Why IMF and World Bank bailout will not solve our problem

The International Monetary Fund (IMF) has recently approved a $3 billion bailout from the IMF to the Ghana government. This is after a history of the New Patriotic Party (NPP) rejecting IMF bailouts as a solution and promising to stay clear of the IMF. Unsurprisingly, they have now fully embraced the IMF as the saviour of the Ghanaian economy and are jubilating and asking Ghanaians to join them in celebration.

However, we in the Social Justice Movement of Ghana (SJMG) refuse to celebrate with them. We will not be celebrating because the historical record of IMF bailouts shows that an IMF bailout has never solved the country’s economic problems. After going to the IMF seventeen times, it will be naïve to think that this bailout will do anything different from what it has always done; give us only temporary relief rather than solve our economic problems.

Since the underlying factors that led us into an unsustainable debt situation which forced the trip to the IMF remain unresolved, the bailout only gives the ruling elite some relief and opportunity to borrow from the capital markets and sink us further into debt. And as past experience shows, borrowing on the capital markets has tended to benefit individuals in power rather than the Ghanaian economy.

The predominantly government-sympathetic media almost unanimously see and endorse the IMF as the saviour. Governments, past and present, are usually blamed for the failure to manage our economy properly. The conclusion is that if our governments had managed our economy prudently, we would not have been going back to the IMF so often.

Bizarrely the NPP is claiming that this bailout will lay the basis for economic recovery and there may not be the need to go back to the IMP again. If previous bailouts did not lead to economic recovery why should this one do the impossible given the nature of our neo-colonial economy?

There is no doubt that our governments; both the New Patriotic Party (NPP) and National Democratic Congress (NDC) have performed poorly when it comes to the management of our economy. Had it not been the fact that both parties control the levers of power when they are in office, have the economic muscle, and are supported by powerful economic interests that support them to buy votes and win elections, they would have been thrown into the dustbin of history.

And who are these external forces that support them to continue to mismanage and destroy our economy? It is the same forces that we are praising Ghana today for the bailout. They relaxed their conditionalities and made them implementable after the bailout has been agreed upon only because they want to keep the farce that Ghana is a model country with an entrenched democratic culture. It is the IMF/WB that has supported our political parties to maintain the present neo-colonial economy that makes it possible for us to be running back to the IMF/WB frequently.

Though Ghana is supposed to be a member of the IMF and it is argued that as a member we have a right to access their resources when we are in need, the costs of membership far outweigh the benefits. These Bretton Woods institutions were set up by the United States with the support of Western Europe to control the economies of third-world countries.

As an emergent superpower, the United States wanted to use soft power, and not necessarily military might all the time, to maintain its economic dominance over the world. They were set up to keep developing countries under their control and thereby continue to provide natural resources to the United States and Europe.

These institutions were not meant to develop our countries. Now you will ask, whose fault is this? After all, we are independent, but are we? We have what is described as flag independence. We have black people occupying visible political positions. These people who occupy these positions do the bidding of the United States and Europe because it also benefits them.

Our so-called leaders will continue to maintain our countries as producers of raw materials and importers of most things needed by our economy. They will not set up import-substituting industries as Nkrumah did. They will give out, for peanuts, our gold, diamond, uranium, manganese, lithium to international capitalists. They will implement neo-liberal policies that allow foreign capital to take control of our minerals and extract them for the benefit of Western capital and few local interests.

Our political leaders benefit and their interests coincide with foreign interests. Foreign capital takes away the bulk of wealth, especially in the extractive sector. Our ruling elites who control the government, and their allies, take the crumbs that fall from the table.

The United States has in the past come down heavily and even helped to overthrow leaders, especially Kwame Nkrumah because, he dared to extricate us from foreign control. Our so-called leaders know this very well and therefore will not take any action against foreign interests.

In as far as our resources and our economy is in the hands of foreign capitals, these so-called leaders of ours will periodically go cup in hand crying to their masters to come to their aid, anytime they are failing to supervise the neo-colonial economy. This is what explains the unfair trade arrangements reached with many countries such as the United States, Western Europe, and us. We will never be able to get out of this quagmire if we continue to operate and oil the economy that favours foreign interest.

Ghana has enough resources, especially minerals. If we take control of these minerals and engage in meaningful export and import-substituting industrialisation we will not always be running to the IMF/WB for bailouts. An independent approach through delinking from the domination of foreign control is the only way out through very painful but it must be done.

In the coming months, our people are going to suffer immensely. Apart from increases in almost everything, our public utilities are in danger of being privatised. When this happens, foreign capital would have taken full control of almost everything in Ghana.

Source: Ghana Web