Nasar Ali-Khan | Pambazuka News

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Feb 28, 2002

Economic nobel prize winner - World Bank's former chief economist Joseph Stiglitz - has explained the hidden agendas and plans of IMF and World Bank. He points out that there are always 4 steps to suck all the resources out of a country.

Here are the four steps... (details with examples are down below)

Step 1 - Privatization (or briberization) causing depression and starvation in the population.

Step 2 - The coming up with One-size-fits-all economy rescue plan. Deregulate Capital Markets of that country so that capital can easily flow in and (more importantly) out of that country. Then IMF asking 30% or 50% interest rates for money to flow back in.

Step 3 - Market-based pricing, increasing price on Water, food and cooking gas which causes 'IMF riots' in that country. Resulting in government bankruptcies and selling the remaining assets of that country at fire-sale prices to foreign investors. IMF then interferes and "BAIL-OUT" local banks and financiers. At the same time, IMF and World Bank orders that country to divert aid money to its reserve account at the US Treasury, which pays a pitiful 4% return, while that country has borrowed US Dollars at 10% or 15%. At this point: the clear winner is US Treasury and Western Banks.

Step 4 - 'Povery Reduction Strategy': Forcing Free Trade according to the rules of WTO - including intellectual property rights helping international corporations By the way, don't be confused by the mix in this discussion of the IMF, World Bank and WTO. They are interchangeable masks of a single governance system. They have locked themselves together by what are unpleasantly called, "triggers." Taking a World Bank loan for a school 'triggers' a requirement to accept every 'conditionality' - they average 111 per nation - laid down by both the World Bank and IMF. In fact, said Stiglitz the IMF requires nations to accept trade policies more punitive than the official WTO rules.

Economic nobel prize winner - World Bank's former chief economist Joseph
Stiglitz - has explained the hidden agendas and plans of IMF and World
Bank. He points out that there are always 4 steps to suck all the
resources out of a country.

Here are the four steps... (details with examples are down below)

Step 1 - Privatization (or briberization)
causing depression and starvation in the population

Step 2 - The coming up with One-size-fits-all economy rescue plan.
Deregulate Capital Markets of that country so that capital
can easily flow in and (more importantly) out of that country.
Then IMF asking 30% or 50% interest rates for money to flow
back in.

Step 3 - Market-based pricing, increasing price on Water, food
and cooking gas which causes 'IMF riots' in that country.
Resulting in government bankruptcies and selling the
remaining assets of that country at fire-sale prices
to foreign investors. IMF then interferes and "BAIL-OUT"
local banks and financiers. At the same time, IMF and
World Bank orders that country to divert aid money to
its reserve account at the US Treasury, which pays a
pitiful 4% return, while that country has borrowed US
Dollars at 10% or 15%.
At this point: the clear winner is US Treasury and Western Banks.

Step 4 - 'Povery Reduction Strategy':
Forcing Free Trade according to the rules of WTO - including
intellectual property rights helping international corporations

By the way, don't be confused by the mix in this discussion of the IMF,
World Bank and WTO. They are interchangeable masks of a single governance
system. They have locked themselves together by what are unpleasantly
called, "triggers." Taking a World Bank loan for a school 'triggers' a
requirement to accept every 'conditionality' - they average 111 per nation
- laid down by both the World Bank and IMF. In fact, said Stiglitz the IMF
requires nations to accept trade policies more punitive than the official
WTO rules.

Here are the details with examples...

-----------------------------------------------------------------------

WINNER OF THE NOBEL PRIZE IN ECONOMICS
Joseph Stiglitz was Chief Economist of the World Bank

The World Bank's former Chief Economist's accusations are eye-popping...

http://www.GregPalast.com
by Greg Palast
The Observer, London
October 10, 2001

"It has condemned people to death," the former apparatchik told me. This
was like a scene out of Le Carre. The brilliant old agent comes in from
then cold, crosses to our side, and in hours of debriefing, empties his
memory of horrors committed in the name of a political ideology he now
realizes has gone rotten.

And here before me was a far bigger catch than some used Cold War spy.
Joseph Stiglitz was Chief Economist of the World Bank. To a great extent,
the new world economic order was his theory come to life.

I "debriefed" Stigltiz over several days, at Cambridge University, in a
London hotel and finally in Washington in April 2001 during the big confab
of the World Bank and the International Monetary Fund. But instead of
chairing the meetings of ministers and central bankers, Stiglitz was kept
exiled safely behind the blue police cordons,the same as the nuns carrying
a large wooden cross, the Bolivian union leaders, the parents of AIDS
victims and the other 'anti-globalization' protesters.The ultimate insider
was now on the outside.

In 1999 the World Bank fired Stiglitz. He was not allowed quiet
retirement;
US Treasury Secretary Larry Summers, I'm told, demanded a public
excommunication for Stiglitz' having expressed his first mild dissent from
globalization World Bank style.

Here in Washington we completed the last of several hours of exclusive
interviews for The Observer and BBC TV's Newsnight about the real, often
hidden, workings of the IMF, World Bank, and the bank's 51% owner, the US
Treasury.

And here, from sources unnamable (not Stiglitz), we obtained a cache of
documents marked, "confidential," "restricted," and "not otherwise (to be)
disclosed without World Bank authorization."

Stiglitz helped translate one from bureaucratise, a "Country Assistance
Strategy." There's an Assistance Strategy for every poorer nation,
designed, says the World Bank, after careful in-country investigation. But
according to insider Stiglitz,the Bank's staff 'investigation' consists of
close inspection of a nation's 5-star hotels. It concludes with the Bank
staff meeting some begging, busted finance minister who is handed a
'restructuring agreement' pre-drafted for his 'voluntary' signature
(I have a selection of these).

Each nation's economy is individually analyzed, then, says Stiglitz, the
Bank hands every minister the same exact four-step program.

S T E P I
---------
Step One is Privatization - which Stiglitz said could more accurately be
called, 'Briberization.' Rather than object to the sell-offs of state
industries, he said national leaders - using the World Bank's demands to
silence local critics - happily flogged their electricity and water
companies. "You could see their eyes widen" at the prospect of 10%
commissions paid to Swiss bank accounts for simply shaving a few billion
off the sale price of national assets.

And the US government knew it, charges Stiglitz, at least in the case of
the biggest 'briberization' of all, the 1995 Russian sell-off. "The US
Treasury view was this was great as we wanted Yeltsin re-elected. We don't
care if it's a corrupt election. We want the money to go to Yeltzin" via
kick-backs for his campaign.

Stiglitz is no conspiracy nutter ranting about Black Helicopters. The man
was inside the game, a member of Bill Clinton's cabinet as Chairman of the
President's council of economic advisors.

Most ill-making for Stiglitz is that the US-backed oligarchs stripped
Russia's industrial assets, with the effect that the corruption scheme cut
national output nearly in half causing depression and starvation.

S T E P II
----------
After briberization, Step Two of the IMF/World Bank one-size-fits-all
rescue-your-economy plan is 'Capital Market Liberalization.' In theory,
capital market deregulation allows investment capital to flow in and out.
Unfortunately, as in Indonesia and Brazil, the money simply flowed out and
out. Stiglitz calls this the "Hot Money" cycle. Cash comes in for
speculation in real estate and currency, then flees at the first whiff of
trouble. A nation's reserves can drain in days, hours. And when that
happens, to seduce speculators into returning a nation's own capital
funds,
the IMF demands these nations raise interest rates to 30%, 50% and 80%.

"The result was predictable," said Stiglitz of the Hot Money tidal waves
in
Asia and Latin America. Higher interest rates demolished property values,
savaged industrial production and drained national treasuries.

S T E P III
-----------
At this point, the IMF drags the gasping nation to Step Three:
Market-Based
Pricing, a fancy term for raising prices on food, water and cooking gas.
This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls,
'The IMF riot.'

The IMF riot is painfully predictable. When a nation is, "down and out,
[the IMF] takes advantage and squeezes the last pound of blood out of
them.
They turn up the heat until, finally, the whole cauldron blows up," as
when
the IMF eliminated food and fuel subsidies for the poor in Indonesia in
1998. Indonesia exploded into riots, but there are other examples - the
Bolivian riots over water prices last year and this February, the riots in
Ecuador over the rise in cooking gas prices imposed by the World Bank.
You'd almost get the impression that the riot is written into the plan.

And it is. What Stiglitz did not know is that, while in the States, BBC
and
The Observer obtained several documents from inside the World Bank,
stamped
over with those pesky warnings, "confidential," "restricted," "not to be
disclosed." Let's get back to one: the "Interim Country Assistance
Strategy" for Ecuador, in it the Bank several times states - with cold
accuracy - that they expected their plans to spark, "social unrest," to
use
their bureaucratic term for a nation in flames.

That's not surprising. The secret report notes that the plan to make the
US
dollar Ecuador's currency has pushed 51% of the population below the
poverty line. The World Bank "Assistance" plan simply calls for facing
down
civil strife and suffering with, "political resolve" - and still higher
prices.

The IMF riots (and by riots I mean peaceful demonstrations dispersed by
bullets, tanks and teargas) cause new panicked flights of capital and
government bankruptcies. This economic arson has it's bright side - for
foreign corporations, who can then pick off remaining assets, such as the
odd mining concession or port, at fire sale prices.

Stiglitz notes that the IMF and World Bank are not heartless adherents to
market economics. At the same time the IMF stopped Indonesia 'subsidizing'
food purchases, "when the banks need a bail-out, intervention (in the
market) is welcome." The IMF scrounged up tens of billions of dollars to
save Indonesia's financiers and, by extension, the US and European banks
from which they had borrowed.

A pattern emerges. There are lots of losers in this system but one clear
winner: the Western banks and US Treasury, making the big bucks off this
crazy new international capital churn. Stiglitz told me about his unhappy
meeting, early in his World Bank tenure, with Ethopia's new president in
the nation's first democratic election. The World Bank and IMF had ordered
Ethiopia to divert aid money to its reserve account at the US Treasury,
which pays a pitiful 4% return, while the nation borrowed US dollars at
12%
to feed its population. The new president begged Stiglitz to let him use
the aid money to rebuild the nation. But no, the loot went straight off to
the US Treasury's vault in Washington.

S T E P 4
---------
Now we arrive at Step Four of what the IMF and World Bank call their
"poverty reduction strategy": Free Trade. This is free trade by the rules
of the World Trade Organization and World Bank, Stiglitz the insider
likens
free trade WTO-style to the Opium Wars. "That too was about opening
markets," he said. As in the 19th century, Europeans and Americans today
are kicking down the barriers to sales in Asia, Latin American and Africa,
while barricading our own markets against Third World agriculture.

In the Opium Wars, the West used military blockades to force open markets
for their unbalanced trade. Today, the World Bank can order a financial
blockade just as effective - and sometimes just as deadly.

Stiglitz is particularly emotional over the WTO's intellectual property
rights treaty (it goes by the acronym TRIPS, more on that in the next
chapters). It is here, says the economist, that the new global order has
"condemned people to death" by imposing impossible tariffs and tributes to
pay to pharmaceutical companies for branded medicines. "They don't care,"
said the professor of the corporations and bank loans he worked with, "if
people live or die."

By the way, don't be confused by the mix in this discussion of the IMF,
World Bank and WTO. They are interchangeable masks of a single governance

system. They have locked themselves together by what are unpleasantly
called, "triggers." Taking a World Bank loan for a school 'triggers' a
requirement to accept every 'conditionality' - they average 111 per nation
- laid down by both the World Bank and IMF. In fact, said Stiglitz the IMF
requires nations to accept trade policies more punitive than the official
WTO rules.

Stiglitz greatest concern is that World Bank plans, devised in secrecy and
driven by an absolutist ideology, are never open for discourse or dissent.
Despite the West's push for elections throughout the developing world, the
so-called Poverty Reduction Programs "undermine democracy."

And they don't work. Black Africa's productivity under the guiding hand of
IMF structural "assistance" has gone to hell in a handbag. Did any nation
avoid this fate? Yes, said Stiglitz, identifying Botswana. Their trick?
"They told the IMF to go packing."

So then I turned on Stiglitz. OK, Mr Smart-Guy Professor, how would you
help developing nations? Stiglitz proposed radical land reform, an attack
at the heart of "landlordism," on the usurious rents charged by the
propertied oligarchies worldwide, typically 50% of a tenant's crops. So I
had to ask the professor: as you were top economist at the World Bank, why
didn't the Bank follow your advice?

"If you challenge [land ownership], that would be a change in the power of
the elites. That's not high on their agenda." Apparently not.

Ultimately, what drove him to put his job on the line was the failure of
the banks and US Treasury to change course when confronted with the crises
- failures and suffering perpetrated by their four-step monetarist mambo.
Every time their free market solutions failed, the IMF simply demanded
more
free market policies.

"It's a little like the Middle Ages," the insider told me, "When the
patient died they would say, 'well, he stopped the bloodletting too soon,
he still had a little blood in him.'"

I took away from my talks with the professor that the solution to world
poverty and crisis is simple: remove the bloodsuckers.

----------------------------------

A version of this was first published as "The IMF's Four Steps to
Damnation" in The Observer (London) in April and another version in The
Big
Issue - that's the magazine that the homeless flog on platforms in the
London Underground. Big Issue offered equal space to the IMF, whose
"deputy
chief media officer" wrote:

"... I find it impossible to respond given the depth and breadth of
hearsay
and misinformation in [Palast's] report."

Of course it was difficult for the Deputy Chief to respond. The
information
(and documents) came from the unhappy lot inside his agency and the World
Bank.

.

--- A Nizami Nowadays, IMF gives "Aid" (read: debt) to many
countries that have monetary crisis, such as
Argentina, Mexico, Indonesia, etc. Most of the
monetary crisis that happen on those countries, caused
by Forex speculators that also IMF's members of honor,
such as George Soros and his friends in Quantum Fund.

In return to its aid, IMF will force those countries
to sell companies and government owned company in the
LOI (Letter of Intent) to support their national
expense, while continuing pay their debt with interest
to IMF. Of course the buyers will be from the IMF's
gang, though the bid is open and in a very cheap
price.

For example: the biggest bank in Indonesia, BCA that
has profit Rp 2,000,000,000,000,- (about USD
200,000,000,-) only sold for USD 500,000,000,- only.
BCA manages USD 10,000,000,000,- of its customer
money, and it could earn 17,5% per year from SBI
(obligation from Bank Indonesia).

Anyway, by privatization, which means selling
government owned companies (though the companies
making high profit) to IMF's member of honor that
mostly Jewish Conglomerates, it only makes the
countries weak. They don't have much money that used
to be given from the government owned company to
maintain the country. They have to depend on IMF and
its conglomerates.

Ergo, those countries, just like in USA, actually
controlled by IMF and its conglomerates. No one could
be the president without their support. It only make
the people suffer, because this government will set
the minimum wage according to IMF and its capitalists
favor.

The natural resources will be maintained by those
capitalists for their own benefit, not for the people.
The oilfield, the mining field, forestry, etc. Many of
those capitalists owned millions of hectares of land
for their mining or wood industry. For example,
Freeport own at least 5 million hectares as their
mining area in Papua, while many wood entrepreneurs
own millions of hectares in Kalimantan and Sumatera.
The native people could no longer work as farmers
since most of the land is already own by the
capitalists through the corrupt governments.

That is what happens now in many Islamic Countries.

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__________________________________________________
Do You Yahoo!?
Yahoo! Sports - Coverage of the 2002 Olympic Games
http://sports.yahoo.com

For business and financial news from the Arab-Islamic world
visit http://suhufonline.com
Updated round-the-clock

Visit ISLAMIC BUSINESS & FINANCE NETWORK
website at http://islamic-finance.net
& ISLAMIC BUSINESS & FINANCE NETVERSITY
website at http://netversity.org

Also visit these area-specific portals:
http://www.islamic-economy.com
http://www.islamic-accounting.com
http://www.islamic-insurance.com
http://www.islamic-microfinance.com
http://www.islamic-ethics.com
http://www.islamic-economics.com
http://www.islamic-exchange.com
http://www.riba-free-banking.com
http://www.islamicfiqh.com

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/

-----Original Message-----
From: Murtaza Jaffer
Sent: 22 February 2002 23:22
To: Shabbir AlidinaKampala; Prof. Hassanali; Nasrin Tejani; Murtaza
JafferTIMA; Munaver Dhanani; Mohamed Kassamali; Mohamed Jaffer Nakuru;
MHemani; [email protected]; Islamic Education Board; Husein Rashid;
Hassanain Jaffer; Hassan Jaffer; Hasnain Kassamali; Haider Jaffer;
Candle Light; Cassiem Khan; Bashir Tejani; Bashir Mugo; Asief Tejani;
Arif Suleiman; ABIDALI MOHAMEDALI; Abdi Mohamed Baffo; Abbas MullaAsgher
Jaffer
Subject: Fw: [ibfnet] IMF: Capitalists Tool to Invade the World.

----- Original Message -----
From: "Nasar Ali-Khan" To: Sent: Tuesday, February 19, 2002 3:43 AM
Subject: Re: [ibfnet] IMF: Capitalists Tool to Invade the World.