IMF and World Bank - Rascist organizations

The International Monetary Fund and the World Trade Organization promised that more trade would help to eradicate poverty and hunger. Food crops? Self-sufficiency in food? They had a better idea. Local farms would be closed down or encouraged to concentrate on exports. This would make the most, not of natural conditions which might be good for growing tomatoes in Mexico or pineapples in the Philippines, but of the fact that production costs are lower in Mexico and the Philippines than they are in Florida or California.

Farmers in Mali would rely on more highly mechanised, more productive producers in the Beauce or the Midwest for grain supplies. The farmers would pack up, move into town and get jobs in some western firm that had relocated to take advantage of cheaper labour than it could find at home. The countries on the East African seaboard would lighten their load of foreign debt by selling their fishing rights to the factory ships of wealthier countries. The Guineans would import tinned fish from Denmark or Portugal. Never mind the additional pollution generated by transporting all these goods. A life of bliss was guaranteed and so were the profits of the middlemen – wholesalers, shippers, insurers, advertisers.

The World Bank, prime promoter of this “development” model, now tells us that there may be food riots in 33 countries. And the WTO fears a resurgence of protectionism: some food-exporting countries – India, Vietnam, Egypt, Kazakhstan – have decided to reduce exports in order to feed their own people. What a nerve! The North is easily upset by other people’s selfishness. The Chinese eat too much meat, that’s why the Egyptians are short of wheat.

Some states have followed the World Bank and IMF advice and turned over their food crops. They can no longer keep their produce for themselves. Well, they will pay, that’s the law of the market. According to UN Food and Agriculture Organisation figures, their bill for grain imports has risen by a massive 56% in one year. Naturally the World Food Programme (WFP), which feeds 73 million people in 78 countries every year, is asking for a further $500m.

Someone must have decided this was excessive, as it got only half that amount. But the sum it sought was only what the war in Iraq costs every couple of hours, and a tiny fraction of what the sub-prime mortgage crisis will cost the banking sector, which has been bailed out by the state. To look at it another way, the WFP asked on behalf of millions of starving people for 13.5% of the sum earned last year by John Paulson, the astute hedge fund manager who realised that thousands of Americans are in negative equity and face ruin. No one knows how much the incipient famine will yield or who will reap the profits, but nothing is ever lost in a modern economy.

History repeats itself, one speculation after another. The Federal Reserve’s monetary policy encourages debt, first the internet bubble, now the real estate bubble. In 2006 the IMF was still saying there was “every indication the mechanisms for granting loans on the US property market were still relatively effective”. Market effective. Perhaps the two words should be welded together once and for all. The real estate bubble has burst. So the speculators are resurrecting an old eldorado: the grain markets. Purchasing contracts to deliver wheat or rice at a future date and counting on selling them at a higher price. And what ensures prices will keep on rising? Famine.

So what does the IMF do? The IMF, which has “the best economists in the world” according to its managing director, explains that “one way to solve the problem of famine is to increase international trade”. The poet Leo Ferré once said that “all you need to sell despair is the right formula”. It looks as though they’ve found it.