rn: Chossudovsky: NATO, IMF, Wld Bank- destroying nations


Jan Slakov

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Date: Sun, 16 Apr 2000 20:50:15 +0100

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Part I of an interview with Michel Chossudovsky
Professor of Economics, University of Ottawa
Interview and editing by Jared Israel (4-16-00)

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Chossudovsky: When an IMF mission goes into a country and requires the
destruction of social and economic institutions as a condition for lending
money - this is very similar to the physical destruction caused by NATO
bombing. The IMF will order the closing down of hospitals, schools and
factories. That's of course more cost effective than bombing those
schools and factories, as they did in Yugoslavia, but the ultimate result is
very similar: the destruction of the country.

The IMF has what is called the MAI - the Multilateral Agreement on
Investment. It's the ultimate investment treaty. Signing leads to the
economic destruction of the targeted country. Well, really, war is simply
MAI of last resort.

Israel: What are your thoughts on the demands of the folks protesting now in

Chossudovsky: Well, lots of people have converged on Washington to protest
the Bretton Woods system, the IMF and the World Bank. The question is: what
are we fighting for? I suspect the dominant position among the NGOs
[Non-Governmental Organizations] is still that we need to reform these
institutions, give them a human face, make them work for the poor and so
forth. I think this approach, which developed from the "50 Years Is Enough"
campaign against the Bretton Woods institutions is a mistake. And
increasingly people are challenging it, questioning the legitimacy of these
Washington institutions.

But still there's a lot of confusion. Some think the IMF and World Bank are
playing contradictory roles, which is not so. And also there's a tendency to
see these institutions in isolation. In fact they are simply two tools used
by the Western elite to destroy nations, to turn them into territories.

Israel: You think some people are fooled by the World Bank?

Chossudovsky: They believe the World Bank has adopted a humane approach,
it's involved in poverty alleviation whereas the IMF creates poverty. Or
even think there's a conflict between the two. That's nonsense. The World
Bank is doing essentially the same job as the IMF; it merely has different
responsibilities in the Third World. In a way, it is far more dangerous
precisely because [of the fact that] its supposed mandate to alleviate
poverty disarms critics. The simple fact is: Wall Street is behind both
institutions. They are run by bankers not sociologists.

Free Trade, brother of War

Chossudovsky: More important: a lot of people don't see the link to NATO.
Very few of the organizations criticizing the Bretton Woods institutions
opposed the attack on Yugoslavia. They didn't talk about it in Seattle and
they aren't doing it in Washington now. They campaign against free trade,
against the IMF, in favor of the Jubilee campaign to cancel third world
but not against war. But free trade and war go hand in hand. It was true
the British in the 19th century when they forced the Chinese to "freely"
purchase opium and it is true today.

And there's a good deal of coordination between the IMF and NATO. You saw it
in Kosovo. The IMF and the World Bank had set up a postwar economic plan
including free market reforms well before the onset of bombing. [See note #1
at the end] They work together. If a country refuses IMF intervention, NATO
steps in, or NATO and various covert agencies, and they create the proper
conditions for IMF programs to be imposed.

Israel: Very sharp point.

Chossudovsky: The countries that accept the IMF, like Bulgaria and Romania,
they may not get bombed but they are destroyed with the pen. In Bulgaria the
IMF implemented the most drastic reforms, IMF medicine, which decimated
social conditions - pensions slashed, factories closed, dumping of cheap
finished goods, elimination of free medical care and transportation services
and so on.

And it's not just NATO. We see that in Central Asia and the Caucuses. Hand
hand with the imposition of IMF and World Bank reforms and privatization
program we have not only NATO but also CIA covert intelligence operations -
the institutions of war and economic management interface with one another
a global level.

So right now various countries are being softened up with regional conflicts
that are financed overtly and covertly by the Western elite. The KLA is just
one example of an externally financed insurgency. You see these manipulated
conflicts especially wherever there are strategic pipelines, and they are
linked to the drug trade and the CIA, covertly, then openly linked to NATO
and official US foreign policy, and finally to the IMF, the World Bank and
regional banks and private investors. Links in a chain.

Let's categorize these global institutions: you've got the United Nations
system and peace keeping; they play a role and they are interfacing with
as well. Then you've got the IMF and the World Bank, and the regional
development banks like the ADB, the Asian Development Bank, and so on. In
Europe it's the European Bank for Reconstruction and Development. These are
the main arms.

Sometimes war creates the conditions, and then the economic institutions
in and pick up the pieces. Or conversely the IMF itself does the
destabilizing, as they did in Indonesia. They insisted on cutting off
transfer payments to the various states in the federation. Now that
a country like Indonesia which has 2,000 islands with a system of local
governments. It is the geography of the bloody place. So they leave these
islands to their own devices.

Do you see what that accomplishes?

Israel: In other words, they insisted on cutting money that was suppose to
subsidize the local governments?

Chossudovsky: Yes, for example for education and so on. By doing this - and
incidentally they did it in Brazil as well - they destabilize the country
because in order to have a country there must be fiscal coherence, a system
of fiscal transfers. So in a place like Indonesia, each of these islands
becomes a small state. And of course now the idea of going it alone becomes
far more attractive to the many different ethnic groups. Of course they
is, the planners] are fully aware of this - they have made it happen time
again. It took place in Yugoslavia; it took place in Brazil; it took place
the former Soviet Union where the regions are left to their own devices
because Moscow doesn't transfer any money. Potentially it could happen in
United States as well. It is guaranteed to produce a situation of conflict,
internal strife.

Israel: Mutually unproductive conflict…

Chossudovsky: Yes because people are impoverished to such an extent that
start fighting.

Israel: On every basis, especially ethnic.

Chossudovsky: Incidentally in Somalia there weren't any ethnic groups, but
worked there too. You don't need a multi-ethnic society to have divisions,
have Balkanization.

Israel: And you're saying this is part and parcel of a plan for Empire?

Chossudovsky: I am saying this is recolonization. Countries are transformed
into territories, colonies essentially.

Israel: What distinguishes the two?

Countries vs. territories

Chossudovsky: A country has a government. It has institutions. It has a
budget. It has economic borders. It has customs. A territory has only a
nominal government, controlled by the IMF. No schools and hospitals, as
have been closed down on orders of the World Bank. No borders because the
has ordered free trade. No industry or agriculture because these have been
destabilized as the result of interest rates of 60% per anum and that is
the IMF program.

Israel: 60% per year?

Chossudovsky: In Brazil it's much higher. I'm looking at Botswana now. The
interest rate is horrendously high.

Israel: And this is imposed by the IMF?

Chossudovsky: They put a ceiling on credit. Do you see? So people can't get
bank loans; it drives interest sky high and that kills the economy. Then
open it up to free trade. So the local capitalist enterprises have to borrow
at 60% from the local banks and then they have to compete with commodities
from the United States or Europe where interest rates are 6 or 7%. These
reforms are essentially aimed at destroying local capitalism.

Israel: So how do we fight this?

Chossudovsky: Not with a single-issue movement. We can't focus solely on the
Bretton Woods institutions, or the WTO, or environmental issues or genetic
engineering; we have to look at the totality of relations. When we look at
the totality we see the link to the use of force.

Beneath this economic system lie the undercover features of the capitalist
order: the military-industrial complex, the intelligence apparatus and the
links to organized crime including the use of narcotics to finance conflicts
aimed at opening nations to Western control.

We have gone from gunboat diplomacy to missile diplomacy. In fact it is not
missile diplomacy. It is sheer bombing.

Israel: You said that part of the military intelligence apparatus is
gangsters. I know that you have been writing material about how drugs is
actually an economically powerful force.

Chossudovsky: Well it is more complicated than that. Because in fact the
gangsters are the instruments of big capital. They are not - they don't
overshadow the system in any way. The gangsters are people who can be easily
used precisely because they are not responsible to anybody. So it is much
more convenient.

Let's say you install Hacim Thaci [leader of the Kosovo Liberation Army] in
the seat of government in Kosovo. It's much more convenient to have a
gangster like this running a country than to have an elected prime minister
that is responsible to citizens.

The best thing is to have an elected gangster, somebody like Boris Yeltsin,
that's the best - get an elected gangster. We have elected gangsters in the
US as well.

Why? Because elected gangsters are much easier to control than elected
non-gangsters. But we must understand these gangsters are pretty obviously
subordinate - when we say it is the criminalization of the colony, it is not
true. It's the other way around. You are never going to have a situation
where these gangsters will be given any power. The big ones perhaps... So
there is a certain interpenetration of legal and illicit trade. But in
illicit trade is always subordinate to large scale financial and business

An important aspect of this is that the IMF creates the conditions for the
growth of illicit trade and for the laundering of dirty money, all over the
world. That is very clear because when legal economies collapse under the
brunt of IMF reforms what are you left with? It's the grey economy; it's the
criminal economy.

Israel: And that encourages the development of forces that can be used to
replace potentially responsible legal forces.

Chossudovsky: Yes and that type of collapse in legal economic systems
also the conditions for developing insurgencies, destabilizing elected
governments, closing down of institutions and transforming countries into
territories which are then run as colonies.

Dear reader - this interview is continued. Part II will be posted as soon as
the text is edited and laid out. - JI


Note # 1 "In Opening Kosovo to foreign capital" which you can read in full
http://emperors-clothes.com/articles/chuss/opening.htm, Michel Chossudovsky

"In occupied Kosovo under the mandate of UN peace-keeping, state terror and
the 'free market' go hand in hand. The concurrent criminalisation of State
institutions is not incompatible with the West’s economic and strategic
objectives in the Balkans. Notwithstanding the massacres of civilians, the
self-proclaimed KLA administration has committed itself to establishing a
'secure and stable environment' for foreign investors and international
financial institutions. ..

"In close liaison with NATO, the Washington based financial institutions had
already analyzed the consequences of an eventual military intervention
leading to the occupation of Kosovo: almost a year prior to the beginning of
the War, the World Bank conducted 'simulations' which 'anticipated the
possibility of an emergency scenario arising out of the tensions in Kosovo'.

"While the bombing was still ongoing, the World Bank and the European
Commission were given a special mandate for 'coordinating donors' economic
assistance in the Balkans'2. The underlying terms of reference did not
exclude Yugoslavia from receiving donor support. It was, however, clearly
stipulated that Belgrade would be eligible for reconstruction loans 'once
political conditions there change'.3

"With regard to Kosovo, the World Bank rather than providing loans to
the province’s infrastructure has focussed its intervention on providing
'assistance in designing the reconstruction and recovery program' as well as
so-called 'policy advice in economic management' and 'institution building'
namely 'governance' 4. In other words, an army of lawyers and consultants
have been sent in to ensure Kosovo’s transition to a 'thriving, open and
transparent market economy.' 5

Support granted to the KLA provisional government would be geared towards
'the establish[ment] [of] transparent, effective and sustainable
institutions' 6. An 'enabling environment' for foreign capital is to be
established alongside suitably devised 'social safety nets' and 'poverty
alleviation programs'.

"Meanwhile, Yugoslav State banks operating in Pristina have been closed
The Deutschmark has been adopted as legal tender and the banking system has
been handed over to Germany’s Commerzbank A.G which is the sole private
shareholder in [Kosovo's] Micro Enterprise Bank (MEB) formed in early 2000
the initiative of the World Bank’s International Finance Corporation (IFC),
the European Bank for Reconstruction and Development (EBRD) together with
Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO),
Germany’s Internationale Micro Investitionen (IMI) and Kreditanstalt für
Wiederaufbau (KfW). [Thus the German] Commerzbank AG will gain control over
commercial banking functions for the province [of Kosovo] including money
transfers and foreign exchange transactions."7
[To check out the refernces in the above text please see the original at
http://emperors-clothes.com/articles/chuss/opening.htm ]


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