Alan Macleod reports in MintPress News that the IMF is using the Covid-19 pandemic as an opportunity to push for austerity: “76 of the 91 loans it has negotiated with 81 nations since the beginning of the worldwide pandemic in March have come attached with demands that countries adopt measures such as deep cuts to public services and pensions — measures that will undoubtedly entail privatization, wage freezes or cuts, or the firing of public sector workers like doctors, nurses, teachers and firefighters.”
Although the IMF’s own reports have revealed that its approach of pushing for austerity and fiscal “responsibility” simply do not work, describing them as “all pain, no gain” that do not improve the physical economic standing of the countries under the IMF’s thumb.
Ecuador is a perfect example of the consequences of IMF actions. The previous president, Rafael Correa, made poverty reduction a priority and condemned the IMF and World Bank, but the new president, Lenin Moreno, has made an about-face: last year he cut the health budget by 36% in order to get a $4.2 billion IMF loan. The overwhelmed health system led to high Covid death rates. In October 2020, a new $6.5 billion deal was worked out with the IMF, which demands cuts to health spending, reduction of cash transfers for those unable to work due to the pandemic, and a slashing of fuel subsidies for the poor.
