Committee for the Abolition of Illegitimate Debt

THE AUTHORS

Eric Toussaint is a historian with a doctoral degree in political science from the universities of Paris VIII and Liège. He is the President of CADTM Belgium (www.cadtm.org). He has written many essays on geopolitics including 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.

: A Critical Primer, Pluto Press, London, 2008, and A Glance in the Rear View Mirror. Neoliberal Ideology from its Origins to the Present, Haymarket Books, Chicago, 2012. He has also written several works with Damien Millet, including Debt, 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 , and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Press, New York, 2010, http://cadtm.org/Debt-the-IMF-and-the-World-Bank See also Eric Toussaint, doctoral thesis in political science, presented in 2004 at the Universities of Liège and Paris VIII: “Enjeux politiques de l’action de la Banque mondiale et du Fonds monétaire international envers le tiers-monde” (“Political aspects of the World Bank and the International Monetary Fund actions toward the Third World”), http://cadtm.org/Enjeux-politiques-de-l-action-de

Aminata Traoré is a Malian politician and writer. Her books in French include L’étau. L’Afrique dans un monde sans frontières, Le Viol de l’Imaginaire, L’Afrique humiliée, and L’Afrique mutilée.

Jean Ziegler is a former professor of sociology at the University of Geneva and the Sorbonne, Paris. He was a Member of Parliament for the Social Democrats in the Federal Assembly of Switzerland from 1981 to 1999. He has also held several positions with the United Nations, especially as Special Rapporteur on the Right to Food from 2000 to 2008, and as a member of the Advisory Committee of the UN Human Rights Council from 2008 to 2012. His recent publications include Betting on Famine: Why the World Still Goes Hungry, New Press, 2013 (304p) ISBN 978-1-59558-849-4.

Acknowledgements: I would like to thank Snake Arbusto, Vicki Briault, Pierre Gotiniaux, Pauline Imbach, Anishu Jakim, Charles La Via, Yvette Krolikowski, Mike Krolikowski, Damien Millet, Christine Pagnoulle, Brigitte Ponet, and Patrick Saurin for their support and assistance in writing and translating this book.

Contents

• Preface by Aminata Traoré 9
• Introduction by Pauline Imbach and Damien Millet 11
• The Trial of an Exemplary Man 15
• Epilogue 47
• Appendices 
  1/ The Life and Times of Jacques de Groote 55
  2/ The IMF and the World Bank: It’s time to replace them 61
  3/ The World Bank 66
  4/ The International Monetary Fund (IMF) 69
• Post face : Eric Toussaint – a Courageous Whistleblower by Jean Ziegler 71
• Bibliography 75

Introduction by Pauline Imbach and Damien Millet

As financial and political scandals come and go, the names of important personalities pepper the international press, but in general, we only remember scattered details.

Jacques de Groote, the subject of this book, is an interesting example. He was Belgium’s executive director at the IMF and World Bank for nearly twenty years, and has recently been condemned in Bellinzona, Switzerland for “aggravated money laundering”, “fraud”, and “document forgery.” This story received a great deal of media attention in Europe and beyond throughout 2013.

What interests Éric Toussaint, who has radically criticised the IMF and the World Bank for several decades, is the emblematic role played by Jacques de Groote during a historical period of these two important international financial institutions to which the major media outlets accord so much attention. It is impossible to criticise them or their actions and unimaginable to question their existence in any way. Somehow, they are above all reproach. Their failures, and the serious damage resulting from them, have all been caused by conditions beyond their control. They enjoy unlimited intrinsic legitimacy. Being protected by immunity in the exercise of their functions, those in charge are never called to account. Since their creation in 1944, neither of these institutions has ever been taken to court despite repeated violations of human rights.

These two institutions are under the orders of the dominant governments and the big multinationals, oscillating between private interests (political, economic, and financial) and the interests of the great powers.

This fascinating book, which can be read like a historic novel, highlights these different aspects with examples taken from the career of Jacques de Groote. Éric Toussaint practices neither insinuation nor defamation; he sticks to the facts, basing his enquiry on clearly defined sources.

The narration takes us through the Congo of Mobutu, infamous for the harshness of his dictatorial regime and the personal fortune he amassed on the backs of the Congolese people. Then it is on to Rwanda where our hero helps his friend Van Den Branden, a baron and CEO of a major mining company. Killing three birds with one stone, de Groote acted in favour of the institutions he was representing, his friend, and the regime of General Juvenal Habiyarimana. The saga continues in the Czech Republic with the fraudulent privatisation of MUS (Mostecka Uhelna Spolecnost), one of the principal Czech coal mines. Belgium and its kingdom’s interests are also part of the narrative, as is the generalisation of neoliberal policies starting in the 1980s, and pressure groups, political friendships, and alliances. The operations take on a worldwide character: trials in the U.S. and Switzerland, a pipeline in India, World Bank and IMF success stories in Mexico, relations with the big international private banks, and on several occasions clear conflicts of 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. .
The backdrop of this work remains the international financial institutions that are so often guilty of infringing upon and violating human rights. Lifting the curtain to unveil their actions is essential. It goes without saying that they must answer for them, as must their Directors and representatives. It is crucial to analyse the powerful methods of domination at work all over the planet for the last seventy years. The CADTM has endeavoured to make this radical critique for over twenty years, and has published numerous analyses enabling us to understand the deathly logic commanding major international decisions.