Economics: IMF killer prescriptions

Among the International Monetary Fund (IMF) prescriptions for the Australian economy is a dose of GST tax increases. Australia beware!

In 2008 Cambridge and Yale university researchers observed that countries which received IMF loans between 1989 and 2005 experienced on average a 16 per cent spike in TB death rates after accepting the aid, followed by a 30.7 per cent dip after the loans were paid off.

The researchers found that the size of the loan was proportional to the mortality rate. Deaths rose 4 per cent for every year of repayment and 0.9 per cent for every 1 per cent increase in IMF lending.

Tuberculosis is a good test because it has long been viewed as a social indicator. When your society breaks down, tuberculosis rates rise pretty quickly, particularly death rates from TB. 

The IMF this year joined the European Union to lend Greece €110 billion when its economy nearly collapsed in the wake of the bankers' crisis. As a result, Greek civil society has faced huge stresses, because of conditions attached to the loan.

Demonstrators in The Hague respond to the call of the
European Trade Union Confederation for a day of protest against austerity programs

Public sector wages have been slashed, employment reduced, employment protection provisions demolished, pensioners' income reduced or capped, their pension age changed, sales tax lifted by 2 per cent and tiny public-sector bonuses abolished. Millions have been on strike, the Acropolis has been stormed and unrest continues to grow as cuts bite ever harder.

In 2008, the IMF approved a 23-month stand-by arrangement for Pakistan of US$7.6 billion. In return it required Pakistan to raise its power tariff by 24 per cent during the fiscal year in three phases - 6 per cent in the October-December quarter, 12 per cent in January-March and 6 per cent in the April-June period. A 4.4 per cent tariff increase was announced in October 2009,6 and an additional 13.6 per cent increase was implemented in the last quarter.

The IMF also demanded a rise in interest rates and high rates are now choking Pakistan's economy. Small and medium-sized businesses and farmers cannot afford credit and are often forced out of business. Pakistani farmers are forced to sell their land, leading not only to less productive agriculture but environmental devastation.

At present, Turkey is seeking an IMF loan to see it through the aftermath of the world bankers' crisis. An IMF delegation is in Ankara today to negotiate terms and conditions which are expected to include the country rejigging its tax systems, raising the level of personal taxation dramatically and reducing government expenditure.

In Britain the IMF has just praised the slash and burn economic plans of the Con-Dem coalition government's handling of the economy, saying that it is "on the mend."

Keep the IMF quacks away from any economy near you!