If you don't know very much about the International Monetary Fund, you might think of it as another faceless bureaucracy among the many three-letter international agencies. Once you learn a little more about it, you start humanizing it. Perhaps something like J.P. Morgan: heavy, bald, thick-mustached and smoking cigars in the back room.
But if you really understand how the IMF works, you'll find it's best thought of as a slightly different heavy and bald man, one who breathes heavily and wears a saliva-soaked ring.
Like the Godfather, the IMF profits by extorting from and threatening the poor. As Conn Hallinan of The San Francisco Examiner explained, "what the IMF does is make you an offer you can't refuse."
When a country finds itself deeply indebted, the IMF makes emergency loans -- with conditions. The conditions, like those of any loan shark, are impossible to fulfill and often lead the country deeper into debt. Few countries have found themselves better off after an IMF "bailout."
In fact, the ones who get bailed out by the IMF are not the poor countries, but the wealthy. It's easy to see how this works if one follows the money. Taxes from people in wealthy countries (that's you) are given to the IMF, which loans the money to poor indebted countries, who use it to pay interest on their debts to the original investors in wealthy countries (that's probably not you).
So the IMF ensures that speculators never have to actually face the risks of making bad investments. As Michel Chossudovsky says, the IMF is a "'social safety net' for the institutional speculator."
Many of these bad investments were made in countries led by dictators like Mobutu Sese Seko in the former Zaire and Suharto in Indonesia. Loan money was used to buy weapons in order to repress the public, and much of it was stolen by the dictators themselves.
Yet, the people held responsible for paying back these loans are the victims. People who have struggled to achieve democracy now find themselves struggling to pay for the sins of their oppressors, in Afghanistan, in Bolivia, in Chile -- you get the idea.
The Brookings Institution says many of the IMF's debts are "odious debts," a legal notion created by the United States in 1898 to nullify debts of former colonies. Unfortunately, our government no longer accepts that principle.
The interest payments on these debts end up being taken from far more important programs, like health care in countries with severe AIDS epidemics and food aid in countries with mass starvation.
Indeed, according to the Jubilee USA Network, which lobbies for the forgiveness of the debts of Third World countries, for every dollar of "foreign aid" that rich countries give to poor countries, the poor countries give $1.30 back to the rich countries in interest payments.
You haven't read the worst, though. The structural adjustment programs imposed by the IMF on all of its debtors are the primary source of outrage among its critics. The common features of SAPs are the demand that public services for the poor be eliminated and that the resources of countries be given to foreign corporations.
The IMF has demanded the privatization of water services, health care and education throughout Africa and Latin America. Multinational corporations have taken them over and have doubled and tripled rates, deepening poverty.
Not only does the IMF make it impossible for governments to pay for desperately needed services, it bars them from even attempting it.
The other SAP conditions are foreign investment "liberalization" policies. Every country in the world that has a good standard of living for its people has achieved it not through free trade, but through careful management of its resources. America, for example, has a long history of protectionism, which continues today in farm subsidies, airline bailouts and steel tariffs.
Countries under SAPs, however, are prevented from using tariffs or restricting foreign investment in any way. So the country has no possibility of achieving the sort of prosperity that would enable them to actually pay off their debts.
It is little wonder that nearly every country living under a structural adjustment program is poorer now than before. They are actively prevented from pursuing the economic policies of the rich countries.
This is perhaps the greatest crime of the IMF: it burns the bridges of true economic development, instead encouraging sweatshop labor and squandering resources.
There is much more information than I can give here. Essential Action, at www.essential.org, maintains a huge collection.
In the end, the message of the anti-IMF protests is not merely that rich countries aren't doing enough to help the poor. It is that rich countries, through the IMF, actually steal from the poor.
Reforms are not going to solve this problem. Only cancelling these "odious debts," at long last, will solve it. Until then, the IMF is quite literally a criminal organization.
Washington police arrested more than 650 people during the IMF meetings. Unfortunately none of the IMF mafiosi were among them.
Stephen Preston is a lecturer in Mathematics.
