World Bank and IMF Witness Readings and Prayer
During the retreat, participants processed with banners and signs and had a ten minute witness at four World Bank and IMF Sites on 19th St. NW:
- World Bank on H St. between 18th and 19th Street.
- IMF on corner of 19th and Pennsylvania Ave.
- IMF on 19th St.
- World Bank (International Finance Corp.) on 19th St.
The World Bank/IMF and Global Poverty
Structural Adjustment—a Major Cause of Poverty
Why Drop the Debt?
The Biblical Mandate
Prayer
Song
The World Bank/IMF and Global Poverty
The World Bank and the International Monetary Fund (IMF) are the two largest sources of foreign currency loans for poverty alleviation in the poorest countries of the world. At the same time, the poorest countries of the world owe more money to these two institutions than they do any other private or government institutions because most of these loans were so poorly designed that the borrowing countries have not reaped enough income to pay them back. In other cases, government officials and private contractors have siphoned off the funds into private bank accounts. This international debt problem has become such a crisis that many poor countries pay more money to the World Bank and the IMF each year than they receive in loans. The World Bank's own figures indicate that the IMF extracted a net of $1 billion from Africa in 1997 and 1998 more than they loaned to the continent.
The global financial crisis devastated the global economy, particularly the world’s poorest countries, where an additional 64 million people were forced into extreme poverty instead of fixing the international economic system that caused the crisis, world leaders gave the International Monetary Fund – an institution whose policies contributed to the crisis - even greater responsibility. Charging the IMF as a principle player in the global economic recovery, G20 leaders tripled the IMF’s lending capacity from $250 billion to $750 billion. When the US approved an additional $100 billion to the IMF, civil society and humanitarian organizations argued that fundamental reform of the IMF was needed, given its previous lending practices and the detrimental effect it has had on low-income countries. Before the fall 2010 IMF and World Bank meetings in October, Jubilee USA issued a report at a Congressional briefing calling on the US government - who has significant power and influence over the practices and policies of the IMF - to promote a number of measures to help reign in destructive lending practices.
Structural Adjustment—a Major Cause of Poverty
by Anup Shah -- From the Global Issues Web Site: November 28, 2010
Debt is an efficient tool. It ensures access to other peoples’ raw materials and infrastructure on the cheapest possible terms. Dozens of countries must compete for shrinking export markets and can export only a limited range of products because of Northern protectionism and their lack of cash to invest in diversification. Market saturation ensues, reducing exporters’ income to a bare minimum while the North enjoys huge savings. The IMF cannot seem to understand that investing in … [a] healthy, well-fed, literate population … is the most intelligent economic choice a country can make.
— Susan George, A Fate Worse Than Debt, (New York: Grove Weidenfeld, 1990), pp. 143, 187, 235
Many developing nations are in debt and poverty partly due to the policies of international institutions such as the International Monetary Fund (IMF) and the World Bank. Their programs have been heavily criticized for many years for resulting in poverty. In addition, for developing or third world countries, there has been an increased dependency on the richer nations. This is despite the IMF and World Bank’s claim that they will reduce poverty. Following an ideology known as neoliberalism, and spearheaded by these and other institutions known as the “Washington Consensus” (for being based in Washington D.C.), Structural Adjustment Policies (SAPs) have been imposed to ensure debt repayment and economic restructuring. But the way it has happened has required poor countries to reduce spending on things like health, education and development, while debt repayment and other economic policies have been made the priority. In effect, the IMF and World Bank have demanded that poor nations lower the standard of living of their people.
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Why Drop the Debt? taken from the Jubilee USA Network
"Must we starve our children to pay our debts?"
Julius Nyerere, former President of Tanzania
In the world's most impoverished nations, the majority of the populations do not have access to clean water, adequate housing or basic health care. These countries are paying debt service to wealthy nations and institutions at the expense of providing these basic services to their citizens. The United Nations Development Program estimated in 2003 that 30,000 children die each day due to preventable diseases. Debt service payments take resources that impoverished countries could use to cure preventable diseases. Debt cancellation frees up resources to reverse this devastating reality.
They Are Already Paid
These nations have already paid back their debts time and again. The debt crisis set in when interest rates skyrocketed and compound interest made repayment impossible.
- FACT: From 1970-2002, Africa received some $540 billion in loans and paid back $550 billion in principal and interest. Yet Africa remains today with a debt stock of $295 billion.
The conditions that come with new loans and debt relief hurt the poor. Debt relief under the current program keeps essential human services, like primary health and education and access to safe water, out of reach of the impoverished majority.
- FACT: Debt relief is conditioned on requirements that countries limit government spending, private basic services, and/or change trade and investment rules.
Much of the debt is a result of "bad faith" lending including:
- The practice of pushing loans on developing nations because banks had too much money and had to lend it
- Knowingly lending to corrupt governments for political purposes
- Lending with conditions ensuring profits return to the creditors
Some debt also resulted from stolen wealth or loans that served the purposes of the elite and not the people. Other debt resulted from irresponsible projects that failed to serve a greater purpose or caused harm to the people or the environment.
This is why debt campaigns from around the world say, "Don't Owe, Won't Pay!"
Texts in both the Hebrew Scriptures and throughout the New Testament call for debt cancellation and the righting of relationships every seven years with a super Jubilee every 50th year. The practice of debt cancellation can also be found in history among early Pagan kings. The Qu'ran also challenges debt by harshly criticizing usury.
"Proclaim liberty throughout the lands
and to all the inhabitants thereof,
it shall be a jubilee for you."
Leviticus 25:10
Debt Cancellation is Adding by Subtracting
Debt cancellation allows countries to access their own resources for poverty eradication. Savings from debt service can now be allocated for health care, education, fighting HIV/AIDS and more.
- FACT: Experts estimate it would take an annual commitment of $18 billion a year to reverse the AIDS crisis in Africa that claims 7,000 lives a day. Sub-Saharan Africa pays almost $13 billion in debt service to the wealthy nations and institutions every year. Just do the math.
Debt sucks the natural resources out of a country, forcing countries to become dependent on international creditors for more aid and new loans.
"Debt is tearing down schools, clinics and hospitals and the effects are no less devastating than war."
- Dr. Adabayo Adedeji, African Center for Development Strategy
Debt is a New Kind of Slavery
International debt slavery means that countries are caught in a debt trap that they can't escape. The debt trap is composed of economic conditions that take away a country’s sovereignty and freedom. When countries are enslaved by debt they can't improve the lives of their citizens nor gain control over their own futures.
"Every child in Africa is born with a financial burden which a lifetime's work cannot repay. The debt is a new form of slavery as vicious as the slave trade."
- All Africa Council of Churches
"Debt means death," cries Wahu Kaara, of the Kenya Debt Relief Network. Jesus proclaimed, "Forgive us our debts as we forgive our debtors" (Mt. 6:12). Jesus also declared, "The Spirit of the Lord is upon me...He has sent me to proclaim liberty to the captives...and to let the oppressed go free, and to proclaim a year acceptable to the Lord" (Lk: 4:18-19). As Jesus proclaimed this to be his mission so we, too, must make it ours.
In the name of the poor who have been deemed expendable by the IMF, World Bank, corporations and the rich nations; in the name of the poor who have suffered and died because of a global economic and political order based on greed and exploitation; we commit ourselves to breaking the chains of debt and creating a global economy based on justice and peace for all of God's children. The reign of God is at hand! Let us, and all religious bodies and nations truly proclaim liberty to the captives and let the oppressed go free. Let us truly proclaim a year acceptable to the Lord! Amen.
Child, child, child, child
Will we ever see you grown?
We are working for your future
We love you so