For more than sixty years, the International Monetary Fund and the World Bank together with their partner regional development banks and export credit agencies, have used international finance capital to exercise control and restructure the societies of the South to serve the interests of global private corporations and the economic and geo-political agenda of the few powerful nations that control these institutions. The resulting effects on people's lives, on communities, on the environment, and on the economic as well as political structures in the South have been profound and over the years have generated numerous resistance struggles against these institutions.
Despite well-documented evidence and countless testimonies to the destruction, displacement and dispossession their policies and operations have caused, these institutions persist in legitimizing their role. In recent years they have declared themselves to be champions of "poverty reduction" and "good governance."
This year, 2006, we pledge to intensify our struggles against these institutions and raise the level of international coordination and concerted action. In particular, we commit to organizing different forms of mobilization and direct action in many countries across the globe during the week of the IMF and WB Annual Meetings, September 14-20, 2006. This will include various activities and actions in the vicinity of their meetings in Singapore.
WE CALL on all people's organizations, social movements, labor movements, women's movements, farmers groups, first peoples, religious and cultural groups, community organizations, NGOs, political forces, and all concerned citizens around the world to join us in mounting vigorous actions that will focus the world's attention on the destruction and human rights violations caused by the IMF and World Bank, the regional development banks, export credit agencies, and the neoliberal global system they enforce.
Our actions will identify issues and articulate demands that reflect the particular impacts of these institutions on each of our countries but will also be united on the following global demands:
1. Immediate and 100% cancellation of multilateral debts as part of the total cancellation of debts claimed from the South, without externally imposed conditionalities.
The inhuman and destructive consequences of debt domination which the international financial institutions play a major part in perpetuating are evidence against the outrageously deceitful claim of these institutions that they are working for "poverty reduction" and "financing for development."
Debt relief initiatives of international financial institutions have to date covered only a very small part of the debt claimed from the South. Worse, these initiatives come with conditions that undermine the sovereignty of people to determine their own path of development, have proven harmful to livelihoods and the environment, and keep South economies tied to the interests of global private profit.
Cancellation of only a small part of the debt may release some funds that can be used for basic services but does not free the South from debt bondage. Debt cancellation must be 100%.
And for immediate action, we highlight the especially urgent cases - most of Africa, Haiti, Nepal, Tsunami-hit countries and others recently devastated by natural calamities, countries ravaged by war, societies overwhelmed by HIV/AIDS, and others experiencing severe social, financial and economic crisis.
We reject the international financial institutions' "debt sustainability" framework. There is no level of debt that is "sustainable" in a global economic system that is founded on domination and exploitation of the peoples, economies and resources of the South. This framework is a means by which these institutions justify maintaining the "indebtedness" of Southern countries.
The insistence on their "debt sustainability framework" is also a refusal to address the more fundamental question of the illegitimacy of the debt claimed from the South. Peoples of the South should not be made to pay for illegitimate debts -- debts they have not benefited from, debts that financed projects that have caused displacement of communities and damage to the environment, debts wasted on corruption or failed projects, debts contracted through undemocratic and fraudulent means, debts with grossly unfair terms and harmful conditions, odious debts incurred by dictatorships, debt contracted in the context of exploitative international economic relations, debts for which peoples of the South have paid many times over.
Though the financial debts claimed from the South are of staggering amounts, totaling more than US$2.3 trillion dollars, the North in fact owes the peoples of the South a far, far greater debt. It is the historical, economic, social, and ecological debt accumulated over centuries of plunder and exploitation by North with the collaboration of Southern elites.
The IMF and the World Bank should bear the costs of writing off debts owed to them by using the World Bank's loan loss provisions (valued at US$3 billion as of June 30, 2005) and retained earnings (valued at US$27 billion as of June 30, 2005) and IMF gold stocks. With the market price of gold surpassing US$600 an ounce, the IMF's 103.4 million ounces of gold are worth more than US$60 billion, rather than the US$9 billion recorded on the IMF's books.
2. Open, transparent and participatory External Audit of the lending operations and related policies of the International Financial Institutions, beginning with the World Bank and IMF.
Debt campaigns, movements, people's organizations, and NGOs are now involved in preparing for and conducting country-level independent Citizens' Audits of Debts claimed from South countries as well as calling on South governments to conduct transparent, open and participatory Government Audits (e.g. Parliamentary) of these debts. These audits are aimed at examining the origins and causes of the debt problem, taking stock of effects and impacts, bringing to light the dubious and illegitimate character of the debts, identifying responsibility and accountability, and establishing and strengthening the basis for urgent changes in national policies on the debt and related issues.
We challenge the international financial institutions to subject themselves to similar independent audits of the loans they have released, their lending policies, processes and operations, and the terms and conditionalities that have accompanied these loans, and take stock of the effects and impacts. Such audits should look into the culpability and accountability of these international financial institutions, and asses what restitution and reparations must be made.
The international financial institutions have recently been stepping up efforts to portray themselves as champions of good governance, including the announcement of renewed efforts and strategies to fight corruption. We challenge these institutions to begin with themselves and examine how they have been involved in creating and exacerbating the problem of corruption. External, independent audits of their loans, lending operations and conditionalities should include this question. Further, corruption must be seen as a systemic problem that also involves the private sector, especially transnational corporations.
3. Stop the imposition of conditions and the promotion of neoliberal policies and projects.
Through the conditions attached to their loans and programs, the IMF and World Bank have succeeded in restructuring the global economy. The widespread use of "structural adjustment programs" from the early 1980s in countries with significant debt, poverty, and financial problems has forced most of the South countries' economic policies to ape those of the industrialized countries, regardless of how inappropriate those policies may have been for the countries' development needs. Because of the imposition of neo-liberal policies on countries desperate for access to credit, peoples across the South now confront economies oriented to export production rather than providing for local markets, devastated manufacturing sectors, a large percentage of economic actors in foreign hands, valuable public assets privatized, health and other social sectors crippled by decades of de-funding, environmental resources devastated by over-exploitation, small farms and businesses wiped out by denial of credit and subsidies, and massive unemployment.
Our struggle against debt domination is waged in large part to win freedom from the conditions that indebted governments are blackmailed into accepting. For the September 2006 actions we demand:
a. In this 50th anniversary year of the International Finance Corporation (IFC), the IFIs end the promotion of privatization of public services and the use of public resources to support private profits.
The IMF and especially the World Bank have been the main drivers in the global push for the privatization of basic services. They are joined by other financial institutions like regional development banks and export credit agencies.
The international financial institutions promote privatization of public services through policy conditions and policy advice, financing of projects that pave the way for privatization, providing technical assistance in the preparation of feasibility studies as well as the process of implementation, and even direct support for private companies taking over public utilities. The International Finance Corporation plays a major role in providing risk guarantees as well as equity assistance for these private companies, and facilitating government bail-outs of privatized utilities in distress.
The continued emphasis on privatizing basic services such as water provision - or, when no company is interested in purchasing the utility, arranging leases and service contracts - and the "commercialization" of even life-saving agencies such as those managing food reserves reflects a fixation on markets as the only organizing principle for economies even in the face of overwhelming contradictory evidence. Failure after failure of water privatizations in the South has not deterred the IFIs from their mission to wrest assets from public ownership.
Our message to the IFC and its multilateral partners is clear: no more public resources for support of private profit.
b. Stop IFI funding and involvement in environmentally destructive projects beginning with big dams, oil, gas and mining and implement the major recommendations of the Extractive Industries Review.
The international financial institutions are also presenting themselves as leading in the fight against climate change and environmental destruction. However, no amount of clever rhetoric about stronger commitments and new strategies can hide the fact that many projects designed, driven and supported by international financial institutions violate the already watered-down standards and safeguards avowed by these same institutions and cause massive environmental as well as social problems.
The World Bank is itself a major ecological debtor, having funded major projects such as hydro-electric dams, mines, pipelines and petroleum exploration and development projects which have displaced populations and wrought major environmental damage. The World Bank has refused to implement major recommendations of its own Extractive Industries Review including 1) the principle that communities faced with resource extraction projects must give free, prior and informed consent, 2) and the phase out of investment in hydrocarbon extraction projects.
The World Bank's attempt to claim leadership on the issue of climate change with the application of its development of carbon credit trading is another tragic example of market fundamentalism. Entrusting the precarious future of the world's climate to the World Bank's clever market solutions distracts the major actors from focusing on the over-consumption that threaten to doom the planet and all who live on it. Meanwhile, the World Bank Group, which claims leadership in developing alternative energy, devotes much greater resources to developing conventional energy sources. Indeed, the World Bank is the world's leading financer of projects producing greenhouse gases.
c. Immediately stop imposing conditions that exacerbate health crises like the AIDS pandemic and make restitution for past practices such as requiring user fees for public education and health care services.
IFI policies have aggravated health crises like the AIDS pandemic in a number of ways. Austerity measures have constrained health budgets, prevented the hiring of critically needed teachers and health care workers due to limits on spending for public sector employees, and kept people out of clinics and children away from schools by insisting on user fees. The macroeconomic policies the International Financial Institutions have imposed over the last 25 years - including fiscal austerity, high interest rates, unilateral trade liberalization and privatization of essential services - have led to lower growth rates and fewer improvements in social indicators than had occurred over the two decades between 1960 and 1980.
The IFIs owe an enormous social debt to countries whose public services have been damaged by their policies. Their creditors are the women of South countries, who have had to step in to provide the health care, the food, the teaching, the water, and the other basic goods and services put out of reach by IFI policies. The World Bank and the IMF should pay for free primary education and primary health care as a form of reparations or restitution for the damage their policies have caused.
It seems like years since we had some genuinely positive news about the eurozone’s economic outlook. So for many the news that the economy of the eurozone has grown by 0.4% in the first three months of the year was well over due. The official figures show that the recovery is beginning to speed up slightly, although many forecasters had been predicting a slightly larger rise than this.
The trend is encouraging though with this fastest quarter growth results for a couple of years. The growth is still slow but it’s looking sustainable and showing the possibility that it may increase.
There were other figures released before then which are of interest to eurozone economists. Germany’s economic growth was actually below the average at 0.3%, which represents a significant slow down from the previous 0.7% growth figure for the last quarter of 2014. The positive signs in the German economy in the areas of private consumption and investment in construction which both rose, were countered by a surprising fall in German exports.
Inflation in Germany is under control and is under the current ECB target of 2% or under. Most European countries have fairly well controlled inflation in fact the concerns are usually around the level being too low. An interesting economic documentary covered the risks of deflation, you can still catch the programme on the BBC iPlayer application although you’ll need to connect through a UK proxy to view it.
One of the bigger surprises was the long awaited improvement of the French recovery. The economy also hit a two year high for growth with it rising an impressive 0.6%. There are reports that confidence is returning to the economy with French consumer spending growing by 1.6%, although some of this will be due to the lower oil prices and the relatively weak euro rate. Industrial production levels are also on the rise, with a four year high being recorded.
Other countries are also fairing better with Italy also recording growth figures, for the first time in several years. Spain topped the Euro growth charts with a recorded 0.9% improvement in it’s economy, the fastest rate for eight years.
How much of this is a result of external factors like the fall in oil prices and the weak currency is difficult to tell. There is no doubt that there are several factors which are helping plus the increased level of fiscal stimulus from the European Central Bank. There is little doubt that the majority of this growth is being fuelled by domestic demand which would be similar to the initial recover in the UK economy too.
It seems like these comments come along every week, in fact you’d probably manage to find IMF comments to support most divergent policies if you looked hard enough. Although their latest statements regarding the economy rings very true with us on Jubileesouth.org.
It’s focussed not on our national debt for once, but on the household debt figures – the amount of debt that an average British household has to cope with. Just like any sort of debt, it has to be serviced and can have a huge effect on our daily lives and the economy in general. It’s quite simple really, an economy grows if it can stimulate demand and keep it’s output growing. However domestic demand is obviously going to be related to our spending power, of which Britain has a problem.
Families in the UK simply have more debt than the vast majority of developed countries, in fact the only comparable country is Portugal. This is a country which has already sought emergency funding because it nearly ran out of money, it’s not a club that the UK wants to be a member of.
IMF suggests that household debt is 87% of GDP in the UK, compared with 82% in Portugal, 72% in Spain, 55% in Germany and less than 40% in France and Italy.
So are UK families excessive consumers? Do we wander around on credit fuelled spending sprees and consistently live beyond our means? Well the answer is no, not particularly our debt levels are largely due to our obsession with home ownership.
Houses are expensive in the UK, largely due to the laws of supply and demand. The UK simply doesn’t have enough houses and demand is always very high. it’s simply hard coded into our identity – own your own home at all costs. Prices are unlikely to fall in the short term at least until some serious increases in supply are undertaken which also seems unlikely.
Just take a look at the UK media, get yourself a subscription to a proxy service like this and have a look at the BBC and other UK TV services. You’ll see evidence of the UK’s obsession with home ownership pretty quickly, thousands of hours every week with buying, selling and upgrading property.
The problems is that this particular desire is extremely expensive, house prices are amongst the highest in the world and even the process of buying a house is expensive. Yet we all try and do this, an inevitably take on huge levels of debt in order to own our own home. Never mind property costs, first you have to deal with estate agent fees, removal costs, and stamp duty – average cost of moving or buying – about £12,000 currently.
UK consumers are unlikely to be able to either save enough or spend to fuel a domestic demand driven recovery with these sort of costs to contend with. But until we change our outlook about owning property then it is likely that household debt is likely to stay extremely high.
Over the last few governments, there has been a move to distance the Bank of England from the political process. Successive governments have given it more power to act independently from the ruling party. It’s a process which has been a success and we will see another aspect of this during the election process in the UK over the next few weeks.
Although it may be more accurate to say ‘ you won’t see’ as the Bank of England is now in blackout mode until the election is over. The ‘purdah’ rules came into place at the dissolution of parliament on the 30th March and they state that no BoE officials can make public statements until May 7th when the election takes place.
It’s likely to be a frustrating time for business and those in the financial sectors, as the announcements from Mark Carney or any other officials on a host of important committees are an extremely important source of information. They’ll hear nothing from the Monetary policy committee, the Financial Policy Committee or any of the other bank regulation units that reside under the Bank of England.
Of course, all these functions will still be busy working as normal. There will still be neutral updates and releasing monthly figures as normal. The Bank of England will still make all the decisions it needs to such as controlling inflation, setting interest rates and all the other policies it controls.
These ‘purdah’ rules are an important part of the UK’s democratic systems which are designed to maintain the political impartiality of several important sectors of the UK. They include the UK Civil Service, who are the huge sector of officials that keep the State machinery running. The idea is that no-one in any of these important sectors can influence the result by making any sort of statement which could have political connotations.
This election might involve an even longer blackout this time as there is a distinct possibility that no single party will win control. Most of the opinion polls are pointing to a ‘hung’ result which means that some negotiation will be required to form a government with an operating majority. This would require an even longer blackout than normal as it might be required until a Government is put into place.
The election promises to be hugely exciting with no-one really knowing what will happen. The pollsters seem genuinely unsure about how it will all unfold, there will though be a huge amount of media coverage. If you want to follow the various parties and economic implications then the main media company to follow is the BBC. The British Broadcasting Corporation is renowned for it’s political coverage and you can access it all from their web site and the BBC iPlayer application. If you are based outside the United Kingdom though you will need to use a UK based VPN such as this one, in order to access the coverage. It effectively hides your location and routes through a secure UK server in order to access any content only available in the United Kingdom.
European economy is still a booming market. Europe remains a perfect partner for anyone, when it comes to business here in 2015. Even with the trouble in Greece, most of the other EU countries are doing really well. The economy in Europe fluctuates at the moment, and it is still a growing market. Germany turned out as Europe’s largest national economy that ranks as the fourth globally in GDP (nominal) and fifth in (PPP) purchasing power parity GDP. France follows after Germany that ranks fifth globally in GDP (nominal). After France, United Kingdom follows that ranks sixth globally in GDP (nominal), Italy followed as rank seventh globally in GDP (nominal), Russia followed that ranks as tenth globally in GDP (nominal). These 5 countries rank in the world’s top 10. Therefore, the European economies account for ½ of the 10 wealthiest ones. And right now this economy is just growing. According to the latest data from Paul Kostumer, the is a trend that seems to continue far into the year. European countries become closer together by the end of World War II, culminating in the formation of European Union. By the year 1999, it was the introduction of unified currency that is called “euro”. European Union turned out as the largest and wealthiest economy all around the world. By the year 2009, Europe was still claimed as the wealthiest region around the world. A lot of European companies have also gained a large increase in their econony over the last year. This goes for both large and small companies. One example is karnevalsshoppen.dk which is a danish company selling udklædning and tyroler kostumer. They have in 2014 increase their budget with over 13% compared to 2013, which also showed an increase compared to 2012. This is just one of many examples, and you will see similar cases all over Europe.
With the top 500 largest corporations measured by revenue, 184 have their headquarters in the nation of Europe, 161 are situated in EU, 15 in the country of Switzerland, there are 6 in Russia, 1 in Turkey and 1 in Norway. Manuel Castel was a Spanish sociologist who noted that the average standard of living in Western Europe is very high. As you can see, European economy turned out as breaking news, according to Paul Kostumer. Many countries get alarmed and being jealous because of the success of European countries’ economy. In the year 2008 until present, European country are not having a problem on their economy. They continue to progress and continue to build corporations. A lot of nations envied the wealth of European countries and tried to look out on European’s financial system. With a high and competitive economy in Europe, European people don’t really experience hardship even the poor. Although there are poor people in the nation, they never experience hardship on their standard of living. They can easily look for a source of income. With many commercial building built in Europe, people can easily find jobs.
For the record of unemployed people in Europe, you would find out that it has low percentage of jobless applicants. A lot of applicants are hired and find job easily. The European economy never left behind from any other nations. Although United States is known as largest national economy, European economy will always be on the top of it. In comparison to European economy, it is not just known as largest national economy but wealthiest nation as well. People who wish to work in Europe would surely not be frustrated on the salary they would receive. Many foreigners are enticed to work in Europe. European economy has a very good feedback when it comes on foreign workers. European economy doesn’t only claimed as largest economy but a wealthy nation as well. The economic sectors of Europe are generally highly developed as well.
Is democracy working in Europe, more specifically is it working in Greece for example. The country has voted for and anti-austerity party – the Syriza party, who have a mandate to pursue a specific set of economic policies based on reducing austerity measures and promoting growth instead as a means to reducing the country’s huge debts.
However as subsequent events have seen, Syriza has very little opportunity to pursue this particular strategy unless the creditors of Greece give their blessing. The German finance minister was quick to point out in a recent Channel 4 Online documentary covering the results that the new elections changed nothing meaning that it didn’t matter who Greece voted in the elections, the debt has to be repaid and austerity was the main instrument in achieving this. It seems that democratic choice currently means very little in Greece, a cost of the huge debts it has run up. Or does it mean that being a member of the Eurozone means that domestic democracy is ceded to Europe’s leaders and financiers.
This is not something that is specific to Greece of course, there are elections in several other European countries this year perhaps most notably Spain. Here also the radical left are leading the polls headed by the Podemos party, who also are opposed to the strict financial restrictions imposed by Wolfgang Schaulde the German finance minister. The same has happened in other countries who seek to change their economic direction, the new Italian government were also prevented from investing more stimulus in the short term.
Similar situations are occurring all over Europe, with even France desperate to borrow more and inject some stimulus into their economy. Most of these economies could borrow and invest more if Brussels allowed them to. It’s difficult to see how this will play out, it is fairly inconceivable that the same methods will solve all the individual economic woes of the Eurozone countries. What is good for the German economy and the Eurozone in general certainly won’t solve the debt issues of Greece and Spain, but how can they change direction. Even string economic mandates have failed to soften the German governments stance, yet Greece for example will face decades of misery if they continue along this road.
The big issue for outsiders is that the Eurozone seems to strip domestic voters and their elected leaders of the ability to make many economic and political decisions. The Eurozone is supposed to be a collective of democracies, however it’s difficult to see that when the ‘throne’ seems to reside in Brussels and power wielded from Berlin.
The UK economy took a little breather in the last quarter of 2014, with economic growth slowing down across many sectors. However there were exceptions which demonstrate that certain areas of the UK economy are driving forward the recovery with others relatively stagnant.
One of the most important surveys in the last few weeks is that of the KPMG/Markit UK report which tracks various economic indicators. It is particularly interesting to monitor the performance of the UK technical sector and compare it with other areas. The UK Technical sector has been of increasing importance to the UK economy for many years and it seems that it growing by the year, the last quarter of 2014 demonstrated the highest performance gap for the last 8 years.
The tech sector continues to outstrip virtually every other sector of the economy, with new business gains, new products and even allowing for slow cost inflation (which can often effect demand for technical products). Many new product launches helped perhaps inflate this difference but it has also resulted in a higher investment spending across the sector.
This is of course important to jobs as well and there is evidence of substantial employment increases to help fuel this growth. Employment in the IT sector is also traditionally fairly well paid and can contribute to other sectors and overall growth of GDP. The outlook remain positive, although perhaps with some slight reservations along with the rest of the economy.
There is no doubt that the IT sector is becoming in increasingly important to the UK economy. There is also evidence that the pattern of employment in the UK is diversifying from the traditional roles. There is much evidence to demonstrate that more and more people are becoming self employed or working across several roles rather than the standard 9-5 one company employment model. It is important to develop these sectors as they typically create highly skilled, adaptable and well paid employees.
One area which has shown a huge increase is that of people who leverage the internet to provide their main source of income. Many thousands of people now do business purely online, with virtual businesses contributing a small but growing contribution to the internet. Digital products and services like this from Ireland are bought and sold all across the world, providing income for thousands.
A couple of years ago, myself and several potential investors attended a presentation by a whole host of people and managers urging us to invest in Russia. At the time it seemed like a very sensible thing to do, however a few short months later it’s looking like exactly the opposite.
The Russian economy doesn’t seem to have much to look forward to anymore with political and economic events combining to push it deeper into recession. This week those prospects were underlined as Moody’s cut Russia’s debt rating yet again, bringing it down to ‘junk status’.
Unfortunately these ratings often become a self fulfilling prophecy as the fall in ratings will inevitably affect capital investment and the cost of borrowing. Standard and Poor have already taken this step and reduced the rating last month. Both agencies predicted a deep recession which will carry on to 2016, consumer confidence is key with domestic demand also falling in light of such reports.
So what has caused Russia’s fall from economic prosperity so quickly? There are obviously many factors but most could be managed except for one – the fall in oil prices. The market is now awash with oil due to the global recession and other factors like the US fracking boom – Russia’s economy is linked directly to the oil price which of course has plummeted. All of Russia’s other problems could easily be handled if there was a high oil price, there isn’t so it’s running a severe deficit until it recovers.
Much of the rest of Russia’s woes are largely self inflicted, the sanctions which have been imposed are due to it’s intervention in Ukraine’s territorial problems. Unfortunately control and access to the media is tightly controlled, so there is significant spin on these events. Although some Russians have access to other sources of news by using VPNs to access things like the BBC abroad – http://www.iplayerabroad.com/. Most people are restricted to the Russian controlled media. This means that Russian’s are further likely to adapt a siege mentality when it comes to domestic spending.
The likelihood is that Russia will suffer further sanctions unless it pulls back in Ukraine, which at the moment seems likely. Despite Putin’s rhetoric, the economy is likely to continue to decline over the next few years, especially with a major hike in the price of oil looking likely for a significant period.