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.
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.
Well the IMF seems to think so, in it’s latest assessment of the US economy the International Monetary Fund reduced it’s growth forecast for the US by nearly a third. They also suggested that perhaps there was still some need for the virtually nil interest rates to remain at that rate for the time being.
The estimates of the US economy fell by .8% from the April estimation, to an expected growth rate of 2% in 2014. Why the turnaround? Well the first quarter results were weak although this was very probably due to the very severe winter impacting on all areas of the economy from employment, housing through to retail sales.
It’s not all bad news, it seems that the IMF considered this to be just something of a blip in the recovery – maintaining the 3% growth estimate for 2015. The caveat for this though is to increase the minimum wage and keep investing heavily in it’s infrastructure which could be difficult in the political climate.
This reduction in estimates wasn’t entirely unexpected as the IMF had already hinted that this would happen in relation to the poorer growth results in many of the other major economies across the world. The Ukraine crisis is also having an impact on economic growth particularly if sanctions on Russia are increased.
It’s going to mean that there’s some impact on the markets, employment goals are not going to be reached until 2017, and it’s expected this will be in an environment of low inflation. It’s one of the reasons that the IMF is urging the US to keep it’s interest rates low, the markets were expecting a rise after mid-2015 but that could be later now if the advice is heeded.
The US equity market like that of most of Europe is experiencing rises virtually across the board. This is of course partly due to the low interest rates making investment cheaper and of course a stream of positive indicators. The pressure will be upwards on shares the longer the interest rates stay low. There are worries of a market correction within the equity market with many experts hedging fund with safer investments like telcos and utility companies.
You can check the latest share prices and get some excellent investment advice on some of the US media and equity research funds. Beware though due to the sometimes complicated state tax and federal laws, these are often limited to US only customers, unless you buy VPN services and use them remotely of course.
Richard Hargreaves II
Technical Source: – hide IP software
Many have claimed these are long overdue, but the Czech Government currently working as a coalition have released it’s predictions for the period up to 2017. Overall it’s a fairly optimistic outlook, with public spending recovering without any increase in debt levels. It is expected that this increase in public spending will largely be covered by higher growth levels. There was some expectation about information on various efficiency drives and cost cutting initiatives promised by the coalition – unfortunately there was little about these.
For anyone who follows Czech economics and politics there will be little surprise that one of the hot topics is that of the level of Value Added Tax (VAT) being set. This has been a major source of disagreement between the parties who make up this coalition. It is thought that there will be some sort of agreement with a plan to introduce a lower level of VAT in the near future. In the interim period is it expected that the current rates will drop a single point to 14 and 20% respectively. Many want these drops to be much higher as well as simplifying the current rates into a single VAT and removing the lower and higher rate levels.
Growth figures look encouraging yet unspectacular, it is hoped that the Czech economy will grow by 2.0 % in the 2015 period. This is up a few ticks from the current growth rate of 1.7%, public deficit figure currently are running at 18 and look set to rise over the next year before falling back to a manageable 1.7% of GDP in 2017.
There are specific reasons that public spending has jumped over the last 12 months. One of the major reasons is the end of certain measures in the country’s austerity programme. This year sees the end of a public sector pay freeze, and increased wage settlements will pay a large part in the increase in the levels of the public deficit rise. There are also several large infrastructure projects being initiated over the next few years, some of these supported by EU grants and loans. Some of the most important are directed at increasing the country’s telephone and broadband infrastructure. This is especially important as there is a growing need to support the digital marketplaces and economy – there are many encouraging start ups which could end up being the next Facebook or Twitter!
There is a feeling that the economic prospects for Portugal are at last showing some sign of recovery. This month (May 2014) the bailout organised by the international community and the IMF is nearing it’s end. The last review of the bailout was perhaps the first one with a slightly optimistic short term outlook.
The IMF though did stress that there should be no let up on the economic reforms, the growth of debt is still concerning and without these reforms could easily spiral out of control very quickly. Unemployment is probably the most worrying aspect of the recovery, it is obviously the one with the highest social cost. At over 15% it is still among the highest in Europe and like other countries the worse affected sector are the countries young people. However economic activity is improving all the time so it is hoped that this will filter through to the employment figures very shortly.
The reduction of GDP budget deficit is of course the core goal of the IMF bailout targets, Portugal has so far achieved or in some instances beaten it’s agreed levels. Although the official bailout is finished this month, there will be a continuation of some payments whilst the deficit is still being tackled.
Furthermore the country has the option to request a standby loan, mainly to support the substantial shortfall that is still in existence for the 2015 economic year. Access to the financial markets is still limited and until Portugal has full access to the credit markets then it is likely it still will need some financial assistance to stay in the Euro and maintain it’s austerity programme.
The full economic figures and economic indicators can be obtained from a variety of financial data sites. If you want background stories and information on the European economies then check out the financial pages of the BBC website, all data should be available but you may need to use a VPN to access some of the transmitted broadcasts – here’s a guide.
James Goldwing writes on several technology and economic websites and blogs.
It seems quite a long time since the doomsayers of the Euro Zone where out in force. The speculation then was not ‘if’ a country would default and crash out of the currency union, but rather ‘when’ and ‘who’. There were predictions that Greece, Ireland, Spain and Portugal where likely candidates but at the moment those predictions look misplaced.
However throughout the hysteria and doom laded forecasts, the fundamental economic data hasn’t really changed. There are still too many European countries literally swamped in debt with little expectation of that changing soon. The problems have moved off the front pages of the financial press but they’re still very much with us.
The European Commission has last week urged Greece to step up it’s efforts to reduce national debt quicker than is currently happening. It is worried that agreed targets for reduction look unlikely to be met despite some swinging austerity measures. There has been an increase in confidence that the worse was over in countries like Greece, yet EU officials don’t all share this optimism.
Figures like debt being more than 170% of the overall economic output of a country, are truly staggering. With this sort of burden on an economy, it’s difficult to see where any increase in prosperity can come from.
These economic targets were strictly linked to the bailout of the Greek economy, one of the conditions for example was that debt should be decreased to 124% of GDP by the year 2020. Latest EU estimates suggest that this target will not be met, in addition further long term goals will also be missed.
However there is hope, and it is expected that both the EU nations and the IMF would react to these problems rather than let Greece stagger towards other defaults and failures which will almost certainly effect growth prospects and confidence. It was agreed that if these targets were not met, then renewed efforts and help may be available. It was a realization that these goals may not be realistically achievable in the current economic climate and that other measures may have to be deployed. One of the important factors that is fundamental to the Greek recovery is the level of interest it pays on it’s debts, lowering this could make a huge impact on the economy in the short term.
The Greek economy will certainly need some more help, it lacks the monetary tools to make significant changes on it’s own. The UK economy is leading the way of recovery but of course it’s not part of the Eurozone currently. There is much talk and several decent documentaries available on UK TV documenting this recovery. To access these you’ll have to be in the UK or have access to a UK IP proxy, try this one.
To end some good news though for the Greek economy. At the beginning of the month, it was able to return to the Bond market. This enabled the country to at least raise finance from private investors after being absent from this sector for nearly five years.
Consumer spending is restrained by a cooling housing marketplace and under performs the USA mainly due to large household debt amounts and Canada’s economic system will develop only modestly over the following two years, a Reuters survey found.
Those forecasting are virtually unchanged from January’s survey and lower than outlooks for the USA, which will be anticipated to increase 2.7% in 2014 and 3% in 2015.
Economists decreased their outlook for annualized increase in the 1st quarter of the year to 1.7% from 2.2% in January’s survey. Predictions for the remaining quarters of the year and the 1st half of next yr were virtually unchanged.
National demand, and in change, consumer outlay, has been among the significant reasons why Canada’s market recovered more rapidly in the monetary disaster than the USA.
That need was mainly a result of a housing boom, that has been fuelled by record-low borrowing expenses. Unlike in the USA, which endured a punishing house market crash, Canada’s home market has moved in a straight-line up for a long time.
But the home marketplace is now cooling-down, and a couple of market watchers remain worried about threats of an US-fashion crash. Along with high-flown home debt degrees, that’s created the Canadian customer more careful about disbursement.
Truly, Canada’s disposable home debt-to-earnings ratio reaches a close-record-high of 164.0%. By comparison, U.S. families reduced their indebtedness in the aftermath of the crash.
Economists in Wednesday’s survey anticipate Canada’s home market to continue to great.
Prognosticators anticipate that amount to fall farther to 172,000 houses next yr, compared with the 180,200 forecast three months past.
Canadian housing starts reached a yearly pace of over 200,000 in the price-fueled growth that adopted the monetary disaster.
Nevertheless, the majority are perhaps not worried about an out right crash.
“We nevertheless view that as a low chance threat now.
A substantial increase in the Bank of Canada’s key interest in the present 1.00% and a surprising fall in job would be two causes, Issa included. He does not anticipate either to occur.
Rising prices will climb up to 1.9% next yr, a contact away from the reserve bank’s 2 percent goal, the survey revealed. Nevertheless, another survey taken before this month discovered the banking isn’t likely to raise its key interest rate until the 3rd quarter of next yr.
Obviously this is just a basic economic summary and for up to date information on the Canadian economy, it’s best to check out the local TV and media sites. To watch the main TV stations if you’re based outside Canada will require a proxy server to access them – you can find one here.
The greatest prospect for the Canadian market is an exporter resurrection, which will be anticipated to happen over the following two years as more powerful U.S. economic growth prospects to increased need for Canadian products – including electricity, automotive and mineral exports.
A poorer Canadian dollar may also help by fostering exporters’ revenue in local currency periods. A Reuters survey ran early this month identified foreign trade strategists anticipate the money to weaken over the next 1 2 or even 3 months.