Suspend Realizing Debt Installments during COVID-19 Distress
10 April 2020 by Collective
We the following Civil Society Organizations (CSOs) from all over the world, are calling on the World Bank (WB), International Monetary Fund (IMF), Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB) and all bilateral, regional and multilateral development financiers of Bangladesh to suspend the realization of debt instalments for all public debts of developing countries combating the Covid-19 pandemic so that the current crisis is not aggravated.
Countries, irrespective of developed, developing and the Least Developed Countries
Least Developed Countries
LDC
A notion defined by the UN on the following criteria: low per capita income, poor human resources and little diversification in the economy. The list includes 49 countries at present, the most recent addition being Senegal in July 2000. 30 years ago there were only 25 LDC.
(LDCs), are in a predicament due to the Covid-19 pandemic and are all facing an acute shortage of emergency protective devices and life-saving equipment. Bangladesh’s economy is also severely under stress due to the additional burden of pandemic management while the country has a budget deficit of USD 17.65 billion in the current financial year. Despite the budget deficit, the Government of Bangladesh (GoB) has allocated an additional 9.06 billion USD as a bailout to the private sector. The GoB now needs a supplementary amount of USD 8.11 billion to fight Covid-19 in the health sector alone. Another USD 1.7 billion, over and above the national budget, is required for supplying adequate food to 34 million people living below the poverty line. Considering the calamitous situation, GoB needs at least USD 1.5 billion for providing subsidies in agriculture and rural economies dominated by micro, small and marginal (MSM) producers in order to ensure the food security of the country.
We want to urgently bring to your attention that the GoB budget for the current financial year is forced to allocate 6.20 billion USD for servicing external debts to International Financial Institutions. At this critical time if this servicing of public debts are suspended, the GoB will be able to put the amount into serving emergency health, food and agriculture sectors to fight the Covid-19 pandemic. We urge all the multilateral, regional and bilateral financial institutions to follow the suggestions proposed by the World Bank
World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.
It consists of several closely associated institutions, among which :
1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;
2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;
3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.
As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.
and IMF
IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.
When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.
As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).
The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
http://imf.org
and suspend servicing of the public debts for 2020, so that GoB can free its limited resources and allocate it solely for helping the people in overcoming the Covid-19 challenge.
We therefore strongly demand the suspension of all instalments of public debt for at least the financial year 2020-2021 so that the country can better combat the pandemic and overcome the impact of this disaster on its citizens’ health, food and economic vulnerabilities.
THIS STATEMENT IS SUBMITTED ON BEHALF OF GLOBAL CSOs, BY:
SIGNATORIES
SEEKING ATTENTION AND ACTION OF THE FOLLOWING 33 FINANCIERS
Agence Française de Développement (AFD) | Asian Development Bank (ADB) | Asian Infrastructure Investment Bank (AIIB) | Belgian Development Cooperation (DGCD) | China Development Bank (CDB) | CIDIC Group | Citigroup | Danish International Development Agency (DANIDA) | European Bank for Reconstruction and Development (EBRD) | European Investment Bank (EIB) | Export Finance Australia | Export-Import (EXIM) Bank of China | Export-Import (EXIM) Bank of India | Export Import (EXIM) Bank of Korea | HSBC Group | International Finance Corporation (IFC) | International Monetary Fund (IMF) | Islamic Development Bank (ISDB) Group | International Fund for Agricultural Development (IFAD) | Japan Bank for International Cooperation (JBIC) | Japan International Cooperation Agency (JICA) | KfW Group | Korean International Cooperation Agency (KOICA) | Kuwait Fund for Arab Economic Development (KFAED) | Nordic Development Fund (NDF) | Norwegian Agency for Development Cooperation (NORAD) | OPEC
OPEC
Organization of Petroleum-Exporting Countries
OPEP is a group of 11 DC which produce petroleum: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela. These 11 countries represent 41% of oil-production in the world and own more than 75% of known reserves. Founded in September 1960and based in Vienna (Austria), OPEC is in charge of co-ordinating and unifying the petroleum-related policies of its members, with the aim of guaranteeing them all stable revenues. To this end, production is organized on a quota system. Each country, represented by its Minister of Energy and Petroleum, takes a turn in running the organization. Since 1st July 2002, the Venezuelan Alvaro Silva-Calderon is the Secretary General of OPEC.
OPEC : http://www.opec.org/opec_web/en/
Fund for International Development (OFID) | Saudi Fund for Development (SFD) | Standard Chartered | Swedish International Development Cooperation Agency (SIDA) | Swiss Agency for Development and Cooperation (SDC) | United States Agency for International Development (USAID) | World Bank Group
31 March, by Collective
1 February, by Collective
26 January, by Collective
9 January, by Collective
16 December 2022, by CADTM , Collective
5 December 2022, by Collective , Eurodad , Afrodad , Latindadd , ODG (Observatorio de la Deuda en la Globalización)
Sign on statement
Roundtable on Sustainable Palm Oil (RSPO): 19 years is enough2 December 2022, by CADTM , Collective , GRAIN , Friends of the Earth
10 October 2022, by Collective
17 September 2022, by Collective
28 August 2022, by Collective