The IMF's Grip on Latin America
Monetary Fund (IMF) took advantage of the serious economic, monetary
and social crisis that the COVID-19 pandemic has given rise to in most
nations of Latin America and the Caribbean to strengthen its financial
control over the countries in the region that requested loans.
The figure is overwhelming: between March and November 2020,
the Fund delivered $63.74 billion to that region of the world where the
IMF's emergency financing was most concentrated.
to reports from the IMF itself, six out of every 10 dollars of the
$102.15 billion it delivered in the year, went to Latin American
countries, most of which are not eligible for debt suspension or relief
mechanisms as they are considered middle-income countries.
the region, 21 countries obtained a loan during the month of May of
last year, with three of these accounting for 80 per cent of the money.
Chile was approved for $23.93 billion; Colombia for $16.948 billion and
Peru $11 billion, all through flexible credits.
the 1980s and 1990s, Latin America witnessed the harsh conditions that
the IMF imposed on every government in the region that accessed its
loans. Today, in the context of the pandemic, the immediate effects are
not seen but the story will change as the loan terms advance.
Recently, Mexican President Andrés Manuel
López Obrador accused international organizations such as
the IMF and the World Bank of being jointly responsible for the crises
that occurred in his country in past six-year terms and added that the
greatest fault lay with "servile governments."
said they forced neo-liberal Mexican governments to sign so-called
letters of intent which established what the State had to do, "a
flagrant violation of the autonomy, the sovereignty of our nation."
The IMF and the World Bank, López Obrador pointed
out, recommended that Mexican governments privatize public companies,
not increase jobs, increase the price of electricity and fuels such as
gasoline -- guidelines that were followed by subordinate governments.
In addition to Chile, Colombia and Peru, the Fund provided
loans through the rapid financing method to Ecuador for $6 billion;
Dominican Republic, $650 million; Guatemala, $594 million; Jamaica,
$520 million; Panama, $515 million; Costa Rica, $508 million; El
Salvador, $389 million; Bolivia, $327 million; Paraguay, $274 million,
and Bahamas, $250 million. Those that received less than $100 million
were Barbados, Saint Lucia, Grenada, Saint Vincent and the Grenadines,
In this way and throughout the year,
the IMF took advantage of the opportunity that the spread of the
pandemic opened up to it, to re-initiate the indebtedness of the
region, after a period in which it had been rejected for imposing
economic policies to the detriment of the great majority of the world.
The Latin American Geopolitical Center (CELAG) assures that
the global emergency implies an urgent and unforeseen need for external
liquidity on the part of Latin American countries, not only to face the
expenses related to the pandemic but also to deal with the capital
flight that has been taking place in the region.
unfortunately, in several of these nations, governments will use the
loans to help large companies and businesses deal with the crisis and
not to address the serious problems of the population.
the IMF and the World Bank are financial organizations created in 1944,
during the meeting held in Bretton Woods shortly before the end of
World War II. They have been dominated from the beginning by the United
States and Western European powers, and they act against the interests
of the people.
Their adjustment programs seek to
bolster the confidence of international capital markets in the debtor
country. Without the approval of the IMF, which, acting as a censor,
determines the willingness and capacity of a country to pay the debt
servicing costs, the doors generally do not open for the delivery of
To exercise control they oblige the nations
that receive this "benefit" to submit to conditions ranging from
non-mandatory recommendations to extreme inspections with the
imposition of forced sanctions.
As nations are
increasingly indebted, they are forced to follow the financial,
economic and social directives established by these institutions so
that they pay the debts they have acquired and to be able to have
access to new credits in amounts that become unpayable.
a result, governments are forced to promote the privatization of public
companies and services, lower wages and pensions, as well as increase
prices for the supply of water, electricity and fuel.
borrowing policies have meant that if in 2008 the internal and external
public debt of Latin America reached 40 per cent of the Gross Domestic
Product, eleven years later, in 2019, it had increased to 62 per cent
In conclusion, the new indebtedness will
further affect the sovereignty and economic and political independence
of several of these nations if their governments allow it.
Blanch is a Cuban journalist, writer and researcher.
This article was published in
Volume 51 Number 8 - March 21, 2021