"The financial crises that affected the developing countries between 1994 and 2002, resulting from the deregulation of the market and the private financial sector as recommended by the World Bank and the IMF, led to an enormous increase in internal public debt. In short, by following the Washington Consensus, governments of developing countries had to give up their currency and capital controls. This was combined with the deregulation of the banking sector in different countries. Private banks had to take more and more risks, which led to numerous crises, beginning with Mexico in December 1994. Capital was massively withdrawn from Mexico, sparking off a chain reaction of bank failures. The Mexican government supported by the World Bank an dthe IMF, transformed the banks' private debt into internal public debt. This took place in extactly the same way in countries as different as Indonesia ((in 1998) and Ecuador (1999/2000).
In addition, even in those countries whose banking sectors had not collapsed, the World Bank advised the governments to increase their internal debt... It advised governments of indebted countries to encourage large foreign banks to take over local banks — something already very prevelant in Latin America. Large Spanish banks have massively invaded the banking sector in South America, and U. S. banks dominate banking in Mexico. The World Bank also supports the privatisation of pension schemes and encourages the use of workers's savings (which constitute their future pensions) to buy securities in domestic public debt..."
— Toussaint and Millet, Debt, the IMF and the World Bank, 2010.
The World Bank and the IMF as tools of imperialist plunder and domination.
Comments