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CADTM | Contrary to popular opinion, the World Bank is not entitled to immunity as an institution. Section 3 of Article VII of the Bank’s Articles of Agreement explicitly states that the World Bank may be taken to court under certain conditions. For example, the World Bank may be tried by a national court of justice in countries where it is represented and/or has issued bonds.
The overthrow of the Sheikh Hasina’s dictatorial government in Bangladesh by students and the populace last week is a startling outcome of the economic nightmare that many so-called developing economies are experiencing now: stagnant trade, rising debt interest costs and severe austerity being imposed by the IMF and private capital in return for ‘financial aid’.
CADTM | In the second half of the 1990s, it was clear that the 1982 debt crisis had not been resolved. Measures to reduce the debt had failed. Structural adjustment policies had made countries vulnerable to financial speculation. This led to a succession of financial crises for the major indebted countries.
In recent years, the rightful rejection of the policies promoted by the traditional imperialist powers (North America, Western Europe and Japan), followed by the announcements made by the BRICS (Brazil, Russia, India, China and South Africa), have aroused great interest and expectations of major changes, including the creation of a common currency to challenge the US dollar as the dominant currency. But what has actually happened? What has been achieved by the New Development Bank and the BRICS Contingent Reserve Arrangement (CRA)?
Until the debt crisis broke in 1982, the World Bank held a double discourse. One, destined for the public and the indebted countries, claimed that there was nothing to worry about and that if there were problems, they would be short-lived; that was what appeared in official documents available to the public. The other discourse took place behind closed doors at internal meetings.
For Global South economies deep in unrepayable debt, the current choice is: rescheduling often on even harsher terms; or forced stagnation of the economy to pay back foreign creditors. From the Magnificent Seven to the Desperate Hundred.
CADTM | Eric Toussaint | The World Bank claims that, in order to progress, the Developing Countries should rely on external borrowing and attract foreign investments. The main aim of thus running up debt is to buy basic equipment and consumer goods from the highly industrialised countries. The facts show that day after day, for decades now, the idea has been failing to bring about progress.
CADTM | The World Bank’s strategy in Turkey clearly recalls its policy towards Ferdinand Marcos’ dictatorship in the Philippines from 1972, Augusto Pinochet’s in Chile from 1973, and the economic model they promoted. Geopolitical reasons are once again a determining factor: a hinge between Europe and Asia, Turkey is an essential pawn on the Middle East chessboard. Consequently it is necessary to subordinate this country to Washington’s interests by giving full support to an authoritarian regime. The World Bank works in this direction when, in perfect agreement with the military leaders, it develops neoliberal economic policies that open the door wide to investments by transnational corporations and suppresses both trade unions and far-left parties.
Michael Hudson | CounterPunch | When interest-bearing commercial and agrarian debt came to be incorporated into civilization’s economic structure in the third millennium BC, it was accompanied by clean slates that liberated bondservants and restored to debtors the rights to the crops and land that creditors had taken.
CADTM | After the Second World War, in a growing number of Third World countries, policies diverged from those of the former colonial powers. This trend encountered firm opposition from the governments of the major industrialised capitalist countries whose influence held sway with the World Bank (WB) and the IMF. WB projects have a strong political content: to curtail the development of movements challenging the domination/rule of major capitalist powers. The prohibition against taking “political” and “non-economic” considerations into account in WB operations, one of the most important provisions of its charter, is systematically circumvented. The political bias of the Bretton Woods institutions is shown by their financial support to dictatorships ruling in Chile, Brazil, Nicaragua, Congo-Kinshasa and Romania.
CADTM | China has been demonized by several commentators: it is said to be the main creditor of many countries of the South and to get the most of them through ruthless exploitation whereas the World Bank, the IMF, the Paris Club, that bring together traditional creditor powers, are supposed to do their best to help those countries burdened by too much debt.
China also uses propaganda. It parades as an ally of countries of the South, regularly announces debt cancellation and debt relief, and claims that it does not enforce neoliberal conditionalities as do the IMF and the World Bank. It also stresses its efficiency.
CADTM | Series: 1944-2024, 80 years of interference from the World Bank and the IMF, that’s enough!
CADTM | In July 2024, the World Bank and the IMF will be 80 years old. 80 years of financial neo-colonialism and the imposition of austerity policies in the name of debt repayment. 80 years is enough! The Bretton Woods institutions must be abolished and replaced by democratic institutions serving an ecological, feminist and anti-racist bifurcation. To mark these 80 years, we are republishing a series of articles every Wednesday until July, looking in detail at the history and damage caused by these two institutions.
CADTM | In July 2024, the World Bank and the IMF will be 80 years old. 80 years of financial neo-colonialism and the imposition of austerity policies in the name of debt repayment. 80 years is enough! The Bretton Woods institutions must be abolished and replaced by democratic institutions serving an ecological, feminist and anti-racist bifurcation. To mark these 80 years, we are republishing a series of articles every Wednesday until July, looking in detail at the history and damage caused by these two institutions.
CADTM | In the first 17 years of its existence, the projects supported by the World Bank focussed on improvement of communication infrastructures and the production of power. The money lent by the World Bank was to be spent essentially in industrialized countries. Projects approved by the Bank were designed to improve the South’s export capacities to the North, thereby meeting the needs of Northern countries and enriching a handful of transnational companies in the relevant sectors. During this period, no projects were undertaken in the areas of education, health, drinking water supply and waste water treatment.
CADTM | In July 2024, the World Bank and the IMF will be 80 years old. 80 years of financial neo-colonialism and the imposition of austerity policies in the name of debt repayment. 80 years is enough! The Bretton Woods institutions must be abolished and replaced by democratic institutions serving an ecological, feminist and anti-racist bifurcation. To mark these 80 years, we are republishing a series of articles every Wednesday until July, looking in detail at the history and damage caused by these two institutions.
Éric Toussaint and CADTM | This is a major crisis of the globalized capitalist system, the worst crisis since those of the years 1914-1945.
States, faced today with the international economic crisis articulated with the consequences of the climate and health crises, should invoke the “fundamental change of circumstances” to stop reimbursing their creditors in order to come to the aid of their populations. Because, ultimately, human rights must effectively prevail over creditors’ rights.