‘a Ps es IMF unable to answer burning oor nations needs of world’s Tribune Special Correspondent TORONTO — As the deliberations at the International Monetary Fund’s (IMF) annual meeting unfold in here last week, it became clear that not all of the approximately 7,000 delegates and guests were well-heeled financiers. Among those huddling in the com- mittee rooms of the mammoth Sheraton Hotel convention centre on Queen Street were hundreds of ministers of finance and economists from the economically troubled, developing world. These Third World representatives, whose countries are already reeling from big debt burdens and low prices for their exports, were there to get a fair deal in any financial assistance that may be forthcoming from the world’s major financial institution. From the opening day Sept. 6, dele- gates from the economically poor coun- tries soon realized that it was the same story as at previous meetings — how to wring this financial assistance on favor- able terms out of the Washington-dom- inated IMF and its closely related project financing agency, the World Bank. As it turned out, the big Western industrial governments were determined that the over $300-billion in loans would be directed to those countries which guarantee what McGill University eco- nomist Kari Levitt termed ‘‘the power of international capital’. While there were some gains made by the developing world, the tight fistedness of the U.S. delegation ensured that the 100-150% in- crease asked for by the poor nations did not get approval. It is reported that Beryl Sprinkel, the U.S. Treasury undersecretary for mone- tary affairs, said that anything more than 25% was unacceptable to Washington, a stand which was accompanied by the traditional IMF/World Bank stipulations that the borrowing nations curb public spending and wage increases. This state of affairs prompted Univer- sity of Toronto economist Gerald Hel- liner, who with Levitt was part of a paral- lel conference organized by Canadian church groups and trade unions, to note: ‘the U.S. had wrecked the meeting’’. At this counter parley, several Third World delegates spoke from first hand knowledge of the economic damage and destabilization imposed on their coun- tries by the big Wéstern governments through the IMF/World Bank. These de- legates point to the harsh conditions (‘‘conditionality’’ in international finance lingo) laid down by the IMF/World Bank top brass on Third World borrowers. The delegates argued at the Toronto meeting that such condi- tions often lead to the loss of human dig- nity and social rights including the right to strike in some cases. Tanzania’s Minister of Finance Amir Kamal, argued that the global impact of the IMF and related institutions created “despair and despondency when the need is that of giving hope and self con- fidence’’. Trade Unions Reject IMF Most trade unions reject the IMF/World Bank conditionality that calls for wage increases to be “‘realistic’”’ in the words of IMF managing director Jacques de Larosiere. Significantly, in a statement issued by the Caribbean Con- gress of Labor (CCL), the umbrella organization to which the majority of unions in the English speaking Caribbean belong, recently urged the Barbados government to ‘“‘keep away from IMF policies”. Speaking at the 4ist annual conference of the 35,000-strong Bar- bados Workers Union, CCL secretary- treasurer Burns Bonadie said that a government of a Third World Caribbean country like Barbados cannot afford to subscribe to the ‘‘rigid prescriptions”’ of the Fund. With regard to Canadian workers, whose money Ottawa uses in its dealings with the IMF/World Bank, Peter War- rian, a researcher with the Canadian sec- tion of the United Steelworkers of America, told the counter conference, “the interests and policies that the Cana- dian taxpayer has to fork out $5 out of every $100. loaned by the World Bank and about $4 for every $100 from the IMF. This source of the deep tensions among the developing countries and the Washington-led Western governments has its roots in the formation of the Fund and the World Bank themselves. Both financial organizations were established directly after World War Two to put some order into the chaos of the Western economies, which were - then recovering from the battering of the Great Depression and the war itself. The setting up of the IMF/World Bank also The tightfistedness of the United States delegation ensured that the 100-150% increase asked for by the poor nations did not get approval. Washington said anything over 25% was unacceptable. mi O Both the International Monetary Fund and Wotld Bank have from the beginning best ni dominated by western governments. The majority of votes on the IMF’s 22-member cou are held by Washington. coincided with the emergence of the U.S. as the world’s dominant capitalist power, a situation which was reflected in the fact that U.S. dollars soon replaced the English pound as the main currency to transact international financial deals. In time, the IMF/World Bank and other closely related institutions such as the International Development Fund, came to deal primarily with requests from the developing world, whose economies were constantly being wrecked by crises brought on by the domination of foreign corporations on these economies and the inequitable trade terms for their exports on the world markets. Washington Dominated Both the bureaucracies of the IMF and the World Bank were from the beginning dominated by such Western govern- ments as the United States. The majority of votes on the IMF’s 22 member central decision making body, the executive board, are for example held by Washing- ton. Interestingly, although certain socialist states like Poland are. members of the IMF, they have little voting power on the decision-making bodies. Said Bernard Coard, Grenada’s Fi- nance Minister at his press conference, ‘*There must be a greater say by develop- ing countries in how things are run’. Minister Coard, who led the delegation from the Eastern Caribbean nation, said that the Grenada team also called for- more attention be paid by the present bureaucracy to the needs of small island states and land locked developing coun- tries. He described as ‘‘positive and important’ the inclusion of a paragraph in the report of the Development Com- mittee which recognized this necessity. ‘‘The Group of 24’’, a coalition of Third World countries at the annual meeting, also urged that a study on this topic be undertaken at future IMF/World Bank meetings. Among the over 7,000 delegates and at — this year’s meeting were several rep- resentatives from the commercial banks. There are those who argue that the origi- nal functions of the Fund, i.e., to inter- vene and correct financial mismanage- ment, has declined over the years despite the overall increase in funds loaned. Economist Kari Levitt says that the Fund now serves as an overseer for international banks including the major Canadian chartered banks which earn on their offshore operations a rate of profit almost one-third higher than at home. According to Levitt, the IMF is not now ‘‘an enormously powerful manager of the world financial system’’, although of course it still wields considerable weight. Interestingly, even Brazil’s Fr nance Minister Galveas is reported 10 have gone so far as to contrast the -“tesponsible performance”’ of the banks with the diminished status of the Fund. “The fact of the matter is that the IMF does not have anywhere near the re sources required to meet the present crisis,” said Tanzania’s Jamal. ‘‘The | primary concern of the. powers-that-be seems to be to ensure that the banking | system is not destabilized,’’ he added. — Taxpayers Cushion Banks Unlike the situation at home, whet things go wrong in the international aren@ the IMF (in effect, the taxpayers) pays the bill, not the banks themselves. — Meanwhile, according to the Financial Times, the major Canadian banks, which dominate. the banking sector in the | Caribbean and indeed are among thé | world’s largest international lenders, ré- port continued profits. ; The retrogressive influence of the pr vate banks on the monetary aid programs to the developing world, and indeed of the economy of the home country wheré the banks operate, have prompted calls by trade unions and progressive political organizations that the banks bé nationalized and run in the interests 0° | the working people. The recent takeover of the Mexicali banks by that country’s government was hailed by economist Levitt as significant. She said that had Jamaican Prime Min- ister Michael Manley dealt more firmly with the local and foreign-owned banks in his country during the economic trou bles which eventually brought down his progressive government in late 1980, things may have been different in that Caribbean island today. While praising — _the reforms carried out by Manley’s so-_ cial democratic People’s National Party; Levitt said that the Manley administra: tion acted in an ‘‘incredibly naive fash ion’’ in its dealings with the the banking sector. Levitt, who once taught at the Jamaican campus of the University 0 the West Indies, said that Manley should have “‘locked it (the banking sector) down”’ in 1974 before the IMF could do any more mischief. In praising the actions of the Portillo government in Mexico with regard to thé takeover of the banks, Levitt said: ‘‘Thé Fund will not now be able to squeeze an dictate (to the developing world) in such a hard fashion’’.