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Volume 6, No 4, Winter 1996 [back]

The UN, NGO's including the World Bank and IMF and Market Economy
Confused thinking?

Daud R. Matthews


With the collapse of communism most "Western thinking" countries are pinning their hopes on Market Economy.

There seems to be some inherent flaws in the system of Market Economy:

If the US is the leading exponent of this system, then surely this system must be considered a failure:

Now, we see particular UN agencies, the World Bank and the IMF attempting to pressurize developing countries to opt for Market Economy reforms. I would suggest that there are deeper waters than appear on the surface.

The UN is "controlled" by former "colonial" powers. The US and all those countries with powers of veto in particular. Small countries whose GNP is less than the "aid" they receive from UN agencies are "forced" (blackmailed) into voting for UN and UN agencies' resolutions or risk having the aid cut off. The recent "UN" sponsored conferences in Cairo and Beijing are cases in point.

Let us consider an example, Pakistan with its nuclear program:

Benazir Bhutto's first government did not get their budget accepted. Nawaz Sharif came as Prime Minister. When he brought the "black money" home and attempted to make Pakistan independent of US aid, his government was brought down.

Qureishi was brought in as acting Prime Minister. He was not even in Pakistan. He was in the IMF. He drafted a package for Pakistan as an interim measure. However, Benazir Bhutto came back and again she couldn't get her budget accepted. What did she do? She and her aides flew to the US and came back with a package from the IMF!!!

Now, we find, Pakistan is heavily committed to debt. It is claimed, "National key organizations have been sold to foreign companies". What is more alarming, perhaps, is the willingness for the government to sign IMF/World Bank funded loans for specific projects. Admittedly, 4% interest is extremely favourable at international rates. However, these projects are usually non-revenue producing. The problem comes 4-5 years afterwards, when the debt is due to be paid off, and the country (Pakistan in this case) cannot pay off the debt because no extra revenue has been generated. The interest rate then shoots to 15% and, of course, the country is firmly in the grip of the IMF or World Bank. This is irrespective of whether the loan is actually used to fund the specific or whether it goes into the pockets of corrupt politicians.

The remaining question is: Who "controls" the IMF and the World Bank?

In this context one should review the situation of Turkey: With a $5 billion deficit with the EU and no hope of balancing this deficit, Turkey must turn to other countries and develop trade. Obviously, the ex-USSR countries are possibilities but equally (or even more so) are the Middle East and Asian countries - especially the Muslim countries.

If it is true that many of the world's resources are in Muslim lands, it is imperative that Prime Minister Erbakan's call for an Islamic equivalent of the IMF/World Bank be established or the control of these resources will pass to others.

The UN is supporting Market Economy. Saudi Arabia is "consolidating" its debt. Qatar, Kuwait and Bahrain are under pressure from the US. The UAE is under pressure from the UK. The UN imposes sanctions according to the "strong countries" in the UN. These sanctions are only lifted providing the subject countries agrees to the terms and conditions imposed through the UN. Yet, in many cases, what is the basis for these sanctions? What action is taken against sanction-breakers? Specifically in the case of the former South Africa where there was still US and UK investments despite the sanctions against apartheid? The answer, of course, was none.

There is another aspect to be considered: Non-governmental organizations (NGO's).

In the case of NGO's the Bangladesh Government linked the increase in number of people converting to Christianity with the increase in NGO activity in the country.

On 4th December 1996 in the BBC radio program "News Hour" at 13:00 hours GMT the American Ambassador to Turkey in Ankara told the BBC reporter "The 5000 Kurds being evacuated from Northern Iraq worked for NGO's as gardeners, cooks, etc." These NGO's were financed by the US. When asked if these Kurds were part of some CIA plan, the Ambassador, instead of simply saying yes or no, repeated what he had said before and added that they would be taken to Guam where their cases would be evaluated and some of them would be given refugee status based on the evaluation.

Your guess is as good as mine as to what this actually means. It does sound ominous for any country where NGO's are active, e.g. Afghanistan, Sudan.

Isn't it time the Muslim world began to help themselves? After the calls at the recent OIC Meeting, isn't now the right time to look into the proposals of Prime Minister Erbakan and establish an alternative to the IMF and the World Bank?

Also, until the EU adopts a single currency there is really no strong alternative to the US dollar as the international currency. If the US dollar weakens due to the failure of Market Economy system it would be an excellent idea to have an Islamic dinar as an international currency whether it is low key, kept in the background or whatever.

Finally, which "club" allows a member in default of his subscriptions to vote? Why doesn't the UN suspend America's vote and power of veto until their outstanding debt is settled?

If there is any benefit in what I have written, it is from Allah. Any mistakes are from me for which I ask Allah to forgive me, and after Him, each one of you...

[*} If the US government were a private company, it would be required to have that pension money in a bank. A firm in the private sector behaving like the government would be charged with fraud. (Strategic Investment, Special Issue, November 1996, p. 1)
©1996 anadolu
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