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.

Will Rising Debt Derail African Markets

For many years now investors have started to heavily back both global and African emerging markets.  Slower growth rates in the ‘established economies’ have meant that there is little to attract their money. Places like Africa and South America often looked hugely attractive compared to say investing in Europe or North America.  However market pressures are starting to affect these locations too and investment is slowing.

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The problem is that economic indicators in some of these locations is looking ominous.  Growth rates are falling here too and combined with rising inflation and currency depreciating are meaning that debt it rising too. Take for example places like Zambia and Ghana, two investment favorites on the African continent.    Now there is a worry of rising debt highlighted by the IMF.

Zambia no longer looks like a safe and profitable haven for investment funds, the country has many issues which are dragging the economy back.  Commodity prices are plummeting mostly caused by the slowdown in China which are very important for Zambia.   They also have a host of internal issues – like a huge problem with power the electrical infrastructure simply not able to cope with the requirements of a growing country.  There is also a sense of political instability with  an election due in the following twelve months.

The currency of Zambia has now become the worst performing currency in the world, losing over 80 percent of it’s value over the year.  There are numerous examples in the Africana economy of countries following a similar pattern to this and none of them are good.  The lack of confidence in the economy and it’s currency is bound to affect investment and such growth will become something unachievable.

The story is similar in Ghana,which was the fastest growing economy in 2011.  However that strong growth has now stalled and the country has actually needed external assistance in the last few months.  There are a host of reports and studies available on line although to access on an iPad, you may have to spoof your IP address.

Although falling commodity prices have caused a lot of the problems there is still a common problem shared by these advanced African economies – the lack of strong and adaptable policies needed to react to external changes.  It’s easy to be successful in the overall context of world growth but when that stalls it’s important to adapt your own fiscal policy.  Very few of these economies have done this continuing to drift on in the same way, however without growth debt will rise quickly if you don’t check expenditure.

The success of these economies have obviously caused wage pressures, which have filtered into the economy.  This has also added to debt pressures especially and meant huge financing gaps in all sorts of sectors.

Further Reading

UN Votes for Vital Debt Restructuring Guidelines

Whenever debt becomes unsustainable it causes chaos, businesses fail, people lose their homes and livelihoods. There are few winners amongst both debtors and creditors which is why most societies have laws and guidelines for dealing with these situations. Mostly they help minimize the effects and enable a fair resolution on all sides. Often these help people hold onto their homes, businesses keep trading – not always of course but there is at least some sort of protection.

This however has not been the case for sovereign or state debt, the lack of any fair principles has caused chaos, economic and political instability. The latest example is of course Greece, where the crisis has deepened while the arguments go on. The problem is that the lack of agreement hurts both sides – economic output falls due to uncertainty which of course means that the creditors are even less likely to see their money repaid.


However last week we saw what looks like a genuine improvement for nations trying to deal with unsustainable debt problems. The United Nations general assembly has approved a set of guidelines and principles which can be applied to resolve disputes between countries and their creditors. It was passed almost overwhelmingly with 136 voting for, 41 abstaining and only 6 against. The primary hope is that the process will help protect countries from having to make destabilising cuts in order to satisfy aggressive creditors.

The principles are as yet non-binding but perhaps signal a watershed in how bankrupt countries are plunged into disarray in order to meet creditor demands. Nation debt has caused misery to millions across the planet in numerous situations. From Argentina’s default more than a decade ago to ‘vulture funds’, countries like Iceland, Ireland, Greece and El Salvador have also suffered from financial crisis due to debt issues.

It is disappointing but probably not surprising that the few nations which voted against the proposals were the powerful and rich creditors such as the USA, Germany, and the United Kingdom. Even the European Union collectively abstained despite various please for it to join the pro-group.

Further Reading:

UK Media

Choosing A Fast VPN

Will Greece Start a Euro Collapse?

Well today is Sunday the 5th July, the day after the anniversary of US independance but certainly today was an event of much more importance to the future of a European Union.  The Greeks have voted no to the current offer from the EU of more money based on specific austerity measures.

It’s a difficult one to call, at the moment I’m watching the news on the BBC and there are pictures of Greeks dancing in the street at the result. I’m watching from a cafe in Western Paris known for it’s fast internet access even with a VPN to help watch BBC News live – available here.

Greek Exit From Euro

Greek Exit From Euro?

So what’s next? Does the Greek Government now have a mandate to negotiate real change in the debt restructure? Well the reality is probably not, Greece is unable to function for more than a few days without a serious cash injection. It is certainly not a position of strength, although many would argue that a democratic mandate from a few million Euro citizens should count for something.

There are many Euro officials, probably not easy to find now, that stated that a ‘No’ vote was basically a vote to leave the Euro and rejecting the terms of the creditors. The problem is that when the amounts are this large creditors are not really acting from a position of strength.

You can’t send in a firm of bailiffs to a country to recover a few billion euros, after all where will sell a few hundred thousand flat screen TVs with all the settings set to Greek. The reality is that a default and exit for Greece will be devastating for both sides, so I feel that a compromise will definitely happen. You can get really upset about someone not paying you back 50 billion euros, but losing another 200 billion euros as your currency and economy crashes is not going to cheer you up.

Time will tell on what happens, at the moment I’m treated myself to buy IP address, so that I could watch all the different News sites and listen to experts across the world. There seems to be little common consensus, but the reality is that the amount that will be wiped off Euro stocks, the economies of the Eurozone and many other areas, will be many times more that the Greek debts will mean that someone will give ground. My money says that Greece have played a very shrewd game and will benefit from this no vote, however I could be completely wrong.

Trade Figures Point to UK Recovery

At any given time, for most of the European economies you can find a positive economic story and a negative one.  It’s particularly valid for the United Kingdom where speculation and predictions veer widely from one extreme to another.


This week we’ve seen a lot of positive news around increasing trade and negative ones warning of credit problems caused by  the spectre of the European Referendum whenever that might occur.  However it’s best not to dwell on the fears of the market as they are largely overblown so far into the future.

So what about the trade news?  Well the positive signs are coming from the size of the UK’s trade deficit which finally seems to be heading downwards.  In fact it’s falling a significant amount with the March figures falling from 3.1 billion pounds to a little over 1 billion.  A huge fall in one of the UK’s problem areas – the trade deficit is estimated to knock nearly a percentage point from the quarterly economic growth forecast.  So it is expected that this good news should filter through to the economic growth indicators for the second quarter of 2015.

It is the April figures that outshone the rest, and some optimists have predicted that instead of net trade being a drag on economic growth, they might in fact contribute to them in the future.    This would be a huge surprise for most economists and perhaps point to a great increase in confidence particularly in manufacturing and their export markets.

UK growth will likely still be reliant on domestic demand, the improvement in most Eurozone economies over the last quarter will hopefully bring some positive benefits to the UK too.  There are many signs that export volumes are increasing at a pace, this will partly be fueled by the increase in confidence in British companies over the last couple of years and some would suggest the shock Conservative majority.

The overall figures suggest that imports are falling rapidly and the exports are climbing. The fall in imports was largely due to other factors though particularly the falling commodity prices particularly oil – this also helped cut manufacturers costs and make British exports more affordable.

For further information on the UK economy, see the UK press and media.


UK Proxy Service –


Are Prospects Improving for the Canadian Economy

Canada has had a rough few years, which might surprise a lot of people who don’t watch international movements of economies. It initially weathered the global 2008 crash better than most economies mainly because it wasn’t as heavily reliant on the banking sector and they weren’t required to bailout institutions to the extent of the US and European governments.


However they have been impacted by the global slump in economic prosperity partly because this has caused such a fall in oil prices. There are many countries across the world who’s economic success is currently linked directly to the oil price and Canada is definitely in that category.

However economists are particularly worried about the growth of private debt that has been occurring despite this economic slowdown. Some experts think that Canadians have continued to spend and borrow too much over the last few years. House prices and the levels of debt have grown consistently and Mark Warner the previous governor of the Bank of Canada consistently warned of this while he was in office.

The figures are worrying, in March a report stated that Canadians hold about $1.32 for every $1 of disposable income in 2014, this represents a record high for Canada. Some economists are not worried about these numbers arguing that net asset values and worth are also rising steadily to support these debts.

The standpoints vary depending on whether you think that you compare the level of debt to the level of income or net worth.

Further Reading

BBC Reports Canada Economic Development

Access via here –




Is the Eurozone Finally Recovering?

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.

John Usain


IMF States Economic Recovery at Risk

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

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.

Jennie Calwood

The Bank of England Election Blackout

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.

Joseph Benyon

Further Information