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Jo was born in Edinburgh into an activist background. With an academic background in media discourse, Jo writes in areas of economics, politics, and social justice.
Ukraine and the danger with the IMF

The continued rioting in Ukraine is yet another recent example of what seems to be a developing crisis with global Capitalism. Although civil unrest in places such as Brazil, Turkey, Greece, and Egypt were all triggered by differing government policy implementation, the continued spread of discontent throughout the South Americas and parts of eastern Europe collectively illustrates massive instability – both political and social.

In Ukraine, what began as objections to President Viktor Yanukovych pulling out of a treaty with the EU sees protesters now demonstrating against the systemic corruption this symbolises. With the country’s heavy reliance on cheap gas from Russia, many Ukrainians see a system that caters to a select few whilst failing to benefit the ordinary working people. With low wages, declining living standards, and an economy on the brink, the country now ranks behind countries such as El Salvador and Namibia in per capita economic output.

As both the EU and the US desperately try and find a solution to prevent the resulting violence, the protesters, like many others, continue to be prepared to spill blood for what they believe is the fundamental erosion of democracy in exchange for economic dependence. And this is posing a problem for the West. An emerging global discontent with governments and institutions who are putting personal greed, power and the interests of big business before their people and the environment is gaining numbers in those with the increasing realisation that they have less and less to lose. And it is one of those institutions – the International Monetary Fund – that the US ambassador Geoffrey Pyatt has said is ready to step in and further aid one of its largest borrowers.

Initiated after WWII by the Bretton Woods conference in 1944, the IMF was set up to assist in the reconstruction of the world’s payment system by offering loans to Less Developed Countries (LDCs) to help reduce economic disparity and poverty. However, what has largely materialised is a US-based institution that cripples economically weak countries by offering them loans they will likely never be able to pay back, in exchange for policy reform.

the IMF yet again returns as the West’s solution to a feared alternative alliance with former Soviet Russia

As a struggling economy that is not yet a member of the EU, the IMF yet again returns as the West’s solution to a feared alternative alliance with former Soviet Russia. An institution on the face of it that can provide another economic rescue package – not dissimilar to those given in support of military dictatorships in South America, with disastrous consequences for civil liberties. But this of course has to be suggested, and again offered as the political discontent and rioting by the Ukrainian people upsets the tide of globalisation, potentially unbalancing the international economy, and serving as a glaring example of how the country’s debts already incurred from IMF borrowing has not brought about economic prosperity. A divergence the West’s economic ideology cannot tolerate in their quest to propagate neoliberalism and global centralisation of power as the only viable economic structure for countries to employ.

A structure which loathes domestic sovereignty and the power of countries to entertain alternative economic frameworks – but embraces the free market and on a global scale. Views societal differences and traditions as obstacles, and the environment and work force as a means for large scale production and profit.

Economic commentators have and continue to argue that the IMF conditionality based on macroeconomics fundamentally undermines domestic political institutions, as sectors such as government services are often reduced resulting in increased unemployment instead of facilitating economic growth. The danger therefore is as recipient governments sacrifice policy autonomy in exchange for funds, the powers to enact institutional changes that are favourable to citizens become redundant. Not only can this mean increased public resentment of local leadership for accepting and enforcing IMF conditions, but on a larger scale, the democratic accountability of a government to its people is essentially replaced by a Western corporatocracy. The result is that the political instability that was originally the catalyst continues, but in a more insipid form as protesters can no longer demand change from a government that has relinquished its power to enact any change. And it is these crippling effects that have left the Ukrainian people with little choice but to take to the streets.

The economic prosperity their government were sold and accepted hasn’t come to fruition. Instead the reconceptualisation of state sovereignty has brought austerity and economic apartheid through the continued employment of what many, including economist Joseph Stiglitz, see as destructive Keynesian economics which continues to reflect the interests and ideologies of the Western financial community.

In desperate times, further IMF loans may seem like the only option, and maybe even help Ukraine in the short term, but the ordinary people have and will continue to pay the price – and it is far greater than an economic one.

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