Impoverishing a Continent: The World Bank and the IMF in Africa (July 2004)

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By Asad Ismi

The World Bank and the International Monetary Fund (IMF) are the two most powerful institutions in global trade and finance. Since 1980, the United States government which dominates both bodies has used them to economically subjugate the developing world. The World Bank and the IMF have forced Third World countries to open their economies to Western penetration and increase exports of primary goods to wealthy nations. These steps amongst others have multiplied profits for Western multinational corporations while subjecting Third World countries to horrendous levels of poverty, unemployment, malnutrition, illiteracy and economic decline. The region worst affected has been Africa.

For two decades the World Bank and the IMF have forced developing countries to create conditions that benefit Western corporations and governments. These conditions are known as Structural Adjustment Programs (SAPs). SAPs require governments to: cut public spending,(including eliminating subsidies for food, medical care and education); raise interest rates, thus reducing access to credit; privatize state enterprises; increase exports; and reduce barriers to trade and foreign investment such as tariffs and import duties. These measures are supposed to generate export-led growth that will attract foreign direct investment and can be used to reduce debt and poverty.