The IMF, Structural Adjustment and Greece

The IMF and its boosters like to bill it as having 'seen the light.' Nowadays, we hear all about the IMF that has learned its lesson and is warm and cuddly. We are told that the IMF understands the importance of maintaining governance and government capacity. Why, we are even told they have a focus on poverty reduction. For a sterling example of this, you can see a discussion at enmasse.ca between me and several other posters going under the handles thwap, Rufus Polson, elmateo, Senor Magoo and A_J about the IMF, structural adjustment and whether or not Haiti should accept the loans offered by the IMF after the earthquake. You can read it here.

The notion that the IMF is not a heartless profit machine is, frankly, absurd. The conditions being imposed on Greece now prove this and put the lie to the notion that the IMF has changed from the cruel master of the 1980s and 1990s. All you have to do is look at the package of "austerity" measures that the Greek government (a quisling "Socialist Party" government at that) is trying to put through the parliament. The BBC has the details (see here and here), and the thing that is immediately noticeable is that the vast majority of the pain from these reforms is going to be felt by disadvantaged groups: the poor and the elderly.

In a crisis, the government needs to look to both its income and cost situation. Clearly, the IMF and the European Union are demanding action on the cost side of the ledger. But the government is doing almost all of its actions on this side, trying to cut expenditure without substantially increasing long term revenue. These measures don't even include a hike in income taxes, the most progressive way a government has of raising revenue. The government ought to be hiking taxes on its top income brackets to ease its balance of payments crisis, not cutting services and raising taxes that have disproportionate impacts on the poorest people in society. The government should also be raising taxes on banks and other corporations - the ones who actually caused the crisis. Instead, all there is is a one-off tax on profits and hikes in VAT (the Greek sales tax) and increased taxes on fuel, alcohol and tobacco. For the elderly, these cuts will be a double-whammy as they will see their pensions cut, and their costs rise.

The BBC also mentions privatization. Privatization is stupid at the best of economic times, killing the goose that lays the golden eggs. In times like these it would be a fire sale, giving away valuable state enterprises for pennies on the Euro. Privatization represents just another way of transferring capital accrued by the people in common to the owning class. Transferring control away from democratically accountable institutions like Parliament to the kleptomanic classes that caused this problem. But this is another hallmark of the reckless profit-lust of the IMF. It seems that in their view and Naomi Klein's words, the state should be nothing more than a conveyor belt moving public money to private interests.

The IMF remains the same villain it has been for decades. What is happening now shows no indication that the IMF cares a whit about reducing poverty, in fact these actions will without a shadow of a doubt increase poverty in Greece. The IMF cannot viably claim to be new, warm and fuzzy when it is pursuing policy options that could well have been tailored to cause more poverty and misery. The IMF should just admit that it is what it is, a shill for the global capitalist class, seeking to open countries to exploitation by capital.