Time For A Renewed Anti-Debt Movement

1 June by Eric Toussaint , Beverly Keene , Lidy B. Nacpil , Dorothy Guerrero


The coronavirus and global lockdowns mark 2020 as the year in which we re-confront these same issues, only this time with even greater life-or-death urgency, as leaders in one country after another, responding primarily to their own immediate fears, have introduced hitherto unthinkable emergency measures. The economic and social consequences of those measures came as secondary afterthoughts. Yet, it is those postscripts that now threaten to be worse than the disease they are supposed to cure – particularly in the euphemistically labelled developing or less-developed world.

Unlike the re-emergence of essentially the same issues as 20 years ago, 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.

http://imf.org
of today claims to be different. However, is it really any different? The IMF’s latest Fiscal Monitor still calls for the same post-coronavirus “fiscal consolidation”.

To respond effectively, and especially to debate whether and how IMF re-empowerment through Special Drawing Right (SDR) issuance can accompany anti-debt campaigning, we need to come together from all over the world – including progressives from the Global North – to harness our collective knowledge and experiences - to answer additional questions such as: Against the scale of the economic crisis and unfolding global depression, do we need a more flexible attitude to our governments borrowing money from the IMF and 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 should we be pushing the IMF to issue SDRs as some progressives have been arguing? Is the BRICS’ New Development Bank an alternative meriting pushing for a bigger role? Is sovereign debt Sovereign debt Government debts or debts guaranteed by the government. default a feasible strategy for indebted nations? What are the precedents and possibilities?

Conversation moderated by Brian Ashley from the AIDC .




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 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 (see here), etc.
See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint
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.

Other articles in English by Eric Toussaint (532)

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Lidy B. Nacpil

is an activist working on economic, environmental, social and gender justice issues in national, regional and global campaigns.

She is the Co-ordinator of Jubilee South – Asia Pacific Movement on Debt and Development (JSAPMDD), Co-coordinator of the Global Campaign to Demand Climate Justice (DCJ), and member of the global Coordinating Committee of the Global Alliance on Tax Justice (GATJ).

She also serves as the Convenor of the Philippine Movement for Climate Justice and Vice President of the Freedom From Debt Coalition.

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