‘THE IMF must abandon demands for austerity as the cost-of-living crisis drives up hunger and poverty worldwide’ is the demand being made by Oxfam.
Oxfam’s pleas on behalf of the current millions of poor and the billions who are about to be pauperised by the crisis of capitalism have fallen on the deafest of deaf ears, as the worldwide crisis of the capitalist system intensifies.
The charity is shocked that 87 per cent of the International Monetary Fund’s (IMF) Covid-19 loans are requiring developing countries – that have been denied equal access to vaccines and are facing some of the world’s worst humanitarian crises – to adopt tough, new austerity measures that will further exacerbate poverty and inequality.
This new analysis by Oxfam finds that 13 out of the 15 IMF loan programmes negotiated during the second year of the pandemic require new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk. The IMF is also encouraging six additional countries to adopt similar measures.
In 2020, the IMF deployed billions in emergency loans to help developing countries cope with Covid-19, often with few conditions or none at all.
Recently, IMF chief Kristalina Georgieva urged Europe not to endanger its economic recovery with ‘the suffocating force of austerity’.
However, over the past year the IMF has returned to feverishly imposing austerity measures on the already pauperised countries.
Nabil Abdo, Oxfam International’s Senior Policy Advisor, has commented: ‘This epitomises the IMF’s double standard: it is warning rich countries against austerity while forcing poorer ones into it.
‘The pandemic is not over for most of the world. Rising energy bills and food prices are hurting poor countries most. They need help boosting access to basic services and social protection, not harsh conditions that kick people when they are down’, he said.
However, kicking the poorest people when they are down to keep the profits of the largest monopolies up is what the IMF specialises in, in its desperate struggle to save the collapsing capitalist system, with the poorest paying the bills of the richest capitalist groups.
Kenya and the IMF agreed a $2.3 billion loan programme in 2021, which includes a three-year public sector pay freeze and increased taxes on cooking gas and food.
More than three million Kenyans are facing acute hunger as the driest conditions in decades spread a devastating drought across the country. Nearly half of all households in Kenya are having to borrow food or buy it on credit.
Nine countries, including Cameroon, Senegal and Surinam, are being required to introduce or increase the collection of value-added taxes (VAT), which often apply to everyday products like food and clothing, and fall disproportionately on people living in poverty.
Sudan, where nearly half of the population is living in poverty, has been forced to scrap fuel subsidies which will hit the poorest hardest.
The country was already reeling from international aid cuts, economic turmoil and rising prices for everyday basics such as food and medicine before the war in Ukraine started.
Over 14 million people need humanitarian assistance (almost one in every three people) and 9.8 million are food insecure in Sudan, which imports 87 per cent of its wheat from Russia and Ukraine – wheat that is being rocketed up in price as the rich capitalist classes impose more and more sanctions on Russia.
10 countries, including Kenya and Namibia, are now likely to freeze or cut public sector wages and jobs, which will a mean lower quality of education and many fewer nurses and doctors in countries already short of healthcare staff. Namibia had fewer than six doctors per 10,000 people when Covid-19 struck.
What is new about the situation is that the EU states, the UK and the USA are at the centre of the worldwide economic crash that is taking place.
Millions of workers in these ‘advanced’ countries will die from hunger, poverty and disease as NHS health systems are discarded and prices rocket to keep the ruling classes and capitalism going.
There is only one way out of this crisis and that is through building sections of the International Committee of the Fourth International worldwide to lead the workers of the world to organise the victory of the world socialist revolution!