From Wolfensohn to Wolfowitz - The Imperial Wolf Shows its Teeth

6 April 2005 by Jubilee South


Other members of the G8 G8 Group composed of the most powerful countries of the planet: Canada, France, Germany, Italy, Japan, the UK and the USA, with Russia a full member since June 2002. Their heads of state meet annually, usually in June or July. along with the so-called “donors” might pretend to be scandalized at the selection, but the real scandal are the policies and practices of 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.

/ Washington Consensus of which they too form a part.

Without a doubt the nomination of Wolfowitz is reprehensible, a man of the Pentagon who is stained with blood and oil, continuing the tradition which ceded to the US the “right” to name the World Bank’s president and which years passed, was covered by another businessman-warrior and then minister of defense (sic), Robert McNamara, for his commanding of the war against Vietnam. But what really matters is the policy that is carried out independently of personalities - an ever-faithful institution belonging to a power structure that daily claims the lives of 250,000 persons victims of 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).

IMF : http://www.worldbank.org/
policies and imperial mind-sets and interests that are dead set against the radical redistribution of economic and social power required on a systemic level.

Jubilee South believes that the external debt of the South is illegitimate, that it is an ideological construct that oppresses peoples. That construct, embodied in the International Financial Institutions and the WTO WTO
World Trade Organisation
The WTO, founded on 1st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.

, is shared and defended by most governments and governing elites North and South. That some of those elites, and some well intentioned organizations are launching appeals and efforts to stop the nomination of Wolfowitz, is indicative of a rebellion against the crudeness and contempt which the current US administration holds for the very notion of “development”.

Washington’s message however could not be clearer or more “transparent”: the World Bank, and indeed the very notion of development, must continue to take their unambiguous place in the US-driven neoliberal war against people’s right to self-determination and autonomous development. The nexus between economic and military imperialism stands exposed.

Jubilee South condemns the Bush Administration decision and the policy that shapes those decisions. We call on all those concerned to direct their campaign efforts not simply at reversing that decision, but at decommissioning the World Bank itself, holding its owners and directors accountable for the genocidal consequences of its lending and collections, and resisting the neoliberal economic offensive that it is now entrusting Wolfowitz to unambigously lead.

- JUBILEE SOUTH, March 18, 2005




Source: Jubilee South (www.jubileesouth.org/), March 28 2005.

Other articles in English by Jubilee South (17)

0 | 10

CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

8 rue Jonfosse
4000 - Liège- Belgique

00324 226 62 85
info@cadtm.org

cadtm.org