Chavez announces plan to drop out of IMF and World Bank
Current Music: Bright Eyes
Venezuelan leader Hugo Chavez announced Monday his intention to remove Venezuela from the International Monetary Fund and the World Bank, lending organizations that have had a controversial role in the developing world, according to the Belfast Telegraph (http://www.belfasttelegraph.co.uk/news/world-news/article2502497.ece). Venezuela, due to its large oil wealth, has been able to pay off its debt with both organizations under Chavez (even before schedule), making the declaration largely symbolic.
Chavez has denounced the IMF and World Bank for being run by US and Western interests and corportations, leading to unfair privitization, and establishing greater poverty in Latin America. Chavez has also tried to provide money for countries trying to develop in the region. He has often talked about starting a "Bank of the South." Chavez has also spent millions in government funds to reduce poverty and raise welfare in Venezuela, in a transition to a socialist economy.
Some analysts have claimed Chavez is upset about the IMF's support of a rebel group that led a coup against Chavez in 2002, which left him temporarily out of office.
A day earlier Chavez met with leaders from Bolivia, Nicaragua, Cuba and Haiti where he claimed that the IMF and World Bank "sooner or later, those institutions will fall due to their own weight."
According to an AP story, the IMF had already closed its offices in Venezuela late last year (http://www.boston.com/news/world/latinamerica/articles/2007/05/01/venezuela_pulling_out_of_imf_world_bank/?p1=MEWell_Pos3). Chavez often criticized previous administrations for signing IMF deals that lead to inflation. For example, a 1989 deal hiked gas prices, transport fares, and prices, and led to riots that killed over 300 people.
Other Latin American countries like Nicaragua and Equador have also expressed interest in leaving the IMF.
I think these stories were a little unbalanced in their reporting. In neither case did I read any viewpoint of IMF, World Bank, or US officials. Also, I think the articles simply assumed that pulling out those groups would lead to prosperity and didn't mention any negative side effects that could result. For example, another story I read talked about a clause in Venezuela's IMF contract that would default its loan repayment if they left the organization. This fact wasn't mentioned in either of these stories. I thought the AP story did a good job discussing the effects of the IMF in previous presidencies. I simply thought there were too many quotes from Chavez in each story. I think he is the newsmakers, as both leads will show, but there has to be other voices in the background both for support and opposition. I also thought the "Bank of the South" idea was really interesting and should've been expanded in each article.