10

Ideas

The Cadre + 2February 1999

International development increasingly undermined by wealthy investors

*Continued from page 11

back the money which they had loaned to the private sectors in these countries. At the same time, the IMF’s conditions for these bailout loans included a series of harsh measures, from raising interest rates, which has severely contracted the coun- tries’ economies, to cutting sub- sidies for basic foods.

The end result of both the shock of capital outflows and the IMF programs is a massive increase in unem- ployment and poverty. Real wages in Indonesia have been cut in half and the number of people living below the pov- erty line has increased from 22.5 million to 118.5 million,

comprising 61 per cent of the population. People are dying because of cutbacks to health care.

But while the poor suf- fer, those who preach the vir- tues of free market globaliza- tion, such as Wall Street in- vestment bankers, are bailed out, thanks to the IMF use of

our taxpayers’ dollars. Per- versely, this looks like social- ism for the rich and capitalism for the poor.

Fortunately, the forces of globalization are under siege both from without and within. Despite what economist Paul Krugman refers to as a “gag rule” on anyone associated with

the current strategy (bankers, economists, major institutional investors) discussing alterna tives, increasing numbers ar calling for controls on capital flows. Meanwhile, commu- nity-based organizations,

¢Continued on page 13

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International Business

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