Debt Relief to Combat COVID-19 Blocked by U.$. Imperialism
In April, the International Monetary Fund (IMF) began considering calls for aid to Third World countries in the face of the COVID-19 pandemic.(1) Since then, finance capital flows have begun moving out of the Third World and back into the United $tates, resulting in currencies in those countries losing their value. This is making it impossible for these countries to pay off their existing debt burdens, as well as to fund much-needed relief for their people during this crisis.
In our previous article we mentioned the possibility of the IMF issuing Special Drawing Rights (SDRs) which would allow all countries to access funds, via the United Nations, without accruing additional debt and interest. We have also been echoing the call for complete debt forgiveness, or jubilee, for the poorest nations of the world.
In place of these measures, the United $tates has set up a system where countries can apply for dollars in exchange for local currency from the U.$. Federal Reserve Board. This allows the United $tates to decide who gets funding. Due to their control of the IMF, the Amerikans have already blocked funding to Venezuela to combat the pandemic.(2)
The money being offered from the the Fed will also be given as loans, with interest.(2) Already, the most exploited countries of the world cannot afford to pay off existing loans. Many countries are spending more on debt payments than healthcare during the pandemic.(1) In addition, these loans, unlike the proposed SDRs, will have conditions that give the Amerikans control over the path of development these countries take in the future.
The exiting of finance capital from the Third World will have the effect of passing the impacts of the economic crisis disproportionately on to those countries. Meanwhile, the United $tates is offering to send dollars back to put these countries further into debt and ratchet up further policy control over their economies. While the United $tates is currently leading the world in deaths due to the novel coronavirus, the Third World nations are likely destined to see much more dire death and suffering without debt forgiveness, unconditional aid, and the lifting of sanctions and embargoes by the imperialists.
In times of capitalist expansion, exporting finance capital works to transfer wealth from the Third World periphery to the First World nations. Now that the economy is quickly contracting, the methods above show how pulling finance capital out of the periphery also transfers wealth to the First World nations. Ultimately, national liberation struggles are necessary to free the peripheral countries from the economic system of imperialism that uses them as a source of wealth at the expense of much humyn suffering.