Support for dictatorships

Eric Toussaint | LIEGE |
(Eric Toussaint)

LIEGE About the policy of IMF and World Bank and the German government's policy toward the Bretton Woods institutions spoke with Eric Toussaint. Eric Toussaint is president of the Committee for the Cancellation of the Third World Debt (CADTM) in Liège (Belgium). He wrote "The World Bank. A never ending coup d'etat" (London 2007). In your book you write that the IMF and the World Bank have supported many dictatorships all around the world...

Eric Toussaint: It's very clear that from the beginning, the IMF and the World Bank have supported numerous dictatorships all around the world in accordance with the political interests of the United States and its allies. We can mention for instance, the support given by the IMF and World Bank in the 1950s, '60s and '70s to the Somoza dictatorship in Nicaragua. We can also mention the IMF and World Bank support for the military dictatorship in Guatemala in 1954, which was installed to replace the democratically elected president Jacobo Arbenz, who wanted to initiate an agrarian reform. If we go on to the '60s, we can mention the military coup of the generals in Brazil, in April 1964, against the left democratic president Joao Goulart, who also wanted to initiate an agrarian reform and nationalize Brazilian oil. There was also support of the Marcos dictatorship in the Philippines from 1971/72 up to 1986. Are there also current examples?

Toussaint: Looking at the last few years, we can mention the IMF and World Bank's support of the Idriss Deby regime in Chad, because of the oil companies' strong interest in the pipeline between Chad and Cameroon. The corrupt Idriss Deby regime was not respecting the World Bank's anti-corruption clauses, so the World Bank announced the suspension of disbursement in December 2005. But under pressure of the US government, the World Bank's leadership decided in April 2006 to renew the disbursement in support of the Idriss Deby regime. We can also mention the strong IMF and World Bank support of the Musharraf dictatorship in Pakistan. There is today a large democratic movement in Pakistan, a very active struggle of judges against Musharraf's regime. Meanwhile the World Bank is supporting major projects in Pakistan. Has there been any direct German involvement?

Toussaint: Of course. For example, the German government was actively involved in the support for the Mobutu regime which had been backed by the IMF and World Bank - alongside with the Belgian and the US governments. A member of the board of the Deutsche Bank was sent to Zaire in 1981 to draw up a report on the corruption in the Mobutu regime. His name was Edwin Blumenthal. He wrote a report denouncing the very high level of corruption, but the World Bank, with German complicity and under Belgian and US pressure, never used this report and increased its loans to the Mobutu regime. This took place in the climate of the Cold War and because of German, Belgian, US and other corporations being interested in investing in Zaire. It is also important to mention the support the German government gave the Suharto regime, whose military coup against Sukarno in 1965, had been backed as well by the IMF and the World Bank - notwithstanding the massacre of 500.000 civilians accused of being communist supporters. Germany made a sizable loan to Suharto for his transmigration project. Some 3.200.000 people were deported. For more or less 100.000 people, it was forced deportation, which means it was a crime against humanity. Germany was very actively involved in supporting this project. While Germany was supporting Suharto, his regime also invaded East Timor in 1975 and very repressively exploited the East Timorians. Germany and the US government never criticized the Indonesian policy toward East Timor. I think it would be very important for Germans to examine the possibilities of a lawsuit against those responsible for these policies toward Zaire and Indonesia. What about current examples in Latin America?

Toussaint: When the military coup was carried out against Chavez in April 2002, the person in charge of external relations in the IMF, Thomas Dawson, immediately declared the IMF's support of the coup regime. In April 2005 when Rafael Correa was the minister of finance in Ecuador, he decided to use a portion of the oil revenues to increase the government's social budget. The World Bank and the IMF denounced his policy, demanding that all revenues must go toward repaying the external debt. Rafael Correa didn't accept this demand, and in retaliation, the World Bank and the IMF suspended disbursement to the Ecuadorian government. This is why Rafael Correa, Ecuador's new president, expelled the World Bank representatives from Ecuador this year. We can say that the IMF and the World Bank are now going through a major credibility crisis with Third World governments taking initiatives to form a new instrument to become independent from the IMF and World Bank. For instance, six Latin American governments are now founding the Bank of the South. Do the IMF and World Bank have German support for their policies?

Toussaint: Yes, of course. During the latest crisis of the Wolfowitz leadership of the World Bank, Germany asked the US government to reconsider its support of Paul Wolfowitz. But Germany is supporting the decision of the US to replace Wolfowitz with Robert Zoellick, another US citizen. The German government therefore is not really using its influence inside the World Bank to democratically change its rules. It is totally absurd that, since the very beginning, the president of the World Bank has always been a US citizen, selected by the US president. I think that it is very important to criticize the German government's policy toward the Bretton Woods institutions.