Summers said this change would reflect the new realities in which "the private sector is the overwhelming source of capital."

The IMF, with a staff of some 3,000 and $90 billion in outstanding loans to almost 90 countries, plays an important role in defending imperialist property holdings and investments, especially in the Third World. In particular, the IMF promotes the prerogatives of U.S. capital.

As a condition for receiving IMF funds, governments must agree to strict austerity measures that target workers, farmers, and some middle class layers. These often include steep budget cuts in social programs, higher taxes, massive layoffs, and the sell-off of state industries and banks to imperialist investors and other capitalists at bargain-basement prices.

The proposal by the U.S. rulers to alter the IMF's role reflects the growing disorder of capitalism, in which IMF demands for austerity in countries such as Indonesia and south Korea have deepened economic turmoil and led to increased resistance by workers and peasants there.

It also reflects the inability of IMF loan practices to make any headway in overturning the workers states in Russia and throughout eastern Europe.

Summer's proposals were announced shortly before a Congressionally appointed commission which, according to the New York Times, was "to recommend eliminating the fund's programs to promote development in poor countries" and loans "that promote the transition of the former Soviet Union to markets."

Washington's proposals have not gone unchallenged. Stanley Fischer, the IMF's deputy managing director, told reporters, "As we reexamine the role of the fund, we must not underestimate what is our bread and butter. Crisis lending is a critical part of what we do."

"The future role of the International Monetary Fund in the global financial system is now under debate," wrote Stephen Fidler in the December 10 Financial Times. "At issue is whether Washington will be able to use its 18 percent shareholding in the IMF to continue (as it often has since its inception more than half a century ago) to use the Fund as an extension of U.S. foreign policy."

With the current IMF managing director, Michel Camdessus, due to depart this position in mid-February, the debate over who should replace him is heating up. In the Washington Post of January 9, Jim Hoaglund wrote that filling this post "has turned into a quiet quagmire of subterfuge and rivalry among the world's richest nations."  
 
 
Front page (for this issue) | Home | Text-version home