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This process often unfolds in a framework known as the 'IMF's
secret programme'. The IMF lays down a series of policy guidelines
and gives technical advice to a government - without there being the
slightest backing in the form of a loan. The Indonesian government,
for example, had to close a number of large banks in November 1997
before it could receive the funds promised by the IMF. The forced
bankruptcy of these banks provoked wide-scale panic within the
population. The IMF had to recognise this tactical error at the
beginning of January 1998 (New York Times, 14 January 1998). It
then got the Indonesian dictator to sign an agreement of submission
to the IMF under the imperious gaze of Michel Camdessus, broadcast
live on national and international television.
A government is expected to carry out the 'secret programme' to
the IMF's satisfaction before formal negotiations on a loan agreement
can begin in earnest.
Once the loan is disbursed, the policy conditions are closely
monitored on a quarterly basis by the Washington-based institutions.
Loan payments are made in several instalments and can be
suspended if ever the required reforms no longer appear to be 'on
track'.
THE DIVISION OF LABOUR BETWEEN THE IMF AND
WORLD BANK
It should be noted that the IMF and the World Bank stand shoulder
to shoulder when it comes to implementing structural adjustment
programmes.
In a number of debtor countries, the government sets out its
priorities in what is known as a 'policy framework paper' or 'PFP'.
Officially, it is drawn up by the debtor country, but in fact this takes
place under the supervision of the Bretton Woods institutions.
There is a clear division of labour between the two Bretton Woods
sister institutions. On the one hand, the IMF takes care of key nego
tiations over structural matters, keeping in mind the exchange rate
and the budget deficit. On the other hand, the World Bank gets
directly involved in the structural reform through its local represen
tatives and its various technical missions. Moreover, the World Bank
also has people working in the key government ministries responsible
for laying down the specific framework of the structural adjustment.
Reforms to healthcare, education, industry, agriculture, transport
