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.
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.
There are not many convincing recovery stories across Europe yet, but the growth being seen across the UK economy over the last 18 months is genuinely encouraging. Whilst most European countries hover around 0% growth rate and many looking at more recession, the UK economy seems to be moving forward.
However there is a worry that this might not be a sustainable growth and the recovery is simply being pushed by increased consumer spending. Today the news is filled with hysterical shopping scenes as the American ‘Black Friday’ promotion is embraced by UK retailers, seems to add more evidence to this idea.
The problem is that growth that is completely dependent on consumer spending is not sustainable in the long run. UK consumers can’t keep spending to maintain economic activity, without incurring debts and following the road that partly caused the crisis in the first place. The Japanese economy has seen this type of growth in the 80’s when consumers would routinely discard their TV sets every year in order to purchase the latest model.
The growth in the UK economy is also combined with falling exports to the eurozone and some measures suggesting business investment is falling too. Trade has actually caused a negative impact on growth for the last quarter, which suggests that this consumption is partly causing UK imports to rise heavily too.
If the Euro countries where expanding too, then this wouldn’t be too much of a problem, with consumer spending merely providing some impetus. However as exports fall to the doom laden Euro economies, consumer spending simply won’t be enough. Much of the UK’s recovery has been based on austerity measures which means that the wages of these consumers haven’t been rising either.
There are some encouraging signs that wages are starting to increase but nothing dramatic. If the recovery filters into pay cheques then consumer spending might be maintained in 2015. There are some interesting articles on this situation in the UK economic press and online media, you can access some of these by obtaining a British IP address – here.
There’s not yet a crisis in the UK economic recovery however it desperately needs an improvement in it’s main trading partner’s economies – across the channel. Until that happens, the recovery and growth may not continue.
Writer on technology, entertainment and economics.
If you live in North America or Europe it’s easy to get sucked in to this global depression scenario. The fact is that not everyone is on a downward slope of stagnant growth and escalating debt – African economies are actually growing now faster than ever. The continent that has long been the ’basket case’ of the world is now looking at average growth rates of 6%, a level European economies can only dream about.
But there’s more, in some of the major no go areas, investment is beginning to flood in. The latest boost is the report issues by the IIF (Institute for International Finance), who have spent some time analysing the African figures to see if these growth figures really stand up to scrutiny. Their conclusion is that behind Asia, Africa is the fastest growing area in the world.
The IIF are not that well known outside the financial markets but they are hugely influential and respected by investors and financial bodies. The positive report is a huge step for encouraging more investment from the big financial investors across the globe. The main reason that finally Africa is starting to grow is the progress in stabilizing the countries. Most African nations have put in more stable governments and their economies are finally looking somewhere you can invest safely.
There is a little problem however with some of their research, the report does cover African nations but only seven of them. Ghana, Kenya, Tanzania are some of the success stories, stabilising their economies on the backs of some significant mineral resources. They are still relatively poor countries but the fruits of a stable government are beginning to show encouraging signs.
If you’re interested in keeping up to date with all the global financial markets, there are a host of excellent programmes on BBC TV and radio. If you’re outside the UK you can access these sites, by using a proxy server, this site shows you how to access UK TV online – http://www.anonymous-proxies.org/2009/02/using-iplayer-abroad-viewing-bbc-via.html. So if you’re beginning to get frustrated with the investment options in Europe or the US, check out some of the African nations who have overcome their difficulties – they are out there.
Recently came across another option for investigating different sites which are normally blocked. I found it because I needed a method to enable access from tablets and smart phones, the solution is called – Smart DNS and it simply requires modifying your DNS server to use a specially configured one.
It may be a moot point, in a couple of days time depending on the result of the Scottish referendum, however it represents one of the biggest decisions if they vote yes to independence. The basic premise is that Scotland want to maintain the pound as it’s currency, the UK Government have rejected this. In response Alex Salmond has said that Scotland will renege on it’s share of the UK National debt if they stick to this line.
It’s an interesting gambit, whatever happens a Nation needs to be trusted in order to succeed. Without trust in the financial markets borrowing costs can sky rocket. The National Institute of Economic and Social Research (NIESR) suggested that if Scotland did not honour it’s debt obligations it could cause huge economic problems for them.
The first likely result would be a plummet in the credit rating that Scotland enjoys. This is almost certain to happen simply because it would be one of the first decisions that the new country would take and so it’s trust would be severely affected. This would leave the country unable to raise funds for a decade or more, at a time when the country would desperately need funds to build up it’s own infrastructure.
Whether this situation actually occurs or whether it’s brinkmanship is difficult to say. But most economic predictions suggest that Scotland would be a lot more expensive place to live at least for a few decades. The issue is that smaller economies have to pay higher costs simply due to economies of scale plus the huge rise in uncertainty in almost every area of life. Where do Scots get a passport, how do they pay their taxes, how do they tax their cars are just a small selection of the challenges that will be faced.
This will also be combined with reduced investment due to this uncertainty, higher costs in association with credit cards, food bills, and things like insurance and pension costs. There are probably thousands of other small challenges that will need to be faced, things like replacing the national broadcaster – the BBC and you won’t even be able to watch online without using a Smart DNS service or something similar.
The situation will be very similar to that of the Canadian and US border where you cannot access the other TV channels online when you happen to drift across a few mile. They are two different countries and although there’s no real physical barrier, if you connect from an independent Scotland you will need to change your IP address if you want to access any UK resources.
During the credit crisis all over the world and influencing so many of western people, there is some much more dangerous crisis happening in 3rd world countries in Africa and Asia. More than 783 million people don’t have an access to a safe water for drinking or using in their homes. What is more tragic – more than 2,5 billion people doesn’t have access to adequate sanitation. These are worrying numbers as it is more than one third of worlds population.
Food crisis has taken place drastically in recent years as the human population grows and it becomes hard to support it with food. There is not much land for agriculture left either. All this can lead to more than 30% of worlds population starving by year 2020 as said by World Bank. During last 30-50 years tremendous amounts of forests in Africa, Asia and south America has been cleared to gain wood and land, however the land is not usable in agriculture for growing crops. Droughts in Africa lately has raised the food prices and the poorer people can not afford food and starve.
Droughts have severe economic, nutritional and poverty effects. It is not only the 3rd world countries in the risk of food or water crisis. Nowadays because of weather change droughts are often developed even in US and Europe. Because of dry weather there has been incredible decrease of maize and soybeen crops in US. Therefor no one is protected. We have to think of better and more effective ways to produce food and grow crops. The forests and original biospheres should be saved as they help preventing droughts as well as produce oxygen.
In looking for better ways in producing food it can be always suggested to check good baking tips for saving money, water and time. Such small actions could give a little but important benefit to everyone. Take a look at http://best-baking.com/ for some great tips on baking delicious cakes and other bakery products. Take your action and help fighting poverty now!
At first glance, deflation doesn’t sound that bad at least not compared with lots of other economic woes that have recently beset the various economies of Europe. It’s a situation that Portugal, Spain and Greece now find themselves with a very real possibility of being joined by the Italians.
One of the main reasons it sounds good is that of course, deflation means falling prices and in Greece they fell by just over 0.8% in one month. In Portugal that figure was 0.7% and 0.4% in Spain, the Italians have at the moment a 0% inflation rate.
So why is deflation bad? Well there are two main reasons and they are both centered around economic growth. The first one is fairly obvious, for an economy to grow it needs people to spend and buy products and services. Ask yourself the question – if prices are falling every month – will you make that big purchase or wait until it becomes even cheaper. That’s a big reality of deflation – it acts as a disincentive to buy. For the consumer it’s good but for the economy in general it leads to falls in profit and revenue, lower wages and a rise in unemployment. All factors feeding in to reduce the growth of an economy.
The other significant issue is that deflation actually makes debt payments more difficult to afford. Lower revenues, falling sales and profits mean companies and countries are unable to services their debts which can cause significant issues especially in the debt ridden economies of Europe.
The danger leads to a spiral of deflationary pressure, falling levels of consumption in turn lead to falling investment. Both of these will lead to further falls in prices, this isn’t just economic theory either – Japan fell into this trap and took decades or more to recover, in some senses it still hasn’t. When the costs of goods starts to fall, then the revenue and profits fall too – it sounds good for a consumer but ultimately it isn’t. Stable economies which slowly grow are best and for this to happen you need companies to expand and their profits to grow. People don’t tend to buy luxuries like proxies and expensive cars when their livelihoods look under threat.
Often the reality of an economy can be found not in the facts and figures of GDP and tax rates, but simply by looking around. I spent some time earlier this year in Turkey in one of the countries biggest cities – Izmir. I was there long enough to get a feel for the place, and it’s troubles. On a global scale, Turkey seems to be doing well, many economic figures point to increasing prosperity, falling levels of Government debt and many other favorable economic indicators. Yet on a personal level, there are many issues and indeed similarities to European economies some years earlier.
The streets of Izmir are filled with expensive and new motor cars, Mercedes, Audi’s and BMWs are everywhere. These are expensive cars, particularly in Turkey where they are often cost much more than in European countries. The city is not unusual, and there is a huge impression of wealth and economic success on the streets of many big Turkish cities just like Izmir.
So how are Turks able to afford these expensive cars? If you check out the salaries on offer for jobs in local papers, you’ll become even more confused – these salaries are nowhere near the level to be able to afford these sorts of vehicles and lifestyles. In 2013, over 850,000 cars were sold, compared to less than 100,000 in 2002 – the Turkish automotive sector is experience a huge surge in demand. However here lies the clue, the vast majority of these cars are paid for using freely available personal credit. It’s the same with technology. walk down the street and you’ll notice the Turkish youth have all the latest gadgets and phones. They have the same appetite for technology that the youth have in other developed nations despite the efforts of the government at blocking and filtering internet access (details of workarounds here – www.dnsproxy.co.uk)
When I first visited Turkey in the 1990s it was very rare for a Turkish person to own even a single credit card, now most young Turkish people will have four or even five. Bank loans, cheap credit and marketing campaigns promoting luxury items are everywhere, it certainly has the feel of the pre-recession days of the UK and Europe. Personal debts levels in Turkey are growing at an alarming rate, the worry is that it is becoming unsustainable and outside money which helped to sustain this credit boom is becoming much more difficult to find.
It all sounds very familiar, and it is hoped that Turkey manages to control these level of debt without the huge problems the recession and austerity measures needed in most Western countries. The threats are mounting though, the levels of credit look certain to cause wide spread defaults, repayment terms and lengths are becoming longer encouraging even more debt. For many the lure of new technology and luxury items is too strong to resist especially among the young and aspirational. Traditional boundaries and customs are being eroded as more Turkish people move from villages towards the towns and cities. You would rarely find a computer in a Turkish household a decade ago, now they are as common place as Europe. Turkish people use and shop on the internet all the time, often using a DNS service to access sites in other countries that may be blocked by the country’s growing list of internet blocks.