Finding our way forward without the IMF

Finance on the Precipice

- By Ahilan Kadirgamar

The current global era is dominated by finance. Following the long economic downturn of the 1970s with falling profits, capitalism shifted towards an accumulation strategy centred on finance for profit generation. This latest phase of capitalism, which is known as neoliberal globalisation, is in fact a project of the financial capitalist class. These decades are characterised by a tremendous increase in inequality between the countries in the global North and South, along with income and wealth inequality within countries.

In this column I address the crisis tendencies of global finance, which for close to five decades has been the engine of capitalist accumulation. An impending financial crisis is bound to affect the global order; which is led by financiers in Wall Street and the City of London, and moulded by the International Financial Institutions (IFIs) with the backing of the Treasury of the United States, particularly the International Monetary Fund (IMF) and the World Bank. Furthermore, even the other clones of these multilateral financial institutions such as the Asian Development Bank, and for that matter the BRICS Development Bank, are likely to face dramatic changes. With the unravelling global order, what should small states like ours do?

Liberalisation and decay

Sri Lanka went through liberalisation starting in the late 1970s under the Structural Adjustment Programmes of the IFIs, and commonly known here as open economy reforms. We were told the free market was the only way forward for development, and were demanded to abandon our social welfare policies.