They will surely attempt to pull this scam on the USA when the government finally declares bankruptcy. That’s one of the purposes of the “war on terrorism”.
The World Bank’s former Chief Economist’s accusations are eye-popping – including how the IMF and US Treasury fixed the Russian elections
“It has condemned people to death,” the former apparatchik told me. This was like a scene out of Le Carre. The brilliant old agent comes in from the cold, crosses to our side, and in hours of debriefing, empties his memory of horrors committed in the name of a political ideology he now realizes has gone rotten.
And here before me was a far bigger catch than some used Cold War spy. Joseph Stiglitz was Chief Economist of the World Bank. To a great extent, the new world economic order was his theory come to life.
I “debriefed” Stigltiz over several days, at Cambridge University, in a London hotel and finally in Washington in April 2001 during the big confab of the World Bank and the International Monetary Fund. But instead of chairing the meetings of ministers and central bankers, Stiglitz was kept exiled safely behind the blue police cordons, the same as the nuns carrying a large wooden cross, the Bolivian union leaders, the parents of AIDS victims and the other ‘anti-globalization’ protesters. The ultimate insider was now on the outside.
In 1999 the World Bank fired Stiglitz. He was not allowed quiet retirement; US Treasury Secretary Larry Summers, I’m told, demanded a public excommunication for Stiglitz’ having expressed his first mild dissent from globalization World Bank style.
Here in Washington we completed the last of several hours of exclusive interviews for The Observer and BBC TV’s Newsnight about the real, often hidden, workings of the IMF, World Bank, and the bank’s 51% owner, the US Treasury.
And here, from sources unnamable (not Stiglitz), we obtained a cache of documents marked, “confidential,” “restricted,” and “not otherwise (to be) disclosed without World Bank authorization.”
Stiglitz helped translate one from bureaucratise, a “Country Assistance Strategy.” There’s an Assistance Strategy for every poorer nation, designed, says the World Bank, after careful in-country investigation. But according to insider Stiglitz, the Bank’s staff ‘investigation’ consists of close inspection of a nation’s 5-star hotels. It concludes with the Bank staff meeting some begging, busted finance minister who is handed a ‘restructuring agreement’ pre-drafted for his ‘voluntary’ signature (I have a selection of these).
Each nation’s economy is individually analyzed, then, says Stiglitz, the Bank hands every minister the same exact four-step program.
Step One is Privatization – which Stiglitz said could more accurately be called, ‘Briberization.’ Rather than object to the sell-offs of state industries, he said national leaders – using the World Bank’s demands to silence local critics – happily flogged their electricity and water companies. “You could see their eyes widen” at the prospect of 10% commissions paid to Swiss bank accounts for simply shaving a few billion off the sale price of national assets.
And the US government knew it, charges Stiglitz, at least in the case of the biggest ‘briberization’ of all, the 1995 Russian sell-off. “The US Treasury view was this was great as we wanted Yeltsin re-elected. We don’t care if it’s a corrupt election. We want the money to go to Yeltzin” via kick-backs for his campaign.
Stiglitz is no conspiracy nutter ranting about Black Helicopters. The man was inside the game, a member of Bill Clinton’s cabinet as Chairman of the President’s council of economic advisors.
Most ill-making for Stiglitz is that the US-backed oligarchs stripped Russia’s industrial assets, with the effect that the corruption scheme cut national output nearly in half causing depression and starvation.
After briberization, Step Two of the IMF/World Bank one-size-fits-all rescue-your-economy plan is ‘Capital Market Liberalization.’ In theory, capital market deregulation allows investment capital to flow in and out. Unfortunately, as in Indonesia and Brazil, the money simply flowed out and out. Stiglitz calls this the “Hot Money” cycle. Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation’s reserves can drain in days, hours. And when that happens, to seduce speculators into returning a nation’s own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%.
“The result was predictable,” said Stiglitz of the Hot Money tidal waves in Asia and Latin America. Higher interest rates demolished property values, savaged industrial production and drained national treasuries.
At this point, the IMF drags the gasping nation to Step Three: Market-Based Pricing, a fancy term for raising prices on food, water and cooking gas. This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls, “The IMF riot.”
The IMF riot is painfully predictable. When a nation is, “down and out, [the IMF] takes advantage and squeezes the last pound of blood out of them. They turn up the heat until, finally, the whole cauldron blows up,” as when the IMF eliminated food and fuel subsidies for the poor in Indonesia in 1998. Indonesia exploded into riots, but there are other examples – the Bolivian riots over water prices last year and this February, the riots in Ecuador over the rise in cooking gas prices imposed by the World Bank. You’d almost get the impression that the riot is written into the plan.
And it is. What Stiglitz did not know is that, while in the States, BBC and The Observer obtained several documents from inside the World Bank, stamped over with those pesky warnings, “confidential,” “restricted,” “not to be disclosed.” Let’s get back to one: the “Interim Country Assistance Strategy” for Ecuador, in it the Bank several times states – with cold accuracy – that they expected their plans to spark, “social unrest,” to use their bureaucratic term for a nation in flames.
That’s not surprising. The secret report notes that the plan to make the US dollar Ecuador’s currency has pushed 51% of the population below the poverty line. The World Bank “Assistance” plan simply calls for facing down civil strife and suffering with, “political resolve” – and still higher prices.
The IMF riots (and by riots I mean peaceful demonstrations dispersed by bullets, tanks and teargas) cause new panicked flights of capital and government bankruptcies. This economic arson has it’s bright side – for foreign corporations, who can then pick off remaining assets, such as the odd mining concession or port, at fire sale prices. …