Criticism of the International Monetary Fund

The International Monetary Fund is strongly criticized by the anti-globalization movement and by some illustrious economists, such as the Nobel Prize winner Joseph Stiglitz, who accuse it of being an institution manipulated by the economic and political powers of the so-called North of the world and of worsening the conditions of poor countries rather than working for the general interest.

The voting system, which clearly favors “Western” countries, is considered by many to be unfair and undemocratic. The IMF is accused of taking its decisions in a non-transparent manner and of imposing them on democratically elected governments who thus find themselves losing sovereignty over their economic policies.

In his book Globalization and Its Discontents (Globalization and its opponents Einaudi, Turin) published in 2002, and in a series of interviews and articles, Joseph Stiglitz, who recently resigned from the vice-presidency of the World Bank, accuses the Monetary Fund of having imposed all countries a standardized “recipe”, based on a simplistic economic theory, which has aggravated economic difficulties rather than alleviated them.

Stiglitz provides a detailed series of examples, such as the Asian Financial Crisis and the transition from planned economy to capitalism in Russia and the former communist countries of Eastern Europe: IMF loans in these countries served to repay Western creditors, rather than helping their economies. Furthermore, the IMF supported those in ex-communist countries who advocated rapid privatization, which in the absence of the necessary institutions harmed citizens and lined the pockets of corrupt politicians and dishonest businessmen. Stiglitz observes that the best results in terms of transition have been achieved precisely by those countries, such as Poland and China, who did not follow the indications of the IMF, while in Asia the economic model that has allowed massive growth in the economy of many countries is based on strong state intervention, rather than privatization.

Stiglitz also underlines the links of many IMF managers with large American financial groups and their arrogant attitude towards Third World politicians and elites, comparing them to the colonialists of the late 19th century who were convinced that their domination was the only opportunity of progress for “savage” peoples.

In the 1980s the International Monetary Fund, together with the World Bank, tried to promote industrialization in sub-Saharan Africa, sometimes achieving good results, often failing. In fact, in Senegal the neoliberal policies of eliminating customs protectionism have contributed to the disappearance of entire industrial sectors.

Criticism of the IMF found further ammunition when in 2001 Argentina, a country that IMF bureaucrats considered “the model student”, suffered a terrible economic crisis. The IMF was accused of having contributed to it with its indications or at least of having done nothing to prevent it. (from Wilkipedia)