Debt, Power, and Control: The Hidden Agenda of Global Finance
By Mohamad Hammoud
In his groundbreaking book “Confessions of an Economic Hit Man,” John Perkins, a former economic consultant, pulls back the curtain on the shadowy world of international finance. He provides a firsthand account of how the United States and its corporate allies have used debt, bribery, and political coercion to expand their global economic and geopolitical influence. Perkins reveals that international loans, often presented as tools of economic development, are instead used to trap countries in cycles of debt and dependency, ensuring control over their resources, policies, and economies.
The Rise of the "Economic Hit Man"
Perkins' journey began in the 1970s when he was recruited by the consulting firm Chas. T. Main, which had close ties to the National Security Agency [NSA] and the Central Intelligence Agency [CIA]. As an "economic hit man," his role was to persuade leaders of developing countries to accept massive loans for infrastructure projects and other investments. These loans, however, were not meant to lift these nations out of poverty. Instead, they were designed to benefit US corporations, which secured lucrative contracts, while locking the borrowing nations into debt they could never realistically repay.
Perkins describes how economic projections were deliberately inflated to justify the loans, convincing countries that borrowing was the path to modernization and prosperity. In reality, the debt burden left these nations economically crippled and politically subservient. Unable to repay, they were forced to comply with demands from the US government and international financial institutions like the International Monetary Fund [IMF] and the World Bank, giving away control over their resources and economic policies.
Debt as a Tool of Coercion
One of the most insidious aspects of international loans is how they are used to coerce nations into submission. Perkins recounts numerous instances where countries were pressured to align their policies with US interests under the threat of defaulting on their loans or being denied future credit. For instance, Ecuador's democratically elected president, Jaime Roldós, resisted US corporate influence and sought to use his nation’s oil revenues to benefit his people. Shortly thereafter, he died in a suspicious plane crash. His successor, Oswaldo Hurtado, was quickly pressured into accepting IMF loans that came with strict conditions—privatizing state-owned enterprises, slashing public spending, and opening Ecuador’s economy to foreign investment.
This cycle of debt forced Ecuador to prioritize repaying its creditors over investing in social programs, with much of its oil revenue diverted to service its obligations. The pattern repeated itself globally, with nations like Indonesia, Nigeria, and Argentina suffering similar fates. Countries that resisted US or IMF demands faced economic retaliation, such as loan denials, credit downgrades, or crippling austerity measures that exacerbated poverty and inequality.
The IMF and the "Shock Doctrine"
One of the most striking critiques of the IMF's role in global finance comes from journalist Naomi Klein, who coined the term "shock doctrine." This concept describes how economic crises are deliberately exploited to push through neoliberal policies that would otherwise face public resistance. During times of financial turmoil, the IMF intervenes with loans packaged as "rescue solutions." However, these loans often come with conditions that restructure economies to benefit multinational corporations and global elites.
What makes the "shock doctrine" especially insidious is how it uses moments of vulnerability—natural disasters, political upheaval, or economic collapse—to enact sweeping changes, such as privatizing critical assets or removing trade protections, while populations are too destabilized to resist. This process ensures that valuable national resources and industries are sold off at bargain prices, benefiting powerful external actors while deepening inequality within borrowing nations.
The Changing Landscape: The Rise of China
While the US and its allies have long dominated the global financial system, the rise of China has begun to challenge their influence. Through its Belt and Road Initiative, China has offered an alternative source of financing for developing nations, funding infrastructure projects without imposing the same stringent political conditions as the IMF or World Bank.
However, China’s approach has also drawn criticism, with some accusing it of engaging in "debt trap diplomacy." In several cases, countries that accepted Chinese loans have struggled to repay, leading to controversial deals such as the transfer of strategic assets to Beijing, like Sri Lanka’s Hambantota Port. Nevertheless, China’s growing influence has disrupted the status quo, forcing the US and its allies to adapt their strategies in the face of increasing competition for global economic dominance.
Conclusion: Breaking the Cycle
As John Perkins highlights in “Confessions of an Economic Hit Man,” the international loan system is not primarily designed to aid development but to serve the interests of powerful nations and corporations. Loans often come with conditions that prioritize resource extraction, political alignment, and economic restructuring to benefit lenders rather than borrowers. The result is a system that subjugates developing nations, keeping them locked in a cycle of debt and dependency while enriching multinational corporations and global elites.
For developing nations, escaping this cycle requires bold action. Alternative financial models, regional alliances, and policies that prioritize national interests over foreign-imposed strategies are essential. Without these changes, the international financial system will continue to function as a tool of coercion rather than a means of empowerment. Perkins' revelations challenge us to rethink the role of international finance and demand reforms that prioritize genuine development and sovereignty over exploitation and control.
