Library:Enough is Enough

Enough is Enough: Dear Mr. Camdessus ... Open Letter of Resignation to the Managing Director of the International Monetary Fund
Author	Davison L. Budhoo
Publisher	New Horizons Press
First published	1990 New York
Type	Book
Source	archive.org

Foreword by Errol K. McLeod

The International Monetary Fund is one of the most powerful institutions in the world. Along with its 'sister' institution, the International Bank for Reconstruction and Development (the World Bank), the IMF is playing a crucial role in the reorganisation of global production. Through the rigid implementation of structural adjustment policies, the IMF and the World Bank are ensuring that the governments of countries that seek IMF and World Bank loans become faithful adherents to the philosophy of monetarism. And because the philosophy was never intended to create meaningful and sustained development, the result of the structural adjustment policies has been the deepening crisis of debt for Third World countries and rapidly growing poverty which leaves much of the peoples in these countries in a state of marginalisation at best, and abject misery at worst.

To confront an institution that has the power to implement this systematic process of recolonisation is not easy. It is also a task that requires a tremendous amount of personal courage. This publication is the result of one such act of courage. Davison Budhoo, former IMF and World Bank staffer, in a historic open letter of resignation from the IMF has not only challenged the philosophy and epistemology of the IMF and condemned its creation of mass poverty. He has gone further than anybody before by exposing massive statistical fraud carried out by the Fund in Trinidad and Tobago in the period 1985-1987.

Budhoo's resignation was an act of courage and conscience. All Third World peoples who have had to bear the economic and social weight of the Fund's "streamroller" policies are indebted to him. All those in the "developed" world of the North who are opposed to the injustice of the IMF and World Bank, are indebted to Budhoo.

The Oilfields Workers' Trade Union of Trinidad and Tobago invites others to express their indebtedness by utilising the facts and information provided in Budhoo's letter to the maximum. World public opinion must foa.as on the IMF's fraud. And at the same time we must collectively ensure that "Man of Conscience" Davison Budhoo is encouraged to continue his work. History is all too replete with the elites of this world using their to break people of conscience. We must not allow this to happen to Budhoo.

For the record it rust be said that Budhoo's position on fraud by the IMF in Trinidad and Tobago has been vindicated. The report by an investigating team appointed by the Cabinet of the Government of Trinidad and Tobago (which team was headed by Professor Compton Bourne of the Faculty of Economics, University of the West Indies) stated:

"(i) The Committee concludes that there have been serious statistical irregularities and technical deficiencies in the IMF's economic analysis and reporting on Trinidad and Tobago.

(ii) The likely consequences of these errors are:

(a) Unwarranted adverse judgement of the country's economic performance and national economic management;

(b) Inappropriate policy recommendations by the IMF and those agencies influenced by its economic analyses;

(c) International credit problems for Trinidad and Tobago

(iii) The IMF behaved irresponsibly in not disseminating the revised statistical series and in not revising its economic assessment when the earlier ones were known to be erroneous. Professional ethics, if nothing else, should have dictated that the corrected series be given the same prominence as was afforded the erroneous data."

In addition, the predictions by Budhoo of the effects of IMF and World Bank programmes in Trinidad and Tobago have all too sadly come to pass. Sine his warnings, the people of Trinidad and Tobago have suffered through a currency devaluation, increased unemployment and layoffs, a 15 percent Value Added Tax, cut in public sector employees' wages, cuts in social services, higher prices, loss of foreign exchange due t easing of controls on foreign exchange, impending removal of non-tariff barriers to imports, undermining constitutionally established bodies such as the Industrial Court and the Public Utilities Commission, and willy-nilly privatisation of State Enterprises.

We however are not defeated by the burden of this weight. We have rejected these policies of structural adjustment agreed to by our own weak, spineless and uncreative political directorate. And we have redoubled our efforts and intensified our struggle to bring about economic, social and political transformation. For it is only this that will enable us to end our persistent poverty. And as we struggle, we remember and thank Davison Budhoo for the unique and historic contribution he had made to this development. Davison has pointed a way but only the unity of the people will tame the IMF/World Bank "Goliath."

San Fernando, Trinidad

February 1990

Errol K. Mc Leod

President General

Oilfields Workers' Trade Union, Trinidad

Note by the publisher

The new decade now upon us — the last of this century and millennium — has been characterized by sweeping political and economic change. Starting in Poland, this extraordinary process of change spread rapidly across East Europe and the Soviet Union. Demonstrating the power of grassroots political mobilization, the forces behind this change quickly chal- lenged established centers of political and economic power. The cornmn denominator of the demands generated by these forces has beelö an insistence upon accountability to those whose lives are directly af- fected by those who wield power. It is unlikely that this contagious mass mobilization will be easily contained in one region of the world. Nor is it likely to be confined to producing change only in national governments. Established economic and plitical institutions everywhere are going to be, in the years ahead, subject to demands for greater account- ability for their actions. Accountability is, in the final analysis, what Davison Budhoo's Open Letter of Resignation from the ln- temational Monetary Fund is all about. By exposing the way in which the Fund works, both generally and in specific instances such as Trinidad and Tobago, he lays the groundwork for imposing on the Fund new stand- ards of accountability to the institutions and people affected by its actions.

Historically, the IMF has been primarily accountable to those who have provided the lion's share of its financial resources. This is no longer enough. We — the citizens of the world — are all stakeholders in the Fund. And those that have the greatest stake are the populations of countries that have had to endure the harsh economic and political adjustments imposed by the Fund as a condition of its providing assistance. By far the greatest stake of all is in the hands of the most vulnerable sections of these populations — typically, women, children, and the poor generally — because the burden of these adjustments has fallen most heavi- ly on their shoulders. Davison Budhoo's resignation from the Fund as an act of conscience was a courageous step into the unknown. When he took that step, he burned many bridges behind him, including a retum to the safe, conMortable, well-compensated world inhabited by international civil servants. For him the risks were very large, but he took those risks because, having participated in the work of the Fund and having seen for him- setf the terrible burdens the Fund's actions imposed on poor and innocent people, he could no longer live with his conscience.

The Fund's initial response in threatening Davison Budhoo with legal action ill behooves a powerful public institution. Such institutions must, if they are to be truly accountable to their stakeholders, function not in a closed Byzantine environment but as though they were in a goldfish bowl. By lifting the veil of secrecy that for far too long has protected the IMF and its actions from intense public scrutiny, Davison Budhoo has done all of us who believe in the principle of accountability for public institutions a great service. In publishing Davison Budhoo's Open Letter of Resignation, we seek to make it as widely accessible as possible as a tool for those who are striving to hold the International Monetary Fund to new standards of ac- countability. It will soon be followed by a new book by Davison L. Budhoo. With the working title, Global Jus- tice: The Struggle to Reform the International Monetary Fund, this new book will chronicle what happened as a result of his resignation, including investigation of the charges he made against the IMF and the IMF respnse. It will also set forth a program for reforming the IMF and a strategy for achieving those reforms.

We hope this new book, like the Open Letter, will be useful in the struggle to make the IMF more ac- countable to all of its stakeholders and not just its principal patrons. We are proud to be part of that struggle for global justice.

New York

February 1990

Ward Morehouse, Publisher

New Horizons Press

Author's preface

It is alrmst two years since my Open Letter of Resignation arrived at the desk of Mr. Camdessus, Manag- ing Director of the International Monetary Fund. My expectations of its impact on the Fund itself, its member governments and ordinary penple around the world who might hear or read about what I had done, were greatly underestimated and, simultaneously, naively inflated.

Let me explain what I mean.

When I began writing the Letter in 1987, I though that I had one buming, all-consuming mission - i.e.; to bring to the attention of the world what appeared to me to be the criminal actions by the Fund, perpetrated perhaps sometimes unknowingly against peoples of the Third World, and particularly the poorest and most economically vulnerable amng them.

I labored under the illusion then (as indeed I did for several months after the Letter appeared), that once I took the plunge and proved without question the accuracy of the serious charges that I was making, a process of internal dialogue and soul-searching, forced on the Fund by world public opinion, would inexorab- ly be set in motion. And I felt that in the ensuing climate of flux and accommodation, the regime of reform that I had proposed would necessarily be brought into the international spectrum, along with other proposals emanating from concemed sources.

In short, I believed that there was bound to be some way through which the Fund and its powerful sup- prters in the developed world Øuld be made to rmve away from the path of callous destructiveness and follow a humane course of fair play that makes civilization possible.

That was my thinking, but things did not turn out that way. Instead, the Fund dug in its heels, defiant and unrepentant. It turned all its anger and poison and frustrations on my person. In its own words "the Fund reserves its right to take such action against you as is necessary to protect is interests and those of its mem- ber countries." The Director of Administration who wrote these words did not, as I came to realize, have in mind legal, above-the-board action. For twenty one rmnths I have begged them to take such action and they have refused.

Before the Executive Board in early July, 1988, top management warned that the Fund was being "entrapped" by me. And at about the same time, the Director of External Relations told the British Broadcast- ing Corporation's Channel 4 Television crew that the Fund was determined to take all necessary action to ensure that Budhoo never becomes an "international star." And while my person was vilified, and plans laid to destroy me, no one on the Board thought it necessary to pay heed to the charges that I had made.

Now twenty-one rmnths later, I have eight questions for Mr. Camdessus, as follows:

(1) Does it mean nothing to the Fund that two independent commissions, appointed by the Government of Trinidad and Tobago, should have that all my charges of statistical and non-statistical fraud per- petrated against that country over 1985-88 were absolutely correct?

(2) Or that UNICEF in December, 1988 should have supported, after highly technical and painstaking research, my allegations of Fund-instigated genocide of Third World peoples under the on-going, creditor- oriented, international debt strategy?

(3) Or that the governments of the entire African continent south of the Sahara, in active collaboration with the UN E@nomic Commission for Africa, should have vehemently rejected in 1989 the Fund's concepts and implementation of Third World "structural adjustment" on the basis of technical analysis identical to that developed in the Open Letter? And that the self-same governments, and the self-same UN Commission, should have gone on to develop alternatives that would bypass, totally in the future, the present-day policies of the Fund?

(4) Or that the World Bank, smarting from the facts of the Letter, should have begun distancing itself, in a highly visible way, from Fund "rnonetarisrn" and "Reaganomics"?

(5) Or that several world quasi-legal tribunals, including some of the world's most outstanding jurists and humanitarians, should have seen fit, over the past eighteen months, to declare the Fund guilty of fun- damental violations of human rights and the perpetration of massive crimes against humanity?

(6) Or that First World and Third World voices, muted and uncertain before 1988, should now be raised in angry concert, from every corner of the globe, in condemnation of the Fund and its record of horror and ignominy?

(7) Or that so many thousands of people since 1988 should have been killed by their governments, or been maimed or arrested, fighting the Fund at street comers, and in slums and villages in countries as dif- ferent and as far apart as West Germany, Venezuela, Jordan, Nigeria, Tunisia, Egypt, Algeria and Sierre Leone?

(8) Or that tens of millions of people in the Third World should have suffered needlessly and many died since 1988 because the Fund and the interests it represents still continue to dominate the pages of human history?

In the aftermath of the Letter and its initial impact - and others in due course will judge the latter more objectively and more mmprehensively than I can - one important question arises: Where do we go from here? And on this matter, I will confine myself to two points, seemingly unrelated, but very much the logical outØme of the drama and the trauma of the last two years.

The first @ncerns the fact that the Fund remains a law unto itself, impervious to questions about its per- formance, its human rights record, and its accountability to its victims and others affected by its actions. In this situation, it appears that the effort from 'outside' forces for meaningful reform that will lead to civilized and responsible behavior can continue for some time to be thwarted.

Consequently, there must e an Intensificationo the effort to reac the undredso millionso und vic- tims all around the world. We need to educate them about the institution that dominates their lives and to elicit a worldwide reaction sufficiently strong and broad-based and vocal to convince the High Priests in Washington and elsewhere that the day of reckoning is finally at hand. Branding the Fund's critics as "do- gooders" or "spoilers" or "madmen" or "communists," is no longer enough to get the institution off the hook or to save the over-protected skins of its staff.

Finally, I have to mention, albeit reluctantly, a systematic pattern of violation of my human rights, and the human rights of others associated with my work. On this matter, I respectfully ask to be left in peace. Let those who oppose what I am doing take formal, legal action against me, if they so wish. But Øvert harass- ment and underhanded intimidation at the personal level are, by consensus of civilized people everywhere, among the rmst reprehensible forms of criminal behavior, and I will never accept them as factors miniaturis- ing my life, and conditioning my freedom. Therefore, to all concerned I say, let good sense and propriety prevail. Let us build new foundations for human understanding, not undermine further the existing fragile base inherited from centuries of broadening our tolerance, and deepen our compassion.

Washington, D.C.

February 1990

Davison L. Budhoo

Part I of Open Letter; Reason for This Letter and a Summary of Its Contents

Part II of Open Letter; Our Statistical Misdeeds and Our Statistical Fraud in Trinidad and Tobago, 1985-1988

Part III of open letter; non-statistical areas of wrongdoing in Trinidad and Tobago, 1985-88

Part IV of open letter; a history of the fund, or how we moved from Pax Atlantica to Pax Honeypot

Part V of Open Letter; Details of the Honeypot

Part VI of Open Letter; Reform of the Fund - Psychology, Epistemology, Organisation, Operations

Part VII of Open Letter; The Fund and the Debt Crisis