panganai nzira.jpgBy Panganai Nzira

 

When a government is dependent upon bankers for money, they – and not the leaders of the government – control the situation, since the hand that gives is above the hand that takes.

 

Money has no motherland; financiers are without patriotism and without decency; their sole object is gain. This assertion is credited to Napoleon Bonaparte and his statement has been vindicated in the 21st Century as shown by the mission of many so-called international financial mediums.

 

A discussion with one researcher on the concept of aid and the fallacies associated with money lending was quite informative as it gave hindsight into the myth of aid.

 

He boldly stated that of the dollar that comes into a country as donor aid, a cool 80% will finds its way back to the donor, whilst a mere 20% is consumed by the recipient. This was indeed informative and entertaining in that it led me on a journey of being a hunter and gatherer, not of wild animals, but of wild and untamed conspiracies and of a matrix that would unravel the antics of capitalism and its attendant implementation arms.

 

A look at financial systems across the world will show that every country has a central bank also known as the reserve bank, whose mandate involves creating and enacting monetary policies. The central bank also has monopoly on note issue. It holds cash balances of the government free of interest and most importantly, is the lender of last resort.

 

In Zimbabwe, the Reserve Bank has the mandate to undertake the above mentioned roles. However, since the country is using a multi-currency system for domestic transactions that includes a range of foreign currencies such the United States dollar and the South African rand, the bank’s ability to control money supply is limited.

 

The Reserve Bank also looks after the country’s gold and other assets, and serves as advisor to the government and provides the government with daily banking services.

 

The Reserve Bank of Zimbabwe Act provides for a Board of Directors and a Governor. The Governor, assisted by three deputy governors, is responsible for the day-to-day administration and operations of the bank. The current Governor is Dr Gideon Gono.

 

In the United States of America, the nation’s central bank, the Federal Reserve, derives its authority from the US Congress. According to its website, it is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government.

 

It does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute.

 

Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as “independent within the government.”

 

In 1944 the International Monetary Fund was formed with a mission to form an expanded role of being an international financial counselor and advisor of fiscal and monetary policies of different countries. The IMF charter reads: “The IMF was created to promote international monetary co-operation; to facilitate the expansion and balanced growth of international trade; to promote exchange stability; to assist in the establishment of a multilateral system of payments; to make its general resources temporarily available to its members experiencing balance of payments difficulties under adequate safeguards; and to shorten the duration and lessen the

degree of disequilibrium in the international balances of payments of members.”

 

The IMF operates alongside the World Bank and like any other Cold War institution, the IMF is an organisation in search of a mission. One writer observed that it is more powerful, more controversial, more intrusive, more paternal, more coercive, more ubiquitous and more integrated with the US administration and other multilateral agencies and institutions than it has ever been. It has “invaded” the turf of other agencies and NGO’s and appropriated some private sector functions as well.

 

Thus the institution has self proclaimed itself to become a most sought after resource centre for what it terms sound fiscal and monetary advice such that it is now a global rating agency, technical training facility, development bank, research institute supervisory authority. One would then say it has exceeded its charter and mandate by bestowing upon itself super and supra-executive powers which  it then uses to dangle a carrot to compliant countries and create fertile ground for forces of global capitalism so that they extent their spheres of influence whilst building clientele and pliable regimes across the world.

 

The IMF is undoubtedly under undue political influence by the USA which underwrites a quarter of its budget and hosts its headquarters. That said and confirmed, is the IMF a genuine organ and to whose interests is it indebted? Can the African, Latin American and Asian economies feel secure by swallowing hook, line and sinker IMF prescriptions?

 

It is also true that the IMF is greatly concerned with its members’ ability to service their external debt and, therefore, with the debt’s size, sustainability, and sensitivity to fiscal and monetary policies. In this sense, the IMF is indeed the guardian of foreign creditors and their representative and enforcer. It so happens that most creditors are rich countries or banks and investors from the West.

 

In practice, the IMF and World Bank end up serving powerful interests of western countries. At both institutions, the voting power of a given country is not measured by, for example, population, but by how much capital that country contributes to the institutions and by other political factors reflecting the power the country wields in the world.

 

The G7 plays a dominant role in determining policy, with the US, France, Germany, Japan and Great Britain each having their own director on the institution’s executive board, while 19 other directors are elected by the rest of the approximately 150 member countries. The president of the World Bank is traditionally an American citizen and is chosen with US congressional involvement.

 

The managing director of the IMF is traditionally a European. On the IMF Board of Governors, comprised of treasury secretaries, the G7 have a combined voting power of 46%.

 

The power of the IMF becomes clear when a country gets into financial trouble and needs funds to make payments on private loans. Before the IMF grants a loan, it imposes conditions on that country, requiring it to make structural changes in its economy.

 

These conditions are called ‘Structural Adjustment Programs’ (SAPs) and are designed to increase money flow into the country by promoting exports so that the country can pay off its debts.

 

Not surprisingly, in view of the dominance of the G7 in IMF policy-making, the SAPs are highly neo-liberal. The effective power of the IMF is often larger than that associated with the size of its loans because private lenders often deem a country credit-worthy based on actions of the IMF.

 

Many developing nations are in debt and poverty partly due to the policies of international institutions such as the International Monetary Fund and the World Bank.

 

The crisis induced by these organisations provides good fodder for western corporate vultures. They involuntarily and voluntarily force governments to do away with any social protection policies and send many firms into bankruptcy. These businesses are then taken over by a small clique of leveraged buyout speculators and other powerful foreign economic interests. They purchase the businesses at rock bottom prices. This is called “Privatization through Liquidation.”

 

Susan George in her book, ‘A Fate Worse Than Debt’ sums it up when she says debt is an efficient tool. It ensures access to other peoples’ raw materials and infrastructure on the cheapest possible terms.

 

Thus it is quite ironic and indeed economic insanity for one Erich Bloch to write in his neoliberal inspired articles that  the IMF has a remarkable record for accurate assessments of economies, their future, and for giving good and sound advice. Maybe he is singing for his supper and you and I will be right to conclude that Erich Bloch is an agent of global capitalism and its result – the one-world government.

 

I am inclined to swallow the assertion by the researcher but I am still hungry and thirsty.

 

Indeed money has no motherland, financiers are without patriotism and without decency and their sole object is gain and Bloch is an accomplice in this.

 

Disclaimer:

The opinions expressed in this article are the author’s and do not necessarily represent those of the Zimbabwe Broadcasting Corporation.