IMF: fighting back against austerity and unaccountability

The International Monetary Fund (IMF) is the financial hit man for world capitalism. It uses the power of the big western economies to dictate to the world. That is why we should do everything we can to make the protests against it in Prague in September huge, militant and effective.

When the IMF imposes its policies, the result is nearly always the same: lower wages, lay-offs, and, as economies fall into recession and desperation increases, fewer opportunities for workers to organise unions.
A recent study by the Development Group for Alternative Policies (DGAP) looked at 43 countries with IMF programmes over the period 1978-1995. Thirty-one countries, or 72 per cent, saw unemployment increase while they were receiving IMF loans.

Moreover, those who have jobs in countries under IMF stabilisation/adjustment programmes have seen their wages fall - according to the Inter-American Development Bank (IDB), the real minimum wage is lower today than in 1980 in 17 of the 19 nations with IMF programmes for which it has figures.

In Haiti a 1996 IMF loan required the government to institute a de facto wage cut for government employees. This was to be accomplished by freezing their wages for three years - a period during which inflation was expected to reach 30 per cent.

The IMF also insisted that the Haitian government to eliminate clauses in the country’s labour code that required a rise in the minimum wage if inflation exceeds 10 per cent.

In 1991, Zimbabwe entered into a structural adjustment programme with the IMF in exchange for a $484 million loan. The arrangement required Zimbabwe to dismantle protection for the manufacturing sector and "deregulate" the labour market, lower the minimum wage and eliminate certain guarantees of employment security. Between 1991-96, formal sector employment in manufacturing fell by 9 per cent and real wages declined by 26 per cent.

The purpose of these programmes is not to "reform" faltering economies or bring stability. It is to make every country in the world subordinate to the great powers, the USA, the UK and so on. It is to turn these countries into sources of vast profit for the multinationals.
The IMF must be stopped. The power of the working class can stop it. We must mobilise that power.

Workers have not sat back in the face of the IMF onslaught. They have fought back.

Throughout the last two decades hundreds of thousands of workers, unemployed and poor farmers have taken to the streets, taken strike action and blockaded parliaments in protest at the IMF inspired measures so eagerly implemented by the national rulers.

In Argentina workers held their biggest General Strike in 20 years on 9 June to block IMF-engineered austerity policies. Nearly 85 per cent of the 14 million working Argentines took part in the walk-out.

The strike was sparked by a 29 May announcement of new IMF sponsored spending cuts aimed at bailing out the rich while hitting the workers. Shortly after taking office last December, President De la Rua pushed through an unpopular tax rise and attacks on union rights.

Then in May the government cut the wages of public workers earning more than $1,000 a month by 12 to 15 percent to reduce budget spending by $590 million. The reductions aim to balance the budget by 2003 and meet IMF deficit targets set under a $7.2 billion IMF standby loan.

In Buenos Aires, many trains on the three suburban commuter railways were cancelled as rail workers heeded a call from the nation's largest union federation, CGT, for a nation-wide strike.

In Nigeria a five day General strike started on 9 June. President Obasanjo, who came to office a year ago when 15 years of military rule ended decided to end government petrol subsidies amounting to $1.94 billion a year.

He put up prices at the pumps by 50 per cent. The higher fuel price is part of Obasanjo's economic policy of deregulation and ending subsidies as demanded by the International Monetary Fund as a condition for a $1 billion standby loan it has agreed to make to Nigeria.

Following IMF policies is a condition for the IMF and USA to give backing for debt relief from $31 billion in foreign debt.

US Treasury Secretary Larry Summers said in July after the agreement was signed that US support for debt relief was linked to Nigeria making "significant progress on meaningful economic and financial reforms...under appropriate arrangements with the IMF and the World Bank."

Workers were incensed as they see cheap gasoline and kerosene as the only tangible benefit from governments unable to deliver amenities such as water and electricity.

"We can't afford higher fuel prices'' said Adams Oshimole, president of the Nigeria Labor Congress. The NLC, a union federation, called for an indefinite strike to protest at the price hike, which increased the cost of gas from about 76 cents to $1.15 per gallon.

From day one of the strike protesting youth in Lagos barricaded roads and attacked commuter buses, halting traffic for several hours. Many people abandoned their vehicles and made their way on foot. Traffic was similarly paralysed in the southern cities of Abeokuta, Ibadan and Benin City.

Schools, offices and most banks were closed in major cities across Nigeria, Africa's most populous nation. Airports also shut down.
Trade union members barricaded the main office complex in the capital, Abuja, and refused to let people enter.

After five days the government said they were prepared to reduce the cost of gas to 95 cents per gallon: cut the increase in half, but they could not restore it to original levels. Eventually the NLC accepted this concession and the strike was called off.

Both of these examples show what can be done. They must be publicised and pointed to throughout the anti-capitalist movement as examples we must follow throughout the world.

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