The International Monetary Fund, World Bank, and other IFIs, assume the role of a ‘development’ investor in underdeveloped countries. These investments usually come with a catch; the structural adjustment of economies upon the receipt of investment or aid. Structural adjustment briefly entails privatisation of state-owned assets, causing the reorientation of domestic production in favour of cash crop and natural resources. Big investments are made in the private sector, bypassing local governments, and workforce cuts occur in the public-sector, as well as the elimination of import tariffs which gives corporations free reign. The process that follows creates climates reminiscent of slavery and colonialism. The countries become appendaged to the imperial metropoles and are exploited as a source of cheap labour, a market for capitalism, and a pool of natural resources. Once this structural economic change has been imposed, the real role of the IMF and WB becomes apparent. Capital becomes further centralised around local corrupt elites, removing the need for taxation of the population and therefore the need to represent them. Foreign states and multinational corporations are able to make favourable deals in order to exploit resources, labour, and determine domestic political affairs. These structural changes leave the country independent only in name.
Above is an excerpt from a piece we wrote for the Organisation of Black Unity, link in bio.