Are IMF prescriptions a path to salvation, or to collapse and bankruptcy?

The fundamental function of IMF prescriptions is not to develop emerging countries, but to ensure the uninterrupted flow of international trade and investment and to burden these countries with even greater debt. In other words, it is to render the norms of democracy, law, and justice inoperable. While the implementation of policies proposed by the IMF creates hardship and difficulty for the majority of a country's citizens, it benefits certain segments of society. The parties that the IMF aligns with most cordially in every country are the exporters who expect their profits to increase following a devaluation. The concrete reason why IMF programs are not embraced by the public is that they lead to a decline in domestic production and real incomes. A government that attempts to implement the conditions in the letters of intent given to the IMF is therefore usually removed from office in the first democratic election.

A government that does not fulfill the conditions, or does not make an agreement, or is unwilling to do so, loses its position—most likely through a coup—as public reaction gathers from another direction due to the cutting off of import credits and the unavailability of imported goods within the country.

In reality, the economy of a country that bows to IMF prescriptions does not develop, nor do the living conditions of its citizens improve. All that happens is a temporary relief of current balance of payments problems. The IMF shows affinity toward a country under a very heavy external debt burden. On the condition that the country shows compliance and accepts the IMF's impositions regarding its economic policies in the future, the IMF organizes a debt rescheduling meeting. It is an inevitable fact that the debts rescheduled through the IMF will be repaid in the future along with their interest. Through IMF programs, poor countries are imprisoned in a debt spiral, forced to run faster and faster just to stay in the same place, and to borrow more just to maintain the same standard of living.

Developing countries are caught in a double bind by IMF programs. When they seek official aid under conditions more favorable than commercial terms, they are forced to accept external oversight, abandon projects they believe are vital to their national interests, and slow down their industrialization efforts.

Another goal of the IMF in the countries it lends to is to keep the borrower in line and obedient. It is pure loan-shark logic. Here, the IMF is the employer, and the borrowing country is the worker. The IMF's logic is to keep its worker constantly indebted and permanently dependent without killing them. Countries to which the IMF lends are pushed into a category of slavery—forced to produce cheaply for others and prevented from producing for themselves. This is a form of debt bondage at the international level. Countries trapped within this system are condemned to perpetual underdevelopment or to developing the production of export goods desired by international organizations at the expense of their own citizens' needs.

The IMF forces domestic producers into bankruptcy by creating economic crises in the countries it enters. Workers are laid off. The businesses of domestic producers are taken over by foreigners. It must be remembered that since the loans received do not lead to a flow of resources, they cause the ownership of resources within the country to pass from national producers to foreigners. While IMF loans close the balance of payments deficit in the short term, they lead to profit transfers abroad in the long term, making the balance of payments problem even more intractable. In IMF stabilization programs, the real losers are mostly poor consumers and producers.

At this stage, many firms go bankrupt; many workers lose their jobs. The wage restrictions proposed in IMF programs lead to a decrease in the real incomes of those who are not laid off as well.

IMF prescriptions impose devaluation in the countries they enter. Due to devaluation, the domestic supply of certain goods whose exports increase decreases, and prices rise. Inflation is experienced within deflation. The clear and primary task of IMF programs is to reduce domestic consumption in order to increase the goods available for export.

Another blow dealt to consumers by stabilization programs is the removal of consumer subsidies and price controls. The full implementation of free-market rules through IMF prescriptions degrades the living conditions of a country's individuals to such an extent that they cannot be corrected without a revolution.