
Stephen Kinzer