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Russia refuses to fund outdated World Bank – this is why!

By BO Staff Writer

Evidence of the destruction of “third world” economies and its peoples – caught in the stranglehold of capitalist imperialism – in Africa, Asia, and Latin America is overwhelming. We have seen how the policies of the International Monetary Fund (IMF), the World Bank (WB), the World Trade Organization (WTO) and Free Zones have led to the economies of the “third world” being completely ravaged and destroyed.

In South Africa we have seen and experienced how, through the creation of debt in the form of IMF loans, the Washington Consensus has used this debt to gain access to our raw materials and infrastructure on the cheapest possible terms. The Structural Adjustment Policies (SAPS) imposed by these imperialist institutions on SA has served to ensure debt repayment and economic restructuring. The SAPS ensures reduction in public spending on things like education, health care, housing, food security, development while debt repayment and other economic policies take priority. It compels unregulated imports and the exportation of more of our own commodities.

Moreover the Washington Consensus, via its pro imperialist President Ramaphosa in SA, ensures that the standard of living of blacks is systematically lowered under its stranglehold. Russia understands the anti people agenda of the imperialist institutions perfectly well, hence its move away from it. SA under Ramaphosa, on the other hand, is moving with speed towards embracing this evil agenda.

The following article was previously published on the Sputnik News website and is now reissued by Black Opinion:

The World Bank’s assets are being directed to fund reforms beneficial to transnational corporations, including those from the US, Vasily Koltashov, director of the Institute of Globalization and Social Movements’ Center for Economic Research, told Sputnik, commenting on Russia’s refusal to participate in the financial institution’s additional capitalization.

The World Bank as well as the other institutions of the world’s financial system — the International Monetary Fund (IMF) and the World Trade Organization (WTO) — were founded on the principle of free trade. It was expected that politics would never interfere with the economy in any way and that countries that adopted the principle of economic openness would cooperate with each other while the IMF and WTO would help them implement appropriate reforms.

However, according to the scholar, it has turned out that both the IMF and the World Bank became Washington’s instruments to ensure its economic and political dominance in the world: They pressured economically weak countries into adopting tough rules under the so-called Washington Consensus.
For its part, the US does not consider it necessary to follow any rules: Recently, Washington has adopted a protectionist approach, violating the free trade principle and unleashing a trade war on China. Under these circumstances, the World Bank and the IMF are losing their relevance.

“Russia should use its money to solve its own problems,” Koltashov opined. “This is pure insanity to fund international institutions that not only do not work, but are hostile to [Russia]”

Mikhail Belyaev, chief economist at the Institute of Stock Market and Management (ISMM) echoes Koltashov: “It appears rather awkward to support an organization that promotes US policies, and especially amid [anti-Russian] sanctions,” he noted, in an apparent reference to a new package of restrictions against 38 Russian businessmen and senior government officials over the alleged poisoning attack against former spy Sergei Skripal and his daughter Yulia in the UK that was announced by the White House on April 6.
On April 21, World Bank shareholders approved the decision to bolster the financial institution’s lending capacity by $13 billion. The decision was justified by the need to tackle new challenges, such as climate change, refugee crises and pandemics, World Bank President Jim Yong Kim said, as quoted by Deutsche Welle.

According to Russia’s Deputy Finance Minister Sergei Storchak, Russia refused to invest further funds within the framework of the World Bank Group’s (WBG) new initiative, citing its doubts regarding the efficiency of the bank’s credit policy and suggested that the institution’s strategy could alienate China and India, the bank’s most reliable borrowers.

The US has also signaled its unwillingness to participate in the World Bank’s further capitalization, referring to the low efficiency of projects funded by the financial institution.

“There are fewer and fewer of those wishing to support the World Bank in its current form,” Belyaev said. “It’s like pouring a new wine into old wineskins: the wine will burst the skins and spill out.”

Since the current model of the global financial structure has outlived itself, it may lead to a reorganization of the IMF and the International Bank for Reconstruction and Development (IBRD), operating in tandem with the World Bank, observers believe.

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