136/YOUR MONEY OR YOUR LIFE!
of these programmes is export revenue. A high percentage of these
export earnings soon find their way back into IMF and World Bank
coffers - since they have priority over other lenders - and then into
those of the private banks (in the London Club) and those of Paris
Club member-states. Members of the London and Paris Clubs clearly
have a stake in working with the IMF and World Bank.
DEBT AND STRUCTURAL ADJUSTMENT
Once countries are in debt, the IMF and the World Bank can force
them (through a kind of economic blackmail) to reorient their macro-
economic policies in the way seen to be most in step with the interests
of international creditors.
The objective is that of imposing a relationship in which debt-
servicing becomes a matter of course, while keeping debtor nations
in a strait] acket that prevents them from embarking upon an
independent national economic policy (Chossudovsky, 1994).
Structural adjustment policies have been implemented on a grand
scale. Although conditions vary greatly from one 'adjusting' country
to the next, the same economic remedies are applied the world over.
Acceptance of the Fund's prescriptions - spelled out in economic
stability pacts - is not only a precondition for obtaining loans from
multilateral institutions, it is also a green light for the London and
Paris Clubs, for foreign investors, commercial banking institutions
and bilateral lending agencies (Lenain, 1993).
Not surprisingly, countries that do not accept the IMF's corrective
measures encounter tremendous difficulties in restructuring their
debts and obtaining new development financing and international
aid.
The IMF can also seriously undermine a country's economy by
blocking access to the short-term credit needed for financing ongoing
trade in basic goods.
The IMF and World Bank have increasingly been called upon by
holders of capital in the North to collect 'bad loans' owed to
commercial banks.
Fresh funds (in the form of short-term loans) were provided to force
developing countries to pay back their debts to commercial banks
and foreign governments. Fresh funds were provided to pay off old
debts (Chossudovsky, 1994).