INTRODUCTION
The International Monetary Fund (I.M.F) and the International Bank for Reconstruction and Development (I.B.R.D or World Bank) also known as the Breton woods twins are of course agents of development and underdevelopment in Africa and the third world countries in general, such disparities, notwithstanding there is no doubt that those international financial institutions proved to further exploitation, oppression and subjugation of the developing states especially those in the sub-Saharan Africa.
This paper will attempt to embark on an in-depth exploration and analysis of the facts and the ways by which the Breton woods institutions are furthering and shaping the exploitation and underdevelopment in Africa and the third world states in general.
THE WAYS BY WHICH THE IMF AND THE WORLD BANK USED TO FURTHER THE EXPLOITATION AND UNDERDEVELOPMENT IN AFRICA AND THE THIRD WORLD IN GENERAL
The Breton woods twins are of course agents of development and underdevelopment in the world, while they proved to be agents of real sustainable development in Europe as it happened after the second world war, in Africa and the third world in general, reverse is the case as they proved beyond reasonable doubt as the real agents of underdevelopment and exploitation.
If we critically studied the modus operandi of the international monetary fund towards Africa, to be specific the policy of the structural adjustment programmed (S.A.P) for instances, the 1980s marked the beginning of economic recovery programme under the dictation and supervision of IMF, a development, which has turned African states to became the executive agencies of western imperialism (Iweriebor, 1997:2)
Nigeria, for example, like many other African countries adopted the structural adjustment programme in 1986 under the military regime of General Ibrahim Babangida. The objectives of the SAP were: to restructure the productive base of the nation’s economy, achieve fiscal and balance of payment viability, and lay the basis for sustainable non-inflationary growth (Babangida, 1986:23). Its principle elements such as currency devaluation, trade liberalization, and subsidy’s removal, among others, which were rejected by Nigerians in a nationwide debate/protest, were discreetly applied through the back door. But, in spite of the firm insistence by the government, at the prompting of the IMF that there was no alternative to SAF. More than a decade after SAP was introduced, the major distortions in the nation’s economy persisted. (Musa, 2014:37)
Major indices to evaluate economic performance such as investment performance, employment and capacity utilization were still in the red, until SAP was discontinued. Similarly, danger signals such as unemployment, low productivity, inflation are also in on the increase. A renewed Nigerian Political Economist Samuel Aluko in 1989, three years into the adaptation of the SAP wrote that Nigeria was on “ the horn of policy dilemma” or what the economics call “an inconsistence combination of circumstances” (Samuel, 1990:56)
Moreover, another factor that clearly justify the assertion that the Breton Woods twins used to further the exploitation and underdevelopment in Africa, and the third world in general is that almost all of the loans given to the developing countries was attached to conditions which include consultancy; consultancy alone sometimes takes almost half of the loan, thus, this by implication instead of rendering sustainable development, it rather left the third world states drastically underdeveloped.
The World Bank has been partnering with the developing countries on development related projects, for example the Bank assisted Nigeria in 2011 millions of dollars on loan to control malaria which is one of the major child killer diseases in the country. However, one of the conditions attached to the loan was that Nigeria must import the materials for the programme such as “insecticide treated mosquito nets” from America and Europe. We all know that Nigeria has the local capacity to produce insecticide treated mosquito nets of course, but she was not allowed to do so. By this example, one will realize how the World Bank is doing all it can do to exonerates Nigeria and other third world countries from industrialization yet there are claiming to help them after all, in reality there are contributing toward the underdevelopment and dependency.
More so, the International Monetary Fund has been lending the developing countries billions of dollars, literally the founding will help the third world countries to developed different sectors of their economy so as to diversified their economy, but technically and in reality, the interest that attached to the loans are so high and at exorbitant rate that the underdeveloped states cannot pay the debt, in fact this is what led Professor Yakubu Yusuf of Political Science to called this scenario as “irredeemable debt” which means it is the debt that you cannot repay.
The irredeemable debt as masterminded by the International Monetary Fund was intentionally designated to left the third world countries to became executive agents of the western imperialist, this kinds of instances is what led the then President of Ghana Late Dr Kwameh Nkrumah analyze this phenomena as “Neo-Colonialism; the last stage of imperialism” in the book, Nkrumah extensively discussed how the Breton Woods twins are controlling the economics of the developing countries to their own benefits as at the determinant of the third world countries.
The modus operandi of the Breton Woods twins, that is the World Bank and the International Monetary Fund, are in such a way that the shares of your country determines the voting power of your country, however, it is a well-known fact that the developed countries have the largest shares, precisely the G-7 members (United States, Canada, United Kingdom, France, Italy, Germany and Japan) together they control over 40 percent of the votes.
The US is the only country with a super-majority power to block any decisions of the World Bank. The World Bank president is always an American and the president of IMF is always European. Therefore, the developing World has little or no say over the policies of these international financial institutions. By virtue of their financial contribution to these global financial institutions, the advance Western capitalist nations are the decision makers and as such they dictate who gets what, how and when, and they do not hesitate to use such powers to benefit themselves at the expense of the Third World.
Another point worth mentioning that clearly proves that the World Bank and the International Monetary Fund are used to further the exploitation and underdevelopment in Africa, and the third world in general is that most a times some of the conditions given to the developing countries before they lend them is that their most open up their borders so as the developed countries will gets the chance for their companies to flourish free into the markets of the third world states. Sometimes even the goods that are coming from the developed state into the third world countries are hazardous to their economy and are even killing the local industries this is because our local industries cannot stand to compete with the highly advance technologist of the developed states.
It is worthy to note at this juncture that some of the IMF and World Bank led Reforms in the Third World are at times in conflict with the internal development plans of developing countries. This is what Claude Ake (1996) called ‘competing agendas’ and according to him, “nowhere is the conflict more evident than in the rift between the Bretton Woods institutions and African governments over approaches to African Development.
Nevertheless, the IMF and World Bank are sometimes unwilling to fund development programmes in the Third World countries or even help them when they are experiencing economic crisis. A typical example is the inadequate funding of the Millennium Development Goals (MDGs). It is on record that the MDGs may not be achieved by the year 2015 largely because of the failure of the World Bank and IMF perhaps donor agencies to meet their financial pledges to the MDGs. But the same institutions are always ready to dish out billions of dollars to help the Western nations whenever they are in economic crisis. For example, the IMF has committed billions of dollars in bailout to the Euro-Zone Debt Crisis with little conditions attached. Nobody is asking Greece, Italy, Poland and Spain to use their Foreign Reserve to solve their debt problem. If Africa countries were to experience such debt crisis, it is unlikely that IMF would extend such gesture to them, and moreover, the IMF would have compelled such countries to use their Foreign Reserves and tackle the problem just as it happened during the debt relief in which Nigeria for instance had to spend 12 billion dollars of her Foreign Reserve on debt-buy-back so as to have 18 billion dollars debt relief.
CONCLUSION
Conclusively, the paper has extensively discussed and analyze the mundus operandi of the Breton Woods twins that is he World Bank and the International Monetary Fund, whose are agents of development and underdevelopment, in the case of the advanced capitalist countries whose the international financial institutions happened to dance to their tune by helping them achieve real sustainable development a clear example of this is the case of Germany and other European Countries after the second world war , while for the underdeveloped countries and the third world states in general the World bank and the IMF are of course agents of development but, in reality its actual operations led to furthering underdevelopment and dependence as well as its immediate consequences which is Irreducible debt in the third world.