Hello, friends. Today I intend to address a topic that I have witnessed for years and I got that little bug that every now and then makes my curiosity be satiated. I am referring to the International Monetary Fund (IMF). For some time now, I have witnessed the rulers of some countries referring to this fund as a tentacle of the United States, which is responsible for the poverty of these countries. But how true is this?
There is some reason that the U.S. has great weight and influence in the organization, but that is motivated by having about 60% of the fund's management. Despite the constant criticism, most of the countries with problems end up in one way or another involved with it. Something like a toxic but unavoidable relationship.
When a country has serious problems, it offers its help in the form of loans to boost its development. Subsequently, the country would have to pay back the borrowed money together with a certain interest rate. Something similar to a credit we ask the bank for, because we run out of money and we don't have enough to buy food.
But is this aid obligatory? Countries in need ask the IMF for help. But what I did not understand at all is why so many criticisms to those who lend you money? I discovered that there are conditions attached to the loans. These conditions often involve economic and sometimes political measures, which can be unpopular and difficult to implement. Moreover, the effectiveness of this aid may be questionable. While in some cases it has been beneficial, as in South Korea, in others it has been disastrous, as in Argentina. It should be kept in mind that most of these countries never pay back the money they receive, so the interest is not so much for the IMF to grow economically, but to compensate for the risk of default.
At first glance, IMF aid is good, it serves a good purpose and can help any country to get out of trouble. But if it is so good and so altruistic, why does it have so many detractors? This is because sometimes, instead of help, it tends to be an economic condemnation. We have to be aware that the help is not free, and in the end, we have to pay back the loan with interest.
But there is something we must keep in mind. The vast majority of countries that, after spending the borrowed money, pretend to forget the debt and denigrate the International Monetary Fund, are left-wing governments, as in the case of Cristina Fernandez in Argentina, or Maduro in Venezuela. An important aspect to consider is how IMF aid can strengthen corrupt and populist politicians. Sometimes these leaders use this money to stay in power, leaving the country with even more debt and an impoverished economy.
Currently, we see situations like the one in Argentina, where Javier Milei, who is seeking the help of the IMF to deal with the debt inherited from his predecessors. This perpetual cycle of indebtedness and dependence only aggravates a country's economic problems. Although perhaps, in this case, there are not many options.
In the end, the purpose of this organization should be no more than to provide economic assistance and financial guidance to those developering countries that request it and agree to implement the economic measures that the IMF determines necessary.
The IMF can provide solutions, but its effectiveness may be questionable. However, it is crucial to recognize that it can fuel corruption and impoverishment of the population in certain contexts. The success or failure of an economy cannot be attributed solely to this organization, as there are multiple factors at play. But we must keep in mind that no government is obliged to borrow from this fund, and I find it unethical that after doing so and spending the money, they go out and defame the creditors as thieves or vampires. A rather common practice of leftist governments.
Reference:
- aa.com.tr
- pagina12.com.ar
- elpais.com
- forbes.com.mx
- imf.org
- elpais.com
- diariolasamericas.com
- vozdeamerica.com
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Original text in Spanish: Translated and formatted with Hive Translator by @noakmilo.
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