The IMF has made some encouraging improvements in paying attention to social protection, health, and education, but it needs to do much more to avoid, in its own words, “repeating past mistakes”, says new report. Credit: Charles Mpaka/IPS
by Baher Kamal (madrid)
Inter Press Service
MADRID, Apr 19 (IPS) – As many as 45 African countries –out of the Continent’s 54 nations–, all of them grouped in what is known as Sub-Saharan Africa, have now been further squeezed to their bones, as funding shrinks to lowest ever levels, and as a portion of the so-called aid goes back to the pockets of rich donor countries.
It says that the road to global economic recovery is “getting rocky.’ And that while inflation is slowly falling, economic growth remains ‘historically low,’ and that the financial risks have risen.
Squeezed
Well. In its April Outlook, the IMF devotes a chapter to Sub-Saharan Africa, titled “The Big Funding Squeeze”.
It says that growth in Sub-Saharan Africa is expected to slow to 3.6 percent as a “big funding squeeze”, tied to “the drying up of aid and access to private finance,” hits the region in this second consecutive year of an aggregate decline.
If no measures are taken, “this shortage of funding may force countries to reduce fiscal resources for critical development like health, education, and infrastructure, holding the region back from developing its true potential.”
Some arguments
According to the IMF:
Public debt and inflation are at levels not seen in decades, with double-digit inflation present in half of countries—eroding household purchasing power and striking at the most vulnerable.
The rapid tightening of global monetary policy has raised borrowing costs for Sub-Saharan countries both on domestic and international markets.
All Sub-Saharan African frontier markets have been cut off from market access since spring 2022.
The US dollar effective exchange rate reached a 20-year high last year, increasing the burden of dollar-denominated debt service payments. Interest payments as a share of revenue have doubled for the average SSA country over the past decade.
With shrinking aid budgets and reduced inflows from partners, this is leading to a big funding squeeze for the region.
The giant monetary body says that the lack of financing affects a region that is already struggling with elevated macroeconomic imbalances.
Unprecedented debts and inflation
In a previous article: The Poor, Squeezed by 10 Trillion Dollars in External Debts, IPS reported on the external debt of the world’s low and middle-income countries, which at the end of 2021 totalled 9 trillion US dollars, more than double the amount a decade ago.
Such debts are expected to increase by an additional 1.1 trillion US dollars in 2023, thus totalling 10.1 trillion US dollars.
Now, the IMF reports that “public debt and inflation are at levels not seen in decades, with double-digit inflation present in about half of the countries—eroding household purchasing power and striking at the most vulnerable.”
In short, “Sub-Saharan Africa stands to lose the most in a severely fragmented world and stresses the need for building resilience.”
Like many other major international bodies, the IMF indirectly blames African Governments for non adopting the “right” policies and encourages further investments in the region, while some insist that the way out is digitalisation, robotisation, etcetera.
The big contradiction
Here, a question arises: are all IMF and other monetary-oriented bodies’ recommendations and ‘altruistic’ advice the solution to the deepening collapse of a whole continent, home to around 1,4 billion human beings?
Not really, or at least not necessarily. A global movement of people who are fighting inequality to end poverty and injustice, grounded in the commitment to the universality of human rights: Oxfam, on 13 April 2023 said that multilateral lender’s role in helping to insulate people in low- and middle-income countries from economic crises is “incoherent and inadequate.”
For example, “for every $1 the IMF encourages a set of poor countries to spend on public goods, it has told them to cut four times more through austerity measures.”
Countries forced to cut public funding
Then the global civil society movement explains that an important IMF initiative to shore up poor people in the Global South from the worst effects of its own austerity measures and the global economic crisis “is in tatters.”
New analysis by Oxfam finds that the IMF’s “Social Spending Floors” targets designed to help borrowing governments protect minimum levels of social spending— are proving largely powerless against its own austerity policies that instead force countries to cut public funding.
“The IMF’s ‘Social Spending Floors’ encouraged raising inflation-adjusted social spending by about $1 billion over the second year of its loan programs compared to the first year, across the 13 countries that participated where data is available.”
IMF’s austerity policiesBy comparison, the IMF’s austerity drive has required most of those same governments to rip away over $5 billion worth of state spending over the same period, warns Oxfam.
“This suggests the IMF was four times more effective in getting governments to cut their budgets than it is in guaranteeing minimum social investments,” said incoming Oxfam International interim Executive Director, Amitabh Behar.
“This is deeply worrying and disappointing, given that the IMF had itself urged countries to build back better after the pandemic by investing in social protection, health and education,” Behar said.
“Among the 2 billion people who are suffering most from the effects of austerity cuts and social spending squeezes, we know it is women who always bear the brunt.”
Oxfam’s report: “The Assault of Austerity” found inconsistencies between countries. There is no standard or transparent way of tracking progress and many of the minimum targets were inadequate.
The IMF has made some encouraging improvements in paying attention to social protection, health, and education, the report goes on, but it needs to do much more to avoid, in its own words, “repeating past mistakes”.
According to the OECD report, in 2022, official development assistance (ODA) by member countries of the Development Assistance Committee (DAC) amounted to USD 204.0 billion.
This total included USD 201.4 billion in the form of grants, loans to sovereign entities, debt relief and contributions to multilateral institutions (calculated on a grant-equivalent basis); USD 0.8 billion to development-oriented private sector instrument (PSI) vehicles and USD 1.7 billion in the form of net loans and equities to private companies operating in ODA-eligible countries (calculated on a cash flow basis), it adds.
Total ODA in 2022 rose by 13.6% in real terms compared to 2021, says the OECD.
“This was the fourth consecutive year ODA surpassed its record levels, and one of the highest growth rates recorded in the history of ODA…”
The rich pocketing ‘obscene’ percentage of aid
In response, Marc Cohen, Oxfam’s aid expert, said: “In 2022, rich countries pocketed an obscene 14.4 percent of aid. They robbed the world’s poorest people of a much-needed lifeline in a time of multiple crises.
“Donors have turned their aid pledges into a farce. Not only have they undelivered more than 193 billion dollars, but they also funnelled nearly 30 billion dollars into their own pockets by mislabeling what counts as aid”.
Rich countries inflating their aid budgets
“They continue to inflate their aid budgets by including vaccine donations, the costs of hosting refugees, and by profiting off development aid loans. It is time for a system with teeth to hold them to account and make sure aid goes to the poorest people in the poorest countries.”
April 14 (Reuters) – European foreign policy officials on Friday urged China not to use force over Taiwan, taking a tough stance against Beijing’s threats over the democratically governed island, after comments by French President Emmanuel Macron were perceived as weak.
China in recent days has held intense military drills around Taiwan, which it claims as its own, and has never renounced the use of force to bring the island under its control.
German Foreign Minister Annalena Baerbock, addressing the issue at a press conference in Beijing alongside her Chinese counterpart Qin Gang, said any attempt by China to control Taiwan would be unacceptable and would have serious repercussions for Europe.
EU foreign policy chief Joseph Borrell echoed her remarks in a statement prepared for a speech due to be delivered in Beijing at the Center for China and Globalization think tank on Friday that had to be cancelled after he caught COVID-19.
“A military escalation in the Taiwan Strait, through which … 50% of world trade goes every day, would be a horror scenario for the entire world,” said Baerbock, adding it would have “inevitable repercussions” for European interests.
In interviews published after his trip to China last week, which was meant to showcase European unity on China policy, Macron cautioned against being drawn into a crisis over Taiwan driven by an “American rhythm and a Chinese overreaction”.
While many of the remarks were not new, the timing of their publication, and their bluntness, annoyed many Western officials.
“The European Union’s position (on Taiwan) is consistent and clear,” Borrell said in his remarks. “Any attempt to change the status quo by force would be unacceptable.”
UKRAINE ISSUE
Borrell also said Europe’s future relationship with China depended on it trying to use its influence to find a political solution to the Ukraine crisis.
“It will be extremely difficult, if not impossible, for the European Union to maintain a relationship of trust with China, which I would like to see, if China does not contribute to the search for a political solution based on Russia’s withdrawal from the Ukrainian territory,” Borrell said.
“Neutrality in the face of the violation of international law is not credible,” Borrell said, adding an appeal for Chinese President Xi Jinping to speak to Ukrainian President Volodymyr Zelenskiy and for China to provide more humanitarian aid to Ukraine.
Xi has met Russian President Vladimir Putin twice but not spoken with Zelenskiy since Russia invaded Ukraine in what Moscow calls a “special military operation” in February 2022.
China stated its opposition to attacks on civilians and on nuclear facilities in a position paper on Ukraine published in February, but it has refrained from openly criticising Russia.
“President Xi’s visit to Moscow has demonstrated that no other country has a bigger influence on Russia than China,” said Baerbock.
“It is good that China has signalled to get engaged in finding a solution. But I have to say clearly that I wonder why China so far has not asked the aggressor Russia to stop the war. We all know President Putin has the opportunity to do so any time he wants to.”
Poland’s prime minister warned earlier this week that Ukraine’s defeat may embolden China to invade Taiwan.
Baerbock and Borrell also spoke about the risks of being too dependent economically on China, in line with comments made by European Commission President Ursula von der Leyen in a speech last month on the eve of her China visit.
“We just paid a high price for our energy dependency on Russia, and it is well-known that one should not make the same mistake twice,” said Baerbock, adding that economic security is core to Germany’s strategy for China.
Borrell said that the EU needs to diversify its value chains to reduce its dependency on China for raw materials.
He also said that the increasing trade imbalances between the EU and China are “unsustainable” and called on China to remove market access barriers.
Reporting by Yew Lun Tian in Beijing; Editing by Clarence Fernandez
Jean Claude Muhire, Rwanda Program Director of BRAC Ultra-Poor Graduation Initiative, a flagship program at BRAC International, and Samuel Dusengiyumva, Permanent Secretary of the Ministry of Local Government sign the MoU in Kigali, Rwanda. Credit BRAC UPGI.
by Joyce Chimbi (kigali)
Inter Press Service
KIGALI, Mar 21 (IPS) – Against a brutally painful historical backdrop, a story of hope and resilience unfolds in Rwanda.
A story that lays bare Rwanda’s innovative approaches to empowering her people, for an estimated half of the population still lives in poverty. In the 2022 Global Hunger Index, Rwanda ranked 102nd out of 121 countries with sufficient data to calculate last year’s global hunger index score.
Within this context, BRAC International signed a Memorandum of Understanding (MoU) with the Government of Rwanda under the Ministry of Local Government (MINALOC) to support efforts to empower people in extreme poverty to develop sustainable livelihoods and break the poverty trap long term. This is part of the Government’s broader efforts to eradicate extreme poverty by 2030.
“I am delighted to see the Government of Rwanda take a leadership role in addressing extreme poverty,” said Greg Chen, Managing Director of BRAC Ultra-Poor Graduation Initiative (UPGI), a flagship program at BRAC International.
The four essentials of the Graduation approach and initial outcomes. Credit: BRAC UPGI.
The MoU was signed on Tuesday, March 14, 2023, by Jean Claude Muhire, Rwanda Program Director of BRAC UPGI, and Samuel Dusengiyumva, Permanent Secretary of the Ministry of Local Government.
BRAC International is a leading nonprofit organization with a mission to empower people and communities in poverty, illiteracy, disease, and social injustice, touching the lives of more than 100 million people in the last five decades. And now seeks to touch even more lives in the land of a thousand hills through this partnership.
“We are happy to serve as a partner in advancing the Government of Rwanda’s new National Strategy for Sustainable Graduation (NSSG) and to accelerate the reduction of poverty and extreme poverty,” said Muhire.
The MoU positions BRAC International as a key partner in advancing the Government of Rwanda’s new National Strategy for Sustainable Graduation (NSSG), recently approved by Cabinet in November 2022 to accelerate the reduction of poverty and extreme poverty in Rwanda and contribute to the achievement of the targets set out in the National Strategy for Transformation, 2017 to 2024.
“We are committed to combating extreme poverty by scaling the multifaceted, evidence-based Graduation approach through governments across Africa and Asia and reaching millions more people,” Chen said.
Similar to BRAC’s Graduation approach, which was established in Bangladesh in 2002, the NSSG defines Graduation as a two-year program for households to benefit from inclusive livelihood development programs, multifaceted interventions, access to shock-responsive social protection services, and market access that creates an enabling environment for households to “graduate” out of extreme poverty.
To date, BRAC’s Graduation program has reached more than 2.1 million people in Bangladesh alone and supported the expansion of Graduation in 16 additional countries, including Afghanistan, Egypt, Guinea, India, Kenya, Lesotho, Liberia, Pakistan, Philippines, Rwanda, South Africa, South Sudan, Tanzania, Tunisia, Uganda, and Zambia.
Leveraging 20 years of experience implementing, testing, and iterating the Graduation approach, BRAC International is extending support in the design, delivery as well as evaluation of the Graduation program to Rwanda, supporting the Ministry of Local Government in critical areas.
Areas such as providing technical capacity and expertise in the implementation of the Graduation strategy and making available necessary communication, advocacy, and technical resources to ensure smooth implementation of the Graduation strategy.
Equally important, collaborating with the Ministry will ensure the scale-up of an inclusive, holistic Graduation strategy that includes all Graduation essentials. In all, efforts will focus on the four essential components identified as fundamental to implementing Graduation successfully.
These essential components include meeting participants’ day-to-day needs such as nutrition and healthcare, providing training and assets for income generation, financial literacy and savings support, and social empowerment through community engagement and life skills training – all facilitated through coaching that calls for regular interactions with participants. Rigorous research by Nobel Laureates Abhijit Banerjee and Esther Duflo proves that the combination of support and resources provided through this multifaceted approach is critical for long-term impact.
Overall, the Graduation approach is grounded in the conviction that people living in vulnerable situations can be agents of change if they are empowered with the tools, skills, and hope they need to change their lives.
With such people-centred concerted efforts, it is only a matter of time before Rwanda is known for much more than its scenic beauty and as home to the cleanest city in Africa. It will also make history by defying all odds to become one of the first countries on the continent to establish a sustainable path out of extreme poverty by 2030.
In the southern city of Taiz, 11-month-old Ameer Hellal receives WFP supplementary food for malnutrition. Photo: WFP/Albaraa Mansoor
by Alexander Kozul-Wright (geneva)
Inter Press Service
GENEVA, Mar 03 (IPS) – At a high-level UN event, global donors pledged US$1.2 billion in aid operations to Yemen in 2023. Millions of Yemenis require humanitarian assistance as the country continues to suffer from the fallout of a prolonged civil war.
While the Humanitarian Affairs and Emergency Relief Coordinator Martin Griffiths noted that the UN had received 31 commitments during the conference on February 30, 2023, in Geneva, the amount pledged remains well below the organisation’s target of US$4.3 billion.
The conflict in Yemen started in 2014 when Iranian-backed Houthi rebels – representing the country’s Zaidi Shia Muslim minority – seized the capital, Sanaa. The war intensified in 2015 when a Saudi-led coalition intervened on behalf of the government against the Houthis.
Owing to repeated Saudi-led bombardment campaigns and deep territorial divisions (half of the country remains under Houthi control in the north and the other half under government control in the south), Yemen’s economy has ground to a halt.
Last year, exogenous factors also led to steep falls in Yemen’s Rial relative to the U.S. dollar, pushing inflation up to 45 percent. Elsewhere, food prices surged by 58 percent. In 2022, 13 million people in Yemen relied on the UN’s World Food Program for basic staples.
To date, the conflict has killed more than 375,000 people, sixty percent from indirect causes (mainly from malnutrition and disease). The war has also razed the country’s civilian and physical infrastructure, including its oil sector – Yemen’s only source of foreign exchange.
Last year, warring parties agreed to an UN-brokered cease-fire. Though it expired in October, the six-month truce led to a reduction in casualties. It also enabled commercial traffic to flow through the port of Hodeida, increasing the supply of goods and aid into the country.
A slight improvement in food security at the end of last year meant two million fewer Yemenis suffered from acute hunger. The number of people in famine-like conditions also dropped from 161,000 to zero. But progress remains fragile.
Yemen continues to rely on foreign aid. “More than 21 million people, or two-thirds of the country’s population, will need humanitarian assistance in 2023,” said UN secretary-general António Guterres.
Among those in need, more than 17 million are understood to be living below Yemen’s poverty line. Meanwhile, an estimated 4.5 million Yemenis are internally displaced, largely due to climate-change-related events.
According to the UN, Yemen is “highly vulnerable” to the effects of rising global temperatures (notably arid weather). In recent years, severe droughts have exacerbated food shortages caused by the war.
Yemen Remains in Need of External Support
The UN’s US$4.3 billion funding objective is nearly double what it received last year. Looking ahead, reliance on external aid will be particularly acute in 2023 due to constrained oil exports linked to Houthi attacks on government-held oil terminals last October.
This week’s conference took place as the country’s rival groups agreed to an informal suspension of hostilities. Efforts are underway to declare a lasting peace after the parties failed to extend their UN-backed peace agreement last year.
“We have a real opportunity to change Yemen’s trajectory and move toward peace by renewing and expanding the truce,” noted Guterres at the pledging event, co-hosted by Sweden and Switzerland.
The meeting was attended by officials worldwide, including U.S. Secretary of State Antony Blinken and Germany’s Foreign Minister Annalena Baerbock. In his speech, Blinken called on donors to step up their contributions, citing last year’s funding shortages.
The UN missed its financing target for Yemen by US$2 billion last year. Blinken also urged the international community to help restore Yemen’s economy, suggesting this would “reduce people’s suffering over the long term.”
“Large-scale investment will be needed to rebuild Yemen’s physical infrastructure. Securing peace, however, remains the top priority. “Without it, millions will continue to face extreme levels of poverty, hunger and suffering,” added Blinken.
Meanwhile, the UN secretary-general warned that aid funding would not provide a panacea for Yemen.
“Humanitarian assistance is a band-aid. It saves people’s lives but cannot resolve the conflict itself.”
IPS UN Bureau Report
Rohingya IDPs confined to a Sittwe camp in Rakhine State wait for international intervention. More than 1.5 million people are displaced in Myanmar. Credit: Sara Perria/IPS
by Guy Dinmore, Thompson Chau (bangkok)
Inter Press Service
BANGKOK, Feb 21 (IPS) – Nearly 18 million people – about one-third of Myanmar’s population – need humanitarian aid this year because of civil war and the post-coup economic crisis, according to the latest United Nations estimates.
The numbers needing support continue to rise from the estimated 14 million people needing aid last year. More than 10,000 people were displaced by fighting in southern Kayin State in early January alone, joining more than 1.5 million IDPs across the country.
The UN says it recognises the urgent need to remain in Myanmar and step up humanitarian operations, but it is caught between a hostile military junta imposing restrictions on its activities and a loose network of resistance groups accusing the world body of legitimising an illegal regime.
UN Secretary-General Antonio Guterres is also facing increasing criticism for his apparent hands-off leadership in the crisis.
“Almost 18 million people – nearly one-third of the Myanmar population – are estimated to be in humanitarian need nationwide in 2023, with conflict continuing to threaten the lives of civilians in many parts of the country,” said Ramanathan Balakrishnan, UN Resident and Humanitarian Coordinator for Myanmar.
He told IPS that international and local humanitarian aid organisations are “using a range of approaches” in different areas and had reached over four million people in 2022 despite severe underfunding and what he called “heavy bureaucratic and access constraints”.
Balakrishnan defended the importance of the UN’s engagement with General Min Aung Hlaing’s regime, which has ruthlessly crushed dissent since seizing power two years ago and overthrowing the elected government led by Aung San Suu Kyi.
“Principled engagement with all sides is a must to negotiate access and also to advocate on key protection issues. Advocacy to stop the heavy fighting and airstrikes in populated areas that are threatening the safety of both civilians and aid workers is as important as reaching people in need with humanitarian aid,” he said.
Aid workers accuse the junta of further restricting aid operations and blocking urgently needed aid from reaching millions of people. The regime admitted this month it cannot effectively administer about one-third of Myanmar’s townships. But it is able to choke access to some areas controlled by resistance groups and ethnic armed organisations that have been fighting the military for decades.
The junta is seeking to impose its authority with a new law making registration compulsory for national and international non-governmental organizations and associations and introducing criminal penalties for non-registered entities with up to five years of imprisonment.
“Civic space has been decimated in the country already due to the military’s actions, particularly its systematic harassment, arrest, and prosecution of anyone who opposed their coup,” said James Rodehaver, chief of the UN Human Rights Office for South-East Asia (OHCHR) Myanmar Team. “These new rules could greatly diminish what operational space is left for civic organisations to deliver essential goods and services to a population that is struggling to survive.”
Muslim Rohingya IDPs wait for aid to be unloaded in Pawktaw camp in Rakhine State, an hour by boat from the main city of Sittwe. Credit: Sara Perria/IPS
Many of the more than one million refugees outside Myanmar also need help. Most are stateless Rohingya Muslims forced out of Rakhine State into Bangladesh in waves of ethnic cleansing before the 2021 coup, with many held in border camps.
The UN’s reputation was already battered before the coup over its handling of the long-festering Rohingya crisis in which it was accused by aid workers and activists of being too accommodating with the Myanmar military. And it has come under further fire since.
In a joint letter last September, more than 600 Burmese civil society organisations said they “condemn in the strongest terms the recent public signing of new agreements and presenting of letters of appointment to the illegitimate Myanmar military junta by UN agencies, funds, programmes and other entities working inside Myanmar.”
“We call on you and all UN entities to immediately cease all forms of cooperation and engagement that lends legitimacy to the illegal, murderous junta,” said the letter addressed to the UN Secretary-General. The signatories argued that letters of appointment and agreements should be presented to what they regard as the legitimate government of Myanmar – the parallel National Unity Government established by ousted lawmakers – and “ethnic revolutionary organisations.”
A Myanmar researcher specialising in civil society and international assistance highlighted the role of Burmese CSOs in delivering aid. “Local CSOs comprehend the complexity of specific local needs in the current crisis as the communities they serve struggle with security concerns and essential public services, including healthcare and education,” said the researcher, who goes by the name Kyaw Swar for fear of security reprisals.
He said that donors and foreign organisations had adopted risk aversion arrangements post-coup, referring to UN and INGO’s costs for capacity-building components and disproportionate country-office operations. “Local CSOs have fewer operations, and risk management options have no choice but to channel international aid to their respective communities.”
UN officials reject the notion that they are legitimising the regime and insist that only by operating in the junta-controlled heartland and also through cross-border assistance can aid be delivered to a substantial part of the population in desperate need.
“The UN finds itself in an almost existential bind. It can’t engage with an oppressive regime without being seen to condone its actions,” commented Charles Petrie, former UN Assistant Secretary-General and former UN chief in Myanmar.
“Somehow, the UN’s senior leadership needs to convince all that engaging in a dialogue with a pariah regime is not the same as supporting it and that it should be judged on the outcome of the discussions rather than being condemned for the simple fact of engaging,” he said.
“But being able to do so successfully implies that it has the level of credibility that right now it still needs to rebuild,” he added.
Questions have also been raised about the apparent lack of hands-on leadership on the part of Guterres. The UN Secretary-General seems to have made little personal intervention beyond routine statements, such as the latest marking the second anniversary of the coup in which he condemned “all forms of violence” and said he “continues to stand in solidarity with the people of Myanmar and to support their democratic aspirations for an inclusive, peaceful and just society and the protection of all communities, including the Rohingya.”
Since the coup and despite the unfolding humanitarian crisis, Guterres is seen as having taken a back seat and delegating to two successive special envoys. This stands in contrast to his predecessor Ban Ki-moon who actively intervened during the Cyclone Nargis disaster in 2008, personally meeting then-junta leader General Than Shwe and negotiating the opening of Myanmar to aid workers.
Petrie suggested Guterres should take a page out of Ban’s book and provide much more active leadership on Myanmar and be “more openly engaged and supportive of the work done by his special envoy.”
While China and Russia lend military and other support to the junta, much of the rest of the diplomatic world has taken a step back from the Myanmar crisis, leaning instead on ASEAN to assume the lead.
But the 10-member bloc has been ineffective so far. It has coordinated an unprecedented shunning of the junta’s leadership in regional meetings, but neighbouring countries – with their own blemished democratic records – are unwilling to penalise the regime. The ASEAN Coordinating Centre for Humanitarian Assistance on Disaster Management (AHA Centre) has been charged to respond to the humanitarian crisis, but with no success.
Laetitia van den Assum, the former Dutch ambassador to Myanmar and Thailand, said the aid response would have been more effective if ASEAN had set up a partnership between AHA and experienced UN and other organisations.
“That, in fact, is what happened in the aftermath of Nargis, when under the strong leadership of Dr Surin Pitsuwan, ASEAN and UN worked in tandem. It took time to put the effort together, but ultimately it took off,” van den Assum told IPS.
As with the UN leadership, Lim Jock Hoi, a Bruneian government official who was ASEAN chief until last month, was barely noticed on the issue of Myanmar, in stark contrast to Pitsuwan, who helped persuade Than Shwe to accept humanitarian assistance in 2008 when Cyclone Nargis killed over 100,000 people.
“UN agencies like OCHA, WFP and UNICEF, as well as many dedicated INGOs, continue to provide assistance, more often than not under difficult circumstances, and with countless Myanmar civil society organisations playing critical roles,” Van den Assum observed.
“But until now, the SAC has stood in the way of more effective aid,” she added. “What is missing is an overall agreement between Myanmar and ASEAN about such assistance, how to expand it and how to guarantee that all those in need are served. ASEAN and AHA have not been able to deliver on this.”
Observers point out that AHA is set up to respond to natural disasters and has no experience in intervening with aid in conflict situations.
“That had already become clear in 2018 when AHA was tasked to make recommendations for ASEAN assistance to northern Rakhine state after the enforced deportation of more than 750,000 Rohingya. The initiative died a slow death,” Van den Assum said.
“AHA was not to blame. Rather, ASEAN politicians had taken a decision without first considering whether it was the most advisable approach,” the veteran diplomat said.
No breakthrough is in sight. The junta has extended a state of emergency for another six months, admitting that it lacks control over many areas for the new elections it says it wants to stage but which have already been widely denounced by the resistance as a sham.
“Heavy fighting, including airstrikes, tight security, access restrictions, and threats against aid workers have continued unabated, particularly in the Southeast, endangering lives and hampering humanitarian operations,” the UN Office for the Coordination of Humanitarian Affairs reported in its latest update.
“A street of local markets in a residential area in North Syria that has been blocked by the ruins of collapsed buildings.” Credit: Norwegian Refugee Council (NRC)
by Sania Farooqui (new delhi, india)
Inter Press Service
NEW DELHI, India, Feb 13 (IPS) – Almost over 33,000 people have been killed and thousands injured by the 7.8 earthquake which struck south-eastern Turkey and Syria in the early hours on Monday, February 6th. The first images that came out were of collapsed buildings, rubble strewn across streets, people trapped under rubbles, screaming for help. What followed was the unusually strong aftershock – including one quake which was almost as large as the first.
Rawan Kahwaji was fast asleep in her apartment in Gaziantep, in Turkey when she woke up to the sounds of people screaming. The first two minutes, she says, did not make sense to her. “It was a nightmare, I remember waking up not knowing what was going on. My apartment was shaking really hard and it went on for sometime, we didn’t expect it to be this bad, we just thought we would get out of the apartment for a few hours because earthquakes happen quite regularly. But this time with each hour that we spent waiting outside, following the aftershocks, we realised the situation was much worse,” Kahwaji said.
War in Syria had displaced Kahwaji and her family once, before they moved to Gaziantep in 2015. For many displaced like her, documents which included ID, educational degrees and travel documents meant more than anything for survival. “In the middle of that chaos, we realised we needed our documents in case we had to leave the city. Our apartment was full of cracks and everything inside was destroyed, we somehow managed to get our documents.
“A street of local markets in a residential area in North Syria that has been blocked by the ruins of collapsed buildings.” Credit: Norwegian Refugee Council (NRC)
After spending two days in a shelter in Gaziantep, Kahwaji and her family were amongst the few who managed to get to Ankara safely, but she describes the experience as something she has never seen before. “There were people on the road screaming, we could hear people crying for help, I saw people collapsing because they were having heart attacks. I don’t know if they made it through or not, but it was complete chaos. We lost a lot, we lost our business, our lives, physically we are safe, but mentally we are not fine. I am still imagining the earth shaking and we are all simply sitting, waiting in anticipation that something is going to happen to us again,” Kahwaji said.
It has been almost a week of relentless search and rescue operations, as workers across these regions are still trying to pull survivors from the rubble – there have been some harrowing stories of success and also of heartbreak. Turkish President Recep Tayyip Erdogan has announced a three-month state of emergency in 10 provinces worst-affected by the earthquake.
“Buildings in North Syria completely destroyed.” Credit: Norwegian Refugee Council (NRC)
Syria Civil Defence – also known as White Helmets have been in news since the beginning of the earthquake for their immediate call to action to rescue those trapped under rubbles and for saving lives.
Almost 3000 White Helmet volunteers have been on the ground searching for survivors and pulling the dead from collapsed buildings. It’s been a race against the clock, those who have made it through for them the challenge has been to survive the cold weather, toxic smoke as people burnt plastic to stay warm, lack of water and basic necessities.
“A small truck loaded with a family’s basic items, who are seeking shelter after they lost their home amidst the disastrous earthquake in North Syria.” Credit: Norwegian Refugee Council (NRC)
Cities closest to the epicentre of the earthquake, as per this report, when the temperatures rose on Sunday and it became warm, “odour of rotting bodies became discernible. It was the smell of death.”
“The situation has been very catastrophic, both personally and also collectively,” says Muzna Dureid, Senior Program Manager, White Helmets in an interview given to IPS said, “One of the worst impacted regions is North West Syria, home to almost 4.5 million people who have been forcefully displaced multiple times, they have witnessed the siege, the chemical attacks, bombardments, all types of suffering and now this earthquake.
“A muddy road in North Syria with, and a car damaged by the ruins.” Credit: Norwegian Refugee Council (NRC)
“Unfortunately the situation has been beyond the capacity of our team, we are working with very limited resources as cities and villages have been completely destroyed. Families have been destroyed, so many are living on the streets in dire weather conditions,” Dureid said.
The possibility of finding survivors continues to decrease as the hours pass. A UN liaison officer warned that the two countries are nearing the end of the search and rescue window. The World Health Organization (WHO) estimates up to 23 million people could be affected by the earthquake across both the countries.
“People gathered around the search and rescue team, trying to help them rescue families stuck under the rubble, in one of the neighborhoods that was completely destroyed in North Syria.” Credit: Norwegian Refugee Council (NRC)
The Norwegian Refugee Council (NRC) has been working on the ground across Syria providing relief, water, and support to those affected by the earthquake. In a statement issued here, NRC says, “The quake happened at the worst time of the night at the worst time of the year. The destructive extent of the shock hit a number of cities in Syria, including Aleppo, Idlib, Homs, Hamah and Lattakia, including internally displaced people across Syria’s north.”
“We are now entering a new phase with search and rescue operations largely coming to an end. The real scale of the disaster will start to crystallise in the coming days,” says Emilie Luciani, Country Director, Syria Response Office, Norwegian Refugee council in an interview to IPS.
“Syrians waiting for the search and rescue team to help people stuck under the rubble, where an entire flattened by the earthquake in North Syria.” Credit: Norwegian Refugee Council (NRC)
“Thousands of families are without shelter in open areas or seeking refuge in damaged buildings, existing internally displaced people’s (IDP) sites, reception centres, collective centres or beings temporarily hosted by other families. Communication has been very difficult, and roads around the main affected areas are damaged.
“People in North West Syria are in a desperate situation. They have already spent many years displaced and reliant on humanitarian assistance, and now unfortunately, the aid reaching them is also restricted as the United Nations can only utilise one crossing-point to reach them from Turkey which only just reopened – 5 days after the earthquake,” says Luciani.
According to this report, the Syrian government in Damascus has been receiving aid from international donors, but there is a lot of uncertainty about whether that will be equitably distributed to all the affected parts of Syria including the rebel held North West.
“People trying to help the search and rescue team in rescuing families buried under the rubble in North Syria.” Credit: Norwegian Refugee Council (NRC)
The Red Cross has called for urgent access in Northern Syria to help people who need urgent support. “Impartial humanitarian assistance should never be hindered, nor politicised,” it says.
Avril Benoit, Executive Director, Doctors Without Borders (MSF) USA said: “The massive consequences of this disaster will require an equally massive international response. People urgently need shelter, food, blankets, clothes, heating materials, hygiene kits, and medical assistance – including access to mental health support. For Syrians living the earthquake zone, this is catastrophe layered on top of crisis after crisis. People have endured more than a decade of war, an economic crisis, the COVID-19 pandemic and a recent cholera outbreak, benoit said.
UNHCR has warned that according to its preliminary data, as many as 5.3 million people in Syria may have been affected by the recent earthquake and will need some form of shelter assistance. A huge number and this destruction comes to a population already suffering mass displacement.
“We are really worried, as we have seen in the past, the world has the habit of replacing a crisis with a new crisis and so on. Right now everyone is opening their doors, giving donations, opening relief camps and emergency response which is needed, no doubt but what after that? We are worried that after a week or so when everyone goes back to their routine life, we will forget about those impacted by the earthquake, especially women and children, says Anila Noor, Managing Director of Women Connectors and a policy expert on refugees and migration.
“These are poor people, who have suffered due to war, they live with very limited resources especially in Syria. Emergency response is the first step, but we need to see how we can help them later, make an ecosystem and a system of accountability to track where the money and aid goes, and also see the local efforts,” says Noor.
Government vows meticulous probe into those responsible
Nearly 25,000 buildings collapsed or badly damaged
Opposition has accused government of not enforcing regulations
Erdogan says opposition lies to besmirch government
One developer arrested as he prepared to fly from Turkey
ISTANBUL, Feb 12 (Reuters) – Turkey vowed on Sunday to investigate thoroughly anyone suspected of responsibility for the collapse of buildings in the country’s devastating earthquakes nearly one week ago and has already ordered the detention of 113 suspects.
Vice President Fuat Oktay said overnight that 131 suspects had so far been identified as responsible for the collapse of some of the thousands of buildings flattened in the 10 provinces affected by the tremors early last Monday.
“Detention orders have been issued for 113 of them,” Oktay told reporters in a briefing at the disaster management coordination centre in Ankara.
“We will follow this up meticulously until the necessary judicial process is concluded, especially for buildings that suffered heavy damage and buildings that caused deaths and injuries.”
He said the justice ministry had established earthquake crimes investigation bureaus in the quake zone provinces to investigate deaths and injuries.
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Environment Minister Murat Kurum said that 24,921 buildings across the region had collapsed or were heavily damaged in the quake, based on assessments of more than 170,000 buildings.
Rescuers were still looking for survivors in the earthquake rubble six days after the disaster, which hit parts of Syria and Turkey. The death toll has exceeded 28,000 and is expected to rise further.
Opposition parties have accused President Tayyip Erdogan’s government of not enforcing building regulations, and of mis-spending special taxes levied after the last major earthquake in 1999 in order to make buildings more resistant to quakes.
[1/7] Rescuers carry survivor Muzeyyen Ofkeli in the aftermath of a deadly earthquake, in Hatay, Turkey February 12, 2023. REUTERS/Kemal Aslan
Erdogan has said the opposition just tells lies and spreads slander to besmirch the government, obstructing investment instead of facing up to corruption in the opposition-run municipalities.
In the 10 years to 2022, Turkey slipped 47 places in Transparency International’s Corruption Perception Index to 101, having been as high as 54 out of 174 countries in 2012.
State prosecutors in Adana ordered the detention of 62 people in an investigation into collapsed buildings, while prosecutors sought the arrest of 33 people in Diyarbakir for the same reason, state-owned Anadolu news agency reported.
It said eight people had been detained in Sanliurfa and four in Osmaniye in connection with destroyed buildings believed to have faults, such as columns being removed.
Police detained the developer of one residential complex which collapsed in Antakya at Istanbul Airport as he prepared to board a plane for Montenegro on Friday evening and he was formally arrested on Saturday, according to Anadolu.
The upmarket 12-storey residential complex was completed a decade ago and contained 249 apartments. There was no information on the casualties in that building.
The arrested man told prosecutors he did not know why the complex collapsed and that his desire to go to Montenegro was unrelated, Anadolu reported.
“We fulfilled all procedures set out in legislation,” he was quoted by Anadolu as saying in his statement. “All licenses were obtained.”
Additional reporting by Dominic Evans,
Writing by Daren Butler;
Editing by Ece Toksabay and Raissa Kasolowsky
The Gabura union, a small island adjacent to the Sundarbans forest, is expected to be submerged in seawater by 2050. Credit: Mohammad Rakibul Hasan
by Mohammad Rakibul Hasan – and AI Artificial Intelligence (dhaka, bangladesh)
Inter Press Service
DHAKA, Bangladesh, Jan 18 (IPS) – Climate change is a global problem that requires a global solution. However, negotiating a solution has been challenging due to several factors. One of the main reasons that recent COP Climate summits and other international climate talks have not been able to resolve climate change is that there is a lack of consensus among countries on how to address the issue. Developed countries, which have historically been the largest emitters of greenhouse gases, are often unwilling to take on significant emissions reductions or to provide financial assistance to developing countries to help them adapt to the effects of climate change.
The Gabura union, a small island adjacent to the Sundarbans forest, is expected to be submerged in seawater by 2050. Credit: Mohammad Rakibul Hasan
Another significant barrier to progress on climate change is the need for more political will among leaders of countries. In some cases, leaders may not see climate change as a priority or may be reluctant to take on the economic and political costs of reducing emissions or investing in clean energy due to political reasons. Some countries may be influenced by powerful fossil fuel lobbies that push against climate action. Developed countries must be willing to take on more significant emissions reductions and provide financial assistance to developing countries to help them adapt to the effects of climate change. Developing countries, in turn, need to be willing to take on emissions reduction measures and invest in clean energy and other climate mitigation measures.This can happen through more effective multilateral negotiations such as United Nations Framework Convention on Climate Change (UNFCCC), where all countries agree to set emissions reduction targets and support developing countries.
Bangladesh is located in the low-lying delta region of the Ganges, Brahmaputra, and Meghna rivers, making the country particularly susceptible to flooding and rising sea levels. Bangladesh is also prone to cyclones and other extreme weather events, which are becoming more frequent and severe due to climate change. The country has a long coastline, much of which is low-lying and vulnerable to flooding. As sea levels continue to rise, the risk of coastal flooding is increasing, devastatingly impacting the lives and livelihoods of the people in these areas. These events are causing widespread damage to homes and infrastructure and affecting the country’s agricultural sector, a significant source of income for many people in Bangladesh. Many people in the coastal areas have lost their homes and livelihoods due to sea level rise and coastal flooding. They face food and water insecurity due to increased soil and water salinity.
Globally, rich countries can assist Bangladesh cope with climate change in several ways. One crucial way is by providing financial assistance to help the country adapt to the impacts of climate change. This may include funding for building sea walls and other flood protection infrastructure and programs to help people in coastal areas relocate to higher ground. Another way rich countries can help is by providing technical assistance to Bangladesh to develop and implement clean energy and other climate mitigation measures. This could include funding and expertise to help the country develop renewable energy sources such as solar and wind power, as well as to improve energy efficiency and to reduce emissions from the industrial and transportation sectors.
The Sundarbans forests, located in the coastal belt of Bangladesh, is one of the most vulnerable areas in the country to the impacts of climate change. The forests span over 10,000 square kilometres and is home to various plant and animal species, including the Royal Bengal tiger. Sea level rise is one of the most significant threats to the Sundarbans forest making it particularly susceptible to flooding and rising sea levels. According to a study by the Intergovernmental Panel on Climate Change, sea levels in the Bay of Bengal are projected to increase by up to 1 meter by the end of the century. This would devastate the Sundarban forests, as seawater would submerge large areas.
The impacts of climate change on the Sundarban forests are also likely to have knock-on effects on the people living in the surrounding areas. The forests are a significant source of livelihood for many people in the region, who rely on it for fishing, agriculture, and other activities. As the forests are damaged by sea level rise and extreme weather events, these people will also be affected by food and water insecurity and the loss of their homes and livelihoods. Many people who lost their homes and land to flooding, were forced to relocate to higher grounds.
The health impacts of climate change on people living around the Sundarban are also significant. As a result of sea level rise and increased flooding, many are at risk of waterborne diseases such as cholera and diarrhea. Extreme weather events are accelerating salinity across the coastal belt of Bangladesh. Women are experiencing uterus cancers, infertility, and skin diseases, and men, too, are experiencing fertility problems and other health issues. Due to the loss of livelihoods and displacement, many people face food insecurity and malnutrition. In addition to these immediate impacts, climate change exacerbates the region’s existing social and economic inequalities. People living in poverty and marginalized communities are disproportionately affected by climate change, as they have fewer resources to cope with the impacts and less access to services and support.
Climate change has led to a growing number of people migrating from these areas, searching for better opportunities and escaping the impacts of climate change. Most climate migrants from coastal belt areas of Bangladesh are moving to urban areas, such as the capital city of Dhaka and other major cities. These migrants often seek better job opportunities and access to services and support. However, many migrants face challenges in their new locations, such as a lack of affordable housing, discrimination, and limited access to services and support. The future is uncertain for those still living in coastal areas of Bangladesh and fighting the climate crisis. Many of the people living in these areas are among the country’s most vulnerable and marginalized communities, making them particularly susceptible to the impacts of climate change. Climate conversations worldwide by world leaders and major organizations have been occurring every year. But they must see the severity of the situation for the people suffering and take concrete actions beyond being in a room to converse about the effects of climate change.
Climate conversations by world leaders are occurring worldwide but how much is changing ? Credit: Mohammad Rakibul Hasan Many indigenous communities across the Sundarbans forest have been experiencing extreme weather conditions. Credit: Mohammad Rakibul Hasan Fishing communities face extreme poverty due to the lack of fish available in the rivers. Credit: Mohammad Rakibul Hasan Women around coastline areas of Bangladesh face increased salinity, a major cause of uterus cancer. Credit: Mohammad Rakibul Hasan Due to climate change, extreme heat and salinity are declining birth rates across the coastal belt in Bangladesh. Credit: Mohammad Rakibul Hasan Climate change is accelerating the displacement of inhabitants across the coastal belt of Bangladesh. Credit: Mohammad Rakibul Hasan Four families are sitting with what remains in their food storage. Due to high salinity, agricultural products cannot grow well anymore. Credit: Mohammad Rakibul Hasan
NEW YORK, Jan 13 (IPS) – This week world leaders meet in Davos to discuss cooperation to address multiple crises, from COVID-19 and escalating inflation to slowing economic growth, debt distress and climate shocks.
Only three months earlier, finance ministers had gathered in Washington DC for the same reason. The mood was grim. The need for ambitious actions could not be greater; however, there were no agreements, evidencing the fragility of multilateralism and international cooperation.
Isabel Ortiz
Worse, policy makers -advised by the International Monetary Fund- are resorting to old, failed and regressive policies, such as austerity (now called “fiscal restraint” or “fiscal consolidation”), instead of much needed corporate/wealth taxation and debt reduction initiatives, to ensure an equitable recovery for all.
A recent global report alerts of the dangers of a post-pandemic wave of austerity, far more premature and severe than the one that followed the global financial crisis a decade ago. While governments started cutting public expenditures in 2021, a tsunami of budget cuts is expected in 143 countries in 2023, which will impact more than 6.7 billion people or 85% of the world population.
Analysis of the austerity measures considered or already implemented by governments worldwide shows their significant negative impacts on people, harming women in particular. These austerity policies are:
targeting social protection, excluding vulnerable populations in need of support by cutting programs for families, the elderly and persons with disabilities (in 120 countries);
cutting or capping the public sector wage bill, this is, reducing the number and salaries of civil servants, including frontline workers like teachers and health workers (in 91 countries);
Austerity and all the human suffering it causes is evitable, there are alternatives. There are at least nine financing options, available even in the poorest countries, fully endorsed by the UN and international financial institutions, from increasing progressive taxation to reducing debt. Policymakers must urgently look into these. Many countries have already implemented them.
In recent years, citizens have protested austerity all around the world. A recent study on world protests shows that nearly 1,500 protests in the period 2006-2020 were against austerity. Citizens demand better public services, social protection, jobs with decent wages, tax and fiscal justice, equitable land distribution, and better living standards, among others. Protests against pension reforms, and high food and energy prices have also been very prevalent. Recently, the jobs and cost-of-living crises have been accentuated by the COVID-19 pandemic, resulting in more protests despite lockdowns.
The majority of global protests against austerity and for economic justice have manifested people’s indignation at gross inequalities. The idea of the “1% versus the 99%,” that emerged a decade ago during protests over the 2008 financial crisis, has spread around the world, feeding grievances against elites and corporations manipulating public policies in their favor, while the majority of citizens continue to endure low living standards, aggravated by austerity cuts.
Let’s remember that trillions of dollars have been used to support corporations during the pandemic and to support military spending. Now people are being asked to endure austerity cuts, at a time when they are suffering a cost-of-living crisis. The 2023 meetings in Davos are being faced with new protests and demands to tax the rich.
Unless policymakers change course, we shouldn’t be surprised to see increasing waves of protests all over the world. Clashes in the street are likely to intensify if governments continue to fail to respond to people’s demands and persist in implementing harmful austerity policies.
Governments need to listen to the demands of citizens that are legitimately protesting the denial of social, economic and civil rights. From jobs, public services and social security to tax and climate justice, the majority of protesters’ demands are in full accordance with United Nations proposals and the Universal Declaration of Human Rights. Leaders and policymakers will only generate further unrest if they fail to act on these legitimate demands.
Isabel Ortiz is Director of the Global Social Justice Program at Joseph Stiglitz’s Initiative for Policy Dialogue at Columbia University, former Director at the International Labour Organization (ILO) and UNICEF.
Sara Burke is Senior Policy Analyst at Friedrich-Ebert-Stiftung (FES) New York
Germany, U.S. agree to send combat vehicles to Ukraine
KYIV/BAKHMUT, Ukraine, Jan 5 (Reuters) – Russian President Vladimir Putin called on Thursday for a 36-hour ceasefire in Ukraine to mark Orthodox Christmas, a move rejected by Kyiv which said there could be no truce until Russia withdraws its troops from occupied land.
The United States and Germany made a joint announcement to supply Ukraine with armoured combat vehicles, a boost for Ukrainian President Volodymyr Zelenskiy who has urged Western allies to provide his forces with armour and heavy weapons for months.
Fifty Bradley Fighting Vehicles would be included in a $2.8 billion U.S. package. Germany said it was sending Marder Infantry Fighting Vehicles, following an announcement by France on Wednesday it was sending AMX-10 RC armoured combat vehicles.
The Kremlin said Putin had ordered Russian troops to cease firing from midday on Friday along the entire front, in response to a call for a Christmas truce from Patriarch Kirill of Moscow, the head of the Russian Orthodox Church, a close Putin ally.
“Proceeding from the fact that a large number of citizens professing Orthodoxy live in the areas of hostilities, we call on the Ukrainian side to declare a ceasefire and allow them to attend services on Christmas Eve, as well as on Christmas Day,” Putin said in his order.
Russia’s Orthodox Church observes Christmas on Jan. 7. Ukraine’s main Orthodox Church has rejected the authority of the Moscow patriarch, and many Ukrainian believers have shifted their calendar to celebrate Christmas on Dec. 25 as in the West.
A genuine truce in Ukraine would be the first since May, when the sides halted intense fighting in the devastated port of Mariupol to allow Ukrainian forces to surrender there.
On Thursday night, Zelenskiy accused Russia of wanting to use a truce as cover to stop Ukrainian advances in the strategic industrial area and eastern frontline known as the Donbas.
“They now want to use Christmas as a cover, albeit briefly, to stop the advances of our boys in Donbas and bring equipment, ammunitions and mobilised troops closer to our positions,” Zelenskiy said in his nightly video address, speaking pointedly in Russian rather than Ukrainian.
‘CYNICAL’ SAYS U.S.
In Washington, U.S. President Joe Biden, the State Department and the Pentagon greeted Putin’s order with scepticism. Biden said he thought Putin was “trying to find some oxygen”.
Ukraine has scored some battlefield successes in the past few months although Russia has kept up a barrage of missile and drone strikes on Ukraine’s energy plants, knocking out power to millions of people at times in the middle of winter. Russia has denied targeting civilians since its invasion began Feb. 24 but the strikes included Christmas Day and New Year’s attacks on civilian infrastructure, according to Kyiv.
“There’s one word that best described that and it’s ‘cynical’,” U.S. State Department spokesperson Ned Price said in a press briefing of Putin’s ceasefire order.
“Our concern … is that the Russians would seek to use any temporary pause in fighting to rest, to refit, to regroup, and ultimately to re-attack,” Price said.
Putin’s ceasefire also appeared to face challenges from Russia’s own side. Denis Pushilin, Russian-installed leader in Ukraine’s Donetsk province, scene of the heaviest fighting, wrote on Telegram: “There can be no talk of any truce!”
He said Putin’s order involved only halting offensive operations.
Earlier on Thursday, the Kremlin said Putin had told Turkey’s President Tayyip Erdogan that Moscow was ready for peace talks – but only under the condition that Ukraine “take into account the new territorial realities”, a reference to Kyiv acknowledging Moscow’s annexation of Ukrainian territory. Ukrainian presidential adviser Mikhailo Podolyak called that demand “fully unacceptable”.
MEAT GRINDER
Ten months after Putin ordered what he calls a “special military operation” to protect Russian security, Moscow and Kyiv have entered the new year with hardened diplomatic positions.
Putin has shown no willingness to discuss relinquishing his territorial conquests, despite mounting losses among his troops.
While some of the heaviest fighting of the war continues, the front line has been static since the last big Russian retreat in mid-November. The worst battles have taken place near the eastern city of Bakhmut, which both sides have compared to a meat grinder.
Ukraine says Russia has lost thousands of troops despite seizing scant ground in months of futile waves of assaults on Bakhmut. Russia says the city is key to its aim to capture the rest of Donetsk province, one of four partially occupied regions it claims to have annexed.
Near the front, Reuters saw explosions from outgoing artillery and smoke filling the sky.
“We are holding up. The guys are trying to hold up the defence,” said Viktor, a 39-year-old Ukrainian soldier driving an armoured vehicle out of Soledar, a salt-mining town on Bakhmut’s northeastern outskirts.
Most civilians have been evacuated from Bakhmut. Those who have stayed survive under near constant bombardment, with no heat or electricity. Parts of the city are a wasteland, with sections of residential apartment blocks flattened into concrete piles.
Reporting by Reuters bureaux; Writing by Peter Graff and Grant McCool; Editing by Andrew Heavens and Cynthia Osterman
Taliban orders NGOs to stop female staff from working
Comes after suspension of female students from universities
U.N. says order would seriously impact humanitarian operations
U.N. plans to meet with Taliban to seek clarity
KABUL, Dec 24 (Reuters) – Afghanistan’s Taliban-run administration on Saturday ordered all local and foreign NGOs to stop female employees from working, in a move the United Nations said would hit humanitarian operations just as winter grips a country already in economic crisis.
A letter from the economy ministry, confirmed by spokesperson Abdulrahman Habib, said female employees of non-governmental organisations (NGOs) were not allowed to work until further notice because some had not adhered to the administration’s interpretation of Islamic dresscode for women.
It comes days after the administration ordered universities to close to women, prompting global condemnation and sparking some protests and heavy criticism inside Afghanistan.
Both decisions are the latest restrictions on women that are likely to undermine the Taliban-run administration’s efforts to gain international recognition and clear sanctions that are severely hampering the economy.
U.S. Secretary of State Antony Blinken said on Twitter he was “deeply concerned” the move “will disrupt vital and life-saving assistance to millions,” adding: “Women are central to humanitarian operations around the world. This decision could be devastating for the Afghan people.”
Ramiz Alakbarov, the U.N. deputy special representative for Afghanistan and humanitarian coordinator, told Reuters that although the U.N. had not received the order, contracted NGOs carried out most of its activities and would be heavily impacted.
“Many of our programmes will be affected,” he said, because they need female staff to assess humanitarian need and identify beneficiaries, otherwise they will not be able to implement aid programs.
International aid agency AfghanAid said it was immediately suspending operations while it consulted with other organisations, and that other NGOs were taking similar actions.
The potential endangerment of aid programmes that millions of Afghans access comes when more than half the population relies on humanitarian aid, according to aid agencies, and during the mountainous nation’s coldest season.
“There’s never a right time for anything like this … but this particular time is very unfortunate because during winter time people are most in need and Afghan winters are very harsh,” said Alakbarov.
He said his office would consult with NGOs and U.N. agencies on Sunday and seek to meet with Taliban authorities for an explanation.
Aid workers say female workers are essential in a country where rules and cultural customs largely prevent male workers from delivering aid to female beneficiaries.
“An important principle of delivery of humanitarian aid is the ability of women to participate independently and in an unimpeded way in its distribution so if we can’t do it in a principled way then no donors will be funding any programs like that,” Alakbarov said.
When asked whether the rules directly included U.N. agencies, Habib said the letter applied to organisations under Afghanistan’s coordinating body for humanitarian organisations, known as ACBAR. That body does not include the U.N., but includes over 180 local and international NGOs.
Their licences would be suspended if they did not comply, the letter said.
Afghanistan’s struggling economy has tipped into crisis since the Taliban took over in 2021, with the country facing sanctions, cuts in development aid and a freeze in central bank assets.
A record 28 million Afghans are estimated to need humanitarian aid next year, according to AfghanAid.
Reporting by Kabul newsroom; additional reporting by Susan Heavey in Washington
Editing by Mark Potter and Josie Kao
Sales of arms and military services by the 100 largest companies in the industry reached 592 billion US dollars in 2021, a 1.9% increase compared with 2020 in real terms. Credit: Shutterstock
by Baher Kamal (madrid)
Inter Press Service
MADRID, Dec 22 (IPS) – Day after day, international humanitarian organisations launch desperate appeals for funding to continue saving some of the many lives at high risk. When they get a handful of dollars –even just one million– from a rich country, they welcome it as manna from heaven.
Not only the available funding for humanitarian aid is already short, but next year will also set another record for humanitarian relief requirements, with 339 million people in need of assistance in 69 countries, an increase of 65 million people compared to the same time last year, the United Nations and partner organisations on 1 December 2022 said.
“The estimated cost of the humanitarian response going into 2023 is US$51.5 billion, a 25% increase compared to the beginning of 2022.”
Such highly needed 51.5 billion US dollars amount to less than one-tenth of the total sales of weapons which reached 592 billion US dollars just in one year: 2021.
“United Nations member countries need to overhaul the budgetary approval process for UN human rights work. The current system, overseen by the General Assembly’s Fifth Committee, is inefficient and overly politicised.”
Human rights mechanisms, exposed
It unnecessarily exposes UN human rights mechanisms – teams of independent experts established to investigate serious international crimes – to attempts by hostile governments to curtail their resources or defund them, adds Charbonneau.
Russia has repeatedly tried to defund investigations of its ally Syria, just as China has done for Myanmar. China and Russia have also worked hard to chip away at funding and staffing levels for other human rights activities and the Office of the UN High Commissioner for Human Rights, he said.
Even in their own rich countries, politicians go on cutting further the funding of social services such as public health, public education, and other programmes which citizens and taxpayers have voted for them to provide.
Simply, the wave of privatising all social public services now blows strongly from the United States to an overwhelming majority of countries.
Meanwhile, amidst growing social unrest, protests and strikes, politicians seem to have leaned under the heavy pressure of the arms industry, therefore devoting more and more public funds to purchasing weapons.
Arms sales increase for the seventh year
No wonder: sales of arms and military services by the 100 largest companies in the industry reached 592 billion US dollars in 2021, a 1.9% increase compared with 2020 in real terms, according to new data released on 5 December 2022 by the Stockholm International Peace Research Institute (SIPRI).
Such an increase marked the seventh consecutive year of rising global arms sales. It took place despite the fact that many parts of the arms industry were still affected by pandemic-related disruptions in global supply chains in 2021, which included delays in global shipping and shortages of vital components, says SIPRI.
‘We might have expected even greater growth in arms sales in 2021 without persistent supply chain issues,’ said Dr Lucie Béraud-Sudreau, Director of the SIPRI Military Expenditure and Arms Production Programme.
“Both larger and smaller arms companies said that their sales had been affected during the year. Some companies, such as Airbus and General Dynamics, also reported labour shortages.”
Need to replenish weapons sent to Ukraine
According to the Stockholm-based peace research institute, Russia’s invasion of Ukraine in February 2022 has added to supply chain challenges for arms companies, not least because Russia is a major supplier of raw materials used in arms production.
“This could hamper ongoing efforts in the United States and Europe to strengthen their armed forces and to replenish their stockpiles after sending billions of dollars’ worth of ammunition and other equipment to Ukraine.”
So far, the United States has reportedly spent 100 billion dollars on weapons provided to Ukraine.
US companies dominate the Top 100
The arms sales of the 40 US companies in the listing totalled 299 dollars billion in 2021, the research further explains. North America was the only region to see a drop in arms sales compared with 2020. The 0.8 per cent real-term decline was partly due to high inflation in the US economy during 2021.
Since 2018, the top five companies in the Top 100 have all been based in the USA.
A recent wave of mergers and acquisitions in the US arms industry continued in 2021. One of the most significant acquisitions was Peraton’s purchase of Perspecta, a government IT specialist, for 7.1 billion US dollars.
Private equity companies are becoming more active in the arms industry, particularly in the USA. This could affect the transparency of arms sales data, due to less stringent financial reporting requirements compared with public companies, according to the report.
Chinese companies drive rapid growth in Asian arms sales
The combined arms sales of the 21 companies in Asia and Oceania included in the Top 100 reached 136 billion US dollars in 2021—5.8 % more than in 2020, SIPRI reports. The eight Chinese arms companies in the listing had total arms sales of 109 billion dollars, a 6.3% increase.
There has been a wave of consolidation in the Chinese arms industry since the mid-2010s, said Xiao Liang, a researcher with the SIPRI Military Expenditure and Arms Production Programme. In 2021 this saw China’s CSSC becoming the biggest military shipbuilder in the world, with arms sales of 11.1 billion US dollars, after a merger between two existing companies.
Europe, Russian and the Middle East among the top 100
In 2021 there were 27 Top 100 companies headquartered in Europe. Their combined arms sales increased by 4.2% compared with 2020, reaching 123 billion US dollars.
Meanwhile, six Russian companies are included in the Top 100 for 2021. Their arms sales totalled 17.8 billion US dollars—an increase of only 0.4% over 2020. There were signs that stagnation was widespread across the Russian arms industry, reports SIPRI.
And the five Top 100 companies based in the Middle East generated 15.0 billion US dollars in arms sales in 2021. This was a 6.5% increase compared with 2020, the fastest pace of growth of all regions represented in the Top 100.
The World Food Program has been active in Venezuela since last year, delivering bags of food to families of schoolchildren in some poor areas, such as remote areas accessed by river in the Arismedi municipality, in the southwestern plains state of Barinas. CREDIT: Gabriel Gómez/WFP
by Humberto Marquez (caracas)
Inter Press Service
CARACAS, Dec 15 (IPS) – The social crisis and humanitarian emergency in Venezuela became international headline news again once the government and the opposition, bitter adversaries for two decades, agreed to direct three billion dollars in state funds held abroad to social programs.
When the pact was signed on Nov. 26, renowned nutritionist Susana Raffalli published a photograph of the legs of a girl whose height is eight centimeters shorter than what is appropriate for her age. “I measured her today. Her growth has been irreversibly stunted,” she said.
“Between the first announcement of the social roundtable (meetings to that purpose were already held in 2014) and the one signed today in Mexico, a generation of Venezuelans like her was born. The agreement is not a trophy. It is a commitment to hope,” Raffalli stated.
The Social Agreement signed in Mexico “is an important contribution, which could mean urgent aid for children, the elderly, the disabled and indigenous people, whose situation is extremely critical,” Roberto Patiño, founder of Alimenta la Solidaridad, a network of soup kitchens for children, told IPS.
The resources involved in the agreement are Venezuelan state funds frozen in the United States and European nations that in 2019 refused to accept the re-election of President Nicolás Maduro, in power since 2013, adopted sanctions and recognized opposition lawmaker Juan Guaidó as president.
Now, in talks between the government and the opposition, with the mediation of governments from this region and Norway, an agreement was reached to unfreeze part of the funds and allocate them to social programs under United Nations supervision.
The United States and European countries are participating in the deal as sanctioning parties and the UN as manager of the released funds and social programs covered by them.
“These are absolutely insufficient resources in the face of the crisis, but well-managed they can have a positive impact given the country’s complex humanitarian emergency,” Piero Trepiccione, coordinator of the network of social centers in Latin America and the Caribbean run by the Catholic Jesuit order Society of Jesus, told IPS.
The HumVenezuela Platform, made up of dozens of civil society organizations, has maintained since 2019 that the social situation in this South American country is a complex humanitarian emergency, based on its records on food, water and sanitation, health, basic education and living conditions.
The sharp deterioration in the living conditions in this country over the last decade has gone hand in hand with the decline of the Venezuelan economy – a collapsed oil industry and several years of hyperinflation – whose most visible international consequence has been the migration of seven million Venezuelans.
Renowned nutritionist Susana Raffalli published, as an example of a generation of children born and growing up with malnutrition and other problems in Venezuela, a photograph of the legs of a girl who, the day the government-opposition agreement was reached, was eight centimeters shorter than the appropriate size for her age. CREDIT: Susana Rafalli/Twitter
Barrier against life
In recent years, U.S. sanctions and the political clash with other governments, as in the case of Colombia, a neighbor with which the borders and the transit of people and goods were closed, have had a major impact.
For example, tragedy struck the low-income family of Michel Saraí, a five-year-old girl with pneumonia who was treated at a small hospital in La Fría, a small town in the southwest near the border with Colombia, which lacked the equipment needed for the necessary tests and treatment.
When her health took a turn for the worse on Nov. 30, her parents decided not to take her to the public hospital in the regional capital, San Cristóbal, because they did not have the dozens of dollars charged there to accept patients, who must bring their own supplies and pay for tests.
A Civil Defense ambulance, with fuel donated by a neighbor – gasoline is scarce in the state of Táchira and others – took the girl and her mother some 25 kilometers to the border bridge in the town of Boca de Grita, so that she could be treated free of charge in the cities of Cúcuta or Puerto Santander, on the Colombian side.
With the border formally closed, the Colombian military agreed to receive the ambulance due to the emergency, but the Venezuelan National Guard refused to allow passage of the vehicle carrying the little girl connected to oxygen.
“We had no money to offer them to see if they would let her get through,” the father, Jonathan Pernía, told local reporters a few days later.
In desperation, the mother and an aunt accepted what seemed like the only alternative: disconnecting her from the oxygen, placing her on a wheelbarrow – “as if she were a sack of potatoes,” Pernía lamented – and running with her through the rain to the Colombian side of the bridge, where another ambulance was waiting for them. But the little girl arrived without vital signs.
At the morgue of the hospital in San Cristobal her parents picked up the body. A week later they were still trying to find the money needed to pay the burial expenses.
Jonathan Pernía, the impoverished father of a little girl who died when an ambulance was prevented from crossing the border between Venezuela and Colombia to give her emergency treatment, shows journalists the bill for the funeral expenses, which he has not been able to cover either. CREDIT: Courtesy of Bleima Márquez
Figures behind the crisis
In Venezuela, poverty – defined as those who cannot afford the basic food basket – currently affects 81.5 percent of the population (90.9 percent in 2021), according to the Living Conditions Survey of the Andrés Bello Catholic University, which surveyed 2300 households throughout the country. This is the first time in seven years that it has gone down, partly attributable to a rebound in the economy and remittances from migrants.
Meanwhile, multidimensional poverty – which takes into account housing, education, employment, services and income – fell from 65.2 percent in 2021 to 50.5 percent in 2022, and extreme poverty dropped from 68 percent in 2021 to 53.3 percent in 2022.
Venezuela is the most unequal country in the Americas, and along with Angola, Mozambique and Namibia is one of the most unequal in the world, as the richest 10 percent earn 70 times more (553.20 dollars per month on average) than the poorest 10 percent (7.90 dollars).
Seven million children are in school, down from 7.7 million in 2019, and an estimated 1.5 million children and adolescents are not in the educational system. Preschool and daycare coverage is just 56 percent.
The survey reported an improvement in formal employment and income this year, with average monthly earnings of 113 dollars for public employees, 142 dollars for the self-employed, and 150 dollars for people working in private sector companies.
As a consequence, food insecurity declined from 88 percent of Venezuelans worried about running out of food in 2021, to 78 percent, while the proportion of people who have gone a whole day without eating dropped to 14 percent, from 34 percent in 2021.
More than 90 percent of poor households have received food assistance from the government -especially carbohydrates- but only one third receive these products monthly.
In health, according to the survey, the use of public services is decreasing (70 percent) and health care is becoming more expensive because, while prices in private clinics are skyrocketing, 13 percent of those who turned to public services had to pay in outpatient clinics and 16 percent in hospitals, and in 65 percent of the cases they had to pay themselves for the medicine that was prescribed for them.
Venezuelan government and opposition negotiators, meeting in Mexico with that country’s Foreign Minister Marcelo Ebrard and Norwegian mediator Dag Nylander, agreed to help address social needs in their country, as a preliminary step to a possible agreement to solving the political crisis. CREDIT: National Assembly of Venezuela
Mexican formula
Jorge Rodríguez, president of the legislative National Assembly and the ruling party’s lead negotiator, said that with the funds released after the agreement reached in Mexico, the infrastructure and materials in 2300 schools will be covered, and the vaccines required in accordance with the World Health Organization (WHO) guidelines will be purchased.
Medicine for oncological and HIV patients will be obtained, radiotherapy programs, blood banks and at least 21 hospitals will be revived, while more than one billion dollars will be allocated to the national electricity grid.
The World Food Program (WFP), meanwhile, which now delivers food to families of 100,000 schoolchildren in poor areas in the north of the country, hopes to raise funds to provide meals to more than one million people by the end of 2023.
According to Trepiccione, of the Jesuit network, resources should be directed “to the recovery of the infrastructure of hospitals and schools, which are in terrible condition, because that generates a chain of jobs, services and economic activity along with the obvious improvements in the provision of health care and the quality of education.”
“The same can be said of reactivating the electrical system, hit by blackouts that affect above all the economy and the life of people in the western part of the country,” he added.
Patiño, from the network of soup kitchens, said priorities were “programs for early childhood care, pregnant women, school feeding, as well as care for the elderly and indigenous communities, segments where many are dying too young due to lack of urgent health care.”
Groups of retirees and pensioners hold constant demonstrations in Caracas and other cities in protest against their tiny pensions, which in Venezuela are equal to the legal minimum wage and this December barely reached the equivalent of nine dollars for the entire month. CREDIT: Courtesy of Efecto Cocuyo
Government pensions, which are equal to the minimum wage, were equivalent to 30 dollars at the beginning of the year, but with the depreciation of the local currency they are equivalent to just nine dollars per month as of this December.
“We must also emphasize that this social agreement is absolutely insufficient in the face of the precarious conditions that exist in our country. These are resources that will be exhausted and the needs will not disappear,” said Patiño.
In his view, “the only thing that can really solve the crisis, the best possible social program, is a decent job, with a sufficient income and with a social security and public health program that takes care of the most needy.”
Funds for the agreement, frozen in banks in industrialized countries, will be released gradually under the supervision of a government-opposition committee and with UN agency management to tender, implement and oversee the programs, in 2023 and 2024.
And over the coming year new meetings will be held and further political agreements are expected, which may lead to an easing or lifting of sanctions and, eventually, to an improvement in the living conditions of Venezuela’s 28 million people.
This is an opinion editorial by Alex Gladstein, chief strategy officer of the Human Rights Foundation and author of “Check Your Financial Privilege.”
I. The Shrimp Fields
“Everything is gone.”
–Kolyani Mondal
Fifty-two years ago, Cyclone Bhola killed an estimated 1 million people in coastal Bangladesh. It is, to this day, the deadliest tropical cyclone in recorded history. Local and international authorities knew well the catastrophic risks of such storms: in the 1960s, regional officials had built a massive array of dikes to protect the coastline and open up more territory for farming. But in the 1980s after the assassination of independence leader Sheikh Mujibur Rahman, foreign influence pushed a new autocratic Bangladeshi regime to change course. Concern for human life was dismissed and the public’s protection against storms was weakened, all in order to boost exports to repay debt.
Instead of reinforcing the local mangrove forests which naturally protected the one-third of the population that lived near the coast, and instead of investing in growing food to feed the quickly growing nation, the government took out loans from the World Bank and International Monetary Fund in order to expand shrimp farming. The aquaculture process — controlled by a network of wealthy elites linked to the regime — involved pushing farmers to take out loans to “upgrade” their operations by drilling holes in the dikes that protected their land from the ocean, filling their once-fertile fields with saltwater. Then, they would work back-breaking hours to hand-harvest young shrimp from the ocean, drag them back to their stagnant ponds, and sell the mature ones to the local shrimp lords.
With financing from the World Bank and IMF, countless farms and their surrounding wetlands and mangrove forests were engineered into shrimp ponds known as ghers. The area’s Ganges river delta is an incredibly fertile place, home to the Sundarbans, the world’s biggest stretch of mangrove forest. But as a result of commercial shrimp farming becoming the region’s main economic activity, 45% of the mangroves have been cut away, leaving millions of people exposed to the 10-meter waves that can crash against the coast during major cyclones. Arable land and river life has been slowly destroyed by excess salinity leaking in from the sea. Entire forests have vanished as shrimp farming has killed much of the area’s vegetation, “rendering this once bountiful land into a watery desert,” according to Coastal Development Partnership.
A farm in Khuna province, flooded to make shrimp fields
The shrimp lords, however, have made a fortune, and shrimp (known as “white gold”) has become the country’s second-largest export. As of 2014, more than 1.2 million Bangladeshis worked in the shrimp industry, with 4.8 million people indirectly dependent on it, roughly half of the coastal poor. The shrimp collectors, who have the toughest job, make up 50% of the labor force but only see 6% of the profit. Thirty percent of them are girls and boys engaged in child labor, who work as much as nine hours a day in the salt water, for less than $1 per day, with many giving up school and remaining illiterate to do so. Protests against the expansion of shrimp farming have happened, only to be put down violently. In one prominent case, a march was attacked with explosives from shrimp lords and their thugs, and a woman named Kuranamoyee Sardar was decapitated.
In a 2007 research paper, 102 Bangladeshi shrimp farms were surveyed, revealing that, out of a cost of production of $1,084 per hectare, the net income was $689. The nation’s export-driven profits came at the expense of the shrimp laborers, whose wages were deflated and whose environment was destroyed.
In a report by the Environmental Justice Foundation, a coastal farmer named Kolyani Mondal said that she “used to farm rice and keep livestock and poultry,” but after shrimp harvesting was imposed, “her cattle and goats developed diarrhea-type disease and together with her hens and ducks, all died.”
Now her fields are flooded with salt water, and what remains is barely productive: years ago her family could generate “18-19 mon of rice per hectare,” but now they can only generate one. She remembers shrimp farming in her area beginning in the 1980s, when villagers were promised more income as well as lots of food and crops, but now “everything is gone.” The shrimp farmers who use her land promised to pay her $140 per year, but she says the best she gets are “occasional installments of $8 here or there.” In the past, she says, “the family got most of the things they needed from the land, but now there are no alternatives but going to the market to buy food.”
In Bangladesh, billions of dollars of World Bank and IMF “structural adjustment” loans — named for the way they force borrowing nations to modify their economies to favor exports at the expense of consumption — grew national shrimp profits from $2.9 million in 1973 to $90 million in 1986 to $590 million in 2012. As in most cases with developing countries, the revenue was used to service foreign debt, develop military assets, and line the pockets of government officials. As for the shrimp serfs, they have been impoverished: less free, more dependent and less able to feed themselves than before. To make matters worse, studies show that “villages shielded from the storm surge by mangrove forests experience significantly fewer deaths” than villages which had their protections removed or damaged.
Under public pressure in 2013 the World Bank loaned Bangladesh $400 million to try and reverse the ecological damage. In other words, the World Bank will be paid a fee in the form of interest to try and fix the problem it created in the first place. Meanwhile, the World Bank has loaned billions to countries everywhere from Ecuador to Morocco to India to replace traditional farming with shrimp production.
The World Bank claims that Bangladesh is “a remarkable story of poverty reduction and development.” On paper, victory is declared: countries like Bangladesh tend to show economic growth over time as their exports rise to meet their imports. But exports earnings flow mostly to the ruling elite and international creditors. After 10 structural adjustments, Bangladesh’s debt pile has grown exponentially from $145 million in 1972 to an all-time high of $95.9 billion in 2022. The country is currently facing yet another balance of payments crisis, and just this month agreed to take its 11th loan from the IMF, this time a $4.5 billion bailout, in exchange for more adjustment. The Bank and the Fund claim to want to help poor countries, but the clear outcome after more than 50 years of their policies is that nations like Bangladesh are more dependent and indebted than ever before.
During the 1990s in the wake of the Third World Debt Crisis, there was a swell of global public scrutiny on the Bank and Fund: critical studies, street protests, and a widespread, bipartisan belief (even in the halls of the U.S. Congress) that these institutions ranged from wasteful to destructive. But this sentiment and focus has largely faded. Today, the Bank and the Fund manage to keep a low profile in the press. When they do come up, they tend to be written off as increasingly irrelevant, accepted as problematic yet necessary, or even welcomed as helpful.
The reality is that these organizations have impoverished and endangered millions of people; enriched dictators and kleptocrats; and cast human rights aside to generate a multi-trillion-dollar flow of food, natural resources and cheap labor from poor countries to rich ones. Their behavior in countries like Bangladesh is no mistake or exception: it is their preferred way of doing business.
II. Inside The World Bank And IMF
“Let us remember that the main purpose of aid is not to help other nations but to help ourselves.”
The IMF is the world’s international lender of last resort, and the World Bank is the world’s largest development bank. Their work is carried out on behalf of their major creditors, which historically have been the United States, the United Kingdom, France, Germany and Japan.
The sister organizations — physically joined together at their headquarters in Washington, DC — were created at the Bretton Woods Conference in New Hampshire in 1944 as two pillars of the new U.S.-led global monetary order. Per tradition, the World Bank is headed by an American, and the IMF by a European.
Their initial purpose was to help rebuild war-torn Europe and Japan, with the Bank to focus on specific loans for development projects, and the Fund to address balance-of-payment issues via “bailouts” to keep trade flowing even if countries couldn’t afford more imports.
Nations are required to join the IMF in order to get access to the “perks” of the World Bank. Today, there are 190 member states: each one deposited a mix of their own currency plus “harder currency” (typically dollars, European currencies or gold) when they joined, creating a pool of reserves.
When members encounter chronic balance-of-payments issues, and cannot make loan repayments, the Fund offers them credit from the pool at varying multiples of what they initially deposited, on increasingly expensive terms.
The Fund is technically a supranational central bank, as since 1969 it has minted its own currency: the special drawing rights (SDR), whose value is based on a basket of the world’s top currencies. Today, the SDR is backed by 45% dollars, 29% euros, 12% yuan, 7% yen and 7% pounds. The total lending capacity of the IMF today stands at $1 trillion.
Between 1960 and 2008, the Fund largely focused on assisting developing countries with short-term, high-interest-rate loans. Because the currencies issued by developing countries are not freely convertible, they usually cannot be redeemed for goods or services abroad. Developing states must instead earn hard currency through exports. Unlike the U.S., which can simply issue the global reserve currency, countries like Sri Lanka and Mozambique often run out of money. At that point, most governments — especially authoritarian ones — prefer the quick fix of borrowing against their country’s future from the Fund.
As for the Bank, it states that its job is to provide credit to developing countries to “reduce poverty, increase shared prosperity, and promote sustainable development.” The Bank itself is split up into five parts, ranging from the International Bank for Reconstruction and Development (IBRD), which focuses on more traditional “hard” loans to the larger developing countries (think Brazil or India) to the International Development Association (IDA), which focuses on “soft” interest-free loans with long grace periods for the poorest countries. The IBRD makes money in part through the Cantillon effect: by borrowing on favorable terms from its creditors and private market participants who have more direct access to cheaper capital and then loaning out those funds at higher terms to poor countries who lack that access.
World Bank loans traditionally are project- or sector-specific, and have focused on facilitating the raw export of commodities (for example: financing the roads, tunnels, dams, and ports needed to get minerals out of the ground and into international markets) and on transforming traditional consumption agriculture into industrial agriculture or aquaculture so that countries could export more food and goods to the West.
Bank and Fund member states do not have voting power based on their population. Rather, influence was crafted seven decades ago to favor the U.S., Europe and Japan over the rest of the world. That dominance has only weakened mildly in recent years.
Today the U.S. still owns far and away the largest vote share, at 15.6% of the Bank and 16.5% of the Fund, enough to single-handedly veto any major decision, which requires 85% of votes at either institution. Japan owns 7.35% of the votes at the Bank and 6.14% at the Fund; Germany 4.21% and 5.31%; France and the U.K. 3.87% and 4.03% each; and Italy 2.49% and 3.02%.
By contrast, India with its 1.4 billion people only has 3.04% of the Bank’s vote and just 2.63% at the Fund: less power than its former colonial master despite having a population 20 times bigger. China’s 1.4 billion people get 5.7% at the Bank and 6.08% at the fund, roughly the same share as the Netherlands plus Canada and Australia. Brazil and Nigeria, the largest countries in Latin America and Africa, have about the same amount of sway as Italy, a former imperial power in full decline.
Tiny Switzerland with just 8.6 million people has 1.47% of votes at the World Bank, and 1.17% of votes at the IMF: roughly the same share as Pakistan, Indonesia, Bangladesh, and Ethiopia combined, despite having 90 times fewer people.
Population vs. IMF voting rights
These voting shares are supposed to approximate each country’s share of the world economy, but their imperial-era structure helps color how decisions are made. Sixty-five years after decolonization, the industrial powers led by the U.S. continue to have more or less total control over global trade and lending, while the poorest countries have in effect no voice at all.
The G-5 (the U.S., Japan, Germany, the U.K. and France) dominate the IMF executive board, even though they make up a relatively small percent of the world’s population. The G-10 plus Ireland, Australia, and Korea make up more than 50% of the votes, meaning that with a little pressure on its allies, the U.S. can make determinations even on specific loan decisions, which require a majority.
To complement the IMF’s trillion-dollar lending power, the World Bank group claims more than $350 billion in outstanding loans across more than 150 countries. This credit has spiked over the past two years, as the sister organizations have lent hundreds of billions of dollars to governments who locked down their economies in response to the COVID-19 pandemic.
Over the past few months, the Bank and Fund began orchestrating billion-dollar deals to “save” governments endangered by the U.S. Federal Reserve’s aggressive interest rate hikes. These clients are often human rights violators who borrow without permission from their citizens, who will ultimately be the ones responsible for paying back principal plus interest on the loans. The IMF is currently bailing out Egyptian dictator Abdel Fattah El-Sisi — responsible for the largest massacre of protestors since Tiananmen Square — for example, with $3 billion. Meanwhile, the World Bank was, during the past year, disbursing a $300 million loan to an Ethiopian government that was committing genocide in Tigray.
The cumulative effect of Bank and Fund policies is much larger than the paper amount of their loans, as their lending drives bilateral assistance. It is estimated that “every dollar provided to the Third World by the IMF unlocks a further four to seven dollars of new loans and refinancing from commercial banks and rich-country governments.” Similarly, if the Bank and Fund refuse to lend to a particular country, the rest of the world typically follows suit.
It is hard to overstate the vast impact the Bank and Fund have had across developing nations, especially in their formative decades after World War II. By 1990 and the end of the Cold War, the IMF had extended credit to 41 countries in Africa, 28 countries in Latin America, 20 countries in Asia, eight countries in the Middle East and five countries in Europe, affecting 3 billion people, or what was then two-thirds of the global population. The World Bank has extended loans to more than 160 countries. They remain the most important international financial institutions on the planet.
Today, financial headlines are filled with stories about IMF visits to countries like Sri Lanka and Ghana. The outcome is that the Fund loans billions of dollars to countries in crisis in exchange for what is known as structural adjustment.
In a structural-adjustment loan, borrowers not only have to pay back principal plus interest: they also have to agree to change their economies according to Bank and Fund demands. These requirements almost always stipulate that clients maximize exports at the expense of domestic consumption.
During research for this essay, the author learned much from the work of the development scholar Cheryl Payer, who wrote landmark books and papers on the influence of the Bank and Fund in the 1970s, 1980s and 1990s. This author may disagree with Payer’s “solutions” — which, like those of most critics of the Bank and Fund, tend to be socialist — but many observations she makes about the global economy hold true regardless of ideology.
“It is an explicit and basic aim of IMF programs,” she wrote, “to discourage local consumption in order to free resources for export.”
This point cannot be stressed enough.
The official narrative is that the Bank and Fund were designed to “foster sustainable economic growth, promote higher standards of living, and reduce poverty.” But the roads and dams the Bank builds are not designed to help improve transport and electricity for locals, but rather to make it easy for multinational corporations to extract wealth. And the bailouts the IMF provides aren’t to “save” a country from bankruptcy — which would probably be the best thing for it in many cases — but rather to allow it to pay its debt with even more debt, so that the original loan doesn’t turn into a hole on a Western bank’s balance sheet.
In her books on the Bank and Fund, Payer describes how the institutions claim that their loan conditionality enables borrowing countries “to achieve a healthier balance of trade and payments.” But the real purpose, she says, is “to bribe the governments to prevent them from making the economic changes which would make them more independent and self-supporting.” When countries pay back their structural adjustment loans, debt service is prioritized, and domestic spending is to be “adjusted” downwards.
IMF loans were often allocated through a mechanism called the “stand-by agreement,” a line of credit that released funds only as the borrowing government claimed to achieve certain objectives. From Jakarta to Lagos to Buenos Aires, IMF staff would fly in (always first or business class) to meet undemocratic rulers and offer them millions or billions of dollars in exchange for following their economic playbook.
Abolition or reduction of foreign exchange and import controls
Shrinking of domestic bank credit
Higher interest rates
Increased taxes
An end to consumer subsidies on food and energy
Wage ceilings
Restrictions on government spending, especially in healthcare and education
Favorable legal conditions and incentives for multinational corporations
Selling off state enterprises and claims on natural resources at fire sale prices
The World Bank had its own playbook, too. Payer gives examples:
The opening up of previously remote regions through transportation and telecommunications investments
Aiding multinational corporations in the mining sector
Insisting on production for export
Pressuring borrowers to improve legal privileges for the tax liabilities of foreign investment
Opposing minimum wage laws and trade union activity
Ending protections for locally-owned businesses
Financing projects that appropriate land, water and forests from poor people and hand them to multinational corporations
Shrinking manufacturing and food production at the expense of the export of natural resources and raw goods
Third World governments have historically been forced to agree to a mix of these policies — sometimes known as the “Washington Consensus” — in order to trigger the ongoing release of Bank and Fund loans.
The former colonial powers tend to focus their “development” lending on former colonies or areas of influence: France in West Africa, Japan in Indonesia, Britain in East Africa and South Asia and the U.S. in Latin America. A notable example is the CFA zone, where 180 million people in 15 African countries are still forced to use a French colonial currency. At the suggestion of the IMF, in 1994 France devalued the CFA by 50%, devastating the savings and purchasing power of tens of millions of people living in countries ranging from Senegal to Ivory Coast to Gabon, all to make raw goods exports more competitive.
The outcome of Bank and Fund policies on the Third World has been remarkably similar to what was experienced under traditional imperialism: wage deflation, a loss of autonomy and agricultural dependency. The big difference is that in the new system, the sword and the gun have been replaced by weaponized debt.
Over the last 30 years, structural adjustment has intensified with regard to the average number of conditions in loans extended by the Bank and Fund. Before 1980, the Bank did not generally make structural adjustment loans, most everything was project- or sector-specific. But since then, “spend this however you want” bailout loans with economic quid pro quos have become a growing part of Bank policy. For the IMF, they are its lifeblood.
For example, when the IMF bailed out South Korea and Indonesia with $57 billion and $43 billion packages during the 1997 Asian Financial Crisis, it imposed heavy conditionality. Borrowers had to sign agreements that “looked more like Christmas trees than contracts, with anywhere from 50 to 80 detailed conditions covering everything from the deregulation of garlic monopolies to taxes on cattle feed and new environmental laws,” according to political scientist Mark S. Copelvitch.
A 2014 analysis showed that the IMF had attached, on average, 20 conditions to each loan it gave out in the previous two years, a historic increase. Countries like Jamaica, Greece and Cyprus have borrowed in recent years with an average of 35 conditions each. It is worth noting that Bank and Fund conditions have never included protections on free speech or human rights, or restrictions on military spending or police violence.
An added twist of Bank and Fund policy is what is known as the “double loan”: money is lent to build, for example, a hydroelectric dam, but most if not all of the money gets paid to Western companies. So, the Third World taxpayer is saddled with principal and interest, and the North gets paid back double.
The context for the double loan is that dominant states extend credit through the Bank and Fund to former colonies, where local rulers often spend the new cash directly back to multinational companies who profit from advising, construction or import services. The ensuing and required currency devaluation, wage controls and bank credit tightening imposed by Bank and Fund structural adjustment disadvantage local entrepreneurs who are stuck in a collapsing and isolated fiat system, and benefit multinationals who are dollar, euro or yen native.
Another key source for this author has been the masterful book “The Lords of Poverty” by historian Graham Hancock, written to reflect on the first five decades of Bank and Fund policy and foreign assistance in general.
“The World Bank,” Hancock writes, “is the first to admit that out of every $10 that it receives, around $7 are in fact spent on goods and services from the rich industrialized countries.”
In the 1980s, when Bank funding was expanding rapidly around the world, he noted that “for every US tax dollar contributed, 82 cents are immediately returned to American businesses in the form of purchase orders.” This dynamic applies not just to loans but also to aid. For example, when the U.S. or Germany sends a rescue plane to a country in crisis, the cost of transport, food, medicine and staff salaries are added to what is known as ODA, or “official development assistance.” On the books, it looks like aid and assistance. But most of the money is paid right back to Western companies and not invested locally.
Reflecting on the Third World Debt Crisis of the 1980s, Hancock noted that “70 cents out of every dollar of American assistance never actually left the United States.” The U.K., for its part, spent a whopping 80% of its aid during that time directly on British goods and services.
“One year,” Hancock writes, “British tax-payers provided multilateral aid agencies with 495 million pounds; in the same year, however, British firms received contracts worth 616 million pounds.” Hancock said that multilateral agencies could be “relied upon to purchase British goods and services with a value equivalent to 120% of Britain’s total multilateral contribution.”
One starts to see how the “aid and assistance” we tend to think of as charitable is really quite the opposite.
And as Hancock points out, foreign-aid budgets always increase no matter the outcome. Just as progress is evidence that the aid is working, a “lack of progress is evidence that the dosage has been insufficient and must be increased.”
Some development advocates, he writes, “argue that it would be inexpedient to deny aid to the speedy (those who advance); others, that it would be cruel to deny it to the needy (those who stagnate). Aid is thus like champagne: in success you deserve it, in failure you need it.”
IV. The Debt Trap
“The concept of the Third World or the South and the policy of official aid are inseparable. They are two sides of the same coin. The Third World is the creation of the foreign aid: without foreign aid there is no Third World.”
According to the World Bank, its objective is “to help raise living standards in developing countries by channeling financial resources from developed countries to the developing world.”
But what if the reality is the opposite?
At first, beginning in the 1960s, there was an enormous flow of resources from rich countries to poor ones. This was ostensibly done to help them develop. Payer writes that it was long considered “natural” for capital to “flow in one direction only from the developed industrial economies to the Third World.”
The life cycle of a World Bank loan: positive, then deeply negative cash flows for the borrower country
But, as she reminds us, “at some point the borrower has to pay more to his creditor than he has received from the creditor and over the life of the loan this excess is much higher than the amount that was originally borrowed.”
In global economics, this point happened in 1982, when the flow of resources permanently reversed. Ever since, there has been an annual net flow of funds from poor countries to rich ones. This began as an average of $30 billion per year flowing from South to North in the mid-to-late 1980s, and is today in the range of trillions of dollars per year. Between 1970 and 2007 — from the end of the gold standard to the Great Financial Crisis — the total debt service paid by poor countries to rich ones was $7.15 trillion.
Net resource transfers from developing countries: increasingly negative since 1982
To give an example of what this might look like in a given year, in 2012 developing countries received $1.3 trillion, including all income, aid and investment. But that same year, more than $3.3 trillion flowed out. In other words, according to anthropologist Jason Hickel, “developing countries sent $2 trillion more to the rest of the world than they received.”
When all the flows were added up from 1960 to 2017, a grim truth emerged: $62 trillion was drained out of the developing world, the equivalent of 620 Marshall Plans in today’s dollars.
The IMF and World Bank were supposed to fix balance of payments issues, and help poor countries grow stronger and more sustainable. The evidence has been the direct opposite.
“For every $1 of aid that developing countries receive,” Hickel writes, “they lose $24 in net outflows.” Instead of ending exploitation and unequal exchange, studies show that structural adjustment policies grew them in a massive way.
Since 1970, the external public debt of developing countries has increased from $46 billion to $8.7 trillion. In the past 50 years, countries like India and the Philippines and the Congo now owe their former colonial masters 189 times the amount they owed in 1970. They have paid $4.2 trillion on interest payments alone since 1980.
The exponential rise in developing country debt
Even Payer — whose 1974 book “The Debt Trap” used economic flow data to show how the IMF ensnared poor countries by encouraging them to borrow more than they could possibly pay back — would be shocked at the size of today’s debt trap.
Her observation that “the average citizen of the US or Europe may not be aware of this enormous drain in capital from parts of the world they think of as being pitifully poor” still rings true today. To this author’s own shame, he did not know about the true nature of the global flow of funds and simply assumed that rich countries subsidized poor ones before embarking on the research for this project. The end result is a literal Ponzi scheme, where by the 1970s, Third World debt was so big that it was only possible to service with new debt. It has been the same ever since.
Many critics of the Bank and Fund assume that these institutions are working with their heart in the right place, and when they do fail, it is because of mistakes, waste or mismanagement.
It is the thesis of this essay that this is not true, and that the foundational goals of the Fund and Bank are not to fix poverty but rather to enrich creditor nations at the expense of poor ones.
This author is simply not willing to believe that a permanent flow of funds from poor countries to rich ones since 1982 is a “mistake.” The reader may dispute that the arrangement is intentional, and rather may believe it is an unconscious structural outcome. The difference hardly matters to the billions of people the Bank and Fund have impoverished.
V. Replacing the Colonial Resource Drain
“I am so tired of waiting. Aren’t you, for the world to become good and beautiful and kind? Let us take a knife and cut the world in two — and see what worms are eating at the rind.”
By the end of the 1950s, Europe and Japan had largely recovered from war and resumed significant industrial growth, while Third World countries ran out of funds. Despite having healthy balance sheets in the 1940s and early 1950s, poor, raw-material-exporting countries ran into balance-of-payments issues as the value of their commodities tanked in the wake of the Korean War. This is when the debt trap began, and when the Bank and Fund started the floodgates of what would end up becoming trillions of dollars of lending.
This era also marked the official end of colonialism, as European empires drew back from their imperial possessions. The establishment assumption in international development is that the economic success of nations is due “primarily to their internal, domestic conditions. High-income countries have achieved economic success,” the theory goes, “because of good governance, strong institutions and free markets. Lower-income countries have failed to develop because they lack these things, or because they suffer from corruption, red tape and inefficiency.”
This is certainly true. But another major reason why rich countries are rich and poor countries are poor is that the former looted the latter for hundreds of years during the colonial period.
“Britain’s industrial revolution,” Jason Hickel writes, “depended in large part on cotton, which was grown on land forcibly appropriated from Indigenous Americans, with labor appropriated from enslaved Africans. Other crucial inputs required by British manufacturers — hemp, timber, iron, grain — were produced using forced labor on serf estates in Russia and Eastern Europe. Meanwhile, British extraction from India and other colonies funded more than half the country’s domestic budget, paying for roads, public buildings, the welfare state — all the markets of modern development — while enabling the purchase of material inputs necessary for industrialization.”
The theft dynamic was described by Utsa and Prabhat Patnaik in their book “Capital And Imperialism”: colonial powers like the British empire would use violence to extract raw materials from weak countries, creating a “colonial drain” of capital that boosted and subsidized life in London, Paris and Berlin. Industrial nations would transform these raw materials into manufactured goods, and sell them back to weaker nations, profiting massively while also crowding out local production. And — critically — they would keep inflation at home down by suppressing wages in the colonial territories. Either through outright slavery or through paying well below the global market rate.
As the colonial system began to falter, the Western financial world faced a crisis. The Patnaiks argue that the Great Depression was a result not simply of changes in Western monetary policy, but also of the colonial drain slowing down. The reasoning is simple: rich countries had built a conveyor belt of resources flowing from poor countries, and when the belt broke, so did everything else. Between the 1920s and 1960s, political colonialism became virtually extinct. Britain, the U.S., Germany, France, Japan, the Netherlands, Belgium and other empires were forced to give up control over more than half of the world’s territory and resources.
As the Patnaiks write, imperialism is “an arrangement for imposing income deflation on the Third World population in order to get their primary commodities without running into the problem of increasing supply price.”
Post 1960, this became the new function for the World Bank and IMF: recreating the colonial drain from poor countries to rich countries that was once maintained by straightforward imperialism.
Post-colonial drain from the Global South to the Global North
Officials in the U.S., Europe and Japan wanted to achieve “internal equilibrium” — in other words, full employment. But they realized they could not do this via subsidy inside an isolated system, or else inflation would run rampant. To achieve their goal would require external input from poorer countries. The extra surplus value extracted by the core from workers in the periphery is known as “imperialist rent.” If industrial countries could get cheaper materials and labor, and then sell the finished goods back at a profit, they could inch closer to the technocrat dream economy. And they got their wish: as of 2019, wages paid to workers in the developing world were 20% the level of wages paid to workers in the developed world.
As an example of how the Bank recreated the colonial drain dynamic, Payer gives the classic case of 1960s Mauritania in northwest Africa. A mining project called MIFERMA was signed by French occupiers before the colony became independent. The deal eventually became “just an old-fashioned enclave project: a city in a desert and a railroad leading to the ocean,” as the infrastructure was solely focused on spiriting minerals away to international markets. In 1969, when the mine accounted for 30% of Mauritania’s GDP and 75% of its exports, 72% of the income was sent abroad, and “practically all the income distributed locally to employees evaporated in imports.” When the miners protested against the neocolonial arrangement, security forces savagely put them down.
Geography of the drain from the Global South from 1960 to 2017
MIFERMA is a stereotypical example of the kind of “development” that would be imposed on the Third World everywhere from the Dominican Republic to Madagascar to Cambodia. And of these projects rapidly expanded in the 1970s, thanks to the petrodollar system.
Post-1973, Arab OPEC countries with enormous surpluses from skyrocketing oil prices sank their profits into deposits and treasuries in Western banks, which needed a place to lend out their growing resources. Military dictators across Latin America, Africa and Asia made great targets: they had high time preferences and were happy to borrow against future generations.
Helping expedite loan growth was the “IMF put”: private banks started to believe (correctly) that the IMF would bail out countries if they defaulted, protecting their investments. Moreover, interest rates in the mid-1970s were often in negative real territory, further encouraging borrowers. This — combined with World Bank president Robert McNamara’s insistence that assistance expand dramatically — resulted in a debt frenzy. U.S. banks, for example, increased their Third World loan portfolio by 300% to $450 billion between 1978 and 1982.
The problem was that these loans were in large part floating interest rate agreements, and a few years later, those rates exploded as the U.S. Federal Reserve raised the global cost of capital close to 20%. The growing debt burden combined with the 1979 oil price shock and the ensuing global collapse in the price of commodities that power the value of developing country exports paved the way for the Third World Debt Crisis. To make matters worse, very little of the money borrowed by governments during the debt frenzy was actually invested in the average citizen.
Third World debt service over time
In their aptly named book “Debt Squads,” investigative journalists Sue Branford and Bernardo Kucinski explain that between 1976 and 1981, Latin governments (of which 18 of 21 were dictatorships) borrowed $272.9 billion. Out of that, 91.6% was spent on debt servicing, capital flight and building up regime reserves. Only 8.4% was used on domestic investment, and even out of that, much was wasted.
Brazilian civil society advocate Carlos Ayuda vividly described the effect of the petrodollar-fueled drain on his own country:
“The military dictatorship used the loans to invest in huge infrastructure projects — particularly energy projects… the idea behind creating an enormous hydroelectric dam and plant in the middle of the Amazon, for example, was to produce aluminum for export to the North… the government took out huge loans and invested billions of dollars in building the Tucuruí dam in the late 1970s, destroying native forests and removing massive numbers of native peoples and poor rural people that had lived there for generations. The government would have razed the forests, but the deadlines were so short they used Agent Orange to defoliate the region and then submerged the leafless tree trunks underwater… the hydroelectric plant’s energy [was then] sold at $13-20 per megawatt when the actual price of production was $48. So the taxpayers provided subsidies, financing cheap energy for transnational corporations to sell our aluminum in the international market.”
In other words, the Brazilian people paid foreign creditors for the service of destroying their environment, displacing the masses and selling their resources.
Today the drain from low- and middle-income countries is staggering. In 2015, it totaled 10.1 billion tons of raw materials and 182 million person-years of labor: 50% of all goods and 28% of all labor used that year by high-income countries.
VI. A Dance With Dictators
“He may be a son of a bitch, but he’s our son of a bitch.”
Of course, it takes two sides to finalize a loan from the Bank or Fund. The problem is that the borrower is typically an unelected or unaccountable leader, who makes the decision without consulting with and without a popular mandate from their citizens.
As Payer writes in “The Debt Trap,” “IMF programs are politically unpopular, for the very good concrete reasons that they hurt local business and depress the real income of the electorate. A government which attempts to carry out the conditions in its Letter of Intent to the IMF is likely to find itself voted out of office.”
Hence, the IMF prefers to work with undemocratic clients who can more easily dismiss troublesome judges and put down street protests. According to Payer, the military coups in Brazil in 1964, Turkey in 1960, Indonesia in 1966, Argentina in 1966 and the Philippines in 1972 were examples of IMF-opposed leaders being forcibly replaced by IMF-friendly ones. Even if the Fund wasn’t directly involved in the coup, in each of these cases, it arrived enthusiastically a few days, weeks or months later to help the new regime implement structural adjustment.
The Bank and Fund share a willingness to support abusive governments. Perhaps surprisingly, it was the Bank that started the tradition. According to development researcher Kevin Danaher, “the Bank’s sad record of supporting military regimes and governments that openly violated human rights began on August 7, 1947, with a $195 million reconstruction loan to the Netherlands. Seventeen days before the Bank approved the loan, the Netherlands had unleashed a war against anti-colonialist nationalist in its huge overseas empire in the East Indies, which had already declared its independence as the Republic of Indonesia.”
“The Dutch,” Danaher writes, “sent 145,000 troops (from a nation with only 10 million inhabitants at the time, economically struggling at 90% of 1939 production) and launched a total economic blockade of nationalist-held areas, causing considerable hunger and health problems among Indonesia’s 70 million inhabitants.”
In its first few decades the Bank funded many such colonial schemes, including $28 million for apartheid Rhodesia in 1952, as well as loans to Australia, the United Kingdom, and Belgium to “develop” colonial possessions in Papua New Guinea, Kenya and the Belgian Congo.
In 1966, the Bank directly defied the United Nations, “continuing to lend money to South Africa and Portugal despite resolutions of the General Assembly calling on all UN-affiliated agencies to cease financial support for both countries,” according to Danaher.
Danaher writes that “Portugal’s colonial domination of Angola and Mozambique and South Africa’s apartheid were flagrant violations of the UN charter. But the Bank argued that Article IV, Section 10 of its Charter which prohibits interference in the political affairs of any member, legally obliged it to disregard the UN resolutions. As a result the Bank approved loans of $10 million to Portugal and $20 million to South Africa after the UN resolution was passed.”
Sometimes, the Bank’s preference for tyranny was stark: it cut off lending to the democratically-elected Allende government in Chile in the early 1970s, but shortly after began to lend huge quantities of cash to Ceausescu’s Romania, one of the world’s worst police states. This is also an example of how the Bank and Fund, contrary to popular belief, didn’t simply lend along Cold War ideological lines: for every right-wing Augusto Pinochet Ugarte or Jorge Rafael Videla client, there was a left-wing Josip Broz Tito or Julius Nyerere.
In 1979, Danaher notes, 15 of the world’s most repressive governments would receive a full third of all Bank loans. This even after the U.S. Congress and the Carter administration had stopped aid to four of the 15 — Argentina, Chile, Uruguay and Ethiopia — for “flagrant human rights violations.” Just a few years later, in El Salvador, the IMF made a $43 million loan to the military dictatorship, just a few months after its forces committed the largest massacre in Cold War-era Latin America by annihilating the village of El Mozote.
There were several books written about the Bank and the Fund in 1994, timed as 50-year retrospectives on the Bretton Woods institutions. “Perpetuating Poverty” by Ian Vàsquez and Doug Bandow is one of those studies, and is a particularly valuable one as it provides a Libertarian analysis. Most critical studies of the Bank and Fund are from the left: but the Cato Institute’s Vásquez and Bandow saw many of the same problems.
“The Fund underwrites any government,” they write, “however venal and brutal… China owed the Fund $600 million as of the end of 1989; in January 1990, just a few months after the blood had dried in Beijing’s Tiananmen Square, the IMF held a seminar on monetary policy in the city.”
Vásquez and Bandow mention other tyrannical clients ranging from military Burma, to Pinochet’s Chile, Laos, Nicaragua under Anastasio Somoza Debayle and the Sandinistas, Syria, and Vietnam.
“The IMF,” they say, “has rarely met a dictatorship that it did not like.”
Vásquez and Bandow detail the Bank’s relationship with the Marxist-Leninist Mengistu Haile Mariam regime in Ethiopia, where it provided for as much as 16% of the government’s annual budget while it had one of the worst human rights records in the world. The Bank’s credit arrived just as Mengistu’s forces were “herding people into concentration camps and collective farms.” They also point out how the Bank gave the Sudanese regime $16 million while it was driving 750,000 refugees out of Khartoum into the desert, and how it gave hundreds of millions of dollars to Iran — a brutal theocratic dictatorship — and Mozambique, whose security forces were infamous for torture, rape and summary executions.
In his 2011 book “Defeating Dictators,” the celebrated Ghanaian development economist George Ayittey detailed a long list of “aid-receiving autocrats”: Paul Biya, Idriss Déby, Lansana Conté, Paul Kagame, Yoweri Museveni, Hun Sen, Islam Karimov, Nursultan Nazarbayev and Emomali Rahmon. He pointed out that the Fund had dispensed $75 billion to these nine tyrants alone.
In 2014, a report was released by the International Consortium of Investigative Journalists, alleging that the Ethiopian government had used part of a $2 billion Bank loan to forcibly relocate 37,883 indigenous Anuak families. This was 60% of the country’s entire Gambella province. Soldiers “beat, raped, and killed” Anuak who refused to leave their homes. Atrocities were so bad that South Sudan granted refugee status to Anuaks streaming in from neighboring Ethiopia. A Human Rights Watch report said that the stolen land was then “leased by the government to investors” and that the Bank’s money was “used to pay the salaries of government officials who helped carry out the evictions.” The Bank approved new funding for this “villagization” program even after allegations of mass human rights violations emerged.
Mobutu Sese Soko and Richard Nixon at the White House in 1973
It would be a mistake to leave Mobutu Sese Soko’s Zaire out of this essay. The recipient of billions of dollars of Bank and Fund credit during his bloody 32-year reign, Mobutu pocketed 30% of incoming aid and assistance and let his people starve. He complied with 11 IMF structural adjustments: during one in 1984, 46,000 public school teachers were fired and the national currency was devalued by 80%. Mobutu called this austerity “a bitter pill which we have no alternative but to swallow,” but didn’t sell any of his 51 Mercedes, any of his 11 chateaus in Belgium or France, or even his Boeing 747 or 16th century Spanish castle.
Per capita income declined in each year of his rule on average by 2.2%, leaving more than 80% of the population in absolute poverty. Children routinely died before the age of five, and swollen-belly syndrome was rampant. It is estimated that Mobutu personally stole $5 billion, and presided over another $12 billion in capital flight, which together would have been more than enough to wipe the country’s $14 billion debt clean at the time of his ouster. He looted and terrorized his people, and could not have done it without the Bank and Fund, which continued to bail him out even though it was clear he would never repay his debts.
That all said, the true poster boy for the Bank and Fund’s affection for dictators might be Ferdinand Marcos. In 1966, when Marcos came to power, the Philippines was the second-most prosperous country in Asia, and the country’s foreign debt stood at roughly $500 million. By the time Marcos was removed in 1986, the debt stood at $28.1 billion.
As Graham Hancock writes in “Lords Of Poverty,” most of these loans “had been contracted to pay for extravagant development schemes which, although irrelevant to the poor, had pandered to the enormous ego of the head of state… a painstaking two-year investigation established beyond serious dispute that he had personally expropriated and sent out of the Philippines more than $10 billion. Much of this money — which of course, should have been at the disposal of the Philippine state and people — had disappeared forever in Swiss bank accounts.”
“$100 million,” Hancock writes, “was paid for the art collection for Imelda Marcos… her tastes were eclectic and included six Old Masters purchased from the Knodeler Gallery in New York for $5 million, a Francis Bacon canvas supplied by the Marlborough Gallery in London, and a Michelangelo, ‘Madonna and Child’ bought from Mario Bellini in Florence for $3.5 million.”
“During the last decade of the Marcos regime,” he says, “while valuable art treasuries were being hung on penthouse walls in Manhattan and Paris, the Philippines had lower nutritional standards than any other nation in Asia with the exception of war-torn Cambodia.”
To contain popular unrest, Hancock writes that Marcos banned strikes and “union organizing was outlawed in all key industries and in agriculture. Thousands of Filipinos were imprisoned for opposing the dictatorship and many were tortured and killed. Meanwhile the country remained consistently listed among the top recipients of both US and World Bank development assistance.”
After the Filipino people pushed Marcos out, they still had to pay an annual sum of anywhere between 40% and 50% of the entire value of their exports “just to cover the interest on the foreign debts that Marcos incurred.”
One would think that after ousting Marcos, the Filipino people would not have to owe the debt he incurred on their behalf without consulting them. But that is not how it has worked in practice. In theory, this concept is called “odious debt” and was invented by the U.S. in 1898 when it repudiated Cuba’s debt after Spanish forces were ousted from the island.
American leaders determined that debts “incurred to subjugate a people or to colonize them” were not legitimate. But the Bank and Fund have never followed this precedent during their 75 years of operations. Ironically, the IMF has an article on its website suggesting that Somoza, Marcos, Apartheid South Africa, Haiti’s “Baby Doc” and Nigeria’s Sani Abacha all borrowed billions illegitimately, and that the debt should be written off for their victims, but this remains a suggestion unfollowed.
Technically and morally speaking, a large percentage of Third World debt should be considered “odious” and not owed anymore by the population should their dictator be forced out. After all, in most cases, the citizens paying back the loans didn’t elect their leader and didn’t choose to borrow the loans that they took out against their future.
In July 1987, the revolutionary leader Thomas Sankara gave a speech to the Organistion of African Unity (OAU) in Ethiopia, where he refused to pay the colonial debt of Burkina Faso, and encouraged other African nations to join him.
“We cannot pay,” he said, “because we are not responsible for this debt.”
Sankara famously boycotted the IMF and refused structural adjustment. Three months after his OAU speech, he was assassinated by Blaise Compaoré, who would install his own 27-year military regime that would receive four structural adjustment loans from the IMF and borrow dozens of times from the World Bank for various infrastructure and agriculture projects. Since Sankara’s death, few heads of state have been willing to take a stand to repudiate their debts.
Burkinese dictator Blaise Compaoré and IMF managing director Dominique Strauss-Kahn. Compaoré seized power after assassinating Thomas Sankara (who tried to refuse Western debt) and he went on to borrow billions from the Bank and Fund.
One big exception was Iraq: after the U.S. invasion and ouster of Saddam Hussein in 2003, American authorities managed to get some of the debt incurred by Hussein to be considered “odious” and forgiven. But this was a unique case: for the billions of people who suffered under colonialists or dictators, and have since been forced to pay their debts plus interest, they have not gotten this special treatment.
In recent years, the IMF has even acted as a counter-revolutionary force against democratic movements. In the 1990s, the Fund was widely criticized on the left and the right for helping to destabilize the former Soviet Union as it descended into economic chaos and congealed into Vladimir Putin’s dictatorship. In 2011, as the Arab Spring protests emerged across the Middle East, the Deauville Partnership with Arab Countries in Transition was formed and met in Paris.
Through this mechanism, the Bank and Fund led massive loan offers to Yemen, Tunisia, Egypt, Morocco and Jordan — “Arab countries in transition” — in exchange for structural adjustment. As a result, Tunisia’s foreign debt skyrocketed, triggering two new IMF loans, marking the first time that the country had borrowed from the Fund since 1988. The austerity measures paired with these loans forced the devaluation of the Tunisian dinar, which spiked prices. National protests broke out as the government continued to follow the Fund playbook with wage freezes, new taxes and “early retirement” in the public sector.
Twenty-nine-year-old protestor Warda Atig summed up the situation: “As long as Tunisia continues these deals with the IMF, we will continue our struggle,” she said. “We believe that the IMF and the interests of people are contradictory. An escape from submission to the IMF, which has brought Tunisia to its knees and strangled the economy, is a prerequisite to bring about any real change.”
VII. Creating Agricultural Dependence
“The idea that developing countries should feed themselves is an anachronism from a bygone era. They could better ensure their food security by relying on the U.S. agricultural products, which are available in most cases at lower cost.”
As a result of Bank and Fund policy, all across Latin America, Africa, the Middle East, and South and East Asia, countries which once grew their own food now import it from rich countries. Growing one’s own food is important, in retrospect, because in the post-1944 financial system, commodities are not priced with one’s local fiat currency: they are priced in the dollar.
Consider the price of wheat, which ranged between $200 and $300 between 1996 and 2006. It has since skyrocketed, peaking at nearly $1,100 in 2021. If your country grew its own wheat, it could weather the storm. If your country had to import wheat, your population risked starvation. This is one reason why countries like Pakistan, Sri Lanka, Egypt, Ghana and Bangladesh are all currently turning to the IMF for emergency loans.
Historically, where the Bank did give loans, they were mostly for “modern,” large-scale, mono-crop agriculture and for resource extraction: not for the development of local industry, manufacturing or consumption farming. Borrowers were encouraged to focus on raw materials exports (oil, minerals, coffee, cocoa, palm oil, tea, rubber, cotton, etc.), and then pushed to import finished goods, foodstuffs and the ingredients for modern agriculture like fertilizer, pesticides, tractors and irrigation machinery. The result is that societies like Morocco end up importing wheat and soybean oil instead of thriving on native couscous and olive oil, “fixed” to become dependent. Earnings were typically used not to benefit farmers, but to service foreign debt, purchase weapons, import luxury goods, fill Swiss bank accounts and put down dissent.
Consider some of the world’s poorest countries. As of 2020, after 50 years of Bank and Fund policy, Niger’s exports were 75% uranium; Mali’s 72% gold; Zambia’s 70% copper; Burundi’s 69% coffee; Malawi’s 55% tobacco; Togo’s 50% cotton; and on it goes. At times in past decades, these single exports supported virtually all of these countries’ hard currency earnings. This is not a natural state of affairs. These items are not mined or produced for local consumption, but for French nuclear plants, Chinese electronics, German supermarkets, British cigarette makers, and American clothing companies. In other words, the energy of the labor force of these nations has been engineered toward feeding and powering other civilizations, instead of nourishing and advancing their own.
Researcher Alicia Koren wrote about the typical agricultural impact of Bank policy in Costa Rica, where the country’s “structural adjustment called for earning more hard currency to pay off foreign debt; forcing farmers who traditionally grew beans, rice, and corn for domestic consumption to plant non-traditional agricultural exports such as ornamental plants, flowers, melons, strawberries, and red peppers… industries that exported their products were eligible for tariff and tax exemptions not available to domestic producers.”
“Meanwhile,” Koren wrote, “structural adjustment agreements removed support for domestic production… while the North pressured Southern nations to eliminate subsidies and ‘barriers to trade,’ Northern governments pumped billions of dollars into their own agricultural sectors, making it impossible for basic grains growers in the South to compete with the North’s highly subsidized agricultural industry.”
Koren extrapolated her Costa Rica analysis to make a broader point: “Structural adjustment agreements shift public spending subsidies from basic supplies, consumed mainly by the poor and middle classes, to luxury export crops produced for affluent foreigners.” Third World countries were not seen as body politics but as companies that needed to increase revenues and decrease expenditures.
The testimony of a former Jamaican official is especially telling: “We told the World Bank team that farmers could hardly afford credit, and that higher rates would put them out of business. The Bank told us in response that this means ‘The market is telling you that agriculture is not the way to go for Jamaica’ — they are saying we should give up farming altogether.”
“The World Bank and IMF,” the official said, “don’t have to worry about the farmers and local companies going out of business, or starvation wages or the social upheaval that will result. They simply assume that it is our job to keep our national security forces strong enough to suppress any uprising.”
Developing governments are stuck: faced with insurmountable debt, the only factor they really control in terms of increasing revenue is deflating wages. If they do this, they must provide basic food subsidies, or else they will be overthrown. And so the debt grows.
Even when developing countries try to produce their own food, they are crowded out by a centrally-planned global trade market. For example, one would think that the cheap labor in a place like West Africa would make it a better exporter of peanuts than the United States. But since Northern countries pay an estimated $1 billion in subsidies to their agriculture industries every single day, Southern countries often struggle to be competitive. What’s worse, 50 or 60 countries are often directed to focus on the very same crops, crowding each other out in the global marketplace. Rubber, palm oil, coffee, tea and cotton are Bank favorites, as the poor masses can’t eat them.
It is true that the Green Revolution has created more food for the planet, especially in China and East Asia. But despite advances in agricultural technology, much of these new yields go to exports, and vast swathes of the world remain chronically malnourished and dependent. To this day, for example, African nations import about 85% of their food. They pay more than $40 billion per year — a number estimated to reach $110 billion per year by 2025 — to buy from other parts of the world what they could grow themselves. Bank and Fund policy helped transform a continent of incredible agricultural riches into one reliant on the outside world to feed its people.
Reflecting on the results of this policy of dependency, Hancock challenges the widespread belief that the people of the Third World are “fundamentally helpless.”
“Victims of nameless crises, disasters, and catastrophes,” he writes, suffer from a perception that “they can do nothing unless we, the rich and powerful, intervene to save them from themselves.” But as evidenced by the fact that our “assistance” has only made them more dependent on us, Hancock rightfully unmasks the notion that “only we can save them” as “patronizing and profoundly fallacious.”
Far from playing the role of good samaritan, the Fund does not even follow the timeless human tradition, established more than 4,000 years ago by Hammurabi in ancient Babylon, of forgiving interest after natural disasters. In 1985, a devastating earthquake hit Mexico City, killing more than 5,000 people and causing $5 billion of damage. Fund staff — who claim to be saviors, helping to end poverty and save countries in crisis — arrived a few days later, demanding to be repaid.
VIII. You Can’t Eat Cotton
“Development prefers crops that can’t be eaten so the loans can be collected.”
The Togolese democracy advocate Farida Nabourema’s own personal and family experience tragically matches the big picture of the Bank and Fund laid out thus far.
The way she puts it, after the 1970s oil boom, loans were poured into developing nations like Togo, whose unaccountable rulers didn’t think twice about how they would repay the debt. Much of the money went into giant infrastructure projects that didn’t help the majority of the people. Much was embezzled and spent on pharaonic estates. Most of these countries, she says, were ruled by single party-states or families. Once interest rates started to hike, these governments could no longer pay their debts: the IMF started “taking over” by imposing austerity measures.
“These were new states that were very fragile,” Nabourema says in an interview for this article. “They needed to invest strongly in social infrastructure, just as the European states were allowed to do after World War II. But instead, we went from free healthcare and education one day, to situations the next where it became too costly for the average person to get even basic medicine.”
Regardless of what one thinks about state-subsidized medicine and schooling, eliminating it overnight was traumatic for poor countries. Bank and Fund officials, of course, have their own private healthcare solutions for their visits and their own private schools for their children whenever they have to live “in the field.”
Because of the forced cuts in public spending, Nabourema says, the state hospitals in Togo remain to this day in “complete decay.” Unlike the state-run, taxpayer-financed public hospitals in the capitals of former colonial powers in London and Paris, things are so bad in Togo’s capital Lomé that even water has to be prescribed.
“There was also,” Nabourema said, “reckless privatization of our public companies.” She explained how her father used to work at the Togolese steel agency. During privatization, the company was sold off to foreign actors for less than half of what the state built it for.
“It was basically a garage sale,” she said.
Nabourema says that a free market system and liberal reforms work well when all participants are on an equal playing field. But that is not the case in Togo, which is forced to play by different rules. No matter how much it opens up, it can’t change the strict policies of the U.S. and Europe, who aggressively subsidize their own industries and agriculture. Nabourema mentions how a subsidized influx of cheap used clothes from America, for example, ruined Togo’s local textile industry.
“These clothes from the West,” she said, “put entrepreneurs out of business and littered our beaches.”
The most horrible aspect, she said, is that the farmers — who made up 60% of the population in Togo in the 1980s — had their livelihoods turned upside down. The dictatorship needed hard currency to pay its debts, and could only do this by selling exports, so they began a massive campaign to sell cash crops. With the World Bank’s help, the regime invested heavily in cotton, so much so that it now dominates 50% of the country’s exports, destroying national food security.
In the formative years for countries like Togo, the Bank was the “largest single lender for agriculture.” Its strategy for fighting poverty was agricultural modernization: “massive transfers of capital, in the form of fertilizers, pesticides, earth-moving equipment, and expensive foreign consultants.”
Nabourema’s father was the one who revealed to her how imported fertilizers and tractors were diverted away from farmers growing consumption food, to farmers growing cash crops like cotton, coffee, cocoa and cashews. If someone was growing corn, sorghum or millet — the basic foodstuffs of the population — they didn’t get access.
“You can’t eat cotton,” Nabourema reminds us.
Over time, the political elite in countries like Togo and Benin (where the dictator was literally a cotton mogul) became the buyer of all the cash crops from all of the farms. They’d have a monopoly on purchases, Nabourema says, and would buy the crops for prices so low that the peasants would barely make any money. This entire system — called “sotoco” in Togo — was based on funding provided by the World Bank.
When farmers would protest, she said, they would get beaten or their farms would get burned to rubble. They could have just grown normal food and fed their families, like they had done for generations. But now they could not even afford the land: the political elite has been acquiring land at an outrageous rate, often through illegal means, jacking up the price.
As an example, Nabourema explains how the Togolese regime might seize 2,000 acres of land: unlike in a liberal democracy (like the one in France, which has built its civilization off the backs of countries like Togo), the judicial system is owned by the government, so there is no way to push back. So farmers, who used to be self-sovereign, are now forced to work as laborers on someone else’s land to provide cotton to rich countries far away. The most tragic irony, Nabourema says, is that cotton is overwhelmingly grown in the north of Togo, in the poorest part of the country.
“But when you go there,” she says, “you see it has made no one rich.”
Women bear the brunt of structural adjustment. The misogyny of the policy is “quite clear in Africa, where women are the major farmers and providers of fuel, wood, and water,” Danaher writes. And yet, a recent retrospective says, “the World Bank prefers to blame them for having too many children rather than reexamining its own policies.”
As Payer writes, for many of the world’s poor, they are poor “not because they have been left behind or ignored by their country’s progress, but because they are the victims of modernisation. Most have been crowded off the good farmland, or deprived of land altogether, by rich elites and local or foreign agribusiness. Their destitution has not ‘ruled them out’ of the development process; the development process has been the cause of their destitution.”
“Yet the Bank,” Payer says, “is still determined to transform the agricultural practices of small farmers. Bank policy statements make it clear that the real aim is integration of peasant land into the commercial sector through the production of a ‘marketable surplus’ of cash crops.”
Payer observed how, in the 1970s and 1980s, many small plotters still grew the bulk of their own food needs, and were not “dependent on the market for the near-totality of their sustenance, as ‘modern’ people were.” These people, however, were the target of the Bank’s policies, which transformed them into surplus producers, and “often enforced this transformation with authoritarian methods.”
In a testimony in front of U.S. Congress in the 1990s, George Ayittey remarked that “if Africa were able to feed itself, it could save nearly $15 billion it wastes on food imports. This figure may be compared with the $17 billion Africa received in foreign aid from all sources in 1997.”
In other words, if Africa grew its own food, it wouldn’t need foreign aid. But if that were to happen, then poor countries wouldn’t be buying billions of dollars of food per year from rich countries, whose economies would shrink as a result. So the West strongly resists any change.
IX. The Development Set
Excuse me, friends, I must catch my jet
I’m off to join the Development Set
My bags are packed, and I’ve had all my shots
I have traveller’s checks and pills for the trots!
The Development Set is bright and noble
Our thoughts are deep and our vision global
Although we move with the better classes
Our thoughts are always with the masses
In Sheraton Hotels in scattered nations
We damn multinational corporations
Injustice seems easy to protest
In such seething hotbeds of social rest.
We discuss malnutrition over steaks
And plan hunger talks during coffee breaks.
Whether Asian floods or African drought
We face each issue with open mouth.
And so begins “The Development Set,” a 1976 poem by Ross Coggins that hits at the heart of the paternalistic and unaccountable nature of the Bank and the Fund.
The World Bank pays high, tax-free salaries, with very generous benefits. IMF staff are paid even better, and traditionally were flown first or business class (depending on the distance), never economy. They stayed in five-star hotels, and even had a perk to get free upgrades onto the supersonic Concorde. Their salaries, unlike wages made by people living under structural adjustment, were not capped and always rose faster than the inflation rate.
Until the mid-1990s the janitors cleaning the World Bank headquarters in Washington — mostly immigrants who fled from countries that the Bank and Fund had “adjusted” — were not even allowed to unionize. In contrast, Christine Lagarde’s tax-free salary as head of the IMF was $467,940, plus an additional $83,760 allowance. Of course, during her term from 2011 to 2019, she oversaw a variety of structural adjustments on poor countries, where taxes on the most vulnerable were almost always raised.
Graham Hancock notes that redundancy payments at the World Bank in the 1980s “averaged a quarter of a million dollars per person.” When 700 executives lost their jobs in 1987, the money spent on their golden parachutes — $175 million — would have been enough, he notes, “to pay for a complete elementary school education for 63,000 children from poor families in Latin America or Africa.”
According to former World Bank head James Wolfensohn, from 1995 to 2005 there were more than 63,000 Bank projects in developing countries: the costs of “feasibility studies” and travel and lodging for experts from industrialized countries alone absorbed as much as 25% of the total aid.
Fifty years after the creation of the Bank and Fund, “90% of the $12 billion per year in technical assistance was still spent on foreign expertise.” That year, in 1994, George Ayittey noted that 80,000 Bank consultants worked on Africa alone, but that “less than .01%” were Africans.
Hancock writes that “the Bank, which puts more money into more schemes in more developing countries than any other institution, claims that ‘it seeks to meet the needs of the poorest people;’ but at no stage in what it refers to as the ‘project cycle’ does it actually take the time to ask the poor themselves how they perceive their needs… the poor are entirely left out of the decision-making progress — almost as if they don’t exist.”
Bank and Fund policy is forged in meetings in lavish hotels between people who will never have to live a day in poverty in their lives. As Joseph Stiglitz argues in his own criticism of the Bank and Fund, “modern high-tech warfare is designed to remove physical contact: dropping bombs from 50,000 feet ensures that one does not ‘feel’ what one does. Modern economic management is similar: from one’s luxury hotel, one can callously impose policies about which one would think twice if one knew the people whose lives one was destroying.”
Strikingly, Bank and Fund leaders are sometimes the very same people who drop the bombs. For example, Robert McNamara — probably the most transformative person in Bank history, famous for massively expanding its lending and sinking poor countries into inescapable debt — was first the CEO of the Ford corporation, before becoming U.S. defense secretary, where he sent 500,000 American troops to fight in Vietnam. After leaving the Bank, he went straight to the board of Royal Dutch Shell. A more recent World Bank head was Paul Wolfowitz, one of the key architects of the Iraq War.
The development set makes its decisions far away from the populations who end up feeling the impact, and they hide the details behind mountains of paperwork, reports and euphemistic jargon. Like the old British Colonial Office, the set conceals itself “like a cuttlefish, in a cloud of ink.”
The prolific and exhausting histories written by the set are hagiographies: the human experience is airbrushed out. A good example is a study called “Balance of Payments Adjustment, 1945 to 1986: The IMF Experience.” This author had the tedious experience of reading the entire tome. Benefits from colonialism are entirely ignored. The personal stories and human experiences of the people who suffered under Bank and Fund policy are elided. Hardship is buried under countless charts and statistics. These studies, which dominate the discourse, read as if their main priority is to avoid offending Bank or Fund staff. Sure, the tone implies that perhaps mistakes were made here or there, but the intentions of the Bank and Fund are good. They are here to help.
In one example from the aforementioned study, structural adjustment in Argentina in 1959 and 1960 is described as such: “While the measures had initially reduced the standard of living of a vast sector of the Argentine population, in relatively short time these measures had resulted in a favorable trade balance and balance of payments, an increase in foreign exchange reserves, a sharp reduction in the rate of increases in the cost of living, a stable exchange rate, and increased domestic and foreign investment.”
In layman’s terms: Sure, there was enormous impoverishment of the entire population, but hey, we got a better balance sheet, more savings for the regime, and more deals with multinational corporations.
The euphemisms keep coming. Poor countries are consistently described as “test cases.” The lexicon and jargon and language of development economics is designed to hide what is actually happening, to mask the cruel reality with terms and process and theory, and to avoid stating the underlying mechanism: rich countries siphoning resources from poor countries and enjoying double standards that enrich their populations while impoverishing people elsewhere.
The apotheosis of the Bank and Fund’s relationship with the developing world is their annual meeting in Washington, D.C.: a grand festival on poverty in the richest country on earth.
“Over mountainous piles of beautifully prepared food,” Hancock writes, “huge volumes of business get done; meanwhile staggering displays of dominance and ostentation get smoothly blended with empty and meaningless rhetoric about the predicament of the poor.”
“The 10,000 men and women attending,” he writes, “look extraordinarily unlikely to achieve [their] noble objectives; when not yawning or asleep at the plenary sessions they are to be found enjoying a series of cocktail parties, lunches, afternoon teas, dinners, and midnight snacks lavish enough to surfeit the greenest gourmand. The total cost of the 700 social events laid on for delegates during a single week [in 1989] was estimated at $10 million — a sum of money that might, perhaps, have better ‘served the needs of the poor’ had it been spent in some other way.”
This was 33 years ago: one can only imagine the cost of these parties in today’s dollars.
In his book “The Fiat Standard,” Saifedean Ammous has a different name for the development set: the misery industry. His description is worth quoting at length:
“When World Bank planning inevitably fails and the debts cannot be repaid, the IMF comes in to shake down the deadbeat countries, pillage their resources, and take control of political institutions. It is a symbiotic relationship between the two parasitic organizations that generates a lot of work, income and travel for the misery industry’s workers — at the expense of the poor countries that have to pay for it all in loans.”
“The more one reads about it,” Ammous writes, “the more one realizes how catastrophic it has been to hand this class of powerful yet unaccountable bureaucrats an endless line of fiat credit and unleash them on the world’s poor. This arrangement allows unelected foreigners with nothing at stake to control and centrally plan entire nations’ economies…. Indigenous populations are removed from their lands, private businesses are closed to protect monopoly rights, taxes are raised, and property is confiscated… tax-free deals are provided to international corporations under the auspices of the International Financial Institutions, while local producers pay ever-higher taxes and suffer from inflation to accommodate their governments’ fiscal incontinence.”
“As part of the debt relief deals signed with the misery industry,” he continues, “governments were asked to sell off some of their most prized assets. This included government enterprises, but also national resources and entire swaths of land. The IMF would usually auction these to multinational corporations and negotiate with governments for them to be exempt from local taxes and laws. After decades of saturating the world with easy credit, the IFIs spent the 1980s acting as repo men. They went through the wreckage of third-world countries devastated by their policies and sold whatever was valuable to multinational corporations, giving them protection from the law in the scrap heaps in which they operated. This reverse Robin Hood redistribution was the inevitable consequence of the dynamics created when these organizations were endowed with easy money.”
“By ensuring the whole world stays on the U.S. dollar standard,” Ammous concludes, “the IMF guarantees the US can continue to operate its inflationary monetary policy and export its inflation globally. Only when one understands the grand larceny at the heart of the global monetary system can one understand the plight of developing countries.”
X. White Elephants
“What Africa needs to do is grow, grow out of debt.”
–George Ayittey
By the mid-1970s, it was clear to Western policymakers, and especially to Bank president Robert McNamara, that the only way poor countries would be able to pay back their debt was with more debt.
The IMF had always paired its lending with structural adjustment, but for its first few decades, the Bank would give project-specific or sector-specific loans with no additional conditions attached. This changed during McNamara’s tenure, as less specific structural adjustment loans became popular and then even dominant at the Bank during the 1980s.
The reason was simple enough: Bank workers had a lot more money to lend out, and it was easier to give away large sums if the money was not tied to specific projects. As Payer notes, “twice as many dollars per staff week of work” could be disbursed through structural adjustment loans.
The borrowers, Hancock says, couldn’t be happier: “Corrupt ministers of finance and dictatorial presidents from Asia, Africa and Latin America tripped over their own expensive footwear in their unseemly haste to get adjusted. For such people money was probably never easier to obtain: with no complicated projects to administer and no messy accounts to keep, the venal, the cruel and the ugly laughed literally all the way to the bank. For them structural adjustment was like a dream come true. No sacrifices were demanded of them personally. All they had to do — amazing but true — was screw the poor.”
Beyond “general use” structural adjustment loans, the other way to spend large amounts of money was to finance massive, individual projects. These would become known as “white elephants,” and their carcasses still dot the deserts, mountains and forests of the developing world. These behemoths were notorious for their human and environmental devastation.
A good example would be the billion-dollar Inga dams, built in Zaire in 1972, whose Bank-funded architects electrified the exploitation of the mineral-rich Katanga province, without installing any transformers along the way to help the vast numbers of villagers who were still using oil lamps. Or the Chad-Cameroon pipeline in the 1990s: this $3.7 billion, Bank-funded project was built entirely to siphon resources out of the ground to enrich the Deby dictatorship and its foreign collaborators, without any benefits for the people. Between 1979 and 1983, Bank-financed hydroelectric projects “resulted in the involuntary resettlement of at least 400,000 to 450,000 people on four continents.”
Hancock details many such white elephants in “Lords Of Poverty.” One example is the Singrauli Power and Coal Mining Complex in India’s Uttar Pradesh state, which received nearly a billion dollars in Bank funding.
“Here,” Hancock writes, “because of ‘development,’ 300,000 poor rural people were subjected to frequent forced relocations as new mines and power stations opened… the land was totally destroyed and resembled scenes out of the lower circles of Dante’s inferno. Enormous amounts of dust and air and water pollution of every conceivable sort created tremendous public health problems. Tuberculosis was rampant, potable water supplies destroyed, and chloroquine-resistant malaria afflicted the area. Once prosperous villages and hamlets were replaced by unspeakable hovels and shacks on the edges of huge infrastructure projects… some people were living inside the open pit mines. Over 70,000 previously self-sufficient peasant farmers — deprived of all over possible sources of income — had no choice but to accept the indignity of intermittent employment at Singrauli for salaries of around 70 cents a day: below survival level even in India.”
In Guatemala, Hancock describes a giant hydroelectric dam called the Chixoy, built with World Bank support in the Mayan highlands.
“Originally budgeted at $340 million,” he writes, “the construction costs had risen to $1 billion by the time the dam was opened in 1985… the money was lent to the Guatemalan government by a consortium [led] by the World Bank… General Romero Lucas Arica’s military government, in power during the bulk of the construction phase and which signed the contract with the World Bank, was recognized by political analysts as having been the most corrupt administration in the history of a Central American country in a region that has been afflicted by more than its fair share of venal and dishonest regimes… members of the junta pocketed about $350 million out of the $1 billion provided for Chixoy.”
And finally in Brazil, Hancock details one of the Bank’s most harmful projects, a “massive colonization and resettlement scheme” known as Polonoroeste. By 1985, the Bank had committed $434.3 million to the initiative, which ended up transforming “poor people into refugees in their own land.”
The scheme “persuaded hundreds of thousands of needy people to migrate from Brazil’s central and southern provinces and relocate themselves as farmers in the Amazon basin” to generate cash crops. “The Bank’s money,” Hancock wrote, “paid for the speedy paving of Highway BR-364 which runs into the heart of the north-western province of Rondonia. All the settlers traveled along this road on their way to farms that they slashed and burned out of the jungle… Already 4% deforested in 1982, Rondonia was 11% deforested by 1985. NASA space surveys showed that the area of deforestation was doubled approximately every two years.”
As a result of the project, in 1988 “tropical forests covering an area larger than Belgium were burnt by settlers.” Hancock also notes that “more than 200,000 settlers were estimated to have contracted a particularly virulent strain of malaria, endemic in the north-west, to which they had no resistance.”
Such grotesque projects were the result of the massive growth of lending institutions, a detachment of the creditors from the actual places they were lending to, and management by unaccountable local autocrats who pocketed billions along the way. They were the outcome of policies that tried to lend as much money as possible to Third World countries to keep the debt Ponzi going and to keep the flow of resources from south to north moving. The grimmest example of all might be found in Indonesia.
XI. A Real-Life Pandora: The Exploitation Of West Papua
“You want a fair deal, you’re on the wrong planet.”
The island of New Guinea is resource-rich beyond imagination. It contains, just for starters: the third-largest expanse of tropical rainforest in the world, after the Amazon and the Congo; the world’s largest gold and copper mine at Grasberg, in the shadow of the 4,800 meter “Seven Summit” peak of Puncak Jaya; and, offshore, the Coral Triangle, a tropical sea known for its “unparalleled” reef diversity.
And yet, the people of the island, especially those living in the California-sized Western half under Indonesian control, are some of the poorest in the world. Resource colonialism has long been a curse for the residents of this territory, known as West Papua. Whether the pillage was committed by the Dutch, or, in more recent decades, the Indonesian government, imperialists have found generous support from the Bank and the Fund.
This essay already mentioned how one of the World Bank’s first loans was to the Dutch, which it used to try and sustain its colonial empire in Indonesia. In 1962, Imperial Holland was finally defeated, and gave up control over West Papua to the Sukarno government as Indonesia became independent. However, the Papuans (also known as the Irianese) wanted their own freedom.
In the course of that decade — as the IMF credited the Indonesian government with more than $100 million — Papuans were purged from positions of leadership. In 1969, in an event that would make Geroge Orwell’s Oceania blush, Jakarta held the “Act of Free Choice,” a poll where 1,025 people were rounded up and forced to vote in front of armed soldiers. The results to join Indonesia were unanimous, and the vote was ratified by the UN General Assembly. After that, locals had no say in what “development” projects would proceed. Oil, copper and timber were all harvested and removed from the island in the following decades, with no involvement by Papuans, except as forced labor.
The mines, highways and ports in West Papua were not built with the wellbeing of the population in mind, but rather were built to loot the island as efficiently as possible. As Payer was able to observe even in 1974, the IMF helped transform Indonesia’s vast natural resources into “mortgages for an indefinite future to subsidize an oppressive military dictatorship and to pay for imports which supported the lavish lifestyle of the generals in Jakarta.”
A 1959 article on the discovery of gold in the area is the beginning of the story of what would later become the Grasberg mine, the world’s lowest-cost and largest producer of copper and gold. In 1972, the Phoenix-based Freeport signed a deal with Indonesian dictator Suharto to extract gold and copper from West Papua, without any consent from the indigenous population. Until 2017, Freeport controlled 90% of the project’s shares, with 10% in the hands of the Indonesian government and 0% for the Amungme and Kamoro tribes who actually inhabit the area.
By the time Grasberg’s treasures are fully depleted by the Freeport corporation, the project will have generated some six billion tons of waste: more than twice as much rock as was excavated to dig the Panama Canal.
The ecosystems downstream from the mine have since been devastated and stripped of life as more than a billion tons of waste have been dumped “directly into a jungle river of what had been one of the world’s last untouched landscapes.” Satellite reports show the devastation wrought by the ongoing dumping of more than 200,000 of toxic tailings per day into an area that contains the Lorentz National Park, a world heritage site. Freeport remains the largest foreign taxpayer in Indonesia and the biggest employer in West Papua: it plans to stay until 2040, when the gold will run out.
As the World Bank writes candidly in its very own report on the region, “international business interests want better infrastructure in order to extract and export the non-renewable mineral and forest assets.”
By far the most shocking program that the Bank financed in West Papua was “transmigration,” a euphemism for settler colonialism. For more than a century, the powers in control of Java (home to most of Indonesia’s population) dreamed of moving large chunks of Javanese to farther-flung islands in the archipelago. Not just to spread things out, but also to ideologically “unify” the territory. In a 1985 speech, the Minister of Transmigration said that “by way of transmigration, we will try to … integrate all the ethnic groups into one nation, the Indonesian nation… The different ethnic groups will in the long run disappear because of integration … there will be one kind of man.”
These efforts to resettle Javanese — known as “Transmigrasi” — began during colonial times, but in the 1970s and 1980s the World Bank began financing these activities in an aggressive way. The Bank allocated hundreds of millions of dollars to the Suharto dictatorship to allow it to “transmigrate” what were hoped to be millions of people to places like East Timor and West Papua in what was “the world’s largest-ever exercise in human resettlement.” By 1986, the Bank had committed no less than $600 million directly to support transmigration, which entailed “a breathtaking combination of human rights abuses and environmental destruction.”
Consider the story of the Sago palm, one of the main traditional foodstuffs of Papuans. One tree alone was able to supply food for a family for six to 12 months. But the Indonesian government, at the encouragement of the Bank, came and said no, this is not working: you need to eat rice. And so the Sago gardens were cut down to grow rice for export. And the locals were forced to buy rice in the market, which simply made them more dependent on Jakarta.
Any resistance was met with brutality. Especially under Suharto — who held as many as 100,000 political prisoners — but even today in 2022, West Papua is a police state almost without rival. Foreign journalists are virtually banned; free speech does not exist; the military operates without any accountability. NGOs like Tapol document a legion of human rights violations ranging from mass surveillance of personal devices, restrictions on when and for what reason people can leave their homes and even rules on how Papuans can wear their hair.
Between 1979 and 1984, some 59,700 transmigrants were taken to West Papua, with “large scale” support from the World Bank. More than 20,000 Papuans fled the violence into neighboring Papua New Guinea. Refugees reported to international media that “their villages were bombed, their settlements burned, women raped, livestock killed, and numbers of people indiscriminately shot while others were imprisoned and tortured.”
A subsequent project backed by a $160 million Bank loan in 1985 was called “Transmigration V”: the seventh Bank-funded project in support of settler colonialism, it aimed to finance the relocation of 300,000 families between 1986 and 1992. The regime’s governor of West Papua at the time described the indigenous people as “living in a stone-age era” and called for a further two million Javanese migrants to be sent to the islands so that “backwards local people could intermarry with the newcomers thus giving birth to a new generation of people without curly hair.”
The original and final versions of the Transmigration V loan agreement were leaked to Survival International: the original version made “extensive reference to the bank’s policies on tribal peoples and provides a list of measures that would be required to comply with these,” but the final version made “no reference to the bank’s policies.”
Cultural genocide in West Papua
Transmigration V ran into budget issues, and was cut short, but ultimately 161,600 families were moved, at a cost of 14,146 Bank staff months. The Bank was clearly financing cultural genocide: today, Ethnic Papuans make up no more than 30% of the territory’s population. But social engineering wasn’t the only goal of taking money from the Bank: 17% of funds for transmigration projects were estimated to have been stolen by government officials.
Fifteen years later on December 11, 2001, the World Bank approved a $200 million loan to “improve road conditions” in West Papua and other parts of Eastern Indonesia. The project, known as EIRTP, aimed to “improve the condition of national and other strategic arterial roads in order to reduce transport costs and provide more reliable access among provincial centers, regional development and production areas, and other key transport facilities. Reducing road transport costs,” the Bank said, “will help to lower input prices, raise output prices and increase the competitiveness of local products from the affected areas.” In other words: the Bank was helping to extract resources as efficiently as possible.
The Bank and Fund’s history in Indonesia is so outrageous that it seems like it must be from another time, ages ago. But that’s simply not true. Between 2003 and 2008, the Bank funded palm oil development in Indonesia to the tune of nearly $200 million and hired private companies who were alleged to have “used fire to clear primary forests and seize lands belonging to indigenous people without due process.”
Today, the Indonesian government remains on the hook for the EIRTP loan. In the past five years, the Bank has collected $70 million in interest payments from the Indonesian government and taxpayer, all for its efforts to accelerate the extraction of resources from islands like West Papua.
One might consider bankruptcy an important and even essential part of capitalism. But the IMF basically exists to prevent the free market from working as it normally would: it bails out countries that normally would go bankrupt, forcing them instead deeper into debt.
The Fund makes the impossible possible: small, poor countries hold so much debt that they could never pay it all off. These bailouts corrupt the incentives of the global financial system. In a true free market, there would be serious consequences for risky lending: the creditor bank could lose its money.
The exponential rise of Third World debt
When the U.S., Europe or Japan made their deposits at the Bank and Fund, it was similar to purchasing insurance on their ability to extract wealth from developing nations. Their private banks and multinational corporations are protected by the bailout scheme, and on top of it, they earn handsome, steady interest (paid for by poor countries) on what is widely perceived to be humanitarian assistance.
As David Graeber writes in “Debt,” when banks “lent money to dictators in Bolivia and Gabon in the late ’70s: [they made] utterly irresponsible loans with the full knowledge that, once it became known they had done so, politicians and bureaucrats would scramble to ensure that they’d still be reimbursed anyway, no matter how many lives had to be devastated and destroyed in order to do it.”
Kevin Danaher describes the tension that began to emerge in the 1960s: “Borrowers began to pay back more annually to the Bank than it disbursed in new loans. In 1963, 1964, and 1969 India transferred more money to the World Bank than the Bank disbursed to it.” Technically, India was paying off its debts plus interest, but the Bank’s leadership saw a crisis.
“To solve the problem,” Danaher continues, Bank president Robert McNamara increased lending “at a phenomenal rate, from $953 million in 1968 to $12.4 billion in 1981.” The number of IMF lending programs also “more than doubled” from 1976 to 1983, mostly to poor countries. The Bank and the Fund’s assurances led the world’s titanic money center banks as well as hundreds of regional and local banks in the U.S. and Europe — “most of them with little or no previous history of foreign lending” — to go on an unprecedented lending spree.
The Third World debt bubble finally burst in 1982, when Mexico announced a default. According to official IMF history, “private bankers envisaged the dreaded possibility of a widespread repudiation of debts, such as had occurred in the 1930s: at that time the debt owed by debtor countries to industrial counties was mostly in the form of securities issued by debtor countries in the US and in the form of bonds sold abroad; in the 1980s the debt was almost entirely in the form of short and medium term loans from commercial banks in the industrial members. Monetary authorities of industrial members instantly realized the urgency of the problem posed for the world’s banking system.”
In other words: the threat that the banks of the West might have holes on their balance sheet was the danger: not that millions would die of austerity programs in poor countries. In her book “A Fate Worse Than Debt,” the development critic Susan George charts how the top-nine largest U.S. banks all had placed more than 100% of their shareholders’ equity in “loans to Mexico, Brazil, Argentina, and Venezuela alone.” The crisis was averted, however, as the IMF helped credit flow to Third World countries, even though they should have gone bankrupt.
“Simply put,” according to a technical analysis of the Fund, its programs “provide bailouts for private lenders to emerging markets, thereby allowing international creditors to benefit from foreign lending without bearing the full risks involved: the banks reap significant profits if borrowers repay their debts and avoid losses if financial crisis occur”
Latin American citizens suffered under structural adjustment, but between 1982 and 1985. George reported that “in spite of over-exposure to Latin America, dividends declared by the big nine banks increased by more than a third during the same period.” Profits in that time rose by 84% at Chase Manhattan and 66% at Banker’s Trust, and stock value rose by 86% at Chase and 83% at Citicorp.
“Clearly,” she wrote, “austerity is not the term to describe the experiences since 1982 of either the Third World elite or the international banks: the parties that contracted the loans in the first place.”
The “generosity” of the West enabled unaccountable leaders to plunge their nations into debt deeper than ever before. The system was, as Payer writes in “Lent And Lost,” a straightforward Ponzi scheme: the new loans went straight to paying for the old loans. The system needed to grow to avoid collapse.
“By keeping financing going,” an IMF managing director said, according to Payer, structural adjustment loans “permitted trade that might otherwise not have been possible.”
Given that the Bank and Fund will prevent even the most comically corrupt and wasteful governments from going bankrupt, private banks adapted their behavior accordingly. A good example would be Argentina, which has received 22 IMF loans since 1959, even trying to default in 2001. One would think that creditors would stop lending to such a profligate borrower. But in fact, just four years ago, Argentina received the largest IMF loan of all time, a staggering $57.1 billion.
Payer summed up “The Debt Trap” by stating that the moral of her work was “both simple and old-fashioned: that nations, like individuals, cannot spend more than they earn without falling into debt, and a heavy debt burden bars the way to autonomous action.”
But the system makes the deal too sweet for the creditors: profits are monopolized while losses are socialized.
Payer realized this even 50 years ago in 1974, and hence concluded that “in the long run it is more realistic to withdraw from an exploitative system and suffer the dislocation of readjustment than it is to petition the exploiters for a degree of relief.”
In a true global free market, the policies that the Bank and Fund impose on poor countries might make sense. After all, the record of socialism and large-scale nationalization of industry is disastrous. The problem is, the world is not a free market, and double standards are everywhere.
Subsidies — for example, free rice in Sri Lanka or discounted fuel in Nigeria — are ended by the IMF, yet creditor nations like the U.K. and U.S. extend state-funded healthcare and crop subsidies to their own populations.
One can take a Libertarian or Marxist view and arrive at the same conclusion: this is a double standard which enriches some countries at the expense of others, with most citizens of rich countries blissfully unaware.
To help build out from the rubble of World War II, IMF creditors relied heavily on central planning and anti-free market policy for the first few decades after Bretton Woods: for example, import restrictions, capital outflow limits, foreign exchange caps and crop subsidies. These measures protected industrial economies when they were most vulnerable.
In the U.S., for example, the Interest Equalization Act was passed by John F. Kennedy to stop Americans from buying foreign securities and instead focus them on domestic investing. This was one of many measures to tighten capital controls. But the Bank and Fund have historically prevented poor countries from using the same tactics to defend themselves.
As Payer observes, “The IMF has never played a deciding role in the adjustment of exchange rates and trade practices among the wealthy developed nations… It is the weaker nations which are subjected to the full force of the IMF principles… the inequality of power relationships meant that the Fund could do nothing about market ‘distortions’ (such as trade protection) which were practiced by the rich countries.”
Cato’s Vásquez and Bandow came to a similar conclusion, noting that “most industrialized nations have maintained a patronizing attitude towards underdeveloped nations, hypocritically shutting out their exports.”
In the early 1990s, while the U.S. stressed the importance of free trade, it “erected a virtual iron curtain against [Eastern Europe’s] exports, including textiles, steel, and agricultural products.” Poland, Czechoslovakia, Hungary, Romania, Bosnia, Croatia, Slovenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan were all targeted. The U.S. prevented Eastern European nations from selling “a single pound of butter, dry milk, or ice cream in America” and both the Bush and Clinton administrations imposed stiff chemical and pharmaceutical import restrictions on the region.
It is estimated that protectionism by industrial countries “reduces developing countries’ national income by roughly twice as much as provided by development assistance.” In other words, if Western nations simply opened their economies, they wouldn’t have to provide any development assistance at all.
There is a sinister twist to the arrangement: when a Western country (i.e., the U.S.) runs into an inflationary crisis — like today’s — and is forced to tighten its monetary policy, it actually gains more control over developing countries and their resources, whose dollar debt becomes much more difficult to pay back, and who fall deeper into the debt trap, and deeper into Bank and Fund conditionality.
In 2008, during the Great Financial Crisis, American and European authorities lowered interest rates and juiced up banks with extra cash. During the Third World Debt Crisis and the Asian Financial Crisis, the Bank and Fund refused to permit this kind of behavior. Instead, the recommendation to afflicted economies was to tighten at home and borrow more from abroad.
In September 2022, newspaper headlines stated that the IMF was “worried” about inflation in the United Kingdom, as its bond market teetered on the brink of collapse. This is of course another hypocrisy, given that the IMF did not seem worried about inflation when it imposed currency devaluation on billions of people for decades. Creditor nations play by different rules.
In a final case of “do as I say, not as I do,” the IMF still holds a whopping 90.5 million ounces — or 2,814 metric tons — of gold. Most of this was accumulated in the 1940s, when members were forced to pay 25% of their original quotas in gold. In fact, until the 1970s, members “normally paid all interest owed on IMF credit in gold.”
When Richard Nixon formally ended the gold standard in 1971, the IMF did not sell its gold reserves. And yet, attempts by any member countries to fix their currency to gold are forbidden.
XIV. Green Colonialism
“If you turned the electricity off for a few months in any developed Western society, 500 years of supposed philosophical progress about human rights and individualism would quickly evaporate like they never happened.”
In the past few decades, a new double standard has emerged: green colonialism. This, at least, is what the Senegalese entrepreneur Magatte Wade calls the West’s hypocrisy over energy use in an interview for this article.
Wade reminds us that industrial countries developed their civilizations by utilizing hydrocarbons (in large part stolen or bought on the cheap from poor countries or colonies), but today the Bank and Fund try to push policies which prohibit the developing world from doing the same.
Where the U.S. and U.K. were able to use coal and the Third World’s oil, the Bank and Fund want African countries to use solar and wind manufactured and financed by the West.
This hypocrisy was on display a few weeks ago in Egypt, where world leaders gathered at COP 27 (the Sharm el-Sheikh Climate Change Conference) to discuss how to reduce energy use. The location on the African continent was intentional. Western leaders — currently scrambling to import more fossil fuels after their access to Russian hydrocarbons was curtailed — flew in on gas-guzzling private jets to plead with poor countries to reduce their carbon footprint. In typical Bank and Fund tradition, the ceremonies were hosted by the resident military dictator. During the festivities, Alaa Abd Al Fattah, a prominent Egyptian human rights activist, languished nearby on hunger strike in prison.
British Prime Minister Rishi Sunak arrives at COP 27 on a private jet
“Just like back in the day when we were colonized and the colonizers set the rules to how our societies would work,” Wade said, “this green agenda is a new form of governing us. This is master now dictating to us what our relationship with energy should be, telling us what kind of energy we should use, and when we can use it. The oil is in our soil, it is part of our sovereignty: but now they are saying we cannot use it? Even after they looted incalculable amounts for themselves?”
Wade points out that as soon as the core countries have an economic crisis (as they now face heading into the winter of 2022), they go right back to using fossil fuels. She observes that poor countries aren’t allowed to develop nuclear energy, and notes that when Third World leaders tried to push in this direction in the past, some of them — notably in Pakistan and Brazil — were assassinated.
Wade says her life’s work is prosperity building in Africa. She was born in Senegal, and moved to Germany at age seven. She still remembers her first day in Europe. She was used to a shower being a 30-minute affair: get the coal stove going, boil the water, put some cold water in it to cool it down, and drag the water to the shower area. But in Germany, all she had to do was turn a handle.
“I was shocked,” she says. “This question defined the rest of my life: How come they have this here but we don’t over there?”
Wade learned over time that reasons for Western success included the rule of law, clear and transferable property rights, and stable currencies. But, also, critically, reliable energy access.
“We can’t have limitations on our energy use imposed on us by others,” Wade said. And yet, the Bank and Fund continue to put pressure on energy policy in poor countries. Last month, Haiti followed pressure from the Bank and Fund to end its fuel subsidies. “The result,” wrote energy reporter Michael Schellenberger, “has been riots, looting, and chaos.”
“In 2018,” Schellenberger says, “the Haitian government agreed to IMF demands that it cut fuel subsidies as a prerequisite for receiving $96 million from the World Bank, European Union, and Inter-American Development bank, triggering protests that resulted in the resignation of the prime minister.”
“In over 40 nations since 2005,” he says, “riots have been triggered after cutting fuel subsidies or otherwise raising energy prices.”
It is the height of hypocrisy for the West to achieve success based on robust energy consumption and on energy subsidies, and then try to limit the type and amount of energy used by poor countries and then raise the price that their citizens pay. This amounts to a Malthusian scheme in line with former Bank chief Robert McNamara’s well-documented belief that population growth was a threat to humanity. The solution, of course, was always to try and reduce the population of poor countries, not rich ones.
“They treat us like little experiments,” Wade says, “where the West says: we might lose some people along the way, but let’s see if poor countries can develop without the energy types we used.”
“Well,” she says,” “we are not an experiment.”
XV. The Human Toll Of Structural Adjustment
“To the World Bank, development means growth… But … unrestrained growth is the ideology of the cancer cell.”
The social impact of structural adjustment is immense, and barely ever gets mentioned in traditional analysis of the Bank and Fund’s policy. There have been plenty of exhaustive studies done on their economic impact, but very little comparatively on their global health impact.
Researchers like Ayittey, Hancock and Payer give a few jarring examples from the 1970s and 1980s:
Between 1977 and 1985, Peru undertook IMF structural adjustment: the average per capita income of Peruvians fell 20%, and inflation soared from 30% to 160%. By 1985, a worker’s pay was only worth 64% of what it had been worth in 1979 and 44% of what it had been in 1973. Child malnutrition rose from 42% to 68% of the population.
In 1984 and 1985 the Philippines under Marcos implemented yet another round of IMF structural reform: after one year, GNP per capita regressed to 1975 levels. Real earnings fell by 46% among urban wage earners.
In Sri Lanka, the poorest 30% suffered an uninterrupted decline in calorie consumption after more than a decade of structural adjustment.
In Brazil, the number of citizens suffering from malnutrition jumped from 27 million (one third of the population) in 1961 to 86 million (two thirds of the population) in 1985 after 10 doses of structural adjustment.
Between 1975 and 1984 in IMF-guided Bolivia, the number of hours the average citizen had to work to purchase 1,000 calories of bread, beans, corn, wheat, sugar, potatoes, milk or quinoa increased on average by five times.
After structural adjustment in Jamaica in 1984, the nutritional purchasing power of one Jamaican dollar plummeted in 14 months from being able to buy 2,232 calories of flour to just 1,443; from 1,649 calories of rice to 905; from 1,037 calories of condensed milk to 508; and from 220 calories of chicken to 174.
As a result of structural adjustment, Mexican real wages declined in the 1980s by more than 75%. In 1986, about 70% of lower-income Mexicans had “virtually stopped eating rice, eggs, fruit, vegetables, and milk (never mind meat or fish)” at a time when their government was paying $27 million per day — $18,750 per minute — in interest to its creditors. By the 1990s, “a family of four on the minimum wage (which made up 60% of the employed labor force) could only buy 25% of its basic needs.
In sub-Saharan Africa, GNP per capita “dropped steadily from $624 in 1980 to $513 in 1998… food production per capita in Africa was 105 in 1980 but 92 for 1997… and food imports rose an astonishing 65% between 1988 and 1997.”
These examples, though tragic, only give a small and patchwork picture of the deleterious impact that Bank and Fund policies have had on the health of the world’s poor.
On average, every year from 1980 to 1985, there were 47 countries in the Third World pursuing IMF-sponsored structural adjustment programs, and 21 developing countries pursuing structural or sector adjustment loans from the World Bank. During this same period, 75% of all countries in Latin America and Africa experienced declines in per capita income and child welfare.
The decline in living standards make sense when one considers that Bank and Fund policies sculpted societies to focus on exports at the expense of consumption while gutting food security and healthcare services.
During IMF structural adjustment, real wages in countries like Kenya declined by more than 40%. After billions in Bank and Fund credit, per capita food production in Africa fell by nearly 20% between 1960 and 1994. Meanwhile, health expenditures in “IMF-World Bank programmed countries” declined by 50% during the 1980s.
When food security and healthcare collapse, people die.
Papers from 2011 and 2013 showed that countries that took a structural adjustment loan had higher levels of child mortality than those that did not. A 2017 analysis was “virtually unanimous in finding a detrimental association between structural adjustment and child and maternal health outcomes.” A 2020 study reviewed data from 137 developing countries between 1980 and 2014 and found that “structural adjustment reforms lower health system access and increase neonatal mortality.” A paper from 2021 concluded that structural adjustment plays “a significant role in perpetuating preventable disability and death.”
It is impossible to do a full accounting of just how many women, men and children were killed as a result of Bank and Fund austerity policies.
Food security advocate Davidson Budhoo claimed that six million children died each year in Africa, Asia and Latin America between 1982 and 1994 as a result of structural adjustment. This would put the Bank and Fund’s death toll in the same ballpark as the deaths caused by Stalin and Mao.
Is this remotely possible? No one will ever know. But by looking at the data, we can begin to get a sense.
Research from Mexico — a typical country in terms of consistent involvement historically from the Bank and Fund — shows that for every 2% decrease in GDP, the mortality rate increased by 1%.
Now consider that as a result of structural adjustment, the GDP of dozens of countries in the Third World between the 1960s and 1990s suffered double-digit contractions. Despite massive population growth, many of these economies stagnated or shrank over 15-25 year periods. Meaning: the Bank and the Fund’s policies likely killed tens of millions of people.
Whatever the final death toll, there are two certainties: one, these are crimes against humanity, and two, no Bank or Fund officials will ever go to prison. There will never be any accountability or justice.
The inescapable reality is that millions died too young in order to extend and improve the lives of millions elsewhere. It is of course true that much of the success of the West is because of enlightenment values like rule of law, free speech, liberal democracy and domestic respect for human rights. But the unspoken truth is that much of the West’s success is also the result of resource and time theft from poor countries.
The stolen wealth and labor of the Third World will go unpunished but remains visible today, forever encrusted in the developed world’s architecture, culture, science, technology and quality of life. The next time one visits London, New York, Tokyo, Paris, Amsterdam or Berlin, this author suggests going for a walk and pausing at a particularly impressive or scenic view of the city to reflect on this. As the old saying goes, “We must pass through the darkness to reach the light.”
XVI. A Trillion Dollars: The Bank And Fund In The Post-COVID World
Bank and Fund policy towards developing countries has not changed much over the past few decades. Sure, there have been a few superficial tweaks, like the “Highly-Indebted Poor Countries” (HIPC) initiative, where some governments can qualify for debt relief. But underneath the new language, even these poorest of the poor countries still need to do structural adjustment. It’s just been rebranded to “Poverty Reduction Strategy.”
The same rules still apply: in Guyana, for example, “the government decided in early 2000 to increase the salaries of civil servants by 3.5%, after a fall in purchasing power of 30% over the previous five years.” The IMF immediately threatened to remove Guyana from the new list of HIPCs. “After a few months, the government had to backpedal.”
The same large-scale devastation still occurs. In a 2015 International Consortium Of Investigative Journalists (ICIJ) report, for instance, it was estimated that 3.4 million people were displaced in the previous decade by Bank-funded projects. The old accounting games, meant to exaggerate the good done by assistance, are joined by new ones.
The U.S. government applies a 92% discount to the debt of Highly-Indebted Poor Countries, and yet U.S. authorities include the nominal value of the debt relief in their “ODA” (official development assistance) numbers. Meaning: they significantly exaggerate the volume of their aid. The Financial Times has argued that it is “the aid that isn’t” and has argued that “writing off official commercial debt should not count as aid.”
While it’s true that there have actually been large transformations at the Bank and Fund in recent years, those changes have not been in the way that the institutions try to shape the economies of borrowing countries, but rather in that they have focused their efforts on nations closer to the world’s economic core.
“By practically any metric,” a NBER study observes, “the post-2008 IMF programs to several European economies are the largest in the IMF’s 70-year history.”
The largest IMF bailouts in history
“IMF commitments as a share of world GDP,” the study explains, “hit an all-time high as the European Debt Crisis began to unravel.” Iceland began an IMF program in 2008, followed by Greece, Ireland and Portugal.
The IMF-led bailout of Greece was a staggering $375 billion. In July 2015, “popular discontent led to a ‘no’ vote in a referendum on whether to accept the IMF’s loan conditions, which included raising taxes, lowering pensions and other spending, and privatizing industries.”
In the end, however, the Greek people’s voice wasn’t heard since “the government subsequently ignored the results and accepted the loans.”
The Fund used the same playbook in Greece and other lower-income European countries as it has used all over the developing world for decades: breaking democratic norms to provide billions to the elites, with austerity for the masses.
In the past two years, the Bank and Fund have pumped hundreds of billions of dollars into countries following government lockdowns and COVID-19 pandemic restrictions. More loans were given out in a shorter time than ever before.
Even in late 2022 as interest rates continue to rise, the debt of poor countries keeps rising, and the amount they owe to rich countries keeps growing. History rhymes, and IMF visits to dozens of countries remind us of the early 1980s, when a massive debt bubble was popped by Federal Reserve policies. What followed was the worst depression in the Third World since the 1930s.
We can hope that this does not happen again, but given the Bank and the Fund’s efforts to load up poor countries with more debt than ever before, and given that the cost of borrowing is going up in a historic way, we can predict that it will happen again.
And even where the Bank and Fund’s influence shrinks, the Chinese Communist Party (CCP) is beginning to step in. In the past decade, China has tried to emulate the dynamics of the IMF and World Bank through its own development institutions and through its “Belt and Road” initiative.
As the Indian geostrategist Brahma Chellaney writes, “Through its $1 trillion ‘one belt, one road’ initiative, China is supporting infrastructure projects in strategically located developing countries, often by extending huge loans to their governments. As a result, countries are becoming ensnared in a debt trap that leaves them vulnerable to China’s influence… the projects that China is supporting are often intended not to support the local economy, but to facilitate Chinese access to natural resources, or to open the market for its low-cost and shoddy export goods. In many cases, China even sends its own construction workers, minimizing the number of local jobs that are created.”
The last thing the world needs is another Bank and Fund drain dynamic, only pulling resources from poor countries to go to the genocidal dictatorship in Beijing. So it is good to see the CCP having trouble in this area. It is trying to grow its Asian Infrastructure Investment Bank by more than $10 billion per year, but it is encountering a variety of issues with projects that it financed across the developing world. Some governments, like in Sri Lanka, simply cannot pay back. Since the CCP cannot mint the world reserve currency, it actually has to eat the loss. Because of this, it won’t likely be able to come anywhere close to approximating the lending volume of the U.S.-Europe-Japan-led system.
Which is certainly a good thing: CCP loans may not come with onerous structural adjustment conditions, but they certainly don’t have any considerations for human rights. In fact, the CCP helped shield one belt and road client — Sri Lankan president Mahinda Rajapaksa — from war crimes allegations at the UN. Looking at its projects in Southeast Asia (where it is depleting Burmese minerals and timber and eroding Pakistani sovereignty) and sub-Saharan Africa (where it is extracting an enormous amount of rare earths), it largely amounts to the same kind of resource theft and geopolitical control tactics practiced by colonial powers for centuries, just dressed up in a new kind of clothing.
It’s not clear that the Bank and Fund even view the CCP as a bad actor. After all, Wall Street and Silicon Valley tend to be quite friendly with the world’s worst dictators. China remains a creditor at the Bank and Fund: its membership has never been in question, despite the genocide of the Uyghur people. As long as the CCP does not get in the way of the big picture goals, the Bank and Fund probably don’t mind. There’s enough loot to go around.
In 1979, developing nations gathered in the Tanzanian city of Arusha to devise an alternative plan to the IMF- and World Bank-led structural adjustment that had left them with mountains of debt and very little say as to the future of the world economy.
“Those who wield power control money,” the delegates wrote: “Those who manage and control money wield power. An international monetary system is both a function and an instrument of prevailing power structures.”
As Stefan Eich writes in “The Currency Of Politics,” “the Arusha Initiative’s emphasis on the international monetary system’s burden of hierarchical imbalances was a powerful attempt to insist on money’s political nature by countering claims to neutral technical expertise asserted by the Fund’s money doctors.”
“The IMF may have claimed a neutral, objective, scientific stance,” Eich writes, “but all scholarly evidence, including the Fund’s internal documentation, pointed the other way. The Fund was, in fact, deeply ideological in the way it framed underdevelopment as a lack of private markets but systematically applied double standards in ignoring similar market controls in ‘developed’ countries.”
This resonates with what Cheryl Payer observed, that Bank and Fund economists “erected a mystique around their subject which intimidated even other economists.”
“They represent themselves,” she said, “as highly trained technicians who determine the ‘correct’ exchange rate and ‘proper’ amount of money creation on the basis of complex formulas. They deny the political significance of their work.”
Like most of the leftist discourse on the Bank and Fund, the criticisms made at Arusha were mostly on target: the institutions were exploitative, and enriched their creditors at the expense of poor countries. But Arusha’s solutions missed the mark: central planning, social engineering and nationalization.
The Arusha delegates advocated for the Bank and Fund to be abolished, and for odious debts to be canceled: perhaps noble but entirely unrealistic goals. Beyond that, their best plan of action was “shift power into the hands of local governments” — a poor solution given that the vast majority of Third World countries were dictatorships.
For decades, the public in developing countries suffered as their leaders wavered between selling out their country to multinational corporations and socialist authoritarianism. Both options were destructive.
This is the trap that Ghana has found itself in since independence from the British Empire. More often than not, the Ghanaian authorities, regardless of ideology, chose the option of borrowing from abroad.
Ghana has a stereotypical history with the Bank and Fund: military leaders seizing power by coup only to impose IMF structural adjustment; real wages dropping between 1971 and 1982 by 82%, with public health spending shrinking 90% and meat prices up 400% during the same time; borrowing to build enormous white elephant projects like the Akosombo Dam, which powered a U.S.-owned aluminum plant at the expense of more than 150,000 people who contracted river blindness and paralysis from the creation of the world’s largest manmade lake; and a depletion of 75% of the country’s rainforests as timber, cocoa and minerals industries boomed while domestic food production cratered. $2.2 billion of assistance flowed into Ghana in 2022, but the debt stands at an all-time high of $31 billion, up from $750 million 50 years ago.
Since 1982, under IMF “guidance,” the Ghanaian cedi was devalued by 38,000%. One of the biggest outcomes of structural adjustment has been, like elsewhere around the world, expedition of the extraction of Ghana’s natural resources. Between 1990 and 2002, for example, the government only received $87.3 million from the $5.2 billion worth of gold mined out of Ghanaian soil: in other words, 98.4% of the profits from gold mining in Ghana went to foreigners.
As Ghanaian protestor Lyle Pratt says, “The IMF is not here to bring down prices, they are not here to ensure that we construct roads — it is not their business and they simply don’t care… The IMF’s primary concern is to make sure that we build the capacity to pay our loans, not to develop.”
2022 feels like a rerun. The Ghanaian cedi has been one of the world’s worst-performing currencies this year, losing 48.5% of its value since January. The country is facing a debt crisis, and, like in decades past, is forced to prioritize paying back its creditors over investing in its own people.
In October, just a few weeks ago, the country received its latest IMF visit. If a loan is finalized, it would be the 17th IMF loan for Ghana since the CIA-backed military coup of 1966. That is 17 layers of structural adjustment.
A visit from the IMF is a bit like a visit from the Grim Reaper — it can only mean one thing: more austerity, pain, and — without exaggeration — death. Perhaps the wealthy and well-connected can escape unscathed or even enriched, but for the poor and working classes, the currency devaluation, rising interest rates and disappearance of bank credit is devastating. This is not the Ghana of 1973 that Cheryl Payer first wrote about in “The Debt Trap”: it is 50 years later, and the trap is 40 times deeper.
But perhaps there is a glimmer of hope.
On December 5 to 7, 2022 in the Ghanaian capital of Accra, there will be a different kind of visit. Instead of creditors looking to charge interest on the people of Ghana and dictate their industries, the speakers and organizers of the Africa Bitcoin Conference are gathering to share information, open-source tools and decentralizing tactics on how to build economic activity beyond the control of corrupt governments and foreign multinational corporations.
Farida Nabourema is the lead organizer. She is pro-democracy; pro-poor; anti-Bank and Fund; anti-authoritarian; and pro-Bitcoin.
“The real issue,” Cheryl Payer once wrote, “is who controls the capital and technology that is exported to the poorer countries.”
One can argue that Bitcoin as capital and as technology is being exported to Ghana and Togo: it certainly didn’t arise there. But it’s not clear where it arose. No one knows who created it. And no government or corporation can control it.
Bitcoin and cryptocurrency ownership per capita: countries with a history of IMF structural adjustments tend to rank very high
During the gold standard, the violence of colonialism corrupted a neutral monetary standard. In the post-colonial world, a fiat monetary standard — upheld by the Bank and Fund — corrupted a post-colonial power structure. For the Third World, perhaps a post-colonial, post-fiat world will be the right mix.
Proponents of dependency theory like Samir Amin gathered at conferences like Arusha and called for a “delinking” of poor countries from rich ones. The idea was: the wealth of rich countries was not just attributable to their liberal democracies, property rights and entrepreneurial environments, but also to their resource and labor theft from poor countries. Sever that drain, and poor countries could get a leg up. Amin predicted that “the construction of a system beyond capitalism will have to begin in the peripheral areas.” If we agree with Allen Farrington that today’s fiat system is not capitalism, and that the current dollar system is deeply flawed, then perhaps Amin was right. A new system is more likely to emerge in Accra, not Washington or London.
As Saifedean Ammous writes, “The developing world consists of countries that had not yet adopted modern industrial technologies by the time an inflationary global monetary system began replacing a relatively sound one in 1914. This dysfunctional global monetary system continuously compromised these countries’ development by enabling local and foreign governments to expropriate the wealth produced by their people.”
In other words: rich countries got industrialized before they got fiat: poor countries got fiat before they got industrialized. The only way to break the cycle of dependency, according to Nabourema and other organizers of the Africa Bitcoin Conference, might be to transcend fiat.
XVIII. A Glimmer of Hope
“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”
Whatever the answer is to poverty in the Third World, we know it is not more debt. “The poor of the world,” Cheryl Payer concludes, “don’t need another ‘bank,’ however benign. They need decently paid work, responsive government, civil rights, and national autonomy.”
For seven decades, the World Bank and IMF have been enemies of all four.
Looking forward, says Payer, “the most important task for those in the wealthy countries who are concerned with international solidarity is to actively fight to end the flow of foreign aid.” The problem is that the current system is designed and incentivized to keep this flow going. The only way to make a change is through a total paradigm shift.
We already know that Bitcoin can help individuals inside developing countries gain personal financial freedom and escape the broken systems imposed on them by their corrupt rulers and international financial institutions. This is what will be accelerated in Accra next month, contra the designs of the Bank and Fund. But can Bitcoin actually change the core-periphery dynamics of the world’s power and resource structure?
Nabourema is hopeful, and doesn’t understand why leftists in general condemn or ignore Bitcoin.
“A tool that is capable of allowing people to build and access wealth independent from institutions of control can be seen as a leftist project,” she says. “As an activist that believes that citizens should be paid in currencies that actually value their life and sacrifices, Bitcoin is a people’s revolution.”
“I find it painful,” she says, “that a farmer in sub-Saharan Africa only earns 1% of the price of coffee on the global market. If we can get to a stage where farmers can sell their coffee without so many middle institutions more directly to the buyers, and get paid in bitcoin, you could imagine how much of a difference that would make in their lives.”
“Today,” she says, “our countries in the Global South still borrow money in U.S. dollars, but over time our currencies depreciate and lose value and we end up having to make twice or three times the payment we initially promised in order to reimburse our creditors.”
“Now imagine,” she says, “if we get to a stage in 10 or 20 years where bitcoin is the global money that is accepted for business worldwide, where every nation has to borrow in bitcoin and spend bitcoin and every nation has to pay their debts in bitcoin. In that world, then foreign governments cannot demand that we repay them in currencies that we need to earn but they can simply print; and just because they decide to increase their interest rates, it won’t automatically jeopardize the lives of millions or billions of people in our countries.”
“Of course,” Nabourema says, “Bitcoin is going to come with issues like any innovation. But the beauty is that those issues can be improved with peaceful, global collaboration. No one knew 20 years ago what amazing things the internet allows us to do today. No one can tell what amazing things Bitcoin will allow us to do in 20 years.”
“The way forward,” she says, “is an awakening of the masses: for them to understand the ins and outs of how the system works and to understand that there are alternatives. We have to be in a position where people can reclaim their liberty, where their lives aren’t controlled by authorities that can confiscate their freedom at any time without consequences. Gradually we are getting closer to this goal with Bitcoin.”
“Since money is the center of everything in our world,” Nabourema says, “the fact that we are now able to obtain financial independence is so important for people in our countries, as we seek to reclaim our rights in every field and sector.”
In an interview for this article, deflation advocate Jeff Booth explains that as the world approaches a bitcoin standard, the Bank and the Fund will be less likely to be creditors, and more likely to be co-investors, partners, or simply grantors. As prices fall over time, this means debt gets more expensive and more difficult to repay. And with the U.S. money printer turned off, there would be no more bailouts. At first, he suggests, the Bank and Fund will try to continue to lend, but for the first time they’ll actually lose big chunks of money as countries freely default as they move onto a bitcoin standard. So they may consider co-investing instead, where they might become more interested in the real success and sustainability of the projects they support as the risk is more equally shared.
Bitcoin mining is an additional area of potential change. If poor countries can exchange their natural resources for money without dealing with foreign powers, then maybe their sovereignty can strengthen, instead of erode. Through mining, the vast amounts of river power, hydrocarbons, sun, wind, ground warmth, and offshore OTEC in emerging markets could be converted directly to the world reserve currency without permission. This has never before been possible. The debt trap seems truly inescapable for most poor countries, continuing to grow every year. Maybe investing in anti-fiat Bitcoin reserves, services and infrastructure is a way out and a path to striking back.
Bitcoin, Booth says, can short-circuit the old system that has subsidized wealthy countries at the expense of wages in poor countries. In that old system, the periphery had to be sacrificed to protect the core. In the new system, the periphery and core can work together. Right now, he says, the U.S. dollar system keeps people poor through wage deflation in the periphery. But by equalizing the money and creating a neutral standard for everyone, a different dynamic is created. With one monetary standard, labor rates would be necessarily pulled closer together, instead of kept apart. We don’t have words for such a dynamic, Booth says, because it has never existed: he suggests “forced cooperation.”
Booth describes the U.S. ability to instantly issue any amount of more debt as “theft in base money.” Readers may be familiar with the Cantillon effect, where those who are closest to the money printer benefit from fresh cash while those farthest away suffer. Well, it turns out there is a global Cantillon effect, too, where the U.S. benefits from issuing the global reserve currency, and poor countries suffer.
“A bitcoin standard,” Booth says, “ends this.”
How much of the world’s debt is odious? There are trillions of dollars of loans created at the whim of dictators and unelected supranational financial institutions, with zero consent from the people on the borrowing side of the deal. The moral thing to do would be to cancel this debt, but of course, that will never happen because the loans exist ultimately as assets on the balance sheets of the creditors of the Bank and Fund. They will always prefer to keep the assets and simply create new debt to pay the old.
The IMF “put” on sovereign debt creates the biggest bubble of all: bigger than the dot-com bubble, bigger than the subprime mortgage bubble, and bigger even than the stimulus-powered COVID bubble. Unwinding this system will be extremely painful, but it’s the right thing to do. If debt is the drug, and the Bank and Fund are the dealers, and the developing country governments are the addicts, then it’s unlikely either party will want to stop. But to heal, the addicts need to go to rehab. The fiat system makes this basically impossible. In the Bitcoin system, it may get to the point where the patient has no other choice.
As Saifedean Ammous says in an interview for this article, today, if Brazil’s rulers want to borrow $30 billion and the U.S. Congress agrees, America can snap its fingers and allocate the funds through the IMF. It’s a political decision. But, he says, if we get rid of the money printer, then these decisions become less political and start to resemble the more prudent decision-making of a bank that knows no bailout will come.
In the last 60 years of Bank and Fund dominance, countless tyrants and kleptocrats were bailed out — against any financial common sense — so that their nations’ natural resources and labor could continue to be exploited by core countries. This was possible because the government at the very heart of the system could print the reserve currency.
But in a bitcoin standard, Ammous wonders, who is going to make these high risk, billion-dollar loans in exchange for structural adjustment?
“You,” he asks, “and whose bitcoins?”
This is a guest post by Alex Gladstein. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Data Entry by Specially Trained Community Health Worker in Bangladesh. Credit: Abdullah Al Kafi
Opinion by Morseda Chowdhury (dhaka, bangladesh)
Inter Press Service
DHAKA, Bangladesh, Oct 31 (IPS) – The digital transformation of thousands of community health workers in Bangladesh has dramatically enhanced their work, while enabling the creation and tracking of a healthcare database covering 64 million people. The resulting model holds remarkable promise for the health of the world, especially in the context of evolving pandemics.
Amid the COVID-19 pandemic, BRAC digitalised the work of our 4,100 shasthya kormi, specially trained community health workers, in Bangladesh. Shasthya kormi are women experienced in health education, antenatal and postnatal checkups, non-communicable disease prevention, reproductive health and nutrition. The digital transformation of their work created benefits on a remarkable number of levels, underscored the vast potential for further scaling, and yielded insights directly relevant to increasing the quality of healthcare globally.
Each shasthya kormi was given an Android tablet and trained in its use. That enabled immediate time saving in myriad ways: faster and more accurate record-keeping; reports conveyed online rather than in person; training conducted online and at convenient times rather than only at designated times in person; and related administrative travel and costs avoided. The time saved can exceed a full day every two weeks. The digital devices also enabled us to save approximately USD3.8 million per year in monitoring costs.
But that is just the beginning of the benefits. The digital tablets enhance the prestige of shasthya kormi, as they now have access to vital information at their fingertips. They can screen for diseases and conditions, confirm diagnoses, have complete confidence in describing required treatment and management, and arrange video chats with doctors and specialists. Their decision-making is quicker and more accurate, improving their quality of care and giving them more time to spend with patients.
Electronic reporting enabled the creation of a database that we expect will grow to cover 76 million people. That database can now be tracked and analysed for trends – in the incidence of disease or other conditions, in the delivery of services, and in outcomes. Those trends can be analysed and addressed in real time – locally and nationally, as BRAC’s shasthya kormi cover 61 of Bangladesh’s 64 districts.
For COVID-19, for instance, reports of symptoms and test results can be tracked, as can vaccinations and outcomes. Recognizing the incidence of positive test results in Bangladesh’s border regions is especially valuable to understanding how trends evolve across regions.
For tuberculosis, 1.4 million samples have been collected and tracked. Similarly, non-communicable diseases like hypertension and diabetes, for both of which the incidences are rising in Bangladesh, can be tracked and addressed. If anyone has high blood pressure, a shasthya kormi can precisely record it. A blood glucose test administered by a shasthya kormi can detect abnormal blood sugar levels indicating possible diabetes. The database can track the percentage of pregnant women who are at high risk.
The overall database – with its 150 data points so far – also enables cross-tabulation of facility-specific and community-specific data. It makes it possible to merge BRAC’s trend analyses with data from government and other institutions. It responds to internal migration, with each individual’s medical records linked to their government-issued national identification card – so each person’s health record moves with them.
When these benefits are combined with the cost-effective nature of this digital approach, the potential for scaling increases dramatically. Each digital tablet costs about $100, so 4,100 shasthya kormi can be equipped for less than half a million dollars. In addition, they save money through the efficiencies described above. Patients also save – out-of-pocket expenditure makes up 63% of medical expenses in Bangladesh, and tests conducted by shasthya kormi often cost one tenth what they would in a private clinic. This in turn also takes pressure off health facilities.
The initiative has enormous potential to scale further – within Bangladesh and around the world. Shasthya kormi can be recruited locally and trained in a matter of weeks. They can be equipped digitally without great expense. The quality of their work can be monitored digitally, and everyone benefits from the enhanced access to health care that results.
Key to scaling are several insights that emerged as we orchestrated this digital transformation.
First, it was critical to track data input closely from the start, to identify anyone struggling with the transformation. One of the first clues was a lot of data being entered after 5:00 pm. It was not because people did not know how to enter it, but because they were nervous about using the devices in public, and did not want to make errors in front of the people who trust them.
Once we saw this in the data and figured out the reason behind it, we could easily work with each person to overcome it. Early on, we created a team of 40 technical officers who provided additional training and support for anyone struggling. The help was provided in some cases over the phone, but otherwise in person. Initially most people needed it, but now only about 10% of people need assistance.
Second, the digital tablets enabled constant, on-demand professional development. Needs, equipment and trends change regularly in the health sector, and these changes can occur rapidly. Shasthya kormi could assess their skills at any time convenient to them using tests available on the tablet, and the module would identify weaknesses and suggest further training to address it. Managers could also track their supervisee’s progress. This enhanced the expertise of the network broadly.
Third, we observed a tendency to skip entering critical but more difficult to obtain inputs, like National Identity numbers and birth registration numbers. Fortunately, we can often fill gaps by cross-tabulating with our mobile-based cash transfer system. We also noticed that counselling information was not recorded as seriously as service data. Iterative training has gradually solved these challenges.
Fourth, the digital transformation addressed a decades-old challenge – prestige. Shasthya kormi are often taken for granted, and they are sometimes welcomed, sometimes not. In order to establish the rapport they need to do their work, however, which is often of a sensitive nature, particularly in conservative communities, it is crucial that they are accepted into every household. Digitalisation has elevated the level of respect they receive in the community, particularly among men.
The success of this digital transformation, if scaled, could change community health globally. The result would be superior primary health care service delivery, operational efficiency and establishment of an infrastructure for real time health trend analysis, in a time when we have never struggled more with quality and accessibility of health care around the world.
Morseda Chowdhury is Director of the Health, Nutrition, and Population Programme at BRAC in Bangladesh.
WASHINGTON, Oct 25 (Reuters) – A group of liberal U.S. Democrats withdrew a letter to the White House urging a negotiated settlement to the war in Ukraine, the group’s chairperson, Democratic Representative Pramila Jayapal, said on Tuesday, after blowback from within their own party.
“The Congressional Progressive Caucus hereby withdraws its recent letter to the White House regarding Ukraine,” Jayapal said in a statement. She added: “The letter was drafted several months ago, but unfortunately was released by staff without vetting.” read more
The letter signed by 30 caucus members became public on Monday, leaving some other Democrats feeling blindsided just two weeks before Nov. 8 mid-term elections that will determine which political party controls Congress. And it appeared just as Republicans face concerns that their party might cut back military and humanitarian aid that has helped Ukraine since Russia invaded in February.
Several members of the Progressive Caucus issued statements expressing support for Ukraine, noting that they had joined other Democrats in voting for billions of dollars in aid for Ukraine.
Some said they had signed the letter months earlier and that things had changed. “Timing in diplomacy is everything. I signed this letter on June 30, but a lot has changed since then. I wouldn’t sign it today,” Representative Sara Jacobs said on Twitter.
Representative Jamie Raskin, who also signed, said in a statement he was glad to learn it had been withdrawn and noted “its unfortunate timing and other flaws.”
Ukraine’s troops have been waging a successful counteroffensive, with forces advancing into Russian-occupied Kherson province and threatening a major defeat for Moscow.
[1/2] Ukrainian soldiers drive a captured Russian tank after re-fitting it for use in battle, in Kupiansk region of Kharkiv Oblast, Ukraine, October 15, 2022. REUTERS/Clodagh Kilcoyne
‘BLANK CHECK’
The letter drew immediate pushback, including from within the Progressive Caucus. “Russia doesn’t acknowledge diplomacy, only strength. If we want Ukraine to continue as a free and democratic country that it is, we must support their fight,” Democratic Representative Ruben Gallego, a caucus member, said in a written comment.
Representative Kevin McCarthy, the top House Republican, told Punchbowl News in an interview this month that there would be no “blank check” for Ukraine if Republicans take over. That fed speculation that Republicans might stop aid to Kyiv, although many members of the party said that was not their intention.
In her statement withdrawing the letter, Jayapal said that, because of the timing, the letter was being conflated as being equivalent to McCarthy’s remark.
“Nothing could be further from the truth. Every war ends with diplomacy, and this one will too after Ukrainian victory. The letter sent yesterday, although restating that basic principle, has been conflated with GOP opposition to support for the Ukrainians’ just defense of their national sovereignty. As such, it is a distraction at this time and we withdraw the letter,” Jayapal’s statement said.
State Department spokesperson Ned Price said both Democrats and Republicans support continued assistance for Ukraine and he did not think the letter would put U.S. support into question.
“In recent days, we’ve heard from Democrats, we’ve heard from Republicans, that they understand the need to continue to stand with Ukraine, to stand for the principles that are at play here,” he told a news briefing.
Reporting by Patricia Zengerle; Additional reporting by Richard Cowan and Doina Chiacu; Editing by Chizu Nomiyama and Cynthia Osterman
ROME, Oct 20 (IPS) – That’s why a new ship with a big white “E” will navigate the Mediterranean Sea. The vessel has a red hull, is more than fifty meters long and has low decks. Soon, it will leave the port of Genoa and go out into the open sea. If those living on the north shore of that ‘water cemetery’ bearing the name of Mediterranean had chosen life, the “Life Support” would not have been greeted by the applause of a people packed square, on a late summer night, in the Italian city of Reggio Emilia. It would not be ready to sail now; . if they had chosen life, that ship would have another job.
“Mom, I’m thirsty.” That’s how Loujin died, asking for water. She was four years old and had been at sea for ten days on a boat that launched an SOS to which no one responded until was too late on a still-very-hot September. She and her family were fleeing the war in Syria with the impossible hope of a refugee camp in Lebanon. She died along with six other refugees: “They died of thirst, hunger and severe burns,” said Chiara Cardoletti, Representative of the United Nations High Commissioner for Refugees in Italy, on Twitter. “According to the reports of the survivors who are being verified by the police the corpses were thrown into the sea when they began to be stockpiled,” according to the newspaper Avvenire. The sea took at least eighty, dead off the coasts of Lebanon and Syria, just a few days later. Eleven other decaying bodies were recovered in the first half of October off the coast of Tunisia. Before that, water had snatched away so many lives that we are not even able to count them and cry for them.
If there had been a ship, such as the one with a large white “E” on its red sides, perhaps Loujin would be alive. The “E” is that of Emergency, an Italian NGO founded in 1994 to bring aid to civilian victims of war and poverty.
Emergency has made its choice: It will sail the Mediterranean, fishing for human beings regardless of the “barriers” erected in that water. Barriers created by laws, rules, and sometimes arbitrarily, do not prevent women and men in search of a future; instead, all too often, they turn into dead bodies – those that wars and starvation weren’t able to make.
Ten thousand people were in Reggio Emilia at the annual meeting of Emergency, an organization that has turned the defense of human rights and its radical “No war” policy into concrete actions in the most difficult places on the planet. Those numbers, doubled compared to the previous year, portray a country, Italy, which longs for peace and hospitality.
“Seeing and knowing that there are thousands of people dying off our shores is absolutely not acceptable. With we believe to represent many people in Italy who do not want to see this happen,” Pietro Parrino, Emergency’s director of the Field Operations Department, explained to us.
From 2014 to the day of this writing, i.e., mid-October this year, 25,034 people have died or gone missing in the Mediterranean Sea. “They were more than 1,100 just in the absence of a coordinated search and rescue operation at European level,” a statement from the NGO said. “We must be at sea to save people’s lives,” Parrino stressed. Whatever the reason why those women and men have decided to take the most dangerous of journeys: “They simply need help and we are, and we try to be, in the places where help is needed,” he added.
Being there, however, is a hard choice. There are very few NGO search and rescue ships, constrained by laws and bureaucracy that prevent them from getting to where they are needed, leaving migrants in the hands of the Libyan coast guards or forcing the vessels to wait days before docking at safe ports. Their work is not easy and they have even been accused of being “sea taxis” or “accomplices” of traffickers in a country where the call for a “naval blockade” has been a slogan for those who won the last political election.
It takes courage to choose life, anyway.
The last stretch
Barriers, “walls” within the sea, ancient Romans called Mare Nostrum, built by other choices, political choices, such as the bilateral Memorandum of Understanding that Italy signed with Libya in 2017 or the Malta Declaration issued shortly after. Agreements “that form the basis of a close cooperation that entrusts the patrolling of the central Mediterranean to Libyan coastguards,” followed by the establishment of the Libyan SAR, a large maritime area where the responsibility for coordinating search and rescue activities was assigned to Libya, Amnesty International explained. The human rights organization is among those calling for the suspension of the Memorandum: “In the last five years, over 85 thousand people have been intercepted at sea and sent back to Libya: men, women and children who have faced arbitrary detention, torture, cruel, inhuman and degrading treatment, rape and sexual violence, forced labor and illegal killings.”
Any attempt to pull out those barriers, even if made up of boats, is doomed to fail; instead, it will produce pain. Migrations do not stop, new routes open up, and the old ones close and then reopen as the laws or European policies change. Crossing the sea is just the last stretch of a long journey in which human trafficking is a business built on desperation and managed by the same organizations that smuggle drugs and oil. Trips are a commodity sold on a market where the currency can be money or one’s body.
The Mediterranean route will continue to be worth a lot of money. Dirty money, cash, mobilized in a very sophisticated way, ends up in the pockets of those we do not know, or rather, of those about whom we know what they do, financing other illicit businesses. It is not just a question of the “passage” , but it is a much more complicated mechanism.
NGOs’ search and rescue operations were said to have increased the number of people who decided to travel to Europe. However, data from the Italian Ministry of the Interior show that this is false, as reported by the Huffington Post last year. In 2021, there were many more arrivals than the previous year even though there was not a greater number of vessels in the Mediterranean, as some of them were blocked by “bureaucracy.” There were few ships but a greater number of arrivals because those who flee wars and hunger always find new ways to organize the journey.
“People who to leave countries like Afghanistan or the Horn of Africa and have thousands and thousands of kilometers in front of them to be covered on foot with little or no money, are people who have courage and determination unimaginable for us,” Parrino said. Desperation moves them, a desperation that puts them in the hands of those who promise a place in a rust bucket. “The story these people tell is that few get a simple ride. Many are enslaved for years, in the fields or as prostitutes, because the traffickers earn tens of thousands of euros by selling them and reselling them before setting them free again. The trafficking is not to let people cross the Mediterranean; the trafficking is the management of these thousands of desperate people who are exploited as labor slaves and sex slaves for months, for years, before receiving the green light to take the boat,” he added. “People do it because they have even less than the hope that lies ahead. They are people who accept a risk they already know”, Parrino stressed.
Gabriele Baratto, a criminologist at the University of Trento, studied that market for a research project. He investigated the “digitization” of human trafficking.
Smugglers use social media, especially Facebook, to find migrants who want to leave. Then Baratto and his team contacted them. They thought it would be difficult, that they would have to turn to the dark web, that they would have to use secret jargon. But no, everything happens in the light of day. It was enough to type simple keywords, questions such as: “how to get to Europe.”
“ hundreds of posts, pages, and groups dedicated to promoting travel for migrants and these posts contained and contain basic information on the , point of departure, point of arrival and some indication on the price, date, month of departure. And the thing that left us most bewildered was that there was the phone number of the traffickers,” Baratto explained at Emergency’s meeting in Reggio Emilia.
They are “tour operators” of pain, who ask to be reached by phone, WhatsApp, or Skype, which are more difficult to intercept. “We came up with scripts, stories saying: ‘I am in Italy but I have my sister, I have my brother, I have my parents .’ They answer, and if they don’t answer, they write to you. Within a maximum of half an hour you can talk to them on the phone and they give you all the information.” The more you pay, the safer, more “comfortable,” and more direct the journey is, and traffickers know how laws and policies of states in Europe change.
“‘If you did this, why don’t the police do the same?’ ,” Baratto added. It is just too difficult to arrest traffickers one by one. The solution is only “a new approach to immigration,” he believes.
Behind that market in the sunlight, there is hell – the hell that Emergency knows.
“Is it possible to open a humanitarian corridor and decide with what means (to intervene)? … We know very well from where they come…” The only answer to those questions has been Europe’s agreement with Libya, ” ‘paying’ traffickers, providing patrol boats, money, convincing them not to let people leave. The flows from the countries of departure have not changed, the flows in the countries of arrival have greatly decreased. Where do all these people go? How do traffickers use them?” Parrino told us.
To halt the chain of deaths, it would be necessary to eradicate the factors that force people to leave or to decide that it can’t be fate to open the doors of Europe: “Access cannot be by chance for who are saved at sea or manage to land on our shores by boat. We think that it should be much better structured, without launching ‘invasion’ alarms,” he said.
Legal and safe access for those who must leave their countries: That’s the call of the NGO Emergency. Until then, it will be at sea because the sea swallows everything. “After a few minutes the sea is flat and you don’t realize that there has been a tragedy, there are no pieces left, nothing remains …” Parrino said from the Reggio Emilia stage.
No one answered the SOS of the boat that took away the souls of those eighty people who died in mid-September, as happened to Loujin. No one listened to their cries, betraying the ancient law of the sea that imposes that obligation. Instead, Emergency wants to be there with its “Life Support” to respond to those ships that cry out. It will be one of the few of that small fleet of NGOs that resists the obstacles dictated by a guilty and inhuman bureaucracy that pulls invisible barbed wires straight into the water.
A “bureaucracy,” the Italian one, to which the European Court of Justice replied in August, giving reason to the NGO’s Sea Watch vessels blocked for months in the ports of Palermo and Porto Empedocle in 2020. Ships subjected to inspections, prevented from operating for reasons such as “missing certifications” or “too many people on board.” Laws, political choices, and administrative stops that over time have forced NGOs to rethink even “how” help is brought.
Emergency has already been operating since 2016 with other partners offering health and social assistance, a type of aid that was not so common in the past because search and rescue operations were quick and disembarkation never too long. But now, docking in Italy can be timeless.
“The longest mission I can remember was fifty days. Fifty days at sea, of which at least thirty with the refugees on board because stuck in the harbor, with people jumping off the ship psychologists who had to get on,” Parrino remembered.
There are no well-defined rules, he explained, but a lot of arbitrariness, differences according to the ports or the “political climate. There were moments that three or four days passed from identification at sea to disembarkation and moments when thirty or forty days passed,” he added.
That’s why Life Support’s mission will be about fifteen days, as it could be necessary to stay on board longer. “If I had to leave and return from Sicily, it takes about a day to go patrolling in front of the Libyan coast, and you go there when there are good weather windows because in bad weather there are clearly no departures. Within two or three days you should be able to identify the target, so within four or five days the mission should be over.”
That’s just theory. More often, boat persons must share the little space of the ship for days, and over time that forced coexistence can become hard. “Those vessels are clearly not cruise ships. We are renovating the one we bought to the fullest with the experience we have gained over the years, but there are certainly no one hundred and seventy cabins … so things get heavy.”
Two or three days after the rescue, adrenaline turns into other fears, and “everything returns to memory: hunger, despair, what you have left … what you have suffered, the for what has been and for what will happen.” This is why keeping people on board for a long time has profound repercussions for everyone. We need to work “on empathy” and we need to increase the staff, doctors, nurses, “we need to have psychologists ready to board in case the ship has to stop, you have a crew under pressure,” Parrino explained.
Search and rescue at sea by NGOs is often a divisive topic but saving lives cannot be divisive, ever. This is Energency’s starting point, also this time. That’s why the “Life Support” will go out into the open sea. On its red hull, it will take, off the shores of Genoa, the words of Gino Strada, its founder, who in 2017 won the SunHak Peace Prize and who passed away last year: “If the rights are not for every single person, you’d better call them privileges.”
Opinion by Lars Jensen, George Gray Molina (united nations)
Inter Press Service
UNITED NATIONS, Oct 19 (IPS) – Developing low- and middle-income economies are taking hard hits from global economic developments outside their control. Monetary tightening in advanced economies coupled with increasing fears of a global recession have weakened currencies, sent interest rates soaring, and investors fleeing.
All of which is contributing to a rapid deterioration of an already damaging debt crisis which is, as ever, hitting the most vulnerable the hardest.
In new research released by the United Nations Development Programme (UNDP), 54 developing (low- and middle-income) economies are identified as suffering from severe debt problems, equal to 40 percent of all developing economies. 1
Providing this group of countries with the debt relief they need should be a manageable task for the international economy as the group only accounts for little more than 3% of the world economy. Failing to do so, however, could result in catastrophic development setbacks as the group of 54 accounts for more than 50 percent of the world’s extreme poor and 28 of the world’s top-50 most climate vulnerable countries.
Countries are stuck between a rock and a hard place. They cannot spend what is required to protect their citizens and safeguard their development prospects while continuing to also service their fast-rising debt burdens.
Time is running out. Without an urgent step-up of debt relief efforts from the international community, many more defaults will follow, and the debt crisis will turn into an entrenched development crisis as history has taught us.
Contrary to the advice given in the early stages of the COVID-19 pandemic, in the face of high interest rates, inflation, and debt levels, the International Monetary Fund is now urging countries to reign in fiscal spending while providing targeted and time-bound support to vulnerable populations.
But many developing economies cannot easily shift to effective and targeted social transfers or quickly increase tax revenues, – as the administrative capacity to do so takes years to build up.
Without a viable alternative in the form of access to orderly and comprehensive debt restructuring, and additional liquidity support from the international community, countries will have to choose between a string of messy and costly defaults and/or abrupt spending cuts with disastrous consequences for low-income and vulnerable populations and development prospects at large.
Furthermore, both options greatly increase the risk of political and social unrest threatening further setbacks and a deepening crisis.
We must also remember that these things are happening against the backdrop of an intensifying climate crisis which we can only combat together as a global community. Without a rethink on debt relief the global climate transition will be delayed, the economic costs of the transition will rise, and developing economies, who have contributed the least to the problem, will continue to bear a disproportionate size of the costs.
Developing economies must be allowed sufficient fiscal space to undertake ambitious sustainable development plans – including the undertaking of much-needed climate adaptation and mitigation investments.
Debt relief is one of several crucial components of providing it. The G20’s Common Framework for Debt Treatments, under which countries with debt distress can seek a restructuring, will have to be reformed, including a shift in focus towards comprehensive debt restructurings in return for sustainable development objectives.
This will require a change in attitude and sense of urgency, especially among major official creditors, as well as full debt transparency from both debtors and creditors. In our latest paper we discuss possible ways forward for the Common Framework focusing on country eligibility, debt sustainability analyses, official creditor coordination, private creditor participation, policy conditionalities and the use of debt clauses that target future economic and fiscal resilience.
Decisions on debt relief can no longer wait.
Nineteen developing economies – more than one-third of developing economies issuing dollar debt in international markets – have now lost markets access on account of skyrocketing interest rates, more than doubling from 9 countries at the beginning of 2022.
Similarly, credit ratings have been sliding with 27 countries – close to one-third of credit-rated developing economies – rated either ‘substantial risk, extremely speculative, or default’, up from 10 countries at the beginning of 2020.
Hard-won development gains achieved in the global south over decades are now being eroded by the intertwined cost-of-living and debt crises. Not only will a deepening development crisis result in great human suffering, but the cost of regaining whatever development gains are lost will increase substantially the longer we wait.
It is inconceivable, both morally and economically, that we would allow a development crisis to escalate when the international community has the resources needed to stop it now.
Lars Jensen is Economist at UNDP Strategic Policy Engagement Unit.; George Gray Molina is Head of Strategic Engagement and Chief Economist at UNDP
Ricksani Alice, 19, who was married at a young age but is now back in school hoping to complete her education thanks to the Spotlight Initiative talks with UNFPA Gender Programme Officer Beatrice Kumwenda at Tilimbike Safe Community Space in Chiludzi village, Dowa, Malawi on November 2, 2020. Credit: UNFPA ESARO
by Cecilia Russell (johannesburg)
Inter Press Service
Johannesburg, Sep 29 (IPS) – Child marriage continues to be a scourge in many African countries – despite legislation and efforts of many, including parliamentarians, to keep girls in school and create brighter futures for them. This was the view of participants in a recent webinar held under the auspices of the African Parliamentary Forum on Population and Development (FPA) and UNFPA East and Southern Africa Regional Office (ESARO).
The webinar, supported by the Asian Population and Development Association (APDA) and the Japan Trust Fund, heard how progressive legislation prohibiting marriage for adolescents under 18, and in one case, 21, was not enough to stop the practice.
Dr Kiyoko Ikegami, Executive Director, and Secretary General, APDA, noted in her opening address that the COVID-19 pandemic had affected child marriage prevention programmes and increased poverty and inequality, which was a driving force in child marriages.
Chinwe Ogbonna, UNFPA ESARO Regional Director a.i, said while there had been considerable achievements since the 1994 ICPD conference in Egypt – the work was not yet done.
She encouraged the parliamentarians to commit themselves to actions they agreed to at a regional meeting in Addis Ababa in June, which included “amplifying evidence-based advocacy.” In Africa, she said, teenage pregnancy and HIV prevalence are high. Gender-based violence was on the rise, and femicide and the harmful practices of child marriage, and female genital mutilation continued.
The webinar heard from members of parliament in various countries across the African continent.
Fredrick Outa, from Kenya, FPA Vice-President, told the delegates that while Kenya had made ambitious commitments, FGM was an area of concern. Kenya was committed to strengthening coordination in legislation and policy framework, communication and advocacy, integration and support, and cross-border cooperation to eliminate FGM.
Kenya aimed to eliminate GBV and child and forced marriages by “addressing social and cultural norms that propagate the practice while providing support to affected women and girls.”
An MP from Zambia, Princess Kasune, said it was of concern that the Zambia Demographic and Health Survey (ZDHS) of 2018 indicated that 29 percent of women aged 20-24 reported being married before 18. The country had various programmes to address this, including partnering with traditional rulers and civil society to fight early child marriage.
“Chiefs and headmen have made commitments in the fight against child marriage …. Traditional rulers are themselves champions in the fight against child marriage,” Kasune said.
She said the practice continues even though the Marriage Act prescribes 21 as the minimum age for marriage.
However, customary law differed, and there needed to be consistency in legislation.
The other crucial campaign against early marriages was to keep children in school. While the government had employed 30 000 teachers in rural areas, more was needed.
“Keeping children in school was critical to lowering the incidence of child marriage,” Kasune said.
Muwuma Milton, MP Uganda, agreed that culture played a part in eliminating harmful practices like child marriage. The country was applying a multifaceted approach to eliminating this – including school feeding schemes, providing sanitary packs for girls, and encouraging young mothers to return to school after delivery.
“A challenge is that the country has unmet needs for family planning services, which stands at 30%, and there is a culture that believes that once a girl reaches menstruation age, they are old enough to get married,” Milton said.
Matthew Ngwale, an MP from Malawi, noted that his country adhered to the Southern African Development Community (SADC) protocol that condemns the marriage of people under 18. The Malawian constitution, Marriage, Divorce, the Family Relations Act (2015), and the Childcare Justice and Protection Act all reinforce this policy.
But, Ngwale said, despite “progressive legislation, Malawi has one of the highest rates of child marriage in the world, where approximately 42% of girls get married before the age of 18, and 9% are below the age of 15. Approximately 7% of boys marry before the age of 18.”
He also noted that child marriage is higher in rural than urban areas. Rural girls are 1.6 times more likely to marry early than their urban counterparts.
Poverty is a clear driver, with women in the predominantly ‘poor’ south marrying at a slightly lower age than those in the ‘wealthier’ north and central regions.
“In Malawi, children from more impoverished families are twice as likely to marry early than those from wealthier families,” Ngwale said, and in a country where data shows that 51.5% of the people live below the poverty line, which is higher in rural areas at 60% compared to urban areas at 18%.
Traditional initiation practices, done as part of a rite of passage when a girl reaches puberty, encouraged early sexual activity, Ngwale said, and the prevalence of child marriage is higher among matrilineal than patrilineal groups.
“Due to food insecurity, child marriage often becomes a more likely coping mechanism as families seek to reduce the burden of feeding the family,” he said.
Climatic challenges, such as droughts and floods, have become more frequent and catastrophic.
Child marriage impacts secondary school completion rates. In Malawi, only 45% of girls stay in school beyond 8th grade.
“Most young girls who leave school due to child marriage have few opportunities to earn a living, making them more vulnerable to GBV. Child marriage lowers women’s expected earnings in adulthood by between 1.4% and 15.6%,” he said.
However, the Malawi government had created a conducive environment for civil society organizations to work with the government to end child marriage – including the official Girls Not Brides National Partnership.
Pamela Majodina, MP Republic of South Africa, told the webinar the country was committed to the objectives of ICPD25. It has passed laws, including the Domestic Violence Act, Children’s Act, Sexual Offences Act, and Child Justice Act, where it is a criminal offense to have sex with a child under 16 – regardless of consent.
Goodlucky Kwaramba, MP Zimbabwe, said her country was committed to reducing teenage pregnancies from 21.6% to 12% by 2030 and delivering comprehensive Family Planning services by 2030.
An MP from Eswatini, Sylvia Mthethwa, said her country, with 73 percent of the population below 35 and youth unemployment at 47 percent, was committed to ensuring that youth was front of mind. While senators were mobilizing financial resources, the National Youth Policy and National Youth Operational Plan had been developed.
Meanwhile, in Tanzania, some successes were already recorded Dr Thea Ntara, MP Tanzania, said rural areas were fully supported in the rollout of free ARVs, and adolescent and youth-friendly SRH services have been available in more than 63% of all health facilities since 2017.
Note: The webinar series is based on a recommendation of the African and Asian Parliamentarians’ meeting to Follow-Up on ICPD25 Commitments held in June 2022 in Addis Ababa, Ethiopia.
iGaming solutions supplier SOFTSWISS and crypto payment processing provider CoinsPaidannounced theyhave donated $50,000 to deliver aid to the people affected by the recent natural disaster in Turkey. The donation was made to help earthquake survivors rebuild their lives and get access to basic necessities.
Nurullah Yildiz, a SOFTSWISS representative who visited the earthquake-affected territory in Turkey, noted: “When we were in the disaster area, we saw towns lying in ruins. It was devastating. We contacted the survivors to find out what they needed most and how we could help.”
The SOFTSWISS and CoinsPaid teams procured container houses and got them transferred to the survivors. They also helped people, especially families in urgent need and those who have disabled children or lost their relatives, get food and clean water.
“Such terrible events should not be overlooked by those who can help. SOFTSWISS has both the ability and the desire to help people in need,” the company said in a social media post. “And in this unfortunate time, we are extending financial aid to support the victims in Turkey.”
Ivan Montik, Founder of SOFTSWISS, said: “We have the opportunity to support people in need. It is terrible what happened in Turkey and what is happening in Ukraine. People shouldn’t face this, but life always shows us that nobody is protected here, so we chose to help those who need it.”
SOFTSWISS participates in several global campaigns and initiatives to support people in need, the company notes. Since the start of the Russian invasion of Ukraine, the provider has been actively helping Ukrainian people, having donated over EUR 1 million. The support for Turkey is a continuation of the ongoing commitment to this cause, SOFTSWISS pointed out.
Its community-centered initiatives come as the company sees success in its gaming endeavors.Last week, SOFTSWISS unveiled it has perceived40% client portfolio growth year over year for its Casino Platform in 2022, as the flagship product celebrates its 10th anniversary. Presented in 2013, the SOFTSWISS Casino Platform has seen over 400 successful projects launched to date.
According to the company, 2022 was “a breakthrough year” for the product, with 57 new projects launched and 4.5 million active players. The Casino Platform powers 200 live brands from Europe, Latin America and Asia, with 73% of all projects supporting crypto.In February 2023, SOFTSWISS won the “Crypto Company of the Year” title at the International Gaming Awards.
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