Many developing nations are in debt and poverty partly due to the policies of international institutions such as the International Monetary Fund (IMF) and the World Bank.
Their programs have been heavily criticized for many years for resulting in poverty. In addition, for developing or third world countries, there has been an increased dependency on the richer nations. This is despite the IMF and World Bank’s claim that they will reduce poverty.
Following an ideology known as neoliberalism, and spearheaded by these and other institutions known as the “Washington Consensus” (for being based in Washington D.C.), Structural Adjustment Policies (SAPs) have been imposed to ensure debt repayment and economic restructuring. But the way it has happened has required poor countries to reduce spending on things like health, education and development, while debt repayment and other economic policies have been made the priority. In effect, the IMF and World Bank have demanded that poor nations lower the standard of living of their people.
Structural Adjustment—a Major Cause of Poverty
(via janedoe225)
In my opinion this description of “structural adjustment programs” is far too benign. In fact, they are explicitly used as tools of neocolonialism. The “debts” which are incurred by Third World countries are largely the result of corporate profiteering enabled by puppet dictators, so they’re not even owed by those countries in the first place; that money already got plundered, and now the IMF comes in to make poor countries pay it again with impossibly exorbitant interest. In many countries in Africa, Asia, South America, a majority of economic output goes into servicing those “debts”, so there is no way to emerge from debt and poverty. That’s the purpose of SAPs: to keep a boot heel on the throat of the poor. This is a major component of what I refer to “financialized neocolonialism”.
(via zuky)
