Tunisia and the IMF’s Diktats: How Macro-Economic Policy Triggers Worldwide Poverty and Unemployment

Published on Global Research.ca, by Michel Chossudovsky, January 20, 2011.

… But Ben Ali was not a dictator. Dictators decide and dictate. Ben Ali was a servant of Western economic interests, a faithful political puppet who obeyed orders, with the active support of the international community.

Foreign interference in Tunisia’s domestic affairs is not mentioned in the media reports. The food price hikes were not “dictated” by the Ben Ali government. They were imposed by Wall Street and the IMF.

The role of Ben Ali’s government was to enforce the IMF’s deadly economic medicine, which over a period of more than twenty years has served to destabilize the national economy and impoverish the Tunisian population. 

Ben Ali as head of state did not decide on anything of substance. National sovereignty was foregone. In 1987, at the height of the debt crisis, the left nationalist government of Habib Bourguiba was replaced by a new regime, firmly committed to “free market” reforms.

Macroeconomic management under the helm of the IMF was in the hands of Tunisia’s external creditors. Over the last 23 years, economic and social policy in Tunisia has been dictated by the Washington Consensus.

Ben Ali stayed in power because his government obeyed and effectively enforced the diktats of the IMF, while serving the interests of both the US and the European Union.

This pattern has occurred in numerous countries … //

… Bitter irony: Against a background of rising food prices, the IMF recommends the removal of the subsidies with a view to reaching the goal of fiscal austerity.

Manipulating the Data on Poverty and Unemployment:

An atmosphere of social despair prevails, people’s lives are destroyed.

While, the protest movement in Tunisia is visibly the direct result of a process mass impoverishment, the World Bank contends that the levels of poverty have been reduced as a result of the free market reforms adopted by the Ben Ali government.

According to the World Bank’s country report, the Tunisian government (with the support of the Bretton Woods institutions) was instrumental in reducing the levels of poverty to 7 percent (substantially lower than that recorded in the US and the EU).

Tunisia has made remarkable progress on equitable growth, fighting poverty and achieving good social indicators. It has sustained an average 5 percent growth rate over the past 20 years with a steady increase in per capita income and a corresponding increase in the welfare of its population that is underscored by a poverty level of 7% that is amongst the lowest in the region.

The steady increase in per capita income has been the main engine for poverty reduction. … Rural roads have been particularly important in helping the rural poor connect to urban markets and services. Housing programs improved the living conditions of the poor and also freed up income and savings to spend on food and non-food items with resulting positive impacts on poverty alleviation. Food subsidies, which have been targeted to the poor, albeit not optimally, have also helped the urban poor. (World Bank Tunisia – Country Brief).

These poverty figures, not to mention the underlying economic and social “analysis”, are outright fabrications. They present the free market as the engine of poverty alleviation. The World Bank’s analytical framework is used to justify a process of “economic repression”, which has been applied Worldwide in more than 150 developing countries.

With a mere 7 percent of the population living in poverty (as suggested by the World Bank “estimate”) and 93 percent of the population meeting basic needs in terms of food, housing, health and education, there would be no social crisis in Tunisia.

The World Bank is actively involved in cooking the data and distorting the social plight of the Tunisian population. The official rate of unemployment is 14 percent, the actual level of unemployment is much higher. Recorded youth unemployment is of the order of 30 percent. Social services, including health and education have collapsed under the brunt of the IMF-World Bank economic austerity measures.

Tunisia and the World: … (full text).

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