The International Monetary Fund (IMF) made an embarrassing error just two days before the start of the Libyan people's revolution on February 17. This quote from an IMF country study appeared in a previous article: "The outlook for Libya's economy remains favorable." IMF Feb 15 This advice was 180 degrees off target. The Libyan economy has ceased functioning as protests and popular demands imploded the Gaddafi regime. (Image)
Further investigation unearthed a specific pattern of positive IMF endorsements for each of the nations experiencing popular uprisings that are sweeping the region. When the IMF blesses a nation's progress for conforming to the economic policies underlying globalism, watch out! There is a popular rebellion in the wings.
The Allied powers created the IMF in 1944 as a "cooperative institution that seeks to maintain an orderly system of payments and receipts between nations." The original entity was known as the Bretton Woods Agreement. The US dollar, tied to gold, became the standard for international trade. The agreement claimed to promote open global trade and economic liberalization through IMF loans to nations to increase the volume of global trade, i.e. globalization. The US has led the organization since its inception. In 1971, President Nixon removed the gold standard for the US dollar. Shortly after Nixon's move, members developed their own exchange arrangements in the context of IMF goals.
There are numerous criticisms of the IMF on the left and right. The continued impoverishment of participating nations that were supposed to grow economically is the baseline critique. IMF does not seem to help much, unless one considers debt-laden governments a sign of progress. In essence, the loan program moves in to shore up nations devastated in the various shocks to the world economy from oil price increases, financial crises, etc., and, ironically, problems from following IMF recommendations. For the masses, the IMF is like the corner man for beaten down fighter who refuses to throw in the towel. For the autocrats in charge, it is a regenerating pot of cash at the end of the rainbow.
IMF Scorecard in North Africa and the Middle East
IMF was wrong on Libya, as we have seen. On the date of their report, February 15, "the outlook for Libya's economy" was anything but favorable. The nation was two days away from the current people's revolution, which devastated the economy.
IMF said the following of Egypt before its revolution:
government's FY2009/10 fiscal deficit target of 8.4 percent of GDP is
expected to be met on the strength of careful fiscal management. If
revenues perform better than expected as a result of strengthening
activity, it would be prudent to save these." February 10, 2010
As though torture, political suppression, severe anti union policies, and the mass of people seeing their income buy less and less made no difference, IMF was bullish on Egypt.
IMF was also high on Tunisia just before that revolution took place:
Directors noted that Tunisia weathered the global crisis well, largely
reflecting its sound macroeconomic management and structural reforms
over the last decade, and timely policy responses since the onset of the
crisis. " Amid continued uncertainties for the external environment,
they [IMF Directors] emphasized the need to maintain macroeconomic
policies that support the recovery and to intensify structural reforms
that would enhance competitiveness, diversify exports, and promote job
creation." September 1, 2010
Weeks before the great Tunisian uprising, IMF says that Tunisia came through the global recession and emerged on a sound footing. This point was missed by the Tunisian people. Inspired by a street vendor who chose to self-immolate rather than endure any more of the regular indignities by the state bureaucracy, Tunisians went to the streets demanding the removal of the government. They chased off their dictator but resistance remains as strong for those who oppose reform. The "structural reforms that would enhance competitiveness" were not for the majority. They benefited the despot, former dictator Ben Ali, and his cronies.
Yemen, on the southern border of Saudi Arabia, is the perfect client state for IMF assistance. Due to a decline in oil revenue s, the nation faced serious economic challenges. IMF moved in to offer advice, which entailed reducing fuel subsidies; tightening tax code enforcement; and, "containing nonessential current expenditures."