This is an excerpt from an essay by Alex Gladstein titled, “Structural Adjustment: How The IMF And World Bank Repress Poor Countries And Funnel Their Resources To Rich Ones”
“Everything is gone.”
Fifty-two years ago, Cyclone Bhola killed an estimated 1 million people in coastal Bangladesh. It is, to this day, the deadliest tropical cyclone in recorded history. Local and international authorities knew well the catastrophic risks of such storms: in the 1960s, regional officials had built a massive array of dikes to protect the coastline and open up more territory for farming.
But in the 1980s after the assassination of independence leader Sheikh Mujibur Rahman, foreign influence pushed a new autocratic Bangladeshi regime to change course. Concern for human life was dismissed and the public’s protection against storms was weakened, all in order to boost exports to repay debt.
Instead of reinforcing the local mangrove forests which naturally protected the one-third of the population that lived near the coast, and instead of investing in growing food to feed the quickly growing nation, the government took out loans from the World Bank and International Monetary Fund in order to expand shrimp farming. The aquaculture process — controlled by a network of wealthy elites linked to the regime — involved pushing farmers to take out loans to “upgrade” their operations by drilling holes in the dikes that protected their land from the ocean, filling their once-fertile fields with saltwater. Then, they would work back-breaking hours to hand-harvest young shrimp from the ocean, drag them back to their stagnant ponds, and sell the mature ones to the local shrimp lords.
With financing from the World Bank and IMF, countless farms and their surrounding wetlands and mangrove forests were engineered into shrimp ponds known as ghers. The area’s Ganges river delta is an incredibly fertile place, home to the Sundarbans, the world’s biggest stretch of mangrove forest. But as a result of commercial shrimp farming becoming the region’s main economic activity, 45% of the mangroves have been cut away, leaving millions of people exposed to the 10-meter waves that can crash against the coast during major cyclones. Arable land and river life has been slowly destroyed by excess salinity leaking in from the sea. Entire forests have vanished as shrimp farming has killed much of the area’s vegetation, “rendering this once bountiful land into a watery desert,” according to Coastal Development Partnership.
The shrimp lords, however, have made a fortune, and shrimp (known as “white gold”) has become the country’s second-largest export. As of 2014, more than 1.2 million Bangladeshis worked in the shrimp industry, with 4.8 million people indirectly dependent on it, roughly half of the coastal poor. The shrimp collectors, who have the toughest job, make up 50% of the labor force but only see 6% of the profit. Thirty percent of them are girls and boys engaged in child labor, who work as much as nine hours a day in the salt water, for less than $1 per day, with many giving up school and remaining illiterate to do so. Protests against the expansion of shrimp farming have happened, only to be put down violently. In one prominent case, a march was attacked with explosives from shrimp lords and their thugs, and a woman named Kuranamoyee Sardar was decapitated.
In a 2007 research paper, 102 Bangladeshi shrimp farms were surveyed, revealing that, out of a cost of production of $1,084 per hectare, the net income was $689. The nation’s export-driven profits came at the expense of the shrimp laborers, whose wages were deflated and whose environment was destroyed.
In a report by the Environmental Justice Foundation, a coastal farmer named Kolyani Mondal said that she “used to farm rice and keep livestock and poultry,” but after shrimp harvesting was imposed, “her cattle and goats developed diarrhea-type disease and together with her hens and ducks, all died.”
Now her fields are flooded with salt water, and what remains is barely productive: years ago her family could generate “18-19 mon of rice per hectare,” but now they can only generate one. She remembers shrimp farming in her area beginning in the 1980s, when villagers were promised more income as well as lots of food and crops, but now “everything is gone.” The shrimp farmers who use her land promised to pay her $140 per year, but she says the best she gets are “occasional installments of $8 here or there.” In the past, she says, “the family got most of the things they needed from the land, but now there are no alternatives but going to the market to buy food.”
In Bangladesh, billions of dollars of World Bank and IMF “structural adjustment” loans — named for the way they force borrowing nations to modify their economies to favor exports at the expense of consumption — grew national shrimp profits from $2.9 million in 1973 to $90 million in 1986 to $590 million in 2012. As in most cases with developing countries, the revenue was used to service foreign debt, develop military assets, and line the pockets of government officials. As for the shrimp serfs, they have been impoverished: less free, more dependent and less able to feed themselves than before. To make matters worse, studies show that “villages shielded from the storm surge by mangrove forests experience significantly fewer deaths” than villages which had their protections removed or damaged.
Under public pressure in 2013 the World Bank loaned Bangladesh $400 million to try and reverse the ecological damage. In other words, the World Bank will be paid a fee in the form of interest to try and fix the problem it created in the first place. Meanwhile, the World Bank has loaned billions to countries everywhere from Ecuador to Morocco to India to replace traditional farming with shrimp production.
The World Bank claims that Bangladesh is “a remarkable story of poverty reduction and development.” On paper, victory is declared: countries like Bangladesh tend to show economic growth over time as their exports rise to meet their imports. But exports earnings flow mostly to the ruling elite and international creditors.
After 10 structural adjustments, Bangladesh’s debt pile has grown exponentially from $145 million in 1972 to an all-time high of $95.9 billion in 2022. The country is currently facing yet another balance of payments crisis, and just this month agreed to take its 11th loan from the IMF, this time a $4.5 billion bailout, in exchange for more adjustment. The Bank and the Fund claim to want to help poor countries, but the clear outcome after more than 50 years of their policies is that nations like Bangladesh are more dependent and indebted than ever before.
During the 1990s in the wake of the Third World Debt Crisis, there was a swell of global public scrutiny on the Bank and Fund: critical studies, street protests, and a widespread, bipartisan belief (even in the halls of the U.S. Congress) that these institutions ranged from wasteful to destructive. But this sentiment and focus has largely faded. Today, the Bank and the Fund manage to keep a low profile in the press. When they do come up, they tend to be written off as increasingly irrelevant, accepted as problematic yet necessary, or even welcomed as helpful.
The reality is that these organizations have impoverished and endangered millions of people; enriched dictators and kleptocrats; and cast human rights aside to generate a multi-trillion-dollar flow of food, natural resources and cheap labor from poor countries to rich ones. Their behavior in countries like Bangladesh is no mistake or exception: it is their preferred way of doing business.