Committee for the Abolition of Illegitimate Debt

Thirty-two indictments 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.

and 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

1. Since their creation in 1944, the World Bank and the IMF have actively supported all the dictatorships and all the corrupt regimes of the US-allied camp.
2. They trample the sovereignty of states underfoot in flagrant violation of the right of peoples to self-determination, in particular through the conditionalities they impose. These conditionalities impoverish populations, increase inequalities, deliver countries up to transnational corporations and change states’ legislation (completely rewriting labour codes and mining and forestry codes, abrogating collective-bargaining agreements, etc.) in favour of creditors and foreign ‘investors’.
3. Despite having detected massive misappropriations of funds, the World Bank and IMF have maintained, and even increased, the amounts loaned to corrupt and dictatorial regimes allied with the Western powers (see the classic case of Congo-Zaire under Marshal Mobutu after the Blumenthal report in 1982).
4. Through their financial support they helped prop up the dictatorial regime of Habyarimana in Rwanda until 1992, thus allowing the army to increase its strength fivefold. The economic reforms imposed in 1990 destabilized the country and aggravated the latent contradictions. The genocide that the Habyarimana regime had been preparing since the end of the 1980s was effectively perpetrated from 6 April 1994, leading to almost one million deaths among the Tutsis (and moderate Hutus). Subsequently, the World Bank demanded that the new authorities in Rwanda repay the debt contracted by the regime responsible for the genocide.
5. They supported a number of dictatorial regimes in the other camp (Romania from 1973 to 1982, China from 1980) in order to weaken the USSR before its collapse in 1991.
6. They have supported the worst dictatorships until they were overthrown. For example: the emblematic cases of their supporting Suharto in Indonesia from 1965 through to 1998; Marcos in the Philippines from 1972 to 1986; and Ben Ali in Tunisia and Mubarak in Egypt until their overthrow in 2011.
7. They have actively sabotaged progressive experiments in democracy. (Jacobo Árbenz in Guatemala and Mohammad Mossadegh in Iran in the first half of the 1950s; João Goulart in Brazil in the early 1960s; the Sandinistas in Nicaragua in the 1980s and of course Salvador Allende in Chile from 1970 to 1973. The full list is much longer.)
8. The Bank and the IMF finance tyrants and then demand that their victims repay the odious debts contracted by their oppressors.
9. In the same way, the Bank has forced the people of countries who gained independence at the end of the 1950s and early 1960s to repay odious debts contracted by the former colonial powers for the purpose of colonizing their countries. A prime example is the colonial debt contracted by Belgium with the World Bank to complete the colonization of the Congo (Kinshasa) in the 1950s. This is despite the fact that such transfers of colonial debts are forbidden by international law. [1]
10. In the 1960s the Bank and the IMF gave financial support to countries such as South Africa under apartheid and Portugal, which was maintaining domination over its colonies in Africa and in the Pacific despite these countries being under a UN-decreed international financial boycott. The World Bank also supported a country (Indonesia) that had forcibly annexed another country (East Timor) in 1975.
11. On the environmental front, the Bank continues to pursue productivist and extractivist policies that are disastrous for populations and detrimental to nature. It massively underwrites the construction of coal-fired power plants that have disastrous effects in terms of pollution and climate change. It has even managed to put itself in charge of managing the market for permits to pollute. The World Bank also finances the construction of large dams that cause enormous environmental damage. The Bank encourages the development of agribusiness to the detriment of family farming, supporting the massive use of pesticides, herbicides and chemical fertilizers that are responsible for the dramatic loss of biodiversity and impoverishment of the soil. The World Bank promotes privatization and commercialization of land for the benefit of large landowners.
12. The World Bank finances projects that flagrantly violate human rights. Among the projects least respectful of human rights and directly supported by the Bank is the ‘transmigration’ project in Indonesia in the 1970s and 1980s, many components of which may well be classified as crimes against humanity (destruction of the natural environment of native populations, forced displacement of populations). In the 2000s, the World Bank fully financed the ironically named ‘Voluntary Departure’ project in the DRC, a layoff plan which violated the rights of 10,655 agents of Gécamines, the public mining company located in Katanga. These workers are still waiting for payment of their back wages and the compensation they are entitled to under Congolese law.
13. The World Bank (like the IMF) aided the emergence of factors that caused the outbreak of the debt crisis of 1982. To sum up: a) the World Bank encouraged countries to contract debts under conditions that led to overindebtedness; b) it drove, and even forced, countries to remove capital movement and exchange controls, thereby increasing the volatility of capital and significantly facilitating its flight; and c) it drove countries to abandon import substitution industrialization and replace it with a model based on promotion of exports.
14. The World Bank and the IMF concealed risks they had actually detected (overindebtedness, payment crises, negative net transfers, etc.).
15. As soon as the crisis broke out in 1982, the World Bank and the IMF systematically favoured the creditors and weakened the debtors.
16. The World Bank and the IMF recommended, and even imposed, policies by which the burden of debt was borne by the people, while favouring the most powerful.
17. The World Bank and the IMF have continued the ‘generalization’ of an economic model that systematically increases inequality between countries and within countries.
18. In the 1990s, the World Bank and the IMF, with the complicity of the governing authorities, extended 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 to the majority of the countries of Latin America, Africa, Asia, and Central and Eastern Europe (including Russia).
19. In the aforementioned countries, massive privatizations have been carried out to the detriment of the common good, hugely enriching a handful of oligarchs.
20. The World Bank and the IMF have strengthened large private corporations and weakened both governing authorities and small producers. They have heightened the exploitation of workers and small producers and increased their precarity.
21. Their self-proclaimed fight against poverty fails to conceal a policy that in practice reproduces and aggravates the very causes of poverty.
22. The World Bank’s rhetoric concerning ‘gender equity Equity The capital put into an enterprise by the shareholders. Not to be confused with ’hard capital’ or ’unsecured debt’. ’ coincides in practice with policies that in fact reinforce certain aspects of patriarchal domination. The policies financed by the Bank and by the IMF have negative consequences for women’s lives.
23. The liberalization of capital flows, which they have systematically encouraged, has increased the incidence of tax evasion, capital flight and corruption.
24. The liberalization of trade has strengthened the strongest economies and further weakened the weaker ones. The majority of small and medium producers in developing countries are unable to withstand competition from large corporations, whether in the North or the South.
25. The World Bank and the IMF operate in close cooperation with the WTO WTO
    World Trade Organisation The WTO, founded on 1^st 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.
    
    to enforce an agenda that is radically opposed to the fulfilment of basic human rights.
26. Since the crisis struck the European Union, the IMF, beginning in 2010, has been on the front lines to impose the same policies on the people of Greece, Portugal, Ireland, Cyprus and others as were imposed on the peoples of developing countries and of Central and Eastern Europe in the 1990s.
27. The World Bank and the IMF, who preach about good governance in report after report, actually engage in dubious practices within their own walls.
28. The World Bank and the IMF have contributed systematically to undermining public health services. This has greatly weakened the capability of public authorities and of peoples to face traditional diseases like malaria and tuberculosis as well as new epidemics such as Covid-19.
29. The two institutions keep most developing countries marginalized even though they represent the majority of its members, thus favouring a handful of governments in wealthy countries.
30. To sum up, the World Bank and the IMF are despotic instruments in the hands of an international oligarchy (a handful of major powers, their governments and their transnational corporations) who bolster an international capitalist system that is detrimental to mankind and the environment.
31. The harmful practices and activities of the World Bank and the IMF must be exposed and denounced so that they can be stopped. The debts whose repayment these institutions demand must be cancelled, and the institutions and their directors must be brought to justice.
32. It is urgent that a new, democratic international architecture be set up, one that would promote redistribution of wealth and support the efforts of peoples to achieve a form of development that is socially just and respectful of nature.

Build a new international architecture

Proposed alternatives must radically redefine the very foundations of the international architecture (its missions, its operation, etc.) Let us look at the case of the WTO, the IMF and the World Bank.
The organization that replaces the World Bank should be highly regionalized (banks of the South could be connected with it) and its function would be to provide loans at very low or zero 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. , and aid which would not be granted unless it is used in strict accordance with social and environmental standards and, more generally, fundamental human rights. Unlike the existing World Bank, the new bank the world so sorely needs would not attempt to represent the interests of creditors while forcing debtors into submission to the all-powerful market; its priority mission would be to defend the interests of the peoples who receive the loans and grants and whose labour repays them.
As for the new IMF, it should return to a part of its original mandate to guarantee the stability of currencies, fight speculation, control movements of capital and act to prohibit tax havens and tax evasion. To attain this goal, it could contribute – along with national authorities and the regional monetary funds that also need to be created – to collecting various international taxes.
The aim of the new world trade organization should be to guarantee that a series of fundamental international covenants are established in the area of trade, beginning with the Universal Declaration of Human Rights and all fundamental treaties regarding human rights (individual or collective) and environmental rights. Its function would be to supervise and regulate trade so that it is strictly in conformity with social norms (the conventions of the International Labour Organization) and environmental norms. Such a definition is in direct opposition to the current WTO’s goals. This of course implies a strict separation of powers: there is no question of the WTO, or any other organization for that matter, having its own tribunal. The Dispute Settlement Body must therefore be abolished.

All of these ideas require a new global architecture that is coherent, hierarchized and in which there is a division of powers. Its keystone could be the United Nations, provided that the UN General Assembly becomes a true decision-making body – which implies the elimination of the status of permanent member of the Security Council (and the veto power that goes with it). The General Assembly could delegate specific missions to ad hoc organizations.
Another question that has not yet advanced far enough is that of an international legal system, an international judicial power (independent of other international bodies holding power) that would complement the current system consisting mainly of the International Court at The Hague and the International Criminal Court. With the neoliberal offensive that began during the 1970s and 1980s, trade law has gradually gained dominance over public law. International institutions such as the WTO and the World Bank operate with their own judicial organs – the Dispute Settlement Body within the WTO and the World Bank’s ICSID ICSID The International Centre for the Settlement of Investment Disputes (ICSID) is a World Bank arbitration mechanism for resolving disputes that may arise between States and foreign investors. It was established in 1965 when the Washington Convention of that year entered into force.

Contrary to some opinions defending the fact that ICSID mechanism has been widely accepted in the American hemisphere, many States in the region continue to keep their distance: Canada, Cuba, Mexico and Dominican Republic are not party to the Convention. In the case of Mexico, this attitude is rated by specialists as “wise and rebellious”. We must also recall that the following Caribbean States remain outside the ICSID jurisdiction: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname. In South America, Brazil has not ratified (or even signed) the ICSID convention and the 6^th most powerful world economy seems to show no special interest in doing so.

In the case of Costa Rica, access to ICSID system is extremely interesting: Costa Rica signed the ICSID Convention in September, 1981 but didn’t ratify it until 12 years later, in 1993. We read in a memorandum of GCAB (Global Committee of Argentina Bondholders) that Costa Rica`s decision resulted from direct United States pressure due to the Santa Elena expropriation case, which was decided in 2000 :
"In the 1990s, following the expropriation of property owned allegedly by an American investor, Costa Rica refused to submit the dispute to ICSID arbitration. The American investor invoked the Helms Amendment and delayed a $ 175 million loan from the Inter-American Development Bank to Costa Rica. Costa Rica consented to the ICSID proceedings, and the American investor ultimately recovered U.S. $ 16 million”.

https://icsid.worldbank.org/apps/ICSIDWEB/Pages/default.aspx – whose role has taken on disproportionate scope. The Charter of the United Nations is regularly violated by the permanent members of its Security Council. We have pointed to the limits of international law and the systematic violations of the UN Charter, and in particular of the prohibition of the use of force set down in Article 2 of Chapter I. [2] New lawless zones are being created (one example is the United States’ holding of prisoners without rights at Guantanamo). The United States, after having recused itself from the International Court at The Hague (which had found the US guilty of aggression against Nicaragua in 1985), now rejects the International Criminal Court. Israel guilty of perpetrating genocide against the Palestinian people also rejects ICC jurisdiction. [3] Such a situation is cause for great concern and initiatives for putting a true international legal system in place are urgently needed.

Meanwhile, institutions such as the World Bank and the IMF must be held accountable before national jurisdictions and the debts whose repayment they demand must be cancelled. Action must be taken to prevent application of the harmful policies they recommend or impose.