The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Countries squeezed to the edge of bankruptcy

Nov 3, 2008

Standing in line after Iceland to ask for aid from the International Monetary Fund (IMF) were Ukraine, Hungary, Serbia and Pakistan. Other countries from Central Europe and the Third World are ready to make the same request. As much as they differ, all these countries have the same problem: the international economic and financial crisis has made it impossible for them to pay their bills

These national States aren’t as indebted as is the U.S., France or Germany. In fact, they’re much less indebted, except for Iceland. For example, while the U.S. national debt is 10 trillion dollars or the equivalent of 70% of the wealth produced in a year, Pakistan has 40 billion dollars in national debt, or less than 30% of its annual wealth. But the private banks, which are holding on to their cash, are not only refusing their usual year-end loans, but they also are withdrawing funds from poor countries. Meanwhile, the banks demand punctual payment of debt, and it must be in dollars.

Borrowing from the IMF is accompanied by “recommendations.” These always have the same thrust: make the population pay, cut back on public services (if there are any), starve the poor if need be, but reimburse the Western banks. The IMF’s last intervention to “save” a bankrupt State, Argentina in 2001, ended up with a brutal worsening of the population’s standard of living.

In fact, the same policy that favors the same capitalist groups is carried out in every country, with or without the intervention of the IMF. There is only a difference of degree: while the workers of the rich countries fall from poverty into misery, those of poor countries go from misery to starvation.