Economics and Power

[Not sure who is reading my tirades any more, but what the heck.

I had always thought that the World Bank and the International Monetary Fund were altruistic functions of the wealthy nations of the world to make life better in the lesser successful peoples of the world.

However, I really started to wonder about that when Bush appointed Wolfowitz of all people, to head up the World Bank partly because I didn't know that the administration controlled the World Bank and partly because I didn't believe that even they'd install a person of such questionable character as its CEO!

(Latest news indicates: "World Bank president Paul Wolfowitz attempted to fight his way out of trouble last night – but hinted that he may be prepared to resign if the charges ...)

But now, I see below, that our southern neighbors are alive and prospering and don't need our questionable charity! It seems that for most people, socialism* actually works! Our nation was originally based upon socialism as opposed to royal tyranny but we quickly forgot as we succumbed to the lure of capitalistic greed - screw the other guy before he screws you....

*I should add that our first colony, Jamestown, started out communistic but slavery (and cotton) very quickly changed that! And after the market crash in 1929 when people lost everything, there were many communes established for people to work, contribute and survive. My conclusion here is that communism works when you're hungry. ...AG]

Venezuela pulling out of IMF, World Bank
By JORGE RUEDA, Associated Press Writer

CARACAS, Venezuela - President Hugo Chavez announced Monday he would pull Venezuela out of the World Bank and the International Monetary Fund, a largely symbolic move because the nation has already paid off its debts to the lending institutions.

"We will no longer have to go to Washington nor to the IMF nor to the World Bank, not to anyone," said the leftist leader, who has long railed against the Washington-based lending institutions.

Venezuela, one of the world's top oil exporters, recently repaid its debts to the World Bank five years ahead of schedule, saving $8 million. It paid off all its debts to the IMF shortly after Chavez first took office in 1999. The IMF closed its offices in Venezuela late last year.

Chavez, who says he wants to steer Venezuela toward socialism, made the announcement a day after telling a meeting of allied leaders that Latin America would be better off without the U.S.-backed World Bank or IMF. He has often blamed their lending policies for perpetuating poverty.

Chavez wants to set up a new lender run by Latin American nations and has pledged to support it with Venezuela's booming oil revenues. The regional lender, which he has called "Bank of the South," would dole out financing for state projects across Latin America.

Chavez has criticized past Venezuelan governments for signing agreements with the IMF to restructure the economy — plans blamed for contributing to racing inflation.

Under former President Carlos Andres Perez in 1989, violent protests broke out in Caracas in response to IMF austerity measures that brought a hike in subsidized gasoline prices and public transport fares.

Enraged people took the streets in violence that killed at least 300 people — and possibly many more. The riots came to be known as the "Caracazo," and Chavez often refers to it as a rebellion against the status quo.

During Sunday's talks with leaders from Bolivia, Nicaragua, Cuba and Haiti, Chavez predicted that "sooner or later, those institutions will fall due to their own weight."

"They will wear away — the International Monetary Fund, the World Bank and all those institutions," Chavez said.

Bolivian President Evo Morales raised complaints about a World Bank body that mediates disputes between governments and foreign investors. He said governments never seem to win their disputes against transnational companies at the World Bank's International Center for Settlement of Investment Disputes.

Chavez suggested that Latin countries could instead create their own arbitration body for disputes with big companies.

Venezuela is not the only country in the region distancing itself from international lenders.

Nicaraguan President Daniel Ortega said Sunday that he hopes to "get out of that prison" of IMF debt and that "we are negotiating with the Fund to leave the Fund."

Ecuador's leftist president, Rafael Correa, recently asked the World Bank's representative there to leave and said the country paid off its debt to the IMF. Argentina also has paid back billions of dollars to the IMF.