By: Callum McGoldrick, intern at the TaxPayers' Alliance
The International Monetary Fund (IMF) was founded in 1944 at least initially to ensure economic stability and cooperation between nations. In an era before floating exchange rates, the most important element of this was setting fixed exchange rates and providing short-term loans to prevent nations from defaulting on debts. They also provided loans to aid in infrastructure development. As with many other global quangos, it has morphed into something very different. The organisation now also works to, “discourage policies that would harm prosperity”. To have such a nebulous aim at the core of its work typifies the drift into the murky waters the IMF now finds itself stranded in.
It is not surprising that like other bodies the IMF’s approach to development now frequently ends up straddling developing nations with mountains of debt in the pursuit of progressive, western centric agendas. The ‘First Deputy Managing Director’, second in command at the IMF, Gita Gopinath, has formed a team focused on bringing climate mitigation policies into fruition. As outlined in my blog on the history of the World Bank, many of these methods are not possible in the developing world. In a clear sign of the IMF’s growing tendency to overreach, Gopinath claims that the world needs ‘better stewardship of global public goods.’
Unfortunately, the increasingly radical leanings of the IMF do not end with its First Deputy Managing Director. Kristalina Georgieva, the head of the IMF, is a graduate of what is now the University of National and World Economy in Bulgaria, during Georgieva’s time there it was the Karl Marx Higher Institute of Economics. Despite their rebranding, the University still publishes journals with euphemistic titles typical of communist propaganda, such as ‘Economic and Social Alternatives’. This might explain why Georgieva was found to have helped China in the IMF’s Doing Business Report by instructing staff to alter data to inflate their ranking by an independent report. In another move straight out of a communist dictator's handbook a subsequent report conducted by the IMF itself determined that there was not enough evidence of its leaders' wrongdoing… Shock!
The overlap with other quangos is not limited to programmes such as climate action and pandemic prevention, they have a tendency to promote from within too. Prior to heading the IMF, Georgieva was President of the World Bank after holding a number of other positions within the organisation. She has also worked for numerous EU organisations. Georgieva has spent her entire career either in academia or working for quangos, the same is true for a number of the senior officials at the IMF. Many members of the public rightfully bemoan career politicians for having a lack of real world experience, perhaps the same criticisms should fall upon those who operate at high levels in powerful NGOs too.
Georgieva has suggested that the move to renewable energy will cost $1 trillion per year. More concerningly, she also seems to think that this will ‘pay dividends’ in the form of new jobs created by the industry. While some think that the losses from fossil fuel orientated jobs will be offset, many of the new roles created will inevitably be centred around the developed world and require large amounts of retraining, leaving many underdeveloped countries even further behind - something the IMF claims to be against.
These sorts of costs, blithely thrown around by IMF officials, can only be understood when looking at the organisations’ financing. The organisation has hundreds of billions to spend every year, financed in part by quotas for each member nation. The UK currently pays around £20 billion a year for the privilege of being a member of the IMF. The organisation uses this money in a multitude of ways, from promoting progressive social programmes to funding failing economies. The approaches are often contradictory, leading to criticism from people of all political persuasions. The IMF has been attacked from the left, accused of ‘pink washing’ by using fluffy language around promoting gender equity to hide how their anti-growth austerity measures often harm women in work across the globe. They have been attacked on the right by only granting loans to countries following increased government involvement in economies, often financed by tax increases.
It is impressive that the IMF can draw such harsh criticism from people of such different political outlooks. At such a high cost to taxpayers while offering so little in return, it may be time for the IMF to end its lecturing and stop attempting to be a global government.