Bangladesh got its independence in 1971 and started negotiations with the IMF in 1972. It was in 1973 when Bangladesh had its first experience with policy dialogue with the IMF.

In the early 70s, while there were no structural adjustment loans from the Bank or the Fund, there were loans, tied to domestic policy reform. In the 1980s the formal Structural Adjustment Programme (SAP) arrived. In 1986 Bangladesh was one of the first countries to resort to the Structural Adjustment Facility set up by the IMF. Bangladesh was also among the forerunners to make use of the Enhanced Structural Adjustment Facility launched by the same. For the following years, the country’s economy was subordinated to the guidelines and targets laid down in the Policy Framework Paper prepared by the IMF and the World Bank. In the late 1990s the Poverty Reduction Strategy Paper was initiated by these twin powers. It was nothing but a sugar-coated SAP that declared to reduce poverty by keeping or even strengthening some of its root causes.

In all these phases these institutions carried a common agenda that was crucial for global capital to have: a market economy, an extraordinary return on investment and an open space to do whatever it liked. These included: (a) dismantling public institutions and public enterprises depriving people but giving immense authority to big business; (b) removing all support and protection for local industries and agriculture by liberalising imports; (c) supporting export-oriented activities to meet the needs of western markets by supplying cheap products at the expense of the economy and environment; (d) withdrawing the state’s responsibility of providing health care and education to the people; and (e) raising the prices of fuel, gas and electricity as well as raising the fees for education and healthcare to create good business opportunities for global companies.

They said a loud “NO” to the IMF mission

With the implementation of these prescriptions, Bangladesh, like many others, had to swallow all disastrous contracts with multinational companies that paved the way for their plundering natural resources and witnessed the silent erosion of national capabilities. In the last two decades Bangladesh saw the growth of resources, the rise of  a corrupt criminal hidden economy, and the affluence of a few but also deprivation for many. In fact the process of reproduction, not reduction, of poverty and inequality was strengthened. During the last ten years, people living under the poverty line increased from 51 million to 61 million. Only 10 per cent of the population have gained in their share of GDP, while for 90 per cent of people it shrunk.  

The IMF’s latest invention is the Policy Support Instrument (PSI). Their version of the new instrument says “in recent years several low-income countries have made significant progress toward economic stability and no longer require IMF financial assistance. However, while they may not want—or need—Fund financial support, they might still seek ongoing IMF advice, monitoring and endorsement of their economic policies—what is called policy support and signalling…”

One can easily find this a desperate attempt of the IMF to keep and extend its control over the countries where their ‘good guys’ are in power. This ‘control without funds’ phase is critical for them.

After getting success in countries like Nigeria, a test case of huge resources and high poverty, an IMF mission visited Dhaka in September 2007 to sign a PSI and put another chain around the country’s neck. But the people of Bangladesh did not behave as the mission expected. With the world calling for a change, the people of Bangladesh also wanted change. They said a loud “NO” to the IMF mission. People from all sections of society joined together to register their protest against the IMF’s moves. The IMF mission found their allies shaken and literally fled from the country.

But their missions and meetings are continuing; the disastrous projects are on or in the making. Therefore, in November, academics and activists have made a declaration to form a public tribunal on projects and policies of the World Bank, IMF and Asian Development Bank. Different thematic groups have been formed to proceed with the work. These global lords survive on the existence of a fragile ruling system and corrupt local lords. If people rise, their exit becomes imminent.

Anu Mohammad, Department of Economics, Jahangirnagar University, anujuniv@gmail.com