Sri Lanka owes 81% of its external debt to US and European financial institutions and Western allies Japan and India. China owns just 10%. But Washington blames imaginary “Chinese debt traps” for the nation’s crisis, as it considers a 17th IMF structural adjustment program.
Something that has not changed over 160 years of oil production is the deliberate burning of gas associated with it, called gas flaring. It is turning out to be a major source of methane emission, a greenhouse gas (GHG) “over 80 times more powerful than carbon dioxide as a warming gas on a 20-year timeframe”.
The World Bank’s latest 2022 Global Gas Flaring Tracker Report underscored that the efforts to curb this global warming causing activity have “stalled” in the last one decade.
In the mid-1980s, Soviet officials saw a need to open up their economy in hope of achieving Western-style innovation and productivity. That was the decade in which Margaret Thatcher and Ronald Reagan were sponsoring the neoliberal pro-financial policies that have polarised the U.S., British and other economies and loaded them down with rentier overhead.
The Soviet Union followed a privatization policy far more extreme than anything the social-democratic West would have tolerated. It agreed in December 1990 to adopt the neoliberal blueprint presented in Houston by the International Monetary Fund (IMF), the World Bank, the Organisation for Economic Cooperation and Development (OECD) and the European Bank for Reconstruction and Development (EBRD) to transfer hitherto public property into private hands. The promise was that the privatisers would find their interest to lie in producing abundant new housing, consumer goods and prosperity.
The Soviet leaders believed that the neoliberal advice they received was about how to follow the path by which the advanced industrialised nations had developed and made their prosperity seem so attractive. But the advice actually turned out to be how to open up their economies and enable U.S. and other foreign investors to make money off the former Soviet republics, by creating client oligarchies of the sort that U.S. diplomacy had installed in Latin American and other puppet states. The Cold War’s isolation of the former Soviet Union gave way to turning its republics into prey for financial and natural-resource exploitation by U.S. and other Western banks and corporations.
There is much talk among ‘progressive’ economists that the IMF and the World Bank have turned over a new leaf. Gone are the days of supporting fiscal austerity, demanding that national governments get public debt levels down and insisting on conditions for countries borrowing IMF-WB funds that their governments privatise their state assets, deregulate markets and reduce labour rights.
Now after the experience of the unprecedented COVID pandemic slump, the old ‘Washington Consensus’ is over and has been replaced by a new ‘consensus’. Whereas the “Washington Consensus” for international economic policies of the 1990s saw government failures as the reason for poor growth performance and advised governments ‘to get out of the way’ of market forces, now the IMF, the World Bank and the World Trade Organisation’s chiefs call for more fiscal spending, more funds for lending, and measures to reduce inequality between nations and within nations through higher taxes on the rich.Read More »
The novel coronavirus disease (COVID-19) pandemic, which forced economies around the world to lock down last year, may have increased global poverty by 119 million-124 million, according to updated estimates by World Bank.
This includes the 31 million people who would have moved out of poverty (measured at the international poverty line of $1.90, or Rs 139.3 per day) in 2020 in the absence of the pandemic.
The estimates are based on the forecasts from the Global Economic Prospects (GEP) made by the international financial institution in January 2021.Read More »
There is much self-congratulatory back-slapping among governments, the World Bank officials and many economists about the “decline in poverty” that is supposed to have occurred between 1990 and the onset of the recent pandemic. This decline is claimed on the basis of an International Poverty Line (IPL) of $ 1.90 a day (at 2011 Purchasing Power Parity) worked out by the Bank, which basically defines poverty across the world as lack of access over one day to the bundle of goods that $1.90 would have bought in the U.S. in 2011.
How ridiculously low this figure is can be gauged from two facts. In 2011 in the U.S. $1.90 would have just sufficed to buy a cup of coffee and nothing more. In India the equivalent of $1.90 in 2011, while Rs. 95 at the nominal exchange rate, would have been only Rs.29 at the PPP exchange rate, which would have barely purchased two bottles of drinking water.Read More »
The coronavirus disease 2019 (COVID-19) pandemic is not only stretching health systems to their limits, it is rapidly becoming a threat to the entire global economy, on a scale much greater than the 2007–08 financial crisis. Policymakers from high-income countries have been quick to respond, pledging unprecedented amounts of support to citizens and businesses. The EU announced a “no limits” commitment to protect European economies by purchasing sovereign and corporate debt, while the US congress has agreed a US$2 trillion stimulus bill.
Such measures are not, however, open to low-income and middle-income countries (LMICs), which will face the brunt of the COVID-19 burden. Emerging markets were among the first from which investors fled and have so far withdrawn more than $83 billion from them, the largest capital flow ever recorded. This limits the credit available to governments and businesses, pushes down commodity prices and real economic activity, and ultimately reduces health-system budgets at a time when capacity urgently needs to expand.
The genius of the World Bank was to recognize that it’s not necessary to occupy a country in order to impose tribute, or to take over its industry, agriculture and land. Instead of bullets, it uses financial maneuvering.
— Michael Hudson, 2019
In 1944, as WWII was coming to an end, representatives from 44 countries met in Bretton Woods, New Hampshire to form an international exchange system. In order to foster global stability, foreign currencies were pegged to the U.S. Dollar, itself based on gold. The Bretton Woods System ended in the early 1970s when President Nixon detached the dollar from the price of gold.Read More »
In 2019, the World Bank (WB) and the IMF will be 75 years old. These two international financial institutions (IFI), founded in 1944, are dominated by the USA and a few allied major powers who work to generalize policies that run counter the interests of the world’s populations.
The WB and the IMF have systematically made loans to States as a means of influencing their policies. Foreign indebtedness has been and continues to be used as an instrument for subordinating the borrowers. Since their creation, the IMF and the WB have violated international pacts on human rights and have no qualms about supporting dictatorships.Read More »