The 'Other' Side of the World Bank and the IMF
They created debt-addiction worldwide and turned nations into modern-day slaves.
The Misfit explores the existential questions facing our world. It brings together the diverse topics of economics, society, human thinking, and bitcoin. Here’s an archive of my latest articles. If you’re new here, my aim is to get you thinking each week about the way the world works, why, and how we can make it a better place. If you are one of the few subscribers who has already signed up - thank you! If you’ve been forwarded by someone else, get your own here.
Photo credit: 2020 UN Human Development Report.svg
Last week I talked about the Federal Reserve being an engine of wealth inequality in the United States. This week, I want to talk about the World Bank and the International Monetary Fund (IMF) as the global engines of inequality.
Before I go on, I’d like to clarify that the World Bank is not a bank per se; it’s an organization made up of member countries who contribute funds. Those who contribute the most funds set the economic policies for the developing world and determine how the World Bank ought to implement these policies.
To put it bluntly, the World Bank is the puppet of the Western world.
Fun fact: the World Bank is located in Washington D.C., right across the White House. Talk about strategic positioning.
On the other hand, the IMF ensures international trade and global monetary cooperation in the name of reducing poverty worldwide and promoting economic growth.
They’re like Batman and Robin… except they’re the bad ones.
Modern Day Slavery Created by the World Bank and the IMF
The World Bank and the International Monetary Fund (IMF) were created at the end of World War II to rebuild the economies of Europe. With time, they expanded to support the economies of the developing world.
They did this by offering loans to poor countries but only if the poor countries privatized their economies and allowed Western corporations free access to their raw materials and markets. Desperate for financial support, many countries agreed.
But to pay off the debt, these developing countries have to borrow even more money. As a result, they end up in way more debt than if they hadn’t had the loan in the first place. The loans then snowball, requiring bigger and bigger interest payments.
Their cash flows are negative because these countries are re-paying the same loans over and over and over again. This is why these vulnerable countries are stuck in a never-ending cycle of poverty.
Now brace for impact…
Western banks end up collecting 100 times more than the third world actually gets because the borrowers keep needing new loans to pay for the old ones.
Rather than supporting their own people, countries end up spending a huge portion of their budgets to pay off their loans.
For example, the country of Cameroon spent 36% of their budget on World Bank interest payments, while only 4% on social services like health care or education.
Kenya spent 40% of their budget on World Bank interest payments but only 12.6% on social services.
Since the creation of the World Bank and the IMF, developing countries all around the world are dying from hunger, extreme poverty, and lack of resources at faster rates than ever before, meanwhile the Western world gets richer and richer.
To keep this profit-making machine running smoothly and to prevent the developing world from revolting against this system, the World Bank has funded mass-murderers and dictators in Chile, Brazil, Nicaragua, Congo-Kinshasa and Romania.
It’s a partnership that disregards basic human rights to generate profit.
Anyone with a conscious mind knows that giving out loans that people - and countries - cannot pay back, while simultaneously controlling their markets (or otherwise declaring war on them), is criminal.
It’s modern day slavery.
A Case Study: The Impoverishment of Ghana by the World Bank & the IMF
Ghana is a country in Africa with an abundance of natural resources.
At one point, there used to be prosperous rice farming communities in the Northern parts of the country. The government would give these rice-producing farmers farming subsidies to encourage them to produce rice at large scale and feed the whole country.
That was of course, until the World Bank and the IMF intervened and told the Ghanaian government they would not provide any loans to Ghana unless the government cut the farming subsidies it was providing to the poor rice farmers.
What Ghana was to do instead, was import rice from countries like the United States (not surprising given they’re a huge partner of the World Bank and IMF), while ironically still having the ability to sustainably hand out rice to their own people.
Ghana now had to pay the United States to import rice. At the same time, Ghana had to pay the World Bank interest fees for the loans they were granted access to.
… I could not make this shit up... even if I tried.
Not only that, but Ghana now imports most of its rice at more expensive prices every year because inflation keeps growing thanks to the financial cluster-fuck that the United States is creating with their unlimited amount of money printing.
As a result of this, Ghana’s debt and inability to afford basic goods, like many other countries, will only compound annually. I expect we’ll continue to see extreme poverty rise in the country.
This is a heart-breaking reality we will continue to see as long as the World Bank and the IMF remain as they are… omnipotent and unaccountable.
El Salvador Opts Out of Systemic Poverty
By now you know that the World Bank and the IMF are not in the business of helping developing countries as much as they’re in the business of establishing deep-rooted power, control and wealth.
It’s not surprising the international lender, heroes of all heroes - the World Bank - decided to reject El Salvador’s request for help in implementing bitcoin as legal tender. They said:
"We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes," a World Bank spokesperson told the Reuters news agency via email.
"While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings."
The World Bank used an argument they know would resonate with the masses, even if they’re blatant lies - particularly around the “environmental and transparency controls.” Both of these claims are inaccurate because:
On the issue of environmental control…
Bitcoin mining (or the process of producing new bitcoin) is actually pretty expensive. Why on earth would a bitcoin miner use expensive forms of electricity to mine bitcoin? Makes no business or economic sense. Instead miners tap into renewable and green energy - like hydro power, solar power and wind energy - to mine while reducing costs and increasing profits.
On the issue of transparency control:
The Bitcoin blockchain tracks the movement of every single bitcoin transaction (while protecting your identity to a degree). Anyone in the world, at any time, can view these transactions. Bitcoin has the opposite of transparency issue, it has over-transparency. Cash on the other hand is transparent, meaning we can’t track it’s movement. Hence why cash is the preferred payment option for criminals.
It’s not surprising El Salvador got ignored by the World Bank.
The truth is, bitcoin is a currency that is not owned or issued by a country, or institution or group of people. It cannot benefit the World Bank because it has two distinct features that the World Bank does not like.
Scarcity: there will only ever be 21 million bitcoin in existence. The World Bank could not issue as many bitcoin as they’d like and hand them out as loans. Plus, once they handed them out, they could not access these bitcoin again.
Decentralization: no one owns bitcoin or can even change the rules of its monetary policy because they are hard-coded in. Code > human manipulation and greed.
So, when the World Bank and IMF turned their backs on El Salvador, the country had every right to save itself from the systemic abuse implemented by these institutions.
President of El Salvador, Nayib Bukele, basically said “enough is enough.” He did what every President should do - support their people by giving them a currency that will appreciate with time, not sink them further into poverty.
For the first time, developing country gave the middle finger to the institutions of inequality. They were only able to do this because there was finally a way out.
Final Thoughts…
The World Bank and the IMF are made up of member countries and the power each member has is based on their financial contributions.
Western countries are the biggest contributors so naturally they have the lion’s share of the power to determine economic policies and how the World Bank must implement them. These institutions are corrupt and cannot be reformed.
Perhaps they should be abolished.
Knowing this is nearly impossible, El Salvador did a brave thing. It opted out of the existing system and turned to bitcoin knowing full well of the backlash, criticism and mockery they would receive by these institutional bullies.
It acknowledged bitcoin is a way to outpace systemic poverty and build true wealth. It won’t be long until many more developing countries do the same. That’s why the World Bank and the IMF are quite literally, scrambling to survive.
This post goes well with yours: https://www.inbitcoinwetrust.net/the-dollar-system-is-cracking-u-s-responds-by-attacking-el-salvador-for-its-adoption-of-bitcoin-38d35e98e45
Fantastic post! You really did a great job of explaining what is bad about the World Bank and the IMF. Thank you!