Now the IMF Tells Us!

The IMF’s supposed mea culpa for its role in the social and economic collapse in Greece rings hollow.

True to form, the IMF still insists that even if didn’t fully realize the havoc its insistence on radical belt-tightening would create, on the whole its policies were not mistaken. And the organization insists on fobbing off much of the blame on European institutions for the social meltdown and the agony it caused by asserting that Greece’s creditors came before everyone else.

The IMF has spread misery around the world before in its role as the international repo man. In the late 1990s, its insistence that harsh austerity measures be imposed exacerbated suffering in countries such as Thailand and Indonesia, while Malaysia, which defied IMF orders, got off comparatively lightly. Nobel laureate and former chief economist for the World Bank Joseph Stiglitz pointed out how bass-ackward the IMF’s approach was then.

The IMF’s “policies protect foreign creditors,” Stiglitz told The Progressive. “If I came to the problem of what can I do to maintain the Thai economy from the perspective of the chairman of the collection committee of the international creditors, I might mistakenly say the most important thing is to make sure people don't abrogate their debt. Senior people in the IMF actually said that not paying the debt was an abrogation of a contract, whereas anybody who knows about capitalism knows that bankruptcy is an essential part of capitalism.”

Nothing has changed in the IMF’s approach since that time.

“Every time a debt crisis strikes, the IMF moves in to impose the same short-sighted bailouts, austerity measures and market reforms—and then, several years later, comes to the conclusion that it made major mistakes in its handling of the crisis,” writes Jerome Roos of the Center for Research on Globalization. “Yet it never changes tack. When the next crisis hits, it simply reproduces the same old script: stabilization, privatization, liberalization. Nothing else will do to satisfy the markets.”

Which raises the question that Roos so aptly asks: Are the IMF’s repeated “blunders” really in error?

“If you make the same mistake a hundred times over, can it still be considered a mistake?” Roos inquires. “Or are we looking at the deliberate reproduction of an ideological script that narrowly serves the interests of private creditors by shifting the burden of adjustment squarely onto the shoulders of the poorest and weakest members in the debtor countries?”

In all this seemingly arcane economic debate, let’s not forget the people who have so greatly suffered because of the IMF’s heartlessness.

“Thanks for letting us know but we can't forgive you," Apostolos Trikalinos, a garbage collector in Athens, told Reuters. “Let's not fool ourselves. They'll never give us anything back. I'm sorry for all the people who killed themselves because of austerity. How are we going to bring them back? How?”

If the IMF honchos have even a twinge of conscience, they’ll pause really long and hard before asking the next country to undergo the same ordeal as Greece.

Amitabh Pal, the managing editor of The Progressive and co-editor of the Progressive Media Project, is the author of “ ‘Islam’ Means Peace: Understanding the Muslim Principle of Nonviolence Today” (Praeger).