Magazine article The Nation

First World to Third; Drop Dead

Magazine article The Nation

First World to Third; Drop Dead

Article excerpt

Debt is what leads people to starve, and debt is what leads people to rebel; it is the most potent political factor in the world today. The annual report of the Internationl Monetary Fund, released on September 24, was therefore of great interest. The I.M.F. firmly rejected the growing Third World clamor for fresh infusions of capital and debt renegotiation and insisted that its previous policies of demanding deflation, austerity and export surpluses in the debtor countries have been correct. This is the stone-bottomed policy that the I.M.F.--essentially the industrialized nations, dominated by the United States--was proposing to take to its annual meeting with the World Bank, which started in Seoul, South Korea, on October 8.

The London Financial Times for September 25 made the I.M.F. report its lead story and devoted most of an inside page to extracts from the report, which called on developing countries to adopt a policy of "prudent demand management" (i.e., fierce cuts in living standards which will cause intense misery and provoke political upheavals) and to continue to boost exports (i.e., pay off the Western banks, whatever the internal cost). The newspaper also commented on the report in its lead editorial, remarking that "the cost of debt throughout the world is currently being inflated by the vast credit demands of the world's strongest economy, the U.S. America is one debtor which the fund seems powerless to influence; hence the IMF is increasingly seen at the moment not as an adjustment agency, but as a debt collector for western and predominantly American banks."

So how did the major U.S. media react to the I.M.F. report? Readers of The Wall Street Journal for September 25 were given an intimation of report's existence in the form of four inconsequential paragraphs on page 3. The New York Times gave it seven short paragraphs, similarly inconsequential, on the bottom of page 6 of its Business Day section. …

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