The IMF's Lies (Part 14)
Not only does the IMF fail to reduce world poverty as they claim, but its structural adjustment policies increase and perpetuate it.
Study by Jorge Vendrell that will be part of his next book entitled: "#TOP SECRET CRIOGENIZACION ECONOMICA" Appointment required by copyright
The International Monetary Fund has the sad honour of being the most hated international institution on the planet. No citizen wants their country to be rescued by the IMF because they know the harsh conditions they will impose on the bailout; therefore, the opposition of the people of the countries to be rescued by the IMF is frontal, putting in serious difficulties the governments that request it.
This reality contrasts with the IMF's idea of itself, which in the basic data section published in 2018 and currently in force on its website, it says the following:
"The International Monetary Fund (IMF) promotes financial stability and international monetary cooperation. It also facilitates international trade, promotes employment and sustainable economic growth and contributes to poverty reduction around the world."
Without a doubt, it is a lot of nonsense that has nothing to do with reality as I expose point by point below:
The IMF neither promotes financial stability nor international monetary cooperation. The role of the IMF is reduced to that of a mere lender to countries in crisis, a role which it performs at global level and which only the Troika of the IMF itself, the EC and the ECB carry out in the euro area and whose results are equally unfair.
The objective of the IMF, like that of any lender, is to recover the loans as soon as possible, to ensure their repayment grants loans in tranches, having to repay the loans received in each tranche, in terms ranging from 3 to 5 years. Often the IMF agrees to new loans that are granted to meet the payment of the interest that the creditor country owes it, not being aimed at financially helping the country or its citizens.
In order to ensure repayment within the stipulated time frame, the IMF establishes draconian conditions for creditor countries, which, if defaulted upon, for any reason, could lead the IMF to suspend the tranches following creditor countries, which could lead the most vulnerable to bankruptcy.
That the IMF promotes employment must be a joke. Not only does the IMF fail to promote employment, but it is a ruthless machine for destroying it. Since its main objective is to have the loans reversed in a short space of time, the IMF imposes on the creditor countries a "structural adjustment plan", something like an extreme slimming diet, whose main characteristic is a reduction in all types of public spending that will result in a decrease in consumption, investment and especially employment.
The IMF does not contribute to sustainable economic growth To contribute to sustainable economic growth, the first premise is that this growth should reach the entire population. Leaving 30% of households out of this growth does not seem the best way to ensure sustainable growth.
"The IMF's policy is to drastically reduce expenditures to adjust them to revenues, and thus begin the path of growth. But by reducing spending, which is the income of many citizens, what they reduce is consumption, investment and employment, so in the first instance what the IMF contributes to is the sustainable decline of the economy, precisely the opposite of what it preaches."
The IMF not only fails to reduce poverty worldwide, but perpetuates it. Let us be grateful that the IMF does not get its hands on the whole world as they claim, because if it were, the world would be much poorer than it istoday. The liberal socialist policy pursued by the IMF based on the reduction of social expenditure such as pensions, pensions substantially increases poverty where its austerity recipes are applied.
The IMF advocates making playpens of between 5% and 15% of the savings of the citizens of the rescued countries, in order to reduce the public debt to the levels it considers acceptable.
The examples can be found in all the continents on which it has acted. Since its priority is the repayment of loans granted to creditor countries, the IMF acts in the same sinister way as the Public Treasury does, it stands as a preferred creditor, and it asserts its enormous financial strength as the first lender to impose the conditions for the repayment of the loans it grants to its weak creditors.
If any country that has requested a bailout fails to comply with any of the payments agreed with the IMF, the International Monetary Fund will not hesitate to paralyze its aid, even if this situation ends up leading the rescued countries to the playpen as happened in Argentina in 2001.
Readers should know, that contrary to what is thought, the IMF advocates making playpens ranging from 5% to 15% of the savings of the citizens of the rescued countries in order to lower the public debt to the levels they consider acceptable,which are those that allow creditor countries to meet their debt commitments withoutwidening the gap in their fiscal deficit.
The IMF is well aware that its restrictive liquidationist measures will bankrupt the most indebted companies, causing a fall in consumption and investment employment, and it also knows that when the economy begins its recovery, this will have an unequal impact, with GDP increasing to a greater extent than employment, provided that real GDP is positive.
The IMF seems unaware that if the recovery in GDP is accompanied by inflation, real income could become negative, causing a decrease in citizens' disposable income, which would lead to a fall in consumption and employment even if a positive GDP is given, this being the explanation why countries considered rich see the inequality gap increase. , which has nothing to do with the distribution of wealth but with the lack of wealth to be distributed as a result of an inflation that devours GDP growth by decreasing the income of the middle and lower class.
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Jorge Vendrell - World Economy Development Center
The IMF neither promotes financial stability nor international monetary cooperation. The IMF's role boils down to that of a mere lender to countries in crisis