Series: 1944-2020, 76 years of interference from the World Bank and the IMF (Part 19)

The World Bank and the IMF: the creditors’ bailiffs

14 August 2020 by Eric Toussaint

In 2020, the World Bank (WB) and the IMF are 76 years old. These two international financial institutions (IFI), founded in 1944, are dominated by the USA and a few allied major powers who work to generalize policies that run counter the interests of the world’s populations.

The WB and the IMF have systematically made loans to States as a means of influencing their policies. Foreign indebtedness has been and continues to be used as an instrument for subordinating the borrowers. Since their creation, the IMF and the WB have violated international pacts on human rights and have no qualms about supporting dictatorships.

A new form of decolonization is urgently required to get out of the predicament in which the IFI and their main shareholders have entrapped the world in general. New international institutions must be established. This new series of articles by Éric Toussaint retraces the development of the World Bank and the IMF since they were founded in 1944. The articles are taken from the book The World Bank: a never-ending coup d’état. The hidden agenda of the Washington Consensus, Mumbai: Vikas Adhyayan Kendra, 2007, or The World Bank : A critical Primer Pluto, 2007.

  1. The World Bank: an ABC
  2. The International Monetary Fund (IMF): an ABC
  3. Concerning the founding of the Bretton Woods’ Institutions
  4. The WB assists those in power in a witch-hunting context
  5. Early conflicts between the UN and the World Bank/IMF tandem
  6. SUNFED versus World Bank
  7. Why the Marshall Plan ?
  8. Why the 1953 cancellation of German debt won’t be reproduced for Greece and Developing Countries
  9. Domination of the United States on the World Bank
  10. World Bank and IMF support to dictatorships
  11. The World Bank and the Philippines
  12. The World Bank’s support of the dictatorship in Turkey (1980-1983)
  13. The World Bank and the IMF in Indonesia: an emblematic interference
  14. Theoretical lies of the World Bank
  15. The South Korean miracle is exposed
  16. The debt trap
  17. The World Bank saw the debt crisis looming
  18. The Mexican debt crisis and the World Bank
  19. The World Bank and the IMF: the creditors’ bailiffs
  20. Presidents Barber Conable and Lewis Preston (1986-1995)
  21. James Wolfensohn switches on the charm (1995-2005)
  22. The Meltzer Commission on the IFI at the US Congress in 2000
  23. The World Bank’s accounts
  24. From Paul Wolfowitz (2005-2007) to David Malpass (2019-...): the US President’s men control the World Bank
  25. World Bank and IMF: 76 Years is Enough! Abolition!
  26. The World Bank, the IMF and the respect of human rights
  27. The IMF and the World Bank in the time of Coronavirus: the failed campaign for a new image
  28. The World Bank did not Foresee the Arab Spring Popular Uprisings and still Promotes the very same Policies that triggered them

In July 1981, Alden W. Clausen, then president of the Bank of America, was made president of the World Bank World Bank
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.

. The Bank of America is one of the biggest US banks at risk in case of non-payment of debt by the developing countries. Ronald Reagan, by placing Alden W. Clausen at the head of the World Bank, was sending a strong signal to US banks (and other commercial banks around the world) that their interests would be duly taken care Care Le concept de « care work » (travail de soin) fait référence à un ensemble de pratiques matérielles et psychologiques destinées à apporter une réponse concrète aux besoins des autres et d’une communauté (dont des écosystèmes). On préfère le concept de care à celui de travail « domestique » ou de « reproduction » car il intègre les dimensions émotionnelles et psychologiques (charge mentale, affection, soutien), et il ne se limite pas aux aspects « privés » et gratuit en englobant également les activités rémunérées nécessaires à la reproduction de la vie humaine. of.

US banks were the most at risk compared to European and Japanese banks because they lent proportionately more. The 1982 crisis particularly affected Latin America, the US banks’ preferred hunting-ground. The amounts they lent, compared to their capital, were enormous and imprudent. All the US banks taken as a whole had lent the equivalent of 152% of their own capital. Of those, the top fifteen had lent the equivalent of 160% of their capital. The nine biggest, including the Bank of America, had committed the equivalent of 229% of their capital.

In August 1982 when Mexico announced that it was unable to pay up, the big movers and shakers of world finance got together to bail out the commercial banks. The quartet that orchestrated the strategy was composed of Jacques de Larosière, managing director of the 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.
, Paul Volcker, president of the US Federal Reserve FED
Federal Reserve
Officially, Federal Reserve System, is the United States’ central bank created in 1913 by the ’Federal Reserve Act’, also called the ’Owen-Glass Act’, after a series of banking crises, particularly the ’Bank Panic’ of 1907.

FED – decentralized central bank :
, Gordon Richardson, director of the Bank of England, and Fritz Lentwiler, president of the Bank for International Settlements Bank for International Settlements
The BIS is an international organization founded in 1930 charged with fostering international monetary and financial cooperation. It also acts as a bank for central banks. At present, 60 national central banks and the ECB are members.
(BIS). The president of the World Bank was not invited to the preliminary meetings.

The strategy adopted may be summarised as follows:

This was the strategy that was largely maintained throughout the 1980s, but it had to be modified to take into account the amplitude of the crisis and the reactions of the commercial banks. The latter, instead of following the last point of the strategy mentioned above, practically stopped all lending and made do with gathering repayments, which sent their profits soaring! The profits that the Citibank took from Brazil in 1983 and 1984 alone represented 20% of its total profits. Karin Lissakers (who was later to become the executive director for the USA at the IMF) claimed that the dividends distributed by the big US banks in 1984 came to double what they had been in 1980. [1] In fact, the IMF and the public money-spinners mentioned above, later joined by the World Bank, adopted a tough strategy with regard to the indebted countries in order to protect the commercial banks. They could hardly have done more to promote the interests of big private international finance, or in other words, big international capital. They had become bailiffs at the service of commercial banks.

As Karin Lissakers herself points out: "The IMF was in a sense the creditor community’s enforcer”.

Jacques Polak, who was director of research at the IMF then executive director of the IMF for the Netherlands, writes of the strategy outlined above: "In the second half of the 1980s, however, commercial banks began to exploit this approach. No longer afraid of becoming the victims of a generalized debt crisis, the banks began to realize they could insist on favorable (sic) terms for themselves by blocking a country’s access to Fund credit (and to other credit linked to a Fund arrangement). The Fund was thus pushed increasingly into being used by the commercial banks in the collection of their debts”. [2] What has been said about the IMF goes for the World Bank, too, which behaved in exactly the same way.

The US banks did very well for themselves. So did European banks, by obtaining enormous tax breaks for stocking huge funds as provision against possible losses on their loans. Furthermore, European and Japanese banks had the advantage of the depreciation of the dollar, which reduced the weight in their portfolios of their loans in dollars to indebted countries.

The governments of the indebted countries arranged for their country’s Treasury (and thus its citizens) to take on the burden of the external debt run up by their country’s private companies. The case of Argentina was typical: subsidiaries of trans-national corporations indebted towards their parent company managed to get their debts paid off by the Argentine Treasury! [3]

In doing this, governments of the developing countries submit to the combined pressure of local capitalists, the trans-nationals implanted in their countries, and the big public moneylenders of the North, themselves under the thumb of the big commercial banks of the North.

It was the very same big public moneylenders, particularly the IMF and the World Bank, who gradually replaced commercial banks as creditors to the countries in the greatest distress. Here again, the risks and the costs were transferred from the private sector to the public sector. The following chart shows how commercial banks dissociated themselves from indebted countries encountering repayment difficulties. Their credits to these countries fell from 278 billion dollars in 1982 to 200 billion in 1992, i.e. a reduction of 28%. Over the same period, the official creditors (IMF, World Bank, States) took over, with their credits going from 115 billion to 252 billion between 1982 and 1992, or an increase of 120%).

Real Debt of Developing Countries with Debt-Servicing Difficulties 1982-92
(billions of 1982 US dollars)

YearTo commercial banksTo official creditorsShare Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of official creditors in total
1982 278 115 29.3
1984 286 143 33.3
1986 278 187 40.2
1988 254 232 47.7
1990 222 251 53.1
1992 200 252 55.7

Source: Michael Dooley (1994), “A Retrospective on the Debt Crisis”, paper prepared for the Fiftieth Anniversary of Essays in International Finance, Princeton University, table 2. [4]

On the recommendation or at the injunction of the IMF and the World Bank, the indebted countries use loans that they obtain from public creditors (IMF, World Bank, States) to repay the commercial banks which have no intention of lending them any more money. Not until they have been fully repaid.

However not only do the loans made by public creditors increase the debt stock Debt stock The total amount of debt which will have to be repaid in any case, but they are far too modest to repay the colossal debts owed to the banks, particularly as the interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation.
are extremely high. Concerning the exorbitant interest rates paid by the developing countries, the UNDP UNDP
United Nations Development Programme
The UNDP, founded in 1965 and based in New York, is the UN’s main agency of technical assistance. It helps the DC, without any political restrictions, to set up basic administrative and technical services, trains managerial staff, tries to respond to some of the essential needs of populations, takes the initiative in regional co-operation programmes and co-ordinates, theoretically at least, the local activities of all the UN operations. The UNDP generally relies on Western expertise and techniques, but a third of its contingent of experts come from the Third World. The UNDP publishes an annual Human Development Report which, among other things, classifies countries by their Human Development Rating (HDR).

has this to say in the 1992 Human Development Report 1992: “During the 1980s, when interest rates were at 4% in the industrialised countries, the developing countries were bearing an effective interest rate of 17%. On the outstanding debt of over a thousand billion dollars, that represents a cost increase of 120 billion dollars on top of the net transfers on debt Net transfers on debt This refers to the subtraction of debt-servicing (yearly payments - interest + capital sum - to the industrialised countries) from the year’s gross payments (donations and new loans) made by the creditors.

The net transfer on debt is said to be positive when the country or continent concerned receives more (in loans) than it repays. It is negative if the sums repaid are greater than the sums lent to the country or continent concerned.
which are negative and came to 50 billion dollars in 1989”
. [5]

The question of negative net transfer on debt mentioned in this UNDP report is fundamental, and deserves closer scrutiny.

The debate inside the World Bank on calculating the net transfer on debt

In 1984, the debate over this issue caused a rumpus in the World Bank. For that very year, a team of World Bank economists, led by Sidney Chernick and Basil Kavalsky, produced a report which questioned the Bank’s presentation of external debt flows. [6] Hitherto, the Bank had only considered net flows on debt, which it defined as the difference between the capital lent and the capital repaid, without counting the interest. This team of economists took a different stance, by declaring that interest payments should be included in the calculation so that the debt problem could be presented more realistically.

The following chart illustrates the crux of the debate:

Source: World Bank, Global Development Finance 2005

It shows how the amount of total external debt increased between 1979 and 1987. Using the World Bank’s traditional approach, i.e. without including interest payments, the transfer appears positive throughout the period considered. Such a presentation of the transfers leads one to wonder how anyone could realise that a debt crisis broke out in 1982 and has been carrying on until now.

On the other hand, using the approach advanced by the Bank’s team of economists, the result is totally different. It can be clearly seen that the transfer was positive until 1982 and that it became negative as of 1983. It is perfectly justifiable to calculate the net transfer on debt by deducting the amounts repaid both in terms of capital and interest, from the amounts lent. Moreover, the fact that the crisis was caused by a rise in interest rates can only be seen and understood when the interest payments are taken into account.

The report received a very cold reception when it reached the management level of the Bank. Ernest Stern, one of the Bank’s senior members and vice president for Operations, sent a fax saying:

“I am not prepared to circulate a paper which is analytically based on the net transfer concept”. [7] In his view, there was no question of presenting the payment of interest as a burden since it was simply the remuneration for capital lent. And that was that.

After a meeting of the New York Federal Reserve to which the Bank had been invited, Ernest Stern wrote a memorandum to the Bank’s Managing Committee in which he said: “the issue of net transfers was raised and was greeted with a veritable firestorm of negative comments, from several governors and other participants. The World Bank was also attacked by several speakers for having endorsed this concept”. [8] The subject was taboo.

Such an outcry clearly shows that it was a particularly sensitive and important issue. It is impossible to grasp the full significance of debt repayment without including the payment of interest as well as the repayment of the capital. The following chart uses the same procedure as the previous one applied to Latin America and the Caribbean. The Bank’s erroneous traditional presentation only reveals a slight problem of negative transfer on debt, limited to 1983. Whereas taking the interest paid into account reveals the true situation, that transfers were overwhelmingly negative from 1983 on.

Source: World Bank, Global Development Finance 2005

Calculations have shown that between 1982 and 1985, transfers from Latin America to creditors represented 5.3% of the continent’s Gross Domestic Product GDP
Gross Domestic Product
Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.
(GDP). The burden is enormous when you consider, by way of comparison, that the reparations imposed on Germany by the Treaty of Versailles came to 2.5% of the German GDP between 1925 and 1932. [9]

For the Bank’s Managing Committee, the internal debate over net transfers had a direct bearing upon its interests as a creditor. The Bank (and also the IMF) wanted to maintain its status as a privileged creditor since this enabled it to claim a right to prior repayment over other creditors – private or bilateral. Ernest Stern explained, in an internal note made in preparing a speech that the president of the Bank was to give at the World Economic Forum in Davos in January 1984, that the Bank should refrain from asking commercial banks to maintain positive net transfers (including interest paid) as this could have a backlash for the World Bank. For naturally, such a requirement could also be applied to the Bank. The issue should therefore be fudged by referring only to net loans, or net flows on debt, thus excluding interest payments from the calculation. There follows an extract from this internal note: “If we hold the commercial bank responsible for maintaining net transfers… then we are saying that… the World Bank itself at some future point can be held responsible for not maintaining positive net transfers. We are arguing in other fora that one thing that distinguishes the World Bank from other banks, and justifies our separate treatment in rescheduling, is that we maintain net disbursements – not net transfers. If we accept the net transfer argument in a public speech by the President, our basis for rejecting attempts to draw us into rescheduling when our net transfer payments are no longer positive will be much weaker”. [10]

Two important points emerge from the end of this extract. Firstly, that the World Bank’s leader already foresaw that the net transfer between the Bank and its clients should also become negative; and secondly, that he was worried that as a result, the Bank would no longer be able to refuse the rescheduling of debts owed it.

The next chart shows transfer on debts owed to the Bank. Using the method preferred by Ernest Stern, transfer appears to remain positive. By applying the alternative approach, the transfer becomes negative as from 1987. [11]

Source: World Bank, Global Development Finance 2005

There is one more reason why the Bank refused to discuss negative transfers. In the 1980s, middle-income countries like Mexico, Brazil, Argentina, Venezuela and Yugoslavia, were the main countries affected by the debt crisis. They were also the World Bank’s main clients. These countries funded it through interest payments (added to the repayment of borrowed capital). Indeed, the World Bank owed its positive results to the interest paid by the middle-income countries that made use of its services. The rich countries did not finance the World Bank (the IBRD) since the latter borrowed on the financial markets. The World Bank used its IDA branch to lend to poor countries. In other words, it was the indebted middle-income countries who enabled the Bank to lend to the poor countries at low interest rates without making a loss. The Bank had to conceal this fact since the middle-income countries, were they aware of it, could then have demanded the right to examine the Bank’s policies towards the poorest countries. But defining that policy is the prerogative of the rich countries that control the Bank.

Intellectual terrorism within the World Bank

The World Bank historians claim that a system of spying was officially set up under the presidency of Alden. W. Clausen with a view to detecting people who deviated from the Bank’s managing committee’s politico-economic line. Bank historians say: "Between early 1983 and 1986, the Bank’s Personnel Department informed the institution’s senior managers that the Economics Department had adopted an “intelligence” system to detect staff divergences from establishment positions, that it was categorizing staff by schools of economic thought and openly favouring “loyalists”, and that it was hiring staff on fixed-term contracts to render them more pliable. ERS (Economic Research Staff), the personnel people said, increasingly was seen as a unit selling ideology instead of objective research”. [12]

Intellectual terrorism and neo-liberal obscurantism were such that, during Anne Krueger’s term as vice-president and chief economist, out of 37 researchers at management level of the Research department, 29 left between 1983 and 1986. [13] Even more seriously for the institution’s functioning, for two years more than ten posts remained vacant because no-one in the other services wanted to take the place of those who had left.

The World Bank historians report a crisis that arose between the World Bank’s leadership, especially Anne Krueger, and the editor of a new World Bank review, WB Economic Review, Mark Leiserson. In 1986, Leiserson, backed by the entire editorial committee, had decided to publish an article by Jeffrey Sachs written in 1985. The World Bank’s vice-president, Anne Krueger, prevented publication of the article. The editor resigned in protest after having tried in vain to persuade the World Bank leaders to respect the editorial committee. This was not an isolated phenomenon since a few months later, the editor of another World Bank review, WB Research Observer, also resigned for similar reasons.

When you consider that Jeffrey Sachs had just finished setting up a very tough structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

plan for Bolivia, and was thus in the neo-liberal camp of the World Bank and the IMF, you can appreciate the degree of intellectual terrorism and obscurantism wielded by Anne Krueger, the Bank’s chief economist, on those in the Bank who cautiously tried to give people from outside the institution a chance to make themselves heard. Anne Krueger did not like Jeffrey Sachs’ proposal that the World Bank and the IMF should ask commercial banks to agree to cancel the debts of extremely indebted countries. In short, Sachs was proposing that the private sector should make an effort, and Anne Krueger found that quite unacceptable! Bank historians acknowledge that even the Bank’s most important publication, World Debt Tables, came in for censorship. [14]

Anne Krueger left office in 1987. In 2000, she became n° 2 in the IMF, and occupied that post until August 2006. However, it is important not to see things in personal terms. Anne Krueger acts as the representative of the US administration. She is no unfortunate accident in the history of the IMF and the World Bank.

Radical changes in World Bank discourse on developing countries and their leaders

Until the debt crisis broke out, the World Bank could not praise the leaders of the countries enough, in a desire to encourage them to take on debts and follow the policies it recommended. Some time after the start of the crisis, there was a radical change of tone. The Bank criticised the governments of the developing countries and blamed them for the crisis. On no account was it going to examine its own responsibilities.

The change is clearly apparent in the following two quotations.

In 1982, just before the outbreak of the crisis, the Bank wrote in the World Development Report: “the developing countries, despite the rise in their current account deficits from $40 billion in 1979 to $115 billion in 1981, have been much more successful than the industrialized countries in adjusting to the new situation”. [15]

Four years later, it claimed the opposite: (World Development Report 1986): “at the root of the poor performance and debt problems of developing countries lies their failure to adjust to the external developments that have taken place since the early 1970s, coupled with the magnitude of the external shocks”. [16]

In 1984, one of the Bank’s economists, Carlos Diaz-Alejandro, produced a qualified analysis of the developing countries’ attitudes in the crisis, with emphasis on the fact that they had been subject to powerful external forces. Ernest Stern retorted: “The countries which borrowed $10-15 billion a year are playing in the big league. They thought they had the capacity – they often said so. They did so with their eyes open. They were very proud of what they were doing at the time – and much of what they did was sound. But they miscalculated. That can happen, and the cost of miscalculation can be high. But, if they want to be partners in an open and interlinked international economic system, it is time that they equip themselves to do so properly, and you should not put the burden of failure on the shoulders of everyone but themselves – it is not so. I believe it is a view they, in fact, share”. [17]

There were several aims behind the Bank’s attitude here. Firstly, it sought to avoid criticism for the policy of indebtedness that it had been recommending for decades before the crisis and especially in the 1970s. Secondly, it wished to convince its partners that they should apply radical austerity policies within the framework of structural adjustment without demanding an effort of solidarity on the part of the governments of the rich countries.

Stanley Fisher, who replaced Anne Krueger as the Bank’s chief economist in 1987, wrote in an internal memorandum in 1990: “I very much fear giving them [the less developed countries] any encouragement to believe the international community will do much to help them, and thus tend to emphasize that they have to handle their own problems...” [18]

As The World Bank historians point out: “Anyone interested in the intellectual history of the debt crisis would be struck by the degree to which the intellectual debate was dominated by voices from the US, in contrast to the virtual absence of voices from the countries bearing the brunt of the crisis”. [19] Later they add that the studies published by the World Bank reflect the political interests of its principal shareholders, especially the USA and major commercial banks.

Complicity between bankers of the North and the ruling classes of the South

Several studies show the link between the growing indebtedness of the Latin American countries in the 1970s and ’80s and capital flight from the South to the North. A very large portion of the money lent by Northern bankers returned to their coffers in the form of deposits.

The Bank historians say of this: “The ratio of capital flight to the increase in external debt in the period 1978-82 is estimated to have ranged from 50 to 100 percent for Argentina, Mexico, and Venezuela. In the case of Brazil it was of the order of 10 percent”. [20]

Other studies, one of which is presented in the following chart, produce results that corroborate this.

Argentina, Brazil, Colombia, Mexico, Peru and Venezuela: Capital flight from 1973 to 1987
(in millions of dollars and by percentage)

CountryCapital flight (1973-1987)Stock of assets abroad in 1987Assets abroad as % of the (1973-1987) in 1987 External debt (1987)
Argentina 29,469 43,674 76.9
Brazil 1,556 20,634 18.3
Colombia 1,913 2,994 19.5
Mexico 60,970 79,102 73.3
Peru 2,599 4,148 23.0
Venezuela 38,815 48,027 131.5

Source: IFRI, Ramses 93, Paris, 1992, p. 235 Based on M. Pastor, “Capital flight from Latin America”, World Development, January 1990 rpaddf

The World Bank historians draw an extremely pertinent conclusion from all this: “Capital flight increasingly placed private assets in overseas havens, in the very banks that held national debt. The elite of Latin American countries were unlikely to countenance any scheme entailing default that would place their private assets at risk”. [21] Indeed, the affluent elite of the developing countries had clearly no interest in their country suspending payments on its external debt.

To end this section, how to resist the pleasure of reproducing the delicate exchange of internal notes between Stanley Fisher of the World Bank and Jacob Frenkel, his colleague at the IMF? The IMF had published in a study an optimistic prognosis of the end of capital flight and its return to its country of origin. Stanley Fisher writes to his IMF colleague: "Bank staff are concerned with the Fund’s projections of substantial return capital flight in the financial gap analysis for some countries. We are unaware of the economic analysis on which such projections are based, and believe that it would generally be a self-denying prophesy to argue that a financing gap will be closed by return capital flight, which depends above all on confidence in overall macroeconomic and financial stability”. [22] Jacob Frenkel replies “the issue you raise concerning projections of return capital flight in financial gap analysis is one which, as you are aware, embraces considerations other than purely analytical ones. [23] (My underlining). In other words, the IMF makes optimistic projections for political reasons.

Structural adjustment in every direction

In a book published in 1974, the American economist Cheryl Payer, a critic of the IMF and the World Bank, lists the measures that the IMF imposes on developing countries which call on its services:

In order to define these measures, Cheryl Payer had analysed IMF policy as applied in the 1960 in the Philippines, Indonesia, Brazil, Chile, India, en Yugoslavia and Ghana.

From 1981-1982 on, when the debt crisis broke, a considerable number of countries called upon the services of the IMF (often under pressure from their main creditors, whether public or private), to try to solve the problem of their balance of payments Balance of payments A country’s balance of current payments is the result of its commercial transactions (i.e. imported and exported goods and services) and its financial exchanges with foreign countries. The balance of payments is a measure of the financial position of a country vis-à-vis the rest of the world. A country with a surplus in its current payments is a lending country for the rest of the world. On the other hand, if a country’s balance is in the red, that country will have to turn to the international lenders to meet its funding needs. . The IMF then had greater powers at its disposal to generalise the economic measures listed above. The whole set of measures was to become increasingly known by the expression “structural adjustment policy”.

One of the bitter ironies of history, as was mentioned earlier, was when the price of petrol shot up in 1973 and the IMF declared that no structural adjustment was necessary. Yet the oil crisis had considerably modified the international situation. Oil-exporting countries saw a huge increase in their foreign currency revenues, while there was a huge demand for foreign currency on the part of the non oil-producing developing countries.

In a book edited by John Williamson, [24] and published in 1983, an IMF functionary reports: “The worry at this time (that is, the oil crisis of 1973) was that countries might try to adjust too fast for such an attempt if it were carried out collectively could lead to a regrettable deepening of the global recession.” [25]

When the debt crisis broke out as a consequence of the combined effects of the rise in interest rates decreed by the US Federal Reserve and the fall in prices of raw materials, the IMF and the World Bank completely modified their version of what had happened. They blamed the debt crisis largely on the oil crisis. Suddenly, the adjustment they had deemed unnecessary in the mid-70s became unavoidable.

The World Bank pioneered the launch of the first structural adjustment loans in 1980. It was on the initiative of Robert McNamara that the Bank initiated these new loans. Robert McNamara used the following prediction to justify the policy: after the second oil crisis in 1979, the price of oil would continue to rise throughout the 1980s (In fact he was wrong, the opposite happened). This meant that the developing countries should carry out structural adjustment. [26]

The adjustment measures presented by Robert McNamara were those outlined above. Between 1980 and 1983, the Bank granted 14 structural adjustment loans to 9 countries. [27]

Throughout the 1980s, there were regular clashes between the Bank and the IMF who could not seem to manage to coordinate their actions. This led to a concordat between the two institutions in 1989. [28] The following year, in 1990, the concept of the Washington Consensus was born, codifying the policies to be adhered to within the structural adjustment framework. To the measures listed by Cheryl Payer and cited above were added a dimension of mass privatisation and a policy of cost recovery in sectors like education, health, water distribution, etc. Note that the Washington Consensus concerns not only the IMF and the World Bank, but also the US Executive represented by the Treasury. The novelty of the Washington Consensus was not so much in the economic measures to be applied (most of which were already in effect) as in the public proclamation of an agreement between the Bretton Woods institutions and the Executive.

As well as this, the World Bank produces an enormous number of studies and reports that aim to provide a theoretical foundation and codification for structural adjustment policy. Among these, one report is of particular interest: it is Accelerated Development in Africa South of the Sahara, directed by the economist Elliot Berg. It emanated from an order from Robert McNamara. This report was to underpin the World Bank’s policy line over a long period. Emphasis was placed on the lack of adequate support given to private initiative and over-reliance on the public sector. The report advocated increased aid for cash crops along with even more reduction of subsistence crops. Elliot Berg and his team felt that on no account should countries aim for nutritional self-sufficiency, for, they wrote, “most African countries have a distinct comparative advantage in the area of cash crops”. Far better to export tropical products and import other foodstuffs, since “a policy of self-sufficiency based on sacrificing cash crops would prove costly in terms of lost revenue”. [29] The report criticised foreign aid for having reinforced the public sector! It blamed African leaders for most of the misfortunes of Africa while exonerating the international financial institutions and the countries of the North! The Berg Report might be seen as the World Bank’s answer to the Organisation of African Unity’s (OAU) Lagos Plan adopted in 1980. The World Bank’s leadership was astonished by the negative reactions the Berg Report got, particularly as the African officials at the Bank had approved the report without a murmur. The Bank’s management committee was taken off guard and had to ask two external experts to sound out the African leaders as to what they thought of the Bank. The results of the survey confirmed their worst fears: the Bank’s image was frankly terrible.

The World Bank historians sharply denounced the Bank’s theoretical output during the 1980s and the way the Bank and the IMF shared the roles in this field: “The Bank emerged as the headquarters, the fountainhead – some half-jokingly said the Vatican – of neo-orthodox development economics. Its was the most authoritative articulation of the longer-term side of the so-called Washington consensus (the IMF dominated the short run) concerning appropriate relations between states and markets, including international and interacting national economic policies”. [30]

Timid attempts at resistance on the part of the developing countries

The divide-and-rule strategy drawn up in Washington when the crisis broke out was in full spate. Latin-American governments did not have the political will to create a united front to deal with the crisis and the creditors.

In January 1984 there was to be a secret meeting in Cuzco, Peru, between the finance ministers of Argentina, Brazil, Colombia, Mexico and Peru. The plan was to try to agree on a common strategy. The meeting was called off at the last minute due to the sudden resignation of the Peruvian minister, Carlos Rodriguez Pastor, who was to have hosted it. The decision to cancel the meeting came so late in the day that one of the ministers invited actually arrived at the meeting venue, not having been informed in time. [31]

Richard Webb, one of the World Bank historians, had been governor de the Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

of Peru. He reported that in June 1984, Peru was confronted with a dilemma: whether to continue servicing its external debt and cancel imports needed for growth; or whether to go ahead with the imports needed to maintain growth and only partially suspend debt repayments. The government had just failed to meet the budget austerity goals demanded by the IMF. As governor of the Central Bank of Peru, Richard Webb suggested that Peru should declare unilaterally a partial moratorium, which caused panic in the government. Richard Webb was accused by the Prime Minister of the time of “stabbing the country in the back”. Dismissal proceedings were started against him. He was accused of having destroyed Peru’s financial credibility abroad. [32]

When Alan Garcia, then president of Peru, announced in 1985 that henceforth his country would devote no more than 10% of export revenues to repaying the debt, the World Bank made an internal study of the issue and concluded that should Alan Garcia carry out this plan, Peru would be able to manage very well, provided it spent the money saved on bolstering up its economy. Obviously, the results of this study were never published. [33]

The Argentine economists, Alfredo Eric Calcagno and Alfredo Fernando Calcagno, summarised the experiment that Peru carried out starting from August 1985: “In August 1985, the government of president Alan García made known its decision to no longer pay more than the equivalent of 10% of its export revenues, giving priority to multilateral financial organisations. Thus the net transfers which had been negative to the tune of -488 million dollars in 1984 and -595 million in 1985 became positive at 112 million dollars in 1986, 89 million in 1987 and 90 million in 1988. Peru was subjected neither to reprisals nor to trade restrictions, and in 1986 and 1987 it increased its imports by an extraordinary amount (by 44% and 18% respectively) in spite of a fall in exports of 15% in 1986 (these showed a slight recovery in 1987). Concerning external finance, non payment of the major part of the debt largely compensed for the breaking off of loans from private financiers and the reduction in official and multilateral loans. In 1986 and 1987, the gross domestic product increased by de 8.9% and 6.5% respectively, sustained by the fact that more domestic demands were met by national productive capacity and by an increase in imports made affordable by the reduction in outpayments on the debt. However there was a shortage of big investments over this period and the dynamising effects had fizzled out by 1988, when the GDP fell by 7.5% and inflation rose sharply. So in fact Peru’s crisis over the subsequent years was linked to problems of internal economic policy rather than external trade sanctions or adverse effects of cutting down on debt repayments. On the contrary, the reduced amounts disbursed for external payments opened up an opportunity that the government failed to make the best use of”. [34]

During the 1980s, other Latin American countries totally or partially suspended payments of their external debts for several months [35] but despite the large campaign led by the Cuban government in 1985, no common strategy was adopted. The campaign led by Fidel Castro on the theme “The debt cannot be paid” got a sympathetic reception among social organisations and left-wing parties of the continent but a cooler one from its governments.

Nevertheless, Cuba’s 1985 initiative found an echo beyond the borders of Latin America. In Subsaharan Africa, for example. The young president of Burkina Faso, Thomas Sankara, made the following address to the African heads of state present at the 25th conference of the Organisation of African Unity (OAU) on 29 July 1987 in Addis Abeba: [36] "In debt we see neo-colonialism in another guise, with the colonialists recast as ’technical assistants’. In fact, we should say technical assassins. And they are the ones who offered us funding, and financial backers. (…) Those financial backers were recommended to us, we were advised to turn to them. We were shown enticing files and financial packages. We got ourselves into debt for the fifty, sixty years ahead and even more. In other words, we were persuaded to compromise our people for upwards of fifty years.

The debt in its present form is a carefully organised reconquest of Africa, forcing its growth and development to obey norms which are completely foreign to it. So that each of us will become a financial slave, which means a slave, of those who had the opportunity, the cunning, the dishonesty to place funds at our disposal which we would have to repay. (…) Who, among us here present, does not wish to see the debt quite simply cancelled? Those who do not wish it can leave, take a plane and go straight to the World Bank and pay up. I would not like Burkina Faso’s proposal to be seen as coming from young, immature politicians without experience. Neither would I like people to think that only revolutionaries speak in these terms. I would like them to acknowledge that we are motivated merely by obligation and objectivity. I can give examples of both revolutionaries and non-revolutionaries, among those who have said we should not pay the debt. I will cite, for example, Fidel Castro. He has already said that we should not pay. He is a lot older than me, even if he is a revolutionary".

Three months later, the impetuous Thomas Sankara was assassinated. Since, his country has become a docile pupil of the World Bank, the IMF and the Paris Club Paris Club This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

under the leadership of Blaise Compaore.

Jean-Philippe Peemans puts in a nutshell the relationship of complicity between the World Bank, the IMF and the governments of the developing countries that show themselves to be good pupils: “For the South, the role of international institutions like the IMF and the World Bank has been essential in this area, as the governments that do as they are told are guaranteed permanent access to multilateral credit. This guarantees Guarantees Acts that provide a creditor with security in complement to the debtor’s commitment. A distinction is made between real guarantees (lien, pledge, mortgage, prior charge) and personal guarantees (surety, aval, letter of intent, independent guarantee). them permanent access to global flows, however much their national economy may contract due to adjustment. These external flows enable capital holders to invest their assets abroad with no trouble, while the debt grows in proportion to their withdrawal of capital.” [37]

Should the debt be cancelled?

In October 1985, James Baker, the new secretary of the US Treasury, announced a plan aiming to solve the problems of the 15 highly indebted middle-income countries. [38] The plan was proclaimed with much media coverage during the annual meeting of the IMF and the World Bank in Seoul. [39] Debt cancellation had yet to be mentioned.

Inside the World Bank, in a small inner circle, the debate had begun over whether or not it was necessary to cancel part of the debt of certain countries, especially Argentina, but no-one would commit themselves publicly to such a measure. In the draft copy of the World Development Report 1988 there appeared a sentence on the need for partial cancellation of the concessional debt. It did not appear in the final version. [40] Among the arguments against cancellation was one that still comes up over and over again twenty years later. It is that once a country has benefited from cancellation, it will find it hard to regain access to credit. This argument is and always has been totally fallacious - in fact, the opposite happens. Generally, as soon as a country has benefited from debt reduction, the commercial banks offer to lend it money as its subsequent capacity to repay has been improved.

In 1992 Stanley Fisher explained that, throughout a large part of the 1980s, the US, British (Margaret Thatcher) and German (Helmut Kohl) governments prevented any discussion about debt cancellation. [41]

The turning point when debt reduction (i.e. partial cancellation) was at last envisaged came in 1988, at the G7 in Toronto, in recognition of the failure of all previous policies. The poorest countries were promised cancellation [42] once the USA had changed their mind on the subject. For the first time, in 1990 in Houston, the G7 extended the possibility of partial cancellation to highly indebted middle-income countries like Mexico, Argentina, Brazil and the Philippines. This change of heart was initiated by Washington in March 1989 under the George Bush Senior administration while Nicholas Brady was secretary of the Treasury. Once again, the US government sets the tone. The IMF, the World Bank and the G7 just go along with it.

The Brady Plan consisted of restructuring part of the debt of a series of middle-income countries through the issue of new debt paper called “Brady bonds”. When the indebted countries issued their Brady bonds, bankers of the North accepted a reduction of their credit. In exchange, they are guaranteed generous returns. To issue Brady bonds, the countries concerned first had to buy US Treasury bonds as a guarantee. Thus the indebted countries found themselves financing the policy of indebtedness of the world’s most powerful country. [43]

At first, the Brady Plan seemed to work. The successful outcome for Mexico and its president Salinas de Gortari was made much of, to the extent that in 1994 the very neo-liberal British weekly, The Economist, proclaimed, Carlos Salinas de Gortari to be one of the great men of the XXth Century. In December of that same year, Mexico was struck down by the Tequila crisis and went into its deepest recession for sixty years! A few years later, Carlos Salinas de Gortari and his brother Raul were prosecuted and charged with fraud and massive embezzlement by the Mexican judiciary. Raul Salinas de Gortari served his prison sentence while Carlos Salinas chose exile in Ireland where he works for the Dow Jones Corporation, which among other things owns the Wall Street Journal. The Mexican judicial authorities managed to get their opposite numbers in Switzerland to order Swiss banks to cede back to Mexico the money embezzled by the Salinas brothers and deposited in their coffers.

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. Mexico was the first to be affected at the end of 1994, then the countries of Southeast Asia and Korea in 1997-1998, Russia in 1998, Brazil in 1999, and in 2000-2001 Argentina and Turkey. As for the poorest countries, the partial cancellation of debt conceded to a few good pupils at the G7 summit in Toronto in 1988, and to a few more in London in 1991, Naples in 1994, Lyon in 1996 and Cologne in 1999, have not provided any lasting solution.


[1LISSAKERS , Karin. 1991. Banks, Borrowers and the Establishment : A Revisionist Account of the International Debt Crisis, p. 194

[2KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 636, note 132

[3The Argentine companies with parent companies outside Argentina are: Renault Argentina, Mercedes-Benz Argentina, Ford Motor Argentina, World Bank Argentina, Citibank, First National Bank of Boston, Chase Manhattan Bank, Bank of America, Deutsche Bank. The Argentine state reimbursed the private creditors of the following companies, i.e. their parent companies: Renault France, Mercedes Benz, City Bank, Chase Manhattan Bank, Bank of America, First national Bank of Boston, Credit Lyonnais, Deutsche Bank, Societe Generale. In short, the Argentine taxpayer repaid the debt incurred by subsidiaries of transnational corporations towards their parent companies or international bankers. One may surmise that those transnationals had created a debt on behalf of their Argentine subsidiaries by sleight of hand. The Argentine government had no means of access to their accounts.

[4In KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, Table 11-5, p. 642

[5UNDP, 1992, p. 74

[6IBRD, Operations Policy Staff, “Debt and Adjustment in Selected Developing Countries”, SecM84-698, 1984 in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 615.

[7Fax message, Ernest Stern to Luis de Azcarate, director, CPDDR, May 15, 1984 in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 616

[8Memorandum, Ernest Stern to members of the Managing Committee, “Conference at the Federal Reserve Bank of New York,” May 11, 1984, p. 1 in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 616

[9Andres Bianchi, Robert Devlin, and Joseph Ramos, “The Adjustment Process in Latin America 1981-1986,” paper prepared for World Bank-IMF Symposium on Growth-Oriented Adjustment Programs, Washington D.C., February 25-27, 1987, table 9 in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, note 105 p. 627 (“By way of comparison, the war reparations imposed on Germany between 1925 and 1932 amounted to 2.5 percent of GDP”)

[10Memorandum, Ernest Stern to Munir Benjenk, “Draft Speech For Davos”, January 16, 1984, p. 2, in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 616

[11In drawing up this chart, we took into account loans made by the IBRD branch of the World Bank, which grants loans to middle-income countries. We did not take into account loans made by the IDA to low-income countries.

[12KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 1194

[13Ibid., p. 1193, note 47

[14Ibid., p. 624

[15World Bank, World Development Report 1982, p. 7, in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 617

[16World Bank, World Development Report 1986, p. 33, in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 617

[17Memorandum, Stanley Fisher to Ibrahim Shibata, May 26, 1990 in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 618

[18Memorandum, Stanley Fisher to Ibrahim Shibata, May 26, 1990 in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, p. 618

[19Idem, p. 626

[20Ibid., p. 662. They based this on: Estimates from Miguel A. Rodriguez, “Consequences of Capital Flight for Latin American Debtor Countries,” in Donald Lessard and John Williamson, Capital Flight and Third World Debt (Washington D.C., Institute for International Economics, 1987), table 6.1, p. 130.

[21Ibid., p. 678

[22Memorandum, Stanley Fisher to Jacob A. Frenkel, “Coordination of Forecasts,” June 27, 1989. in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, note 45 p. 611

[23Memorandum, Jacob A. Frenkel to Stanley Fisher, “Coordination of Forecasts,”July 14, 1989, pp. 1-2. in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, note 45 p. 611

[24WILLIAMSON, John. “What Washington means by policy reform”. 1989. in Latin American Adjustment : How much has happened?, Washington, Institute of International Economics.

[25DALE, William B. ‘Financing and Adjustment of Payment Imbalances’, in John Williamson, ed., IMF Conditionality, Institute for International Economics, Washington, 1983, p. 7.

[26Nicholas Stern and Francisco Ferreira. 1997. “ The World Bank as “intellectual actor ” ” in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 2, p.540.

[27Idem, p.543.

[28In 1989 the two institutions agreed to share responsibilities, as a means of limiting the clashes between their recommendations (as occurred for example in Argentina in 1988, when the World Bank backed conditions that the IMF found unsatisfactory). The term “concordat”, used by the institutions themselves, was significant. It meant that the disagreements and tensions between them were considerable. It was agreed that the IMF would mainly examine the global aspects of macro-economic policies, particularly concerning budget, prices, currency, credit, interest rates and exchange rates. The World Bank, on the other hand, would concentrate on development strategies, projects and sector-based aspects. Sharing the tasks in this way required various forms of collaboration but rivalry between the two institutions remains intense. On top of this institutional rivalry there are differences of corporate culture to contend with.

[29World Bank, Accelerated Development in Africa South of the Sahara, Programme indicatif d’Action, Washington, 1981, p. 151

[30KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1, p. 1193

[31Idem, p. 620.

[32Ibid., note 64 p. 615

[33Ibid., p.679

[34CALCAGNO, Alfredo Eric and CALCAGNO, Alfredo Fernando. 1995. El universo neoliberal : recuento de sus lugares comunes, p. 378

[35This was the case for Brazil, which suspended external debt payments to banks from January 1987 to January 1988. See TOUSSAINT, Eric and ZACHARIE, Arnaud. 2000. Le Bateau ivre de la mondialisation, Escales au sein du village planétaire, CADTM- Bruxelles/Syllepse-Paris, p. 67-68.

[36See the complete text reproduced in MILLET Damien. 2005. L’Afrique sans dette, CADTM-Syllepse, Liege-Paris, 2005, p. 205.

[37PEEMANS, Jean-Philippe. 2002. Le développement des peuples face à la modernisation du monde, Academia- Bruylant/L’Harmattan, Louvain-la-neuve/Paris, p.367.

[38Argentina, Bolivia, Brazil, Chile, Colombia, Ivory Coast, Ecuador, Mexico, Morocco, Nigeria, Peru, the Philippines, Uruguay, Venezuela and Yugoslavia, in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1, p. 626

[39Concerning the issue of who makes the important decisions, it is significant that the US Treasury informed the World Bank of the existence of the “Baker plan” only forty-eight hours before it was made public.

[40KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1, p. 648

[41Letter, Stanley Fisher to Nicholas Stern, May 19, 1992, in KAPUR, Devesh, LEWIS, John P., WEBB, Richard. 1997. The World Bank, Its First Half Century, Volume 1, p. 1195

[43This phenomenon has continued to grow.

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography:
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

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