Sunday, March 03, 2013

Kerry doing the IMF's work




2 March 2013
Hon. John Kerry, Secretary
U.S. Department of State
2201 C Street NW
Washington, DC  20520

RE:  Egypt and the IMF

Dear Mr.  Secretary,

To paraphrase a much younger John Kerry: How do you ask a people to be the latest people to suffer and die – for an IMF loan?

These were the stakes as you arrived in Cairo, Egypt this weekend.  Today, violent street protests continued with injuries, possibly deaths, in Cairo, Mansoura, and Port Said.  Tomorrow you are to meet with President Mohammad Morsi and according to numerous reports you will be pressing him to agree to the terms of a $4.8 billion loan through the International Monetary Fund.  The sterile jargon used to describe those terms obscures the real consequences for the people of Egypt.  Nonetheless, they understand what this means for them and that is why they are on the streets.  You are not being greeted as a liberator, Mr. Secretary. 

We know what “structural adjustments” do to the poor and working class of these countries.  In return for its loans, the IMF demands an end to “subsidies” that provide the basic necessities of life to those who cannot pay for them: food, water, and energy.  We have seen the affects of these policies on public health and local economies: the spread of disease and price inflation, to say nothing of the costs of the riots that break out when people’s lives are threatened – the kind of unrest taking place in Egypt right now.  “Non-productive” budget expenditures, such as infrastructure and humanitarian programs, are cut in order to show balanced budgets.  Even measures such as federal minimum wages must be repealed, harming working people’s interests in deference to the IMF’s preference for liberalized markets and competition by multinational corporations.  We have seen local currencies devalued in order to make these countries more “competitive” by offering cheaper exports; for the same reason, we have seen customs barriers cut, to the detriment of local workers and industries as subsidized foreign products enter the market and outcompete local producers. 

I will not belabor my point as I am sure you are familiar with the terms the IMF demands for its loans.  We understand that the IMF is not an altruistic organization working on behalf of the struggling classes of developing nations.  It works on behalf of the international finance system, in particular the interests of globalized competitive capitalism. 

Today I think about that young man who testified beforethe Fulbright Committee in 1971 and spoke truth to power.  Now you are Secretary of State and on your first mission to the Arab world, you do so as an envoy of neoliberal capitalism.  The man who once convicted himself for participating in the destruction of civilian lives during warfare now presses nations to adopt policies that will harm people who are starving and weak. 

I think about that young man and I wonder if this is the work he envisioned himself doing in the world. 

With compassion,






[Image:  Kerry fulfilling the Bretton Woods mission, with the Egyptian president.  Khaled Desouki/AFP/Getty Images]

1 comment:

Ji Hyang said...

Agree. The IMF business model does not serve third world countries' people.