It seems the IMF and Bretton Woods institutions are keen to rebrand themselves and this Bill seems to be linked to that effort by the IMF. The infamous structural adjustment programmes that were imposed by the IMF on this country and many other countries in the developing world or those which hit major economic crises have proved utterly disastrous because of the conditions linked to these loans provided by the IMF and World Bank. The global interventions of the IMF have been just a litany of disaster where the conditions attached to so-called financial support from the IMF were such that they made bad positions worse.
Invariably, the conditions that were attached to the loans were those of austerity, privatisation and deregulation. They were a way in which the wealthy countries of the world, a little bit like loan sharks but on a more sophisticated level and a grander scale, could dictate policy to countries that were recipients of those loans.
For much of the neoliberal period, for want of a better term, since the late 1970s or early 1980s, the damage wrought by the IMF and the World Bank was inflicted on developing countries in Latin America, the Middle East and Africa. With the economic crash of 2008, the damage came a hell of a lot closer to home. The infamous troika of the IMF, the European Commission and the European Union imposed conditions of austerity on foot of loans, supposedly to bail Ireland out after the financial crash created by bankers and developers. The cost was absolutely crippling to this country. We still have an enormous debt of €230 billion. Because of low interest rates, that debt is deemed to be sustainable. If interest rates begin to rise, however, which is almost a racing certainty, at a certain point that debt burden could become absolutely crippling. Bad as that is, the debt burden imposed on ordinary people as a result of the crimes of bankers, developers and the Governments that facilitated them was also linked to cruel and senseless, utterly counter-productive austerity demands.
The legacy of austerity remains with us, most obviously in the form of the housing crisis. Social housing provision - direct State construction of public housing - was effectively halted for more than a decade. We are paying a very bitter price for the demands of the troika to impose austerity in the context of public spending. It has left us with a chronic housing crisis inflicting extraordinary misery on ordinary working people just looking to put a secure, affordable roof over their heads. The origin of that crisis predates the austerity programme but it became worse by multiple factors as a result of the IMF troika loan programme. We are dealing with the consequences of that now. We can also see it in our health service. Tens of thousands of staff were taken out of the public health service as a result of the austerity measures and we are dealing with chronic capacity deficits in our health service today. There are hundreds of people on trolleys because we butchered the health service to get the supposed bailout from these institutions.
It is also worth pondering the connection between IMF policies and war. Particularly now that we are considering the horrors of Putin's invasion of Ukraine, it is worth considering the connection between war, civil breakdowns and IMF loans and structural adjustment programmes. These are rarely commented on. It is rarely said that preceding the current conflict in Ukraine, a structural adjustment programme imposed by the IMF was in place, imposing neoliberal policies and austerity on the people of Ukraine and doing considerable economic damage to that country.
Prior to the Balkans war, the civil war that tore Yugoslavia apart with the horrendous crimes of ethnic cleansing and the rise of horrific forms of nationalism in the Balkans, there had been a structural adjustment programme imposed by the IMF involving crippling austerity and wholesale privatisation of the public and state enterprises in that country. In fact, before the Balkans war there had been massive revolts by working people. Regardless of ethnicity, Serb, Croat or Slovenian, together and united, working class people were on the streets protesting against IMF austerity. It is arguable and I am convinced it is the case that part of the reason there was a bloody civil war in the Balkans, the first encroachment of this kind of serious war and conflict in Europe since the end of the Second World War, was that when the ordinary people in the former Yugoslavia revolted against IMF privatisation and austerity, the leaders of the Yugoslav regime decided to play the nationalist card in order to divert attention, divide and rule and deflect legitimate anger against economic austerity into a horrible campaign of nationalism and ultimately of ethnic cleansing and war. It is important to remember that.
Preceding the Arab Spring was the imposition of structural adjustment programmes in places like Egypt by Hosni Mubarak and in other regimes in north Africa and the Middle East, imposing crippling austerity and the wholesale privatisation of industries. Privatisation was always linked to corruption because the states that were willing to privatise state enterprises inevitably privatised them to the benefit of their mates, the clique around the Government that was imposing them. It is a bit like in this country when we privatised telecommunications and created billionaires like Denis O'Brien. They were the people who benefited. Russian oligarchs came from the wholesale privatisation of state enterprises and industries in the Russian economy. They created this whole layer of horrible oligarchs who then controlled the former state industries. From that is produced the sort of horrible regime we see with Putin.
That scenario is not limited to Russia, as horrible and obnoxious as its particular manifestation in Russia is. It is a more global phenomenon whereby the insistence of the World Bank and the IMF on linking loans to privatisation and austerity has proved disastrous and has usually assisted in the destabilisation of countries and often in the production of civil wars, certainly of wholesale corruption and often full-scale war. The warring brothers of those who ran those states played cynical games, whipping up militarism in order to deflect popular anger away from themselves and onto scapegoat groups or launching wars in order to divert people's attention away from the real problem, which was the impact of neoliberalism being pushed down their throats by the IMF and the World Bank.
It no surprise against that background that the IMF wishes to rebrand, as this Bill sets out to do. Instead of the infamous structural adjustment, we now have much more benign sounding grant and loan programmes such as poverty reduction and growth and catastrophe containment and relief. It sounds beautiful but has anything actually changed? The states that dominate the IMF and the World Bank are the wealthiest and most powerful. Inevitably, they exercise their influence on the conditions attached to loans given to poor countries, which are forced to go looking for these loans and then swallow the conditions attaching to them.
Inevitably, the wealthy countries attach conditions that are beneficial to them and which, almost invariably, operate to the detriment of the people who take the loans. The latter find themselves in hock to these institutions and, in effect, subject to their demands and whims.
There has, perhaps, been something of a recognition among some of these institutions, and among some of the big western powers which dominate them, that neoliberalism is a disastrous experiment that has failed. We saw some evidence of that recognition during the Covid crisis. When one is faced with a public health emergency, one realises, for example, that a privatised health service is not really a very good idea. Suddenly, it dawns on people that having a two-tier health service, with a public service that is overrun and private hospitals that have excess capacity but can only be accessed by people who have the money to pay exorbitant levels of private health insurance, is not the best type of health system to have facing into a public health emergency in which the health of every person is linked to the health of everybody else.
Unprecedented measures were taken during the Covid crisis, including the integration for a brief period of the private health service with the public health service. Of course, it was still done in the neoliberal way. Instead of fully integrating and absorbing the private health service into a fully public, single-tier national health service, the Government just paid out huge amounts of money to the private owners of the private system. There was a refusal to break from the privatised model and we see the same with housing. Yes, there is a recognition that we are facing a housing crisis and that a massive mistake was made in doing what the IMF and others told us to do after the crash of 2008, which was to stop building public housing. However, it is clear we have not really learned that lesson when we look at what is happening now. The vast majority of so-called social housing is still being sourced from private developers under Part V of the Planning Development Act, as amended, through leasing arrangements, through the purchase of property from those developers and so on.
There has been some rhetorical shift by the institutions we are discussing in the way they seek to brand their operations, whether at the international level of the IMF or at the state level of countries like Ireland. However, it is seriously doubtful whether there has been any real and fundamental shift - in fact, I am certain there has not - away from the neoliberal mindset that produced such a disastrous economic crisis in 2008 and such a disastrous response to it in the form of structural adjustment programmes. Of course, horrendous as it was, what we suffered was minor compared with what many countries in Africa, the Middle East and Latin America suffered in the 1980s at the hands of these institutions. I take the vague recognition on their part that the neoliberal model has failed and needs to rebrand itself as a sign of there being pressure on them, and on governments, to begin to shift their thinking. There are very serious questions, however, as to whether they will, in fact, shift their practice or if the change is merely a rebranding and we will continue to see the same disastrous conditions attached to loans, particularly when things begin to get tight.
Considering this country's current debt burden, we may well suffer very serious consequences as a result of the moneys owed to the sorts of institutions that imposed such disastrous conditions on the loans they gave after the crash of 2008. My colleagues and I have made the argument for writing off these debts, an argument that was resisted hotly by Fianna Fáil and Fine Gael, with the Green Party switching its position depending on whether it was in opposition or in government. Those debts should have been written off for many of the countries in the developing world on which they were inflicted in the 1980s and 1990s. It remains my opinion that they should be written off today. In the case of such catastrophe loans and loans dealing with poverty, they often simply fill the gap created by the conditions that were attached to loans that were given previously by the same lenders.
Rather than simply rebranding the structure whereby wealthy countries and wealthy people lend countries money to fill the gaps created by the previous, disastrous mistakes made by those lenders, we should be thinking about a new international order and eliminating the inequality that requires countries to take these kinds of loans in the first place. We must eliminate situations whereby countries are, in effect, subject to an economic system that is dominated by very large corporations and the states associated with those corporations, which use their incredible wealth to grab hold of resources and markets in order to increase their profits. Never are they interested in the welfare of the people in those countries. Their only interest is in how lending money and attaching certain conditions to it can possibly increase their sphere of influence or their access to certain markets.
I am not, therefore, holding my breath on the rebranding of the IMF. If it feels the need to do such rebranding, it is demonstrative of the fact it can no longer stand over the disastrous priorities and policies it has pursued for the past 20 years. Perhaps this rebranding will create the space in which we can argue for a fundamental break from the disastrous policies of neoliberalism and for a different type of international order that is about meeting the needs of society - the needs of human beings - and using the incredible wealth that exists in our world to satisfy people's basic needs for housing, health, education and decent infrastructure and public services. If we went for that sort of emphasis, we might see fewer wars and less military conflict of the terrifying sort that is happening in Europe, Yemen, the Middle East and many parts of the developing world.
