External debt

Source: Committee for the Abolition of Third World Debt
There is a great risk that one of the largest relief operations in history will be similar in nature to the tsunami relief efforts in 2004, unless a radically different approach to a reconstruction model is adopted. January 2010. [see more]
In the last two decades, the external debt has been a huge problem that third world countries have to face. The amount of developing countries external debt in 2004 was 2.5 millions of millions of dollars, this amount represents 34 per cent of the Third World Gross National Product (GNP). Taking into account that in 1968 the Third World debt represented nearly 50 thousand millions dollars, the amount has increased by 50 times.

The World Bank and the International Monetary Fund are the two main loaners. These institutions that were initially created to help poor countries are now being used as a tool by developed countries to increase their power. The sister institutions: the Asian Development Bank, the African Development Bank and the Inter-American Development Bank were created in order to promote development, but their policies have so far failed to achieve these goals.

For low-income countries (defined by the World Bank as those with a GNP per capita below US$785), multilateral debt increased by 544% between 1980 and 1997, from US$24 billion to US$155 billion, and currently represents 33% of their total long-term debt burden (versus 25% in 1980).

As a consequence of this crushing debt-service burden, national governments have virtually no bargaining power when negotiating policy lending. The Structural Adjustment Programs (SAPs) of the World Bank and IMF, created originally to “reduce poverty”, are being replaced by a new approach called Poverty Reduction Strategy Papers (PRSPs). But both are similar instruments that regulate development of poor countries by imposing conditionalities.

The Washington Consensus legitimated and created institutions for the implementation of neo-liberal policies, like privatisation, deregulation, liberalisation of markets, and great reductions in social expenditures. SAPs themselves, by orienting economies towards generating foreign exchange, are designed to ensure that debtor countries continue to pay their debt, further enriching Northern creditors at the expense of domestic programs in the South.

This situation has generated since 1980s a “spiral of poverty” where once inside it, is very difficult for developing countries to get out. The national resources that should be oriented to effective social investment and to improve people’s living conditions are now needed to be destined to payments of debt interest.

Thus, 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 US$1 billion from Africa in 1997 and 1998 more than they loaned to the continent.

The problem has been greatly increased by the multilateral institutions’ conditionalities, since the IMF determines the creditworthiness of countries: i.e., until the IMF gives its stamp of approval (which usually requires adherence to the economic policies it recommends), poor countries generally cannot get credit or capital from other sources.

In the last few years, the World Bank and the IMF have agreed to help countries that are heavily suffering from major debt burdens by creating the Heavily Indebted Poor Countries (HIPC) Initiative of 1996. But to qualify for HIPC, a country must complete three years under an IMF-designed Structural Adjustment Program. Even after that hurdle, the country must fulfil a further three years bound by another SAP before relief is granted on its multilateral debt. The cruel paradox here is that the SAP requires them to cut spending on health care, food subsidies, and education.

Many critics and borrowers have stated that these policy conditions often lead to negative environmental, social and economic impacts - disproportionately harming people living in poverty – and provide few tangible benefits in exchange for large increases in debt. In addition to the well-known consequences such as the increase in public indebtedness, negligible or negative growth, and socio-environmental degradation, these measures reassert a dependency of borrowing countries on ‘creditors’.

As a consequence of this situation, civil society organisations seeking solutions to the debt problem propose alternatives ranging from the sole acknowledgement of legitimate debts to the non-payment or condonation of debts. Several campaigns around the world seek to create awareness in poor countries of how unfair this situation is and to call the attention of national governments and IFIs.

Source: Rede Brasil, World Revolution and International Debt Observatory
Imprimir   Enviar    Correct 
      Versión en español
UPDATES
Tuesday, January 19 2010
Haiti: Grants to repay an odious debt?
(Source: Committee for the Abolition of Third World Debt)

International Financial Institutions (IFIs)

Inter-American Development Bank

African Development Bank

Andean Development Corporation (CAF)

International Monetary Found

World Bank

History and evolution

A historical overview of the fight to cancel Third World debt (CADTM)

Debt campaign

Unfinished business: 10 years of drop the debt (Jubilee Debt Campiagn)

The rise and development of the global debt movement: A North-South dialogue (UN Research Institute for Social Development)

Debt and trade

The debt - trade connection in debt management initiatives. The need for a change in paradigm (Center of Concern)

Debt and Women

Debt and women (Oxfam)

Debt conditionalities

The World Bank policy scorecard: The new conditionality? (Bretton Woods Project)

IMF and World Bank use of conditions under the microscope (Bretton Woods Project)

Analysis of IMF 2004- 2005 conditionality review (Eurodad)

Oxfam International submitted suggestions to World Bank to improve its conditionality practice (Oxfam International)

World Bank conditions on the rise (Eurodad)

The debt cancellation brings about more debt and dependence (IFIs Latin American Monitor)

Evaluation of structural conditionality in IMF-supported programs (IMF)

The resignation of Rafael Correa, Ecuador’s Economy Minister: an example of IFI’s influence? (IFIs Latin American Monitor)

Loosening the leash? The World Bank conditionality review (Eurodad)

IMF and economic growth: The effects of programs, loans, and compliance with conditionality

Still missing the point: Unpacking the new World Bank/IMF debt sustainability framework (Eurodad)

World Bank conditionality: NGO victory on ensuring progress report in 2006 (Eurodad)

Deadly delays: How IMF and World Bank economic conditions undermine debt cancellation (Jubilee USA)

Factoring trade considerations into debt policies: The failure of World Bank and IMF-led frameworks (Center of Concern)

World Bank and IMF conditionality: a development injustice (Eurodad)

Debt relief

Shielding the poorest from the global crisis: How IMF gold sales could generate $10 billion for poor country debt relief (Jubilee USA)

Official information by World Bank

Official information by International Monetary Found

G7 debt relief plan: More grief than relief (Jubilee USA)

The IMF, gold sales and multilateral debt cancellation (Jubilee Research and Debt Ireland Coalition)

Fool's gold: the case for 100% multilateral debt cancellation for the poorest countries (Oxfam)

HIPC debt relief: myths and reality (FONDAD)

Update on debt: following the IMF/WB Spring Meetings and the Meeting of G7 Finance Ministers (50 Years Is Enough)

Debt cancellation: historic victories, new challenges (Foreign Policy In Focus)

G8 communique: More and better aid? (Eurodad)

The G8, the World Bank and the IMF: Debt, aid and trade implications (Bretton Woods Project)

G8 debt plan more of the same - and some non-G8 governments trying to unstitch the deal at IMF Board (Eurodad)

Latin American debt relief: There is less than meets the eye (COHA)

Heavily Indebted Poor Countries (HIPC) Initiative—Status of implementation - Reviewing progress of the HIPC initative (IMF/WB)

World Bank and IMF endorse G8 debt deal - But what does it mean? And where does it leave us? (Jubilee Research)

The World Bank/IMF 2005 annual meeting in the balance (Choike)

Debt: New challenges (CADTM)

The debt burden: Is an end in sight? (Bank Information Center)

Debt cancellation undermined to expand IMF power (50 Years Is Enough)

IMF reveals plans for G8 debt deal (Eurodad)

Activistis condemn IMF for betraying G8 pledge on debt cancellation (50 Years Is Enough)

IMF concedes on 19 out of 20 but still a long way to go on debt cancellation (Eurodad)

Justice for Latin America on IDB debts (Eurodad)

What purposes will serve the IMF debt cancellation in Nicaragua and the other 18 “poor” countries? (FEDH-IPN)

IDB debt cancellation – a pending issue (IFIs Latin American Monitor)

G8 inaction betrays people with AIDS (CADTM)

When the vultures descend (Center of Concern)

Unfinished business: ten years of dropping the debt (Jubilee Debt Campaign)

Ecological debt

Oil Watch

Ecological debt site

Ecological debt: South tells North "time to pay up" (Cosmovisiones)

Drilling into debt: An investigation into the relationship between debt and oil (Oil Change International)

Ecological debt: Prospective and consequences on land (Ecological debt)

Latin American cases

Public debt: Who ows who? (Rede Brasil - Jubilee South)

For an integral audit of public indebtedness - Ecuador at the cross-roads (CADTM)

Repayment of sovereign debts from a legal perspective – the example of Argentina (University of Essex)

Bolivia update on debt issue (Eurodad)

The Debt after the deal: Update on the external debt situation in Argentina (Jubilee South)

Challenges posed by an Argentinian post-default scenario (Choike)

It all depends on the colour of the glass you are looking through: Argentina and Brazil in the face of debt (IFIs Latin American Monitor)

The Argentinean debt: history, default and restructuring (Initiative For Policy Dialogue)

Bolivia: Unconditional debt relief (Platform of Action Against Poverty)

Most part of Latin American budgets are conditioned upon debt payment (IFIs Latin American Monitor)

Who owes who? : External financing in Lula’s administration (Rede Brasil)

Breaking the Chains of Debt: Bolivia's Public Debt (Fundación Jubileo)

To pay back more than what is granted, a Latin American problem (IFIs Latin American Monitor)

Nicaragua: The "Millennium Development Goals" (MDGs) and the IMF program (Coordinadora Civil)

Third World external debt development: The case of Latin America and the Caribbean (CADTM)

Asian cases

Debt and challenges to South Asia (CADTM)

Information resources - International Institutions

Economic Commission for Latin America (ECLAC)

G8: "Group of Eight Countries"

World Trade Organization (WTO)

United Nations Development Programme

United Nations Capital Development Fund

United Nations Conference on Trade and Development

Follow-up process to the International Conference on Financing for Development

Information resources - Civil society

IFIwatchnet

Bretton Woods Project

Center for Economic Justice (CEJ)

Eurodad

RedBrasil

Freedom from Debt Coalition

Negotiations

The Paris Club at 50: A short promenade through the programme and practice (Eurodad)

Debt and development

Debt in Doha: What should be on the agenda? (NGLS)

The hijacking of the development debate how Friedman and Sachs got it wrong (New Rules for Global Finance Coalition)

The geopolitics of Latin American foreign debt (Znet)

How debt and the Washington Consensus destroy development and create poverty (Transnational Institute)

Debt sustainability

A new debt crisis? Assessing the impact of the financial crisis on developing countries (Jubilee Debt Campaign)

Is domestic debt the answer to debt crises? (Initivative for Policy Dialogue)

Debt sustainability in emerging markets: A critical appraisal (Third World Network)

Is China actually helping improve debt sustainability in Africa? (G24)

Still missing the point: Unpacking the new World Bank/IMF debt sustainability framework (Eurodad)

The new World Bank/IMF Debt Sustainability Framework: A human development assessment (Center of Cocern)

To Pay or To Develop - Debt sustainability handbook (Eurodad)

Debt sustainability or defensive deterrence? (Eurodad)

A human development approach to preventing new cycles of debt (CIDSE)

Debt audit

About the report of the Ecuadorean Special External Debt Audit Commission (CEIDEX) (IFIs Latin American Monitor)

Let's launch an enquiry into the debt!: A manual on how to organize audits on Third World debts (CADTM)

Ecuador’s public debt auditing (Jubileo 2000 - Red Guayaquil)

The international peoples' tribunal on the debt (Jubilee South)

International Workshop on debt auditing (Jubilee South)

"Opening the books": Brazil’s experience with debt audits (International debt observatory)

Introducing democracy into solving the debt problem (Network Institute for Global Democratization)

The commission set to audit the external debt in Ecuador begins its work (IFIs Latin American Monitor)

Illegitimate debt

Haiti: Grants to repay an odious debt? (Committee for the Abolition of Third World Debt)

The concepts of odious debt and illegitimate debt (Obela.org)

World Bank Paper on Odious Debt: Dismissive and Limited (Eurodad)

Illegitimate debt: demanding justice beyond solidarity (Observatorio de la Deuda en la Globalización and Campagna per la riforma Della Banca Mondiale)

Enough is enough: The debt repudiation option (Christian Aid)

Skeletons in the cupboard: illegitimate debt claims of the G7 (Eurodad)

Post-Imperialist North-South financial relations. What Norway really owes African 'debtors'? (CADTM)

Odious Debt: Definition, application and context (Eurodad)

International conference on the cancellation of illegitimate debts report (Afrodad)

Post-conflict countries

External debt in post-conflict countries (German Institute for Economic Research (DIW Berlin))

Lebanon en route to an illegitimate debt (Committee for the Abolition of the Third World Debt)

African cases

The illegitimacy of external debts - The case of the Decmocratic Republic of Congo (Afrodad)

Economic development in Africa: debt sustainability: oasis or mirage? (UNCTAD)

Beyond the Washington and Post-Washington Consensus in Zimbabwe and South Africa? (Alternative Information and Development Center)

A leaking ship: The role of debt, aid and trade (Pambazuka)

Strategic considerations for African debt campaigns in 2006 (Solidarity Africa Network)

Kenyan corruption case a step forward for odious debts campaign (Odious Debts)


Choike is a project of the Third World Institute
www.choike.org | Contact | Avda. 18 de julio 2095/301, Montevideo 11200, Uruguay | Phone: +598 2403 1424