The G-20's US$ 1.1 Trillion 'Rescue Plan'

So, the G-20 met in London on April 2nd and managed to agree on two things: that they would contribute US$1.1 Trillion to tackle the global financial crisis and that they would attempt to bring wider global regulation of hedge funds and credit-rating agencies. Well the increased regulation I agree with, but what about all that cash? Half of the rescue fund will go to re-capitalizing the International Monetary Fund (IMF), a quarter will go to boost world trade, another $250 billion will go to a new IMF overdraft facility, and the last US$100 billion will go to assisting International Development banks in lending to poor countries.

First of all, let’s take a look at who the G-20 are: They are the finance ministers and central bank governors along with the leaders of 20 of the world's largest national economies. In addition to these 20 members, the following forums and institutions also participate in the G-20 meetings: The Chairman of the International Monetary and Financial Committee; the European Central Bank; the Managing Director of the IMF; the chairman of Development Committee of the IMF and the World Bank, and the President of the World Bank.

Now, considering the IMF and the World Trade Organization (WTO) are represented by so many different entities in the G-20, it’s no real surprise they came out as the big winners, taking almost the entire rescue fund. Maddening though, considering it’s their poor regulation and unremitting trust in the ‘free’ market that were at the heart of the global financial crisis in the first place!

According to the G-20’s official website, together its member countries represent around 90 per cent of global gross national product, 80 per cent of world trade as well as two-thirds of the world's population. If my math is correct, that leaves one-third of our global population (the poorest third), or about 2.25 billion people unrepresented!

OK, that’s not so bad is it? The G-20 are there to help the rest of the world aren’t they? The IMF lends money to help out poor countries in need, don’t they!? Well, no actually. Instead of giving poorer countries the grants or donations they need, the IMF loans to impoverished countries come with high interest rates. The IMF’s role is then the credit communities ‘enforcer’, calling in debts that countries can never afford to pay, so they attach rules to the loans. If you take a look at the IMF and WTO’s horrendous record, you’ll find that they have two sets of lending rules; one for us in the richest countries in the world, and a separate set of rules for the poorest countries:

Here are the main “instructions” to 3rd world countries:

1. Pay off your debts ASAP!
2. Privatize (so we rich countries can pick up your assets and companies cheap)
3. Raise interest rates (to pay off your debt)
4. Increase taxes and cutback public services.

And the IMF’s “advice” to Western countries?

1. Borrow more money and pay it back when you can
2. Nationalize, but without control (bailout companies intact, with taxpayer money)
3. Lower interest rates (to boost our economy).


In order for the IMF to lend out ‘financial aid’ to poor countries, those countries must accept Free Trade, while we rich countries embrace protectionism! So that’s it, our honorable (indeed, very question-able) leader’s biggest breakthrough at the recent G-20, helping out the very people that caused the crisis and created global impoverishment! This is what happens when the rich countries are the only ones allowed to decide how the world should be run…