INTERNATIONAL MONETARY FUND (IMF)
What it is: A specialised international institution set up in 1945 and based in Washington, USA. Its function: 'to facilitate the expansion and balanced growth of international trade' and 'contribute to the promotion and maintenance of high levels of employment and real income'. Its initial aim: worldwide economic stability, badly needed after the collapse of trade in the 1930s and the devastation caused by the Second World War. By 2005 the IMF had 184 member states.
What it means: The IMF was intended to run a system of fixed exchange rates: countries were to be prevented from altering their currency's value to make their produce cheaper and so attract trade. The IMF was also intended to supply no-strings-attached loans to countries having a short-term financial crisis, so that each country's investments in its own trade and jobs weren't under threat. But the idea that world trade and economy could be organised in this way proved to be a pipe-dream. The governments of the USA and the UK decided that trade should be run by traders: companies must be free to make money wherever it was cheap and profitable. Globalisation speeded up. By the 1980s, IMF loans were being made under strict conditions: developing countries were virtually forced to 'structurally adjust' their economies along capitalist lines. 'Adjustment' included introducing free trade, which was good for foreign buyers but could put local producers out of business. This meant that many countries found themselves up to their ears in debt, and repayments were either impossible or meant depriving their populations of basic welfare. In 1999 an American academic described how 'many of the three billion of the world's poorest live in countries whose governments have long since gone bankrupt under the weight of past credits from foreign governments, banks and agencies such as the World Bank and the IMF'.
Think about it: After decades of Western influence over world trade, and a catastrophic trade collapse (1997-8) in successfully developing countries such as Malaysia, South Korea, Taiwan and Thailand, the 21st century brought increased signs of change. Instead of depending on business with America and Europe, developing countries in the South and East began turning to each other. They began creating their own free trade areas, without the crippling restrictions imposed from abroad. The government of Thailand, for example, went back on a promise made to the IMF to privatise some vital companies such as energy, transport and telecommunications (which risked their being bought by foreign firms to profit from) and kept them in the state's hands. The government encouraged Thais to set up other businesses as well. In 2003 Thailand was able to pay off its debt to the IMF. The prime minister said 'Never again will Thailand fall prey to the forces of foreign capital.' The aim, in 1945, to put the world on an equal and co-operative footing had been derailed by the richest countries at the expense of the poorest. Think about the way money is used to exert power, and how the effects can be as devastating as those of military force. Think about how the force of debt is creating alliances - which might be treated as hostile by countries which had hoped to make more money out of them.