The International Monetary Fund during the Cold War: Charitable Body or Neo-colonial Power?

Written by Ella Raphael.

When we think of colonialism, we tend to think about war, invasion and the suffering certain nations have inflicted onto others. We perhaps think less about the indirect, ideological or economic control countries have over one another. One of the main ways countries do this is by controlling systems of global governance and organisations, such as the International Monetary Fund (IMF). It was established in 1945 as an attempt to regulate the global post war economy. The IMF comprises of 189 nations, but historically the United States has held a strong majority of the votes. It presents itself as an organisation designed to ‘foster global monetary cooperation, promote high employment and sustainable economic growth.’ However, its intervention in Asian and African nations in the late-twentieth century suggests otherwise. Strengthening a capitalist, neoliberal dogma seemed of higher importance than helping the struggling nations it vowed to support. This is not to say that the IMF is a sinister, corrupt organisation; however, it has been branded out of touch and insensitive. Whether it intended to or not, the IMF has a history of damaging countries it claims to help.

Neo-colonialism can be loosely defined as the indirect political and economic control or influence of a nation-state, or a powerful institution extends over another nation. It has been a predominantly modern phenomenon, a new form of influence since the end of imperialism and the Second World War. Tukumbi Lumumba-Kasongo claims imperialism can also be ‘strong or destructive conditions of dependency of a nation-state [or institution] over another,’ which many scholars have argued matches the IMF’s relationship with many developing nations. In the process of receiving loans, struggling nations have been left indebted to the powerful organisation. The only way to escape this debt is to meet the IMF’s conditions. 

This approach has been vastly problematic in the past. Loans are only provided if the countries agree to undergo Structural Adjustment Programs, where the aim is to end protectionism switching to an agenda of privatisation. This has been a way for the IMF (which is dominated by the US) to export and enforce the political and economic ideology it deems desirable. John Hilary has argued that the conditions attached to the aid packages have undermined the passage of democracy in these nations. It prohibits governments from implementing development policies suitable to their national situations as they have to focus on repaying the loans. This weakens the economy further, perpetuating the cycle of dependency on bilateral monetary organisations. 

The US dominance of the fund during the Cold War did not help with its identification as a charitable organisation. This was at a time when these international bodies were promoted as being ‘above’ the affairs of the cold war. There was a clear ideological bias leaning towards capitalism, neoliberalism and privatisation. Between the 1960s and 1980s, it seemed as though the IMF was merely an extension of the US’s power. Teresa Hayter’s book Aid as Imperialism (1971) argues that aid has frequently been used as a political weapon. Nixon even said himself in 1968: ‘let us remember that the main purpose of aid is not to help other nations but to help ourselves’. As the main contributor of aid within the IMF, this creates an unsavoury image. Loans had been disguised as aid, but they meant much more. They ultimately meant meddling with the self-determination and autonomy of the recipient nations. 

This was the experience of many African nations during the 1980s and 1990s. Perhaps the most famous misstep was Ghana. The IMF forced parliament to override a critical governmental decision to raise import tariffs on poultry. Adherence to the funds conditions was suddenly of higher importance than addressing the pressing economic issues. Even the IMF itself has admitted since that its aggressive intervention in the 1980s was inappropriate. The organisation’s reliance on the neoliberal dogma – without assessing if it would work in the individual national frameworks – was an ‘insufficient basis for a constructive trade policy dialogue.’  Again, the IMF was not intentionally pursuing a self-sabotaging policy, however its agenda was out of touch with the nations it was helping. Its priorities leaned towards maintaining the stability of the world economy, and ultimately maintaining the power of the richest nations. 

The Philippines provides another example of the economic disarray caused by IMF intervention, which occurred between 1960 and 1990. Walden Bello argues the IMF and the World Bank were the sole architects of the turmoil the Philippines was left with for the latter part of the twentieth century. The Philippines is one of the few nations to be the subject of multiple IMF structural adjustment programmes. The 1962 devaluation imposed by the IMF forced 1,500 Filipino entrepreneurs into bankruptcy. To make matters worse, during the 1970s the IMF and the World Bank hurled the Philippines into a plan of export led growth. They were not helping to strengthen the domestic economy but were instead making it dependent on the exports of capitalist economies, reinforcing the current dependency paradigm. To many it was clear that the IMF was the engineer of this economic disaster, but it insisted the solution was a continued policy of liberalisation. As is often the case with colonial powers, the organisation took advantage of its power to control the Philippines and tried to morph it into an economy that would slot into the current capitalist order.

Although aid was not provided with malicious intent, the IMF implemented Structural Adjustment Programmes during the Cold War that were rendered out of touch with the national economies. As we have seen in Ghana and the Philippines, these programmes ended up sabotaging domestic growth in favour of maintaining the strength of the capitalist system. It ultimately boils down to a powerful entity forcing an external, unsuitable ideology onto another country under the guise of helping it. When this is the core objective of the fund, it is difficult to separate its ‘charitable’ projects from the quasi-colonial motives bubbling beneath the surface. 


Bello, Walden, Broad, Robin. The International Monetary Fund in the Philippines: In The Philippines Reader: A History of Colonialism, Neocolonialism, Dictatorship and Resistance, 1982.

Gudikunst, Nicole, Briggs, Kristie, Clark, Terry, and Deskins, John. The Social Impact of the International Monetary Fund: Structural Adjustment Programs in Latin America from 1980–2000, 2010, ProQuest Dissertations and Theses.

Hayter, Teresa. Aid as Imperialism. Pelican Books. Harmondsworth: Penguin, 1971.

Hilary, John. “Africa: Dead Aid and the Return of Neoliberalism.” Race & Class 52, no. 2 (2010): pp. 79-84.

Lumumba-Kasongo, Tukumbi. “China-Africa Relations: A Neo-Imperialism or a Neo-Colonialism? A Reflection.” African and Asian Studies 10, no. 2-3 (2011): pp. 234-66.Weisbrot, Mark. “The IMF is hurting countries it claims to help”, The Guardian, 2019.

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