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Via Workers World News Service
Reprinted from the Oct. 17, 1996
issue of Workers World newspaper
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Beware of bankers bearing gifts

By John Catalinotto

It's bad enough when the bankers running the International Monetary Fund and the World Bank act like greedy usurers. When they start to behave charitably, hold on to your wallets.

On Sept. 29, representatives from the Group of Seven major imperialist powers approved a plan to ease the crushing debt that the world's poorest countries face. The richer countries are set to forgive about 25 percent of the debt to these 20 lands.

Here's the hitch. The 20 impoverished countries first have to adopt policies that encourage private enterprise and foreign investment. This means opening the door even wider to a takeover of the local economy by imperialist banks and corporations.

Most of the poor countries involved are in Africa or Latin America. They include Zaire, Zambia, Nicaragua, Bolivia, Madagascar, Tanzania and Uganda.

These countries have a total debt of $97 billion. They are unable to pay the interest on it.

Debt service kills babies

According to Oxfam-an international charity based in the imperialist countries-with its debt forgiven Uganda would save up to $80 million each year in debt-service payments over the next three years. If the Ugandan government uses the funds for social services, it could immunize a million children, provide health service for 2 million people and buy teaching material for 2 million primary-school pupils.

In other words, it's way past time for debt relief. The Ugandans were saddled for years with an impossible debt service. Meanwhile its population has gone without these vital services.

In the 1980s, imperialist banks poured hundreds of billions of dollars in loans into Third World countries. Since then, the IMF and World Bank have pressured these countries' governments to impose austerity programs.

These programs cut social services and decreased or eliminated subsidies for basic food products. The cuts increased malnutrition and decreased health care.

So IMF-World Bank policies are responsible for killing millions of children each year in the poorest countries.

By eliminating jobs and cutting living standards, the IMF-imposed austerity measures have also increased pressure to emigrate to the richer countries in Western Europe and North America. There it is still possible to earn a living- although it's increasingly more difficult, and these immigrants face a stepped-up racist campaign against them.

Privatizing the world

In the 1990s, the IMF and World Bank have stepped up pressure to privatize.

In Eastern Europe and the former USSR this means selling socialized property to private owners. In the Third World capitalist countries it means selling nationalized industries to private owners, often foreign-owned corporations and banks.

A striking example of the horrors of this IMF-sponsored privatization took place in India in 1991-1995.

The Indian government sold much of its nationalized industry-often at far less than market value-to private interests. It ended subsidies to food in its public distribution system, raising prices 85 percent in four years.

And it opened the Indian market to imperialist monopolies, including Kellogg's, McDonald's, Pepsico, Kentucky Fried Chicken and Pizza Hut.

Because of these policies, 125,000 jobs were lost in the public sector. India's 380 million poor have to spend even more for their already inadequate calorie intake. And replacing traditional Indian breakfast foods with Kellogg's products reduces nutrition while increasing costs. (Multinational Monitor, July/August 1995: "India: Open for Business")

The imperialist bankers may be forgiving some debts, but in doing so they are trying to tighten the chains on the debtors.

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