Chapter 57 3. The International Monetary Fund and the World Bank

They will say that the IMF is very arrogant.They will say that the IMF has never really listened to the developing countries it is trying to help.They will say that the IMF's decision-making is secretive and undemocratic.They will say that the IMF's economic therapy has often made the problem worse—slowness to depression, depression to recession.They were right.I served as the chief economist of the World Bank from 1996 to September (2000), and experienced the most serious world economic crisis in half a century (Asian financial crisis, Latin American and Russian financial crisis).I have witnessed first-hand the response of the IMF and the US Treasury to this crisis, and I have been stunned.

Stiglitz, the former chief economist of the World Bank, as the chief economist of the World Bank, published this report against the two largest international financial institutions a week before the 2000 annual meeting of the World Bank and the IMF. He was immediately forced to retire by World Bank President Wolfensohn.In fact, it was not Wolfensohn who fired Stiglitz, but Secretary Summers of the U.S. Treasury Department. The U.S. Treasury Department owns 17% of the shares of the World Bank, has the power to appoint and remove the president of the World Bank, and has one vote to veto power and de facto control over the operations of the World Bank.Summers was so tired of Stiglitz that he couldn't bear it. He didn't even want to force Stiglitz to retire silently, but must use the extreme form of driving away to humiliate Stiglitz.

Stiglitz won the Nobel Prize in Economics in 2001, Stiglitz also served as President Clinton's chief economic adviser. The problem is not that Stiglitz's economics level is not enough, but that his political stance is problematic, mainly because of his negative attitude towards globalization, which international bankers are particularly enthusiastic about.His evaluation and opinions on these two international financial institutions are of course based on a large amount of first-hand information, but what he did not expect at all is that creating and exploiting these problems is the mission of these two financial institutions.

Stiglitz does not believe in conspiracy theories at all. Similarly, most economists and staff working at the World Bank and IMF, including those from China, do not agree that there is any conspiracy theory in their work. conspiracy.In fact, from an operational point of view, all work is completely scientific and rigorous, every data has a source, every algorithm has scientific analysis, and every plan has a successful case. If we talk about their daily work There is a conspiracy in it, it is indeed wronged, and anyone who uses the same mathematical model and method will come to roughly the same conclusion.

This is the brilliance of master design!The details and operations are completely transparent and scientific, almost impeccable, but the real conspiracy lies at the policy level.A classic case is that the economic transformation effects of Poland and the former Soviet Union are quite different. Harvard professor Jeffrey.Sachs, Soros and former Federal Reserve Chairman Paul.Volcker, vice president of Citibank Annuo.Rudin, together concocted Oscillatory Therapy.Soros himself sums up the therapy this way: I take into account the need to show that changes in the political system lead to economic improvements.Poland is one place to try.I have prepared a broad set of economic reform measures, which includes three components: monetary tightening, structural adjustment and debt restructuring.I think it is better to accomplish all three goals at the same time than individually.I advocate a macroeconomic debt-for-equity swap.

As a result, the U.S. Department of the Treasury and international bankers provided substantial financial support during the implementation of the Polish oscillatory therapy. With the large amount of money transfused, the Polish oscillatory therapy achieved great results. After the polar bear was put on the operating table by the economic doctors and disemboweled for a while, the aid from the United States and the financial blood transfusion promised by the international bankers came to an abrupt end, and the fate of the patient can be imagined.No wonder Professor Sachs yelled for being wronged. The successful operation, which was verified by the Polish case, had an accident, and the polar bear patient died.

In fact, the success of Polish oscillatory therapy was originally a trick. This kind of conspiracy at the policy level is beyond the comprehension of Professors Sachs and Stiglitz at the operational level. At the beginning of the design of the Bretton system, the establishment of these two financial institutions was to establish the hegemony of the US dollar as a world currency.The ideal of international bankers to abolish the gold standard is divided into three steps. After Roosevelt abolished the traditional gold standard system in 1933, the direct exchange relationship between gold and the US dollar was replaced by the indirect exchange of gold, completing the first abolition of gold. step.In the international circulation market, foreign dollar holders can still convert dollars into gold.The Bretton system went a step further, replacing gold with gold indirect exchange with US dollar exchange, that is, the currencies of various countries are linked to the US dollar, and the US dollar is linked to gold. Only foreign central banks can exchange US dollars for gold, and gold is further squeezed out of currency circulation. The realm, henceforth, completed the second step by abolishing gold.

Both the IMF and the World Bank are actually controlled by the United States, and the IMF is dominated by Europeans. In order to prevent the situation from getting out of control, the U.S. Department of the Treasury has designed provisions that require more than 85% of the votes in favor of many major issues to be implemented. This is equivalent to giving the US Treasury (17% voting power) a veto.In the World Bank, since the U.S. Department of the Treasury selects the president, and only in rare cases does it set the threshold of 85% of votes in favor of the president, in order to improve efficiency.This is the level gap between playing policy design and being limited to operational procedures.

Keynes, the chief architect of the Bretton system, also conceived a more brilliant concept: special drawing rights to build the future world currency framework. There is a physical shortage of gold.This is an unprecedented invention in human history. It is artificially stipulated that a certain paper currency will never depreciate, which is equivalent to gold, but it can never be exchanged for gold.This concept was grandly launched in 1969 when the serious gold payment crisis occurred in the United States, but it still failed to save the collapse of the international commitment of the dollar-gold exchange relationship.After the disintegration of the Bretton system, the special drawing right was redefined and linked to a basket of currencies.So far, this world currency, conceived by Keynes in the 1940s, has not been used much.

When Nexen announced the suspension of the relationship between gold and the U.S. dollar in 1971, the historical missions of the IMF and the World Bank had actually come to an end, but international bankers quickly found a new position for them: to help developing countries carry out global change. Before Stiglitz was fired, he obtained a large number of confidential files from the World Bank and the IMF.These documents show that the IMF requires countries receiving emergency aid to sign as many as 111 secret clauses, including the sale of core assets of the recipient country: tap water, electricity, natural gas, railways, telecommunications, oil, banks, etc.; Countries must take extremely destructive economic measures; open bank accounts in Swiss banks for politicians in recipient countries and secretly pay billions of dollars in return.If the politicians of these recipient countries reject these conditions, they will no longer be able to borrow emergency loans in the international financial market.That's why international bankers have been furious lately over China's no-strings-attached loans to Third World countries, offering them a new option.

Stiglitz reveals that all countries have the same type of prescription waiting for them: First vice: privatization.More precisely, bribery.As long as the leaders of the recipient countries agree to sell state-owned assets at a low price, they will get a 10% commission, all paid to a secret account in a Swiss bank.In Stiglitz's words you'll see their eyes go wide, and that's going to be billions of dollars!When the largest bribe in history took place during the privatization of Russia in 1995, the US Treasury thought it was great because we needed Yeltsin elected.We don't care if it's a corrupt election.We want the money to flow to Yeltsin. Stiglitz is not a conspiracy theorist, he is just an upstanding academic who, as an economist, with conscience and conscience, sees Russia's economic output nearly halved and the country plunged into a deep recession due to unprecedented corruption. His sense of justice made him very cold about the dirty tricks of the World Bank and the US Treasury Department. The second drug: capital market liberalization.In theory, capital liberalization means that capital flows in and out freely.However, the actual situation of the Asian financial turmoil and the Brazilian financial crisis is that the free inflow of capital stirs up real estate, stock and foreign exchange markets.When a crisis comes, capital just flows out freely, and then flows out again. The speculative capital that Stiglitz calls hot money is always the first to flee, and the foreign exchange reserves of the affected countries are absorbed within a few days or even hours. Dry. The conditions for the IMF’s rescue include tightening monetary policy and raising interest rates to absurd levels of 30%, 50%, and 80%. Such high interest rates will only ruthlessly destroy real estate values, destroy industrial production capacity, and drain society’s years of accumulation. wealth. Tertiary Drugs: Market Pricing.When the half-dead disaster-stricken countries were dragged to this stage by the IMF, the IMF also proposed to increase the prices of food, drinking water, natural gas and other daily necessities for ordinary people.In 1998, large-scale riots broke out in Indonesia because the IMF cut food and fuel subsidies.Citizens riot in Bolivia over rising water prices.Ecuador sparked social unrest over soaring gas prices.And all of this has long been calculated by international bankers. Using their terminology, this is called social unrest.And this kind of social turmoil has a very good effect, that is, funds flee like frightened birds, leaving a piece of extremely cheap assets waiting for the bloody mouth of international bankers who have long coveted. When Ethiopia's first democratically elected president received aid from the World Bank and the IMF in a crisis, he was forced to deposit the aid in his account with the US Treasury and received a meager 4% Interest, while at the same time having to borrow from international bankers at a usury rate of 12% to feed the starving people.When the new president begged Stiglitz to use the aid funds from the World Bank and IMF for disaster relief, Stiglitz could only refuse his request.This is a cruel test of human conscience, and Stiglitz obviously cannot bear such torture. Fourth Vice: Poverty Reduction Strategies: Free Trade.Under such circumstances, Stiglitz compared the WTO's free trade clauses to the Opium War.Stiglitz is particularly outraged by the IP clause, paying such high IP tariffs for branded drugs produced by pharmaceutical factories in Western countries is tantamount to cursing the local people to death, they (Western pharmaceutical companies) don't care about the people life and death. In Stiglitz's view, the IMF, the World Bank and the WTO are all different brands outside the same institution. IMF's harsh conditions for market opening even exceed the official WTO. "Confessions of an Economic Assassin", published in 2004, added brilliant footnotes to Stiglitz's views from the perspective of practitioners. The author of the book John.Based on his own personal experience, Perkins vividly and meticulously describes the beginning and end of the undeclared secret financial war waged by international bankers against developing countries.As the person concerned, the author was recruited by the National Security Agency, the largest spy agency in the United States, in the late 1960s. After a series of tests, the author was considered a very suitable candidate for an economic assassin.In order to prevent his identity from being exposed, the author was sent by an internationally renowned engineering company as the chief economist to various countries in the world to work as an economic assassin. Once the author's plan was exposed, since he had no official background at all, the country concerned could only blame private individuals corporate greed.The author's job is to lobby developing countries to borrow a lot from the World Bank, the debt is much higher than the actual demand, so as to ensure that the debt will not be repaid.In order to let those in power taste the sweetness, hundreds of millions of dollars in bribes are paid in cash at any time.When the debts cannot be repaid, the World Bank and the IMF, on behalf of international bankers, demand the bloody pound owed. The condition is to sell important national assets, such as water supply systems, natural gas, electricity, transportation, communications and other industries. If the economic assassins don't work, then the CIA jackals are sent to assassinate the country's leaders. If the jackals also fail, the military machine is used to start the war. In 1971, the author was sent to Indonesia and successfully completed the task of economic assassin, which led to Indonesia's serious debt.Later, the author went to Saudi Arabia and personally managed the plan to return petrodollars to the United States, which contributed a lot to Kissinger's successful lobbying of Saudi Arabia and the separation of OPEC.Later, the author went to Iran, Panama, Ecuador, Venezuela and other countries, and made outstanding achievements repeatedly.When the September 11 incident in 2001 made the author painfully feel that the United States was hated by the world because of the excellent work of a group of economic assassins like him, the author finally decided to tell the truth.No major publishing house in New York dared to publish his autobiography because the content in the book was too explosive.The fact that he wrote the book quickly spread in circles, and a well-known international company hired him to sit on the bench with a high salary on the condition that he would not publish the book, which was regarded as a legal bribe.When the author published the book in 2004 under the risk and pressure, it became the best-selling novel in the United States almost overnight.The reason for choosing the novel form is also out of necessity. The publishing house is worried that if it appears in the form of a documentary, it will inevitably cause unwarranted disasters.