Independent Peoples Tribunal report

9 October 2007 by Sushovan Dhar


The Independent Peoples Tribunal (IPT) on 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.

Group took place from September 21-24, 2007 at Jawaharlal Nehru University (JNU), New Delhi India. The event was organised by an alliance of over 60 groups in collaboration with the JNU Students Union and Teachers Association. The opening jury members of the panel included eminent historian Romila Thapar, Former Supreme Court Justice P B Sawant, Former Maharastra High Court Justice Suresh, Former Planning Commission member S P Shukla, Scientist Meher Engineer, Former Water Secretary Ramaswamy Iyer, Economist Amit Bhaduri and Mexican Economist Alejandro Nadal.

There couldn’t have been a better opportunity to hold this tribunal since the Bank as the world’s largest multilateral source of equity Equity The capital put into an enterprise by the shareholders. Not to be confused with ’hard capital’ or ’unsecured debt’. and loan financing ruins the lives of hundreds of millions in India and across the globe the impacts of which are explicit on the third-world. It loans to the private sector through the International Finance Corporation (IFC) which in 2006 amounted to a massive US$ 8.3 billion. The Bank claims that it is an apolitical institution but even a cursory look at its Governance conditionalities such as public sector reform, creating legislation to facilitate the private sector shows that it plays a profoundly political role in the country. India, one of the World Bank’s oldest members, joined the institution since its birth and has cumulatively borrowed more money than any other single country (US$65.7 billion). A closer look at the Bank’s performance in India would reveal that in spite of the developmental mandate of ’eradicating poverty’ the Bank in fact functioned more like a commercial bank serving corporate interests. As a matter of fact, owing to World Bank 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
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/
conditionalities India had to undergo a complete policy overhaul after 1991. The immediate policy changes were palpable in the governmental decisions like devaluation Devaluation A lowering of the exchange rate of one currency as regards others. of rupee by 23%, new industrial policy allowing more foreign investments, opening up more areas for private domestic and foreign investment, part disinvestment of government equity in profitable public sector enterprises, closing down of sick public sector units, reforms of the financial sector by allowing in private banks, liberal import and export policy, cuts in social sector spending to reduce fiscal deficit, amendments to the existing laws and regulations to support reforms, market-friendly approach and less government intervention, liberalisation of the banking system, tax reforms leading to greater share 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 indirect taxes, etc. affecting vast sectors of the Indian population.

The Tribunal was held with the aim of providing a forum for people who have faced the impact of projects and policies funded or promoted by the World Bank Group and according to the organisers the principal objectives of Tribunal were to explode the myth that the World Bank operates independently and does not espouse the cause of any country or private agency, to determine the Bank’s influence on the policy-making decisions of Indian government officials and to determine the impact that World Bank’s policies have had on poverty and democratic structures in India.

Several depositions were received by the jury from the activists protesting against disastrous impacts of the Bank’s operation in India; especially, the manifold damage done by the Bank’s conditionalities in granting loans and as well as by the infamous Structural Adjustment Programmes (SAP). The depositions were made by the vulnerable communities dispossessed by the World Bank projects, including women, children, Dalits, minorities, adivasis, workers, fish workers, and farmers and they covered areas like the systematic degeneration of environment and human rights; the influence of big capital, especially trans-national and corporate in the World Bank’s schema; the effects of financial indebtedness and loan conditionalities on social sectors (food, health, education, shelter, etc.), particularly in terms of poverty alleviation and reduction of inequality; governance (role of bureaucrats, consultants and technocrats), sovereignty and democracy; the impact of Bank dictated privatisation across sectors, etc. Testimonies covered 26 sectors including: education, health, agriculture, electricity, water, forests, environmental policy, mining, climate change, indigenous people, post disaster interventions, women’s rights, and urban development among others.

The prominent depositors were noted activists working on these issues for a number of years such as Smitu Kothari of Intercultural Resources, Professor Arun Kumar, Supreme Court Advocate Prashant Bhushan, Shripad Dharamadhikari, Coordinator of Manthan Adhyayan Kendra, Professor Michael Goldman of the University of Minnesota, Professor Anil Sadgopal, Medha Patkar from Narmada Bachao Andolan, Magsayay awardee Arvind Kejriwal, economist Jayati Ghosh and others.

The jury comprising of historian Romila Thapar, writer Arundhati Roy, activist Aruna Roy, former Supreme Court Justice P B Sawant, former Finance Secretary S P Shukla, former Water Secretary Ramaswamy Iyer, scientist Meher Engineer, economist Amit Bhaduri, Thai spiritual leader Sulak Sivaraksa, environmental lawyer Bruce Rich and Mexican economist Alejandro Nadal patiently heard the arguments for four days and came out with it interim findings on September 24th, 2007. In its preliminary findings the jury stated that they were shocked by the evidence and depositions made at the Tribunal since the World Bank started direct intervention in India.

“we have witnessed presents a disturbing and shocking picture
of increased and needless human suffering since 1991 among
hundreds of millions of India’s poorest and most disadvantaged
in rural areas and in the cities. It is clear to us that a significant
number of Indian government policies and projects financed and
influenced by the World Bank have contributed directly and/or
indirectly to this increased impoverishment and suffering.”

The jury also remarked that the marginalised and the poor in India have paid for the economic growth and the current boom has only benefited a minority of India’s population constituting the middle class and the rich. They also made a special mention to the farmer suicide which is continuing at an alarming rate since the 1990s further accentuating from 2001. According to government statistics, the total suicides till date are 1, 37,000. In fact, these incidents which are now commonplace occurrences in India are the result of governmental policies, like reduced subsidies from the union and the state governments, ever-increasing input costs for irrigation water, electric power, and seeds; reduction of low interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. loans for the poor leading to their virtual elimination and opening up of the Indian economy to an uneven playing field in international trade in agricultural commodities Commodities The goods exchanged on the commodities market, traditionally raw materials such as metals and fuels, and cereals. .

The jury made specific remarks about major World Bank Economic Restructuring, Structural Adjustment, and Sector Loans resulting in disaster for much of India’s more than 700 million rural inhabitants, and most disastrous of all for poor farmers. The havoc wrought by the dismantling of public services leading to commodification by way of promoting user fees in the health and education sectors, as well as partial privatisation in these sectors. The jury commented that:

“The net effect of many Bank prescribed policy “reforms” appears
to be the reorientation of the Indian State priorities from striving
to secure a safety net for the poor and vulnerable to providing
a safety net for large domestic and international corporations and
investors.”

The jury heard witnesses from the poorest Dalit and Adivasi communities who described the deterioration for their communities from poverty to destitution because of forced displacement caused by World Bank financed projects and commented adversely on the Bank’s widespread failure to implement its environmental and social safeguards, as well as indications of intentions to even dilute the effective rigour of these safeguards. It must be noted that the Bank’s own Independent Inspection Panel found in 2002 that Bank management violated its own environmental and resettlement policies on 37 counts.

They also stated that the Bank’s influence on the economic and social policies of the Indian government is much greater than the amount of its lending and vindicated the Indian Government for its shares of equal responsibility for this dismal state of affairs. The collusion between the Indian state and the Bank is facilitated by a significant number of officials in key ministries such as finance and planning who have either worked at the Bank or IMF, or share their assumptions and biases.

The panels made commitments to come out with an even larger report to seek redressal of the grave injustices done by the Bank and the Indian government and it held the state accountable and called for changes in these policies holding the World Bank accountable for policies and projects that in practice directly contradict its mandate of alleviating poverty.

The conspicuous absence of the Bank at the Tribunal in spite of advance notices served to them raises further questions. Instead, in a written note put up on the Bank website it explicated stated its disagreements “with the format of a ‘tribunal’ established with juries and judges to ‘try’ the Bank”. This further reinforced the Bank’s notion of the “impunity” or “immunity” it enjoys overriding any scrutiny by the masses or the society whose very existence is stake owing to the Bank’s policies and actions. It inevitably leads us to a conclusion that it is high time that we raise demands to end the “impunity” or the “immunities” enjoyed by the World Bank and hold them responsible for their acts seeking reparations. It is also time that we seek an end to Bank’s activities and replace it an institution with peoples control which goes beyond the framework of a “debtor-creditor” relationship rather, makes resources available for the toilers of the world for the development of one and all. The Tribunal points it out sufficiently that the world would be more just and benign without such institution as the World Bank which thrives as a parasite using its financial leverage Leverage This is the ratio between funds borrowed for investment and the personal funds or equity that backs them up. A company may have borrowed much more than its capitalized value, in which case it is said to be ’highly leveraged’. The more highly a company is leveraged, the higher the risk associated with lending to the company; but higher also are the possible profits that it may realise as compared with its own value. and political clouts. It is also the time to declare war with such governments and regimes which collaborate with such institutions to rob its citizens the fruits of their own labour.

The tribunal ended in an optimistic note with the organisers acknowledging its utility in converging social movements, unions, academicians, researchers and struggle groups from across the country and pledging that “….. next steps would be to use this platform to create a broad based political struggle against neo liberalism and work towards an India without institutions such as the World Bank and the Asian Development Bank”.




Other articles in English by Sushovan Dhar (44)

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