[News] Time to bury the IMF

[Anti-Imperialist News]

Time to bury the IMF



Towards an International Bank for Reconstruction and Reparations



Horace Campbell

2011-06-02, Issue <http://www.pambazuka.org/en/issue/532>532
<http://www.pambazuka.org/en/category/features/73741>http://pambazuka.org/en/category/features/73741

The demise of the IMF's former managing director 
Dominique Strauss-Kahn is an opportunity to 
dismantle the fund and replace the current 
financial architecture with one that ‘invests in 
the repair and reconstruction of livelihoods and 
the planet’ instead of ‘destruction, 
dehumanisation, exploitation, and rape,’ writes Horace Campbell.

It was a fitting metaphor as Dominique 
Strauss-Kahn, managing director of the 
International Monetary Fund (IMF) was arrested on 
charges of assault, attempted rape and sexual 
abuse. The charges were brought after 
Strauss-Kahn assaulted an African woman from 
Guinea, who worked as a housekeeper in a hotel in 
New York City. The image of Strauss-Kahn in 
handcuffs was fitting insofar as this is the 
image that should be presented of the entire 
international financial system that is anchored 
in the Bretton Woods Institutions. For over 60 
years, these institutions (the IMF and the World 
Bank) raped citizens of the world, especially the 
citizens of the poor countries, on behalf the 
United States and the top capitalist nations in 
Europe. The IMF has been a front for the lords of 
finance of Wall Street in the USA, and the 
linkages between the IMF/Wall Street and the US 
Treasury ensured that the poor of the world 
subsidised the US military. As junior partners in 
the imperial chain of domination, the Europeans 
worked with the Wall Street-Treasury alliance to 
ensure that despite presenting arguments about 
free market competition, agriculture in Europe 
and the USA was subsidised. In pursuit of the 
alliance of financial rapists and economic 
terrorists, it was an unwritten rule that the 
managing director of the IMF should be a European.

The current French finance minister is 
campaigning hard to becoming the next managing 
director and has received the support of an 
institution that is as moribund as the IMF, the 
Group of 8 (G8). It is a measure of the 
disrespect that the capitalists have for Africa 
that they could propose Christine Lagarde as the 
candidate to be the next managing director. 
France has been at the forefront of the massive 
plunder of Africa by European states, and the IMF 
has been complicit in this plunder. France 
continues to be a safe haven for the money stolen 
from Africans by African kleptocrats and Western 
elites and corporations. The IMF has assisted in 
granting immunity to Europeans and North 
Americans for crimes of economic rape against Africans.

Many in France who call themselves socialists 
have been in denial about the rape of Africa. 
Instead of supporting activists such as Eva Joly 
who have been exposing the fraud and corruption 
of France in Africa, these ‘socialists’ are 
claiming that Strauss-Kahn was set up. A former 
culture minister Jack Lang described the 
treatment of Strauss- Kahn as a ‘lynching’ that 
had ‘provoked horror and aroused disgust’. 
Clearly, these members of the French socialist 
confraternity do not understand the real lynching 
that is part of the racist structure of western 
capitalism. Indeed, this moment of the 
prosecution of the French-born high priest of the 
IMF over the physical sexual assault of an 
African is an opportune moment for persons who 
have been affected by the decades of economic 
rape perpetrated by the IMF around the world to 
call for the dismantling of the Bretton Woods 
system and set about the establishment of a new 
international financial architecture dedicated to 
repairing the planet earth and for the reconstruction of livelihoods.

There were some commentators in parts of the 
BRICS (Brazil, Russia, India, China, and South 
Africa) countries who were calling for the new 
managing director to be recruited from the 
‘developing’ countries. Such a proposal is only 
one expedient for prolonging the life of the IMF 
when regional institutions are springing up in 
Asia and Latin America to disengage from the 
Bank. In fact, the pervasiveness of regional 
currency projects and the moribund stature of the 
Bretton Woods global financial architecture 
challenge Africans to remove the present crop of 
wheeler-dealers who pose as leaders, and to 
create a new leadership in order to get serious 
about the consolidation of the African Monetary 
Fund. Such seriousness will strengthen the local 
forces all over the world that have been 
campaigning against the IMF and for the creation of a new financial system.

SLOW DEATH OF THE BRETTON WOODS SYSTEM

The Bretton Woods financial architecture, which 
gave birth to the IMF and the World Bank, is 
predicated on the strength and dominance of the 
US dollar, the US financial system and capitalist 
ideology of free market. But the slow death of 
the IMF began after the ending of the fixed rate 
regime that had been established at Bretton Woods 
in 1944. When the system of fixed exchange rates 
ended in 1971, the US dollar was no longer backed 
up by gold but by the military might of the USA. 
Previously, the US hid behind the idea of 
trilateralism, meaning cooperation in the 
management of the global system with Europe and 
Japan. It was in this period when the US 
established the meetings of the G-7 in 1976. 
After the rise of Ronald Reagan, the US 
capitalists opted for the military management of 
the international financial system. This was most 
graphic after the Plaza Accords of September 
1985, when Ronald Reagan literally told the 
Germans and Japanese that they had to support US 
financial hegemony because the US had troops 
stationed in their countries. Following the fall 
of the Soviet Union in 1991, the Russians were 
invited to these G-7 meetings and the group was 
then called the G-8. The US capitalists moved in 
to dismantle the Soviet economy and paved the way 
for a new regime of looters and money launderers 
in Russia. These barons of Russian capitalism 
were integrated into an international system that supported the dollar.

The Russians opted to join the international 
capitalists instead of joining voices with the 
G-77 (Brazil, India, China, Malaysia, Mexico, 
South Korea and other countries) to change the 
rules of the system where the US dollar had a 
preeminent place in the international political 
system as a reserve currency. A major concession 
was made in 2008 after the fall of the US 
investment houses and the details of the 
depression had become too obvious to be covered. 
A hastily convened meeting of the G-20 was held 
in November 2008, following the collapse of the 
Lehman Brothers investment bank and subsequent 
daily fear of an international financial collapse.

Throughout the years of the Bush administration 
(2001-2009), the principal questions related to 
the future of the International Monetary Fund 
(IMF) and the special status of the dollar was 
placed on the back burner by the brazen military 
adventure of the US. At the start of the Bush 
administration the crisis of the US economy had 
become a threat to the IMF itself, to the point 
where the IMF cautioned the US on the 
unsustainability of the debt and deficit. During 
the Bush administration, the New York Times 
published a report on 8 January 2004, revealing 
that the ‘IMF Warns That U.S. Debt Is Threatening Global Stability.’

15 September 2008 exposed to the world the 
hollowness of the US financial system and the 
duplicity of the neoliberal ideologues that have 
been campaigning for free markets. When Lehman 
brothers collapsed and there was the meltdown of 
the system, the US government did not go to the 
IMF but unilaterally pumped more than US$25 
trillion into the financial system to maintain US 
imperial hegemony. Today, as the figurative rape 
of Third World economies is now reinforced by the 
actual rape and sexual assault from the high 
priest of the IMF, capitalist forces inside the 
United States of America nervously balance at the 
apex of this international political crossroads 
with a mode of economic organisation and a 
consumer led form of economics which is creating 
insecurity in all parts of the globe.

The international contamination from this crisis 
in the United States has elicited anxiety in all 
parts of the world. Whether it is the ruminations 
of the oil producing states of the Gulf 
Cooperation Council on the creation of a single 
currency, or the energetic efforts to establish 
the Bank of the South in Latin America, there are 
differing measures by states who seek protection 
from the volatility of the depression and 
possible impact on the dollar as the currency of 
world trade. The rising competitors of Asia are 
seeking ways to reduce their deposits held in 
dollars in favor of the new financial 
arrangements in order to limit their exposure to 
the toxic economic conditions of the USA. Chinese 
leaders, in particular, have been organising 
currency swaps to limit their exposure to the 
dollar while some sections of the Chinese 
leadership are calling for a tricolor currency 
system anchored in the Dollar, the Euro, and the Chinese Renminbi (Yuan).

Under the subtle yet clear dominance of the 
German bankers and the German rulers, the 
European Union has sought to strengthen the 
economic integration of Europe as one pole of the 
competition with the US-based capitalists. 
However, the crisis of the financial system has 
intensified resistance from European workers who 
are opposing the austerity measures proposed in 
order to pay banks while people suffer. In the 
midst of these protests in Europe, US strategists 
are wishing for the collapse of the Eurozone so 
that the Euro does not immediately become an 
alternative to the collapsing dollar.

Of all the regional initiatives to challenge the 
US economic dominance, it is in Latin America 
where there is an explicit statement that the 
initiative of the Bank of the South contains a 
vision ‘to liberate the region's countries from 
IMF, World Bank and Inter-American Development 
Bank (IBD) control that condemn millions to 
poverty.’ The region of Latin America was one 
space where the crystallisation of popular forces 
(women, youth, shack dwellers, environmentalists, 
peace activists, indigenous persons and anti- 
racist forces) forced through counter proposals 
to begin to break with dollar hegemony. Within 
Latin America, the radicalisation of the 
electorate brought to the centre of power parties 
and leaders who see the Bank of the South as one 
step towards economic and political integration 
in that region. This vision is articulated in the 
creation of the Bolivarian Alternative for Latin 
America and the Caribbean. It is not by accident 
that France’s candidate to head the International 
Monetary Fund travelled to Brazil to drum up 
support for her bid, but her hosts are still on 
the fence about whether to back the European 
candidate or throw their weight fully behind 
alternative proposals, including supporting a 
contender from the developing world.

In terms of regional alternatives to the IMF, the 
area where the break is most urgent is in Africa 
where there is tremendous wealth in the midst of 
appalling pauperization. Like the ruminations of 
the Gulf Cooperation Council, there is currently 
an effort by the African Union (AU) to establish 
a single currency. In Africa, there had been a 
long tradition of opposition to the policies of 
the colonialism and neocolonialism, crowned with 
the end of apartheid in 1994. Though outnumbered 
by a class of complicit leaders, African 
spokespersons such as Julius Nyerere had called 
for a dismantling of the institutions of 
international capitalism. Nyerere was quite 
outspoken when he asked, ‘Must we starve our 
children to pay our debts?’ It was in Tanzania 
where there was the most determined opposition to the policies of the IMF.

 From ordinary folks in Bamako in Mali to the 
shack dwellers of South Africa, there are social 
forces opposing the looting of African resources 
and calling on the working poor to ‘fight against 
all manifestations of injustices, and protect 
their human dignity by direct action.’ Scholars 
who have been theorising the interconnections 
between gender, care and economics have been able 
to shatter neo-classical, Marxist and liberal 
understanding of economic relations that excluded 
the labour power of women. These challenges from 
the grassroots women are most evident in the 
rapidly growing societies that have internalised 
the idea that neoliberal economic practices form 
the basis for prosperity. Women of the global 
South have however been the most forthright in 
their articulation of the multiple forms of 
oppression that emanate from the structural 
adjustment policies of the IMF. Gloria 
Thomas-Emeagwali’s book, ‘Women Pay the Price of 
Structural Adjustment in Africa and the 
Caribbean’, represented an explicit exposure of 
the interconnections between racial, economic and 
gendered exploitation. Her work and those of 
other African women could be drawn upon to 
contextualise the actions of Dominique Strauss-Kahn.

The metaphorical economic rape that the peoples 
of Africa and the global South have endured for 
decades is now not only manifesting in the 
literal sense with Strauss-Kahn’s actions; it is 
also no longer limited to the Third World as it 
spreads across Western societies, in form of 
austerity measures that have sparked off 
resistance. By the start of 2009, the 
demonstration effect of the youth rebellion in 
Greece was inspiring strikes and protests from 
Guadeloupe in the Caribbean to Iceland and 
Ireland. By the time of the outbreak of the 
revolutions in Tunisia and Egypt, international 
capitalism was on the defensive. With Strauss 
Kahn caught, literally, with his pants down, the 
nervousness of capitalism has led to a closing of 
ranks behind the French candidate to pre-empt 
serious discussions of the restructuring of the IMF.

This is the current climate of opposition to 
neoliberalism and to the Bretton Woods austerity 
measures in which there is the discussion on the 
successor to Strauss Kahn. The British Guardian 
had summed up the new developments on 31 January 
2009: ‘Europe’s time of troubles is gathering 
depth and scale. Governments are trembling. 
Revolt is in the air.’ No less a person than 
Mervyn King, governor of the Bank of England 
encouraged workers in the United Kingdom to rise 
up and protest against the bankers. He said that 
he was surprised the ordinary people were not 
angrier with the banks. King said that people 
made unemployed and businesses bankrupted during 
the crisis had every reason to be resentful and 
voice their protest. He told a Treasury select 
committee that the billions spent bailing out the 
banks and the need for public spending cuts were 
the fault of the financial services sector.

We will add that behind the financial services industry is the IMF.

EUROPE FEARS THE DEATH OF THE SYSTEM

With each passing day there are clear signs of 
the depth of the international capitalist crisis. 
Austerity measures to save banks in Europe have 
intensified resistance by workers, youths and 
students. Inside the USA, the debt ceiling has 
now placed the US system in a precarious state 
while the treasury secretary, Timothy Geithner (a 
member of the Board of Governors of the IMF) 
fiddles the books to postpone the need for tough 
decisions to rein in the system where the US can 
spend a trillion dollars on the military while 
schools and hospitals are starved of funds. 
Economists, financiers, journalists, 
policymakers, politicians and speculators draw 
attention to the fact that the entire 
international financial system is now in its 
death throes. Whether it is the warnings of 
George Soros who continuously cried that, what we 
are going through is the crisis of the ‘gigantic 
circulatory system’ of a ‘global capitalist 
system that is 
 coming apart at the seams,’ or 
economists and activists from the south, there 
are voices that have made it clear that 
capitalism is going through a defining moment.

A former chief economist of the IMF, Simon 
Johnson, argued that the financiers are now using 
their influence to prevent precisely the sorts of 
reforms that are needed. Johnson, who wrote about 
the ‘Quiet Coup’ in relation to the political 
power of the bankers and financiers in the United 
States, observed later in his book, ‘13 Bankers: 
The Wall Street Takeover and the Next Financial 
Meltdown’, that the financial oligarchs cannot 
halt the rush to a new financial meltdown. The 
question is whether societies all over the world, 
especially Africa are ready for alternatives when this meltdown takes place.

According to Johnson, ‘What we face now could, in 
fact, be worse than the Great Depression­because 
the world is now so much more interconnected and 
because the banking sector is now so big.’ On the 
complexity and depth of the crisis, Simon Johnson 
is not alone. Writing in the London based 
Financial Times on 8 March 2009, Martin Wolf held that:

‘It is impossible at such a turning point to know 
where we are going. In the chaotic 1970s, few 
guessed that the next epoch would see the taming 
of inflation, the unleashing of capitalism and 
the death of communism. What will happen now 
depends on choices unmade and shocks unknown. Yet 
the combination of a financial collapse with a 
huge recession, if not something worse, will 
surely change the world. The legitimacy of the 
market will weaken. The credibility of the US 
will be damaged. The authority of China will 
rise. Globalisation itself may founder. This is a 
time of upheaval. Technical arguments abound in 
relation to the necessity for regulation of the 
financial markets but these interventions fail to 
grasp the political nature of the depression and 
the need for a fundamental break with the social 
production of wealth by the majority and the accumulation by a few.’

These warnings from mainstream commentators seek 
to divert attention from those in the oppressed 
South who are calling for the dismantling of the 
Bretton Woods system and plan for increased 
taxation of the bankers, especially in the short 
run with a financial transaction tax.

TIME TO BURY THE IMF

 From both sides of the Atlantic there are calls 
for the breaking up of the big banks to make them 
more accountable. These calls must be linked to 
the popular power in the streets to connect the 
opposition to the banks to opposition to the IMF. 
During the anti-globalisation protests, 
connections were made between all forms of 
oppression. The United Nations World Conference 
against Racism (WCAR) held in Durban in September 
2001 brought to the forefront the need for a 
repair of the human relations in the process of 
combating racism in the world economy. In the 
programme of action, this conference proposed 
legal measures, educational measures and 
reparations as one component of a phased program 
to halt the inequalities and the iterations of 
warfare. In so far as the proposals of the WCAR 
challenged the power of the leaders of NATO, the 
ideas were shelved while the leaders of the USA 
intensified the militarization of the planet.

Samir Amin grasped the limits of the technical 
responses to this crisis and correctly grasped 
the reasons why the Unites States and the NATO 
powers (called the international community) 
supported a G20 meeting but opposed the 
reconvened Durban 2 conference in Geneva at the 
end of April, 2009. It is in Latin America among 
African descendants where there is now a movement 
to link racism clearly with the crimes of capitalism to racism.

The Barack Obama administration in Washington 
recognised the limitations of the ‘total war’ 
concept that was embedded in the ‘war on terror’ 
and has sought a more conciliatory relationship 
with the rest of the world. This conciliatory 
approach has not, however been backed up a 
demilitarisation of the globe; and it has not 
addressed the fundamental inequalities in the 
international system. In fact, the conciliation, 
is, in part, aimed at finding new ways to extend 
the life of the IMF and to maintain the hegemonic 
position of the dollar. The Obama administration 
supports a strong military and is therefore 
committed to supporting the financial oligarchy, 
irrespective of the social costs to the rest of humanity.

Sixty-five years after the formation of the 
Bretton Woods institution and in the midst of a 
new depression, the challenging question for most 
people, especially those in the exploited world 
is the issue of whether we have come to the end 
of the Bretton Woods system. Is it now time for 
the establishment of the International Bank for 
Reconstruction and Reparations? This question 
must be placed on the table in order to 
reorganise the priorities of activism and to 
define new goals for the reconstruction of 
humanity, so that the diminution of the dollar 
does not engender ‘abrupt, agonizing and brutal change.’

Investment in humans at this period in human 
history is not an intellectual question that 
comes out of the right or wrong analysis. It is a 
fundamental requirement, so that the majority of 
the 6.9 billion persons on earth can have access 
to health, food, clothing, shelter and the 
conditions for generating wealth in a way that 
will increase the quality of life for all the peoples of the planet.

The collapse of some of the US speculative 
companies and the current decomposition of the 
hedge fund and derivatives traders point to the 
fact that the financial meltdown and bank 
failures in the USA were not conjunctural or 
episodic events but reflections of the deep 
contradictions of the capitalist system. The 
crisis of the capitalism is systemic and cannot 
be reformed. Among some South Africans who 
supported the call for a new managing director 
from the developed nations, there were calls for 
Trevor Manuel to be named head of the IMF. Such a 
proposition diverts attention from the need for a 
rigorous discussion on the timetable for 
dismantling the IMF. In this death pang 
situation, one US strategist called for the 
Chinese to be co-imperialists with the USA. 
Zbigniew Brzezinski called for the establishment 
of a G2 between the USA and China.

Radical environmentalists, feminists and the 
peace activists are building a movement where the 
needs of humans come before profit and the 
wellbeing of a small minority. I will agree with 
those who argue that the IMF and the World Bank 
should be abolished. There has been a reform 
discourse for the past ten years but the reform 
has simply strengthened the position of the 
Anglo-Saxon capitalists. Strauss-Kahn had been 
called a reformer and now the world understands 
what reform looks like for the IMF. It now time 
to bury the IMF with the leadership of 
Strauss-Kahn and build a new financial 
architecture that invests in the repair and 
reconstruction of livelihoods and the planet, 
away from the destruction, dehumanisation, 
exploitation, and rape that have been the hallmark of the extant architecture.

BROUGHT TO YOU BY PAMBAZUKA NEWS

* Horace Campbell is professor of 
African-American studies and political science at 
Syracuse University. He is the author of 
‘<http://www.plutobooks.com/display.asp?K=9780745330068&>Barack 
Obama and 21st Century Politics: A Revolutionary 
Moment in the USA’. See <http://www.horacecampbell.net>www.horacecampbell.net.
* Please send comments to 
<mailto:editor at pambazuka.org>editor at pambazuka.org 
or comment online at <http://www.pambazuka.org/>Pambazuka News.




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