IMF and Third World governments:
A relationship of coercion or collusion ?
By Elias Davidsson
One faces a hard choice in attributing responsibility for the consequences of IMF induced programmes.
Is it correct to attribute to the IMF the “imposition” of such policies on countries ? To which extent do the leaders of recipient countries voluntary implement IMF-induced policies ?
IMF officials maintain that countries’ leaders are not “coerced” into implementing the recommended policies. While it is true that countries’ leaders face hard choices between pursuing IMF policies (unpopular with the popular masses) and pursuing alternative policies (which might alienate the business community, internal and external), the choice is nevertheless theirs.
IMF officials can therefore claim that they are not in any way “responsible” for the consequences ensuing from their recommended policies. If such policies are causing hardship to certain sectors of society, it is the country’s government which ultimately bears the responsibility for having chosen such path among a set of alternatives, as well as for having brought the country to such a situation.
Progressive people typically blame the IMF for “imposing” its policies on poor countries, implying that the governments of recipient countries are victims of unbearable pressure. Sometimes critics concede that some collusion exists between governments and the IMF but the consequences of such collusion, in terms of a viable counter-strategy and in terms of assigning responsibility, are seldom spelled out. In spite of the occasional awareness of collusion, the thrust of the critique continues to be levelled at the IMF, its officials and its backers.
It must be noted that while the IMF is often blamed for “imposing” conditions on countries, no evidence is ever presented to substantiate the coercive nature of the relationship. We should distinguish between legitimate pressure and outright coercion. Governments are constantly subject to various kinds of pressure, by constituencies, lobbies, legal constraints and foreign governments. Pressure is thus a legitimate means of influencing a government. The government, acting under various pressures, ultimately choses what to do, taking the various pressures into account. Coercion refers to pressure which by its nature and extent, does not leave a choice. It is more akin to terror than to legitimate pressure. Are governments coerced by the IMF ?
Countries’ leaders accepting to implement IMF “medicine” do not act under the threat of a gun. No IMF official is guiding their hand when they sign legislation to abolish food subsidies or privatize state enterprises. And there is no evidence that the IMF is systematically bribing countries’ leaders in order to obtain their subservience. Typically, a government would send to the IMF a “letter of intent”, detailing its plans of economic adjustment and recovery. The IMF would then determine whether these plans are commensurable with its own agenda and doctrine and if it does, it would disburse funds to the requesting government to help it pursue the planned economic reform.
We do not need here to address the nature of such policies, as this subject is extensively treated in literature. The IMF is without question one of the main governance tools of the international capitalist class, the aim of which is certainly to maintain the privileges and rule of world elites. What concerns us here is only one question: Does the relationship between the IMF and the governments of Third World countries is one of coercion or of collusion ?
At a less formal level “letters of intents” are certainly formulated in close collaboration between a country’s senior officials and the IMF advisors. What happens at these closed meetings ? Is there some arm-twisting going on behind closed doors ? And if so, how does this arm-twisting manifests itself ? Little is known about this aspect. What is known however, is that government officials, including those of central banks and finance ministries, typically share the same economic doctrine as IMF officials: They share with their IMF guests a typically top-down approach to governance, free-market ideology as well as a high salaries. Often we discover that the government officials participating in negotiations with the IMF, are themselves former IMF employees or have been trained in liberal economics at Western universities.
Thus, it is difficult to sustain the claim that the IMF “imposes” its terms on countries or “coerces” governments to impose unpopular policies.
There are fundamental implications to be drawn, depending whether one considers the IMF “imposing” or “coercing” its policies on poor countries or whether one considers countries’ governments as carrying voluntarily IMF policies, acting more or less as willing and paid “agents” of the world’s ruling elite.
If it is claimed that the IMF does “coerce” countries by some hidden weapons (which must be produced as evidence), and that the recipient governments act under what might amount to “duress” or are plainly bribed, the inescapable conclusion would be that the IMF bears the main or full responsibility for the consequences of its imposed policies, including those leading to poverty, disease and death. Such conclusions would warrant concerted efforts to either reform the IMF, abolish it, transfer its prerogatives to the United Nations, demand reparation to be paid by the IMF and its backers to the victims and punish IMF officials for criminal acts.
In the case however that no coercion (as distinct from legitimate pressure) can be shown to have taken place, the term “collusion” between the IMF and the government of the recipient country would be more apt to describe the relationship.
That governments typically attempt to dispel the perception of “collusion” by using anti-IMF rhetoric in public. It would after all undermine governments’ legitimacy to be seen as engaging in collusive practices with international institutions, the foreseeable consequences of which are harmful to these governments’ popular constituencies. Thus, the mere reference to an anti-IMF rhetoric by a government does not necessarily indicate that it tried as hard as it could to resist inequitable demands by the IMF. The IMF has no difficulties to defend itself against charges of arm-twisting by pointing to the “letter of intent” duly and voluntarily signed by a public leader of a recipient government.
What approach is there for the millions of victims of IMF-induced policies, duly carried out by sovereign governments ?
The widely shared approach by progressive individuals and organisations is IMF-bashing. This is the easiest way. It ensures mobilization. And such a rhetoric is even acceptable to some Third-World governments, as it increases their bargaining leverage. But are we thereby unwittingly protecting the lieutnants of world capitalism by feigning that they are victims of the generals or acting under “orders from above” ?
If we conclude that the IMF and its lieutnants in member states do in fact collude in maintaining the majority of the world’s people in poverty, in other words that practically all governments more or less collude with the principal centers of world capitalism, thus participating collectively in maintaining peoples under the heel, what strategies should be pursued for global justice ? How should we relate to institutions such as the United Nations ? Are campaigns to reform it an exercise in futility ? Have we reached the point where all governments must be considered,prima facie, as agents of international capitalism to be resisted and combatted, or do some governments genuinely represent popular needs and a progressive agenda, ready to lead international struggle for a better world ?
Failing to address the above questions, strategies for global justice will remain ambivalent and therefore ineffective.
Elias Davidsson, Iceland
7. Oct. 1999