Demand debt relief for hurricane-hit islands

25 September 2017 by Jubilee Debt Campaign

CC - Flickr - NASA Goddard Space Flight Center

A petition to all creditors, including the IMF and World Bank

Over recent weeks, several countries in the Caribbean have been devastated by hurricanes. Some of those countries were already heavily indebted, often in part because of loans taken out to help with rebuilding efforts following previous disasters.

Please ask lenders to suspend debt payments immediately.

“We have lost all that money can buy and replace.”
– said Prime Minister of Dominica, Roosevelt Skerrit

Debt relief for hurricane-hit islands

Recent hurricanes have caused huge destruction in the Caribbean, including the already heavily indebted countries of Dominica and Antigua & Barbuda. With climate change, such devastating disasters are only likely to get worse, including in the Caribbean. Except for Haiti, Caribbean countries have been excluded from past debt relief initiatives.

We call on all creditors, including 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.
and 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.

, to:

  1. Declare an immediate moratorium on all debt payments for Dominica, Antigua & Barbuda and any other countries drastically impacted by hurricanes in recent weeks.
  2. Reduce debts for all Caribbean countries to a sustainable level, and give assistance to rebuild as grants, not loans.
  3. In light of the increased risks from climate change, create a permanent mechanism to suspend debt payments and reduce debt payments to a sustainable level, for all vulnerable countries hit by disasters.

Sign the petition here:

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