IMF and World Bank are unfazed by how the US treats Venezuela

The International Monetary Fund (IMF) and the World Bank Group (WBG) have announced they will continue dealing with Venezuela, following the kidnapping of President Nicholas Maduro and the first lady Cilia Flores in January this year.

The United States stopped recognising Maduro as Venezuela’s “legitimate” president in January 2019 and spent years trying to pressure him out of office. The Biden administration held direct talks with Maduro in 2022, and when Maduro resumed negotiations with the opposition, Washington issued a licence allowing Chevron to resume some oil operations in Venezuela.

IMF called the announcement an ‘important step’

Both said that dealings with Venezuela were paused in 2019. The IMF said that this was “due to government recognition issues”. Neither have a problem with the illegal capture of a head of state of course, as long as the US is doing it.

As the hegemon bully, during the Covid pandemic the US blocked Iran, Afghanistan, and Venezuela from receiving emergency loans from the IMF. Now that the US’ claws are deep in Venezuela again — with the US seizing Venezuela’s oil sales, then easing sanctions of Venezuela’s central bank — the IMF and World Bank are back to bless it.

A 2022 US Congress report said that the Maduro government had “shown no interest in working with the IMF on a financial assistance package”.

Maduro was following in Chávez’s footsteps who condemned US-controlled multilateral institutions’ roles in promoting debt and underdevelopment in Global South countries.

Venezuelanalysis wrote:

Under Chávez’s predecessors, Venezuela implemented draconian IMF-conditioned structural adjustment policies that saw over half of Venezuelans living in poverty by 1998.

Board of Peace aka ‘Board of Genocide’

Practices by the IMF and WBG have been condemned widely by the Global South. The recent involvement of the WBG in Trump’s Board of Peace is another example of it being part of the predatory western financial system.

Recently, WBG’s president, Ajay Banga, was told the Board of Peace which he sits on is a “sham” and it was more aptly the “Board of Genocide”.

Oxfam reported that in 2024, 90% of African countries with IMF and WBG loads had cut spending on essential services to repay debt.

Several empirical studies have shown that IMF loans have increased poverty. The IMF requires countries to implement fiscal austerity as a condition for receiving loans which results in increased poverty.

A study led by Jason Hickel argues that IMF loans are a tool of US-led hegemony. They impose economic conditions when progressive governments “restricted their access to the cheap labour, resources and captive markets”.

This coercion is backed by military coups when necessary. The US toppled Mossadegh in Iran, Lumumba in the Congo, Arbenz in Guatemala, Allende in Chile, and Nkrumah in Ghana, the study names.

Venezuela has suffered both tactics. First came years of sanctions to strangle the government. Then the US illegally captured President Maduro. Now the IMF and World Bank have returned to certify the US takeover.

Featured image via Pixabay/ jeanmanzano

By Nandita Lal

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