A tale of two emergencies – the interplay of sovereign debt and climate crises in the global south /

Informe publicado por Eurodad “Una historia de dos emergencias – La interacción de la deuda soberana con las crisis climáticas en el Sur Global”, Diciembre 2020 /report published by Eurodad, December 2020 (en español & in english)

The climate emergency has become a wider focus of policy discussions around debt, as natural disasters increase both the cost of borrowing and the risk of debt crises in countries in the global south that are often already bearing large external debt stocks. Similarly, unsustainable debt levels can mean less fiscal space and opportunities to face the challenges of adaptation and mitigation, as well as to recover from loss and damage after a climate disaster. In this context, the need to transition globally towards a more sustainable and equitable economy will not be possible without sustainable, responsible and fair climate finance, as well as finance for transition that does not exacerbate debt vulnerabilities in the global south. In a nutshell, climate justice will not be possible without economic and debt justice.

Continua llegint «A tale of two emergencies – the interplay of sovereign debt and climate crises in the global south /»

Shadow report on the limitations of the G20 Debt Service Suspension Initiative: Draining out the Titanic with a bucket?

Informe publicado por Eurodad ” La Iniciativa de Suspensión del Servicio de la Deuda del G20 ¿drenar el Titanic con un balde?”, Octubre 2020 / Report published by Eurodad, October 2020

The report outlines how the DSSI was intended to help developing countries with overwhelming debt, exacerbated by the impacts of the pandemic and economic downturn. But it has fallen short. 

Continua llegint «Shadow report on the limitations of the G20 Debt Service Suspension Initiative: Draining out the Titanic with a bucket?»

A call to action for CSOs: Stop the new debt crisis from derailing women’s rights

Article escrit amb Veronica Serafini (Latindadd) publicat en anglès a Eurodad, 8 de març de 2020

This blog outlines the serious barriers women are facing due to the unfurling debt crisis in the global south. As debt payments increase, resources are diverted from public services investments and towards the outsourcing and privatisation of these services. This poses a threat to women’s rights and equality. CSOs across the world can help tackle this injustice, but, as this blog states, a greater gender focus for our actions is essential.  Continua llegint «A call to action for CSOs: Stop the new debt crisis from derailing women’s rights»

Out of service / Fuera de Servicio: Cómo amenaza a los servicios públicos y los derechos humanos la creciente crisis de la deuda

Informe publicado con Eurodad el 20 de febrero de 2020 / Report published with Eurodad on February 20th 2020

Los servicios públicos desempeñan un papel fundamental en los avances en materia de derechos humanos y lucha contra la desigualdad. Sin embargo, los crecientes niveles
de deuda pública externa, especialmente en el Sur global, amenazan los servicios de los que dependen los ciudadanos para tener, incluso, un nivel de vida básico.

Public services play a critical role in advancing human rights and fighting inequality. However, growing levels of external public debt, especially in the global south, threaten the very services on which citizens depend in order to have even a basic standard of living.

Continua llegint «Out of service / Fuera de Servicio: Cómo amenaza a los servicios públicos y los derechos humanos la creciente crisis de la deuda»

Haiti 10 years after the earthquake: the fight for social and economic justice continues

Article publicat (en anglès) a Eurodad, el 10 de gener de 2020

On January 12 2010 an earthquake of magnitude 7.3 on the Richter scale ripped through Port-au-Prince metropolitan area and other parts of Haiti. More than 1.5 million people, representing 15 per cent of the country’s population, were directly affected by the earthquake. According to the Haitian government, 316,000 people lost their lives. An estimated US$ 7.8 billion dollars of damage was caused – equivalent to more than 120 per cent of the GDP of 2009. Everyone in Haiti has a story that begins or ends on 12 January and many wounds remain open. Everyone lost someone. Everyone remembers where they were that day.

Continua llegint «Haiti 10 years after the earthquake: the fight for social and economic justice continues»

Debt: A Lever of Dispossession

Article publicat el 22 de maig de 2019 a Public Seminar, en el marc del seminari “Debt | Empire | Digital” (en anglès)

“Debt is a cleverly managed reconquest of Africa”

Thomas Sankara

“In modern times, debt has become a key means of capital accumulation. Ubiquitous, it has taken on a new function, as the most general category through which exploitation is organized”

Silvia Federici

Continua llegint «Debt: A Lever of Dispossession»

Els forts impactes de l’austeritat a Grècia

Us deixo una entrevista que em va fer el Joan Ortiz al programa de ràdio Punt.org de Ràdio Estel

Sabies que un part a la sanitat pública grega costa 800€? O que una baixa per malaltia superior als 15 dies implica l’acomiadament del treballador?

Les mesures d’austeritat que la troika imposa a Grècia estan tenint unes conseqüències sobre la ciutadania molt greus. La Iolanda Fresnillo, que és membre de la Plataforma Auditoria Ciutadana del Deute, ha estat recentment en aquest país i ens ho ha vingut a explicar.

Aquí ho teniu.

Els forts impactes de l’austeritat a Grècia, Iolanda Fresnillo. Punt Org núm 73 from JOS on Vimeo.

La podeu trobar també aquí: http://periodismeiconsciencia.org/impactants-consequencies-de-les-politiques-dausteritat-a-grecia/

World Bank and IMF change the style, not the content

Why there are still reasons for fighting the international financial institutions

Iolanda Fresnillo

October 2010

Published in ODG Blog, CADTM, CanalSolidario, Rebelion, El Economista de Cuba

From 26 to 28 September 2000 tens of thousands of activists took to the streets of Prague. The International Monetary Fund (IMF) and the World Bank were holding their annual assembly in the Czech capital, and they were the target of the criticisms of a growing social alter-globalization movement. “This model of global capitalism is underpinned by the policies of the Bank and the IMF and other like the World Trade Organization (WTO), which are the main causes of the ongoing problems of the world, as they lead to the destruction of the environment and increase the economic and social inequalities of the majority of the population”, declared the Global Resistance Movement manifesto in 2000. On that occasion the Bank and the IMF were forced to bring their 55th annual meeting to a hasty close given the size and virulence of the mobilizations in the street.
Between 8 and 10 October 2010 the 65th annual meeting of the Bank and the IMF was held in Washington DC. A decade later, with just a few hundred people protesting in the street, the two institutions continue to impose their vision of the economy and development on the whole world with renewed vigour. Have they changed so much that we in the social movements have stopped mobilizing against their policies? What are the Bretton Woods twins up to these days?
Historic reforms, really?
One of the most frequently repeated criticisms of the World Bank and the IMF is the lack of democracy at the heart of the two institutions. The right to vote in both of them is distributed according to the weight of each country in the world economy, which sets the contributions in the form of quotas. In recent years the obvious imbalance in the share-out of quotas, and therefore of votes, has become the focus of debate within the Bank and the IMF themselves in the face of the clamour of the emerging countries for a review of the system. Although the most impoverished countries on the planet and the organizations of civil society have been protesting about that imbalance in decision-making power for decades it was not until countries like China, Brazil or South Korea demanded their slice of the cake that the Bank and the IMF took such criticism seriously.
For years, on the occasion of the annual or spring meetings, demands, arguments and statements about the Bank and IMF quotas have been constantly reiterated. In 2008 agreements were reached in both institutions to review the quota system, but it was not until this year that the long trumpeted reform was closed. In April, at the spring meetings, the review of quotas in the Bank was closed and on 23 October, at the meeting of G20 finance ministers held in South Korea two weeks after the annual meetings of the Bank and the IMF, the agreement on the new share-out of the Fund cake arrived. The director of the IMF at the time, Dominique Strauss-Kahn, described the G20 agreement as a “historic commitment” which will make the Fund a “more effective, credible and legitimate” institution.
However, the “historic” reform conceals a reality which has changed very little. The principle on which the quota system is based remains intact. The cake is shared out according to the economic (and political) power of each country. And so the European Union has had to yield 6% of quotas so that “the fast growing emerging economies have a stronger voice in the Fund”. And so the reform has in effect given more power to countries like China, India or Brazil. The reform of World Bank quotas agreed in April follows the same line, giving more power to the emerging economies. With the reform the United States keeps the power to veto in both institutions, as does the European Union (in the event of voting as a block, since the EU countries do not have a single seat in either the IMF or the Bank). In the World Bank, for example, the countries with high income still take 61% of the votes; the ones with medium income up to 35%, whilst the low income countries are left with just 4.46%. At the IMF the same pattern is repeated, giving more power to those who have increased their clout in the world economy, and maintaining the marginal quotas of the most impoverished countries. For Strauss-Kahn, however, the reform “puts an end to the argument about the legitimacy of the Fund, which has gone on for years, almost decades“.
Although it is true that the new share-out of quotas recognises the growing weight in the world economy of the emerging economies, it in no way addresses the problems of lack of legitimacy and democracy of the Bank and the IMF. The institutions are left with deeply unbalanced internal structures insofar as they continue to sideline the countries which are the main victims of their policies.
The crisis as opportunity
For many of us, the lack of legitimacy of the IMF and the Bank is not only due to the deeply antidemocratic structure of the institutions, but most of all to the policies they have imposed on the world for over half a century. As we stated a decade ago on the streets of Prague, the Bank and the IMF “have provided the necessary means for transnational companies, banks and financial institutions to continue to pillage the resources of the periphery and lay the burden of the debt on the most impoverished“. It is this alliance between the International Financial Institutions (IFI), the transnational companies and financial capital that has steered the adjustment policies which the IFIs continue to impose. The obvious failure, from the point of view of the welfare of the nations, of the policies dictated by the IMF or the projects designed by the Bank has never been acknowledged by the institutions or their main shareholders.
Far from acknowledging their failures and correcting their mistakes they continue to “recommend” the same liberalization and adjustment measures, financing the construction of megaprojects at the service of the big companies or generating illegitimate external debt. They have refused to see in the financial and economic crisis the proof of their failure; quite the opposite. Both institutions are brought strengthened by it. Both institutions have been given capital increases or more available funds. In April 2009 the G20 appointed the IMF the central vehicle for overcoming the crisis and trebled its lending capacity, from 250 billion dollars to 750 billion. According to Jubilee USA, “by 2014 the Fund’s capacity for lending to low income countries will be 10 times greater than what it had before the crisis“.
The new funds should theoretically be earmarked for dealing with the crisis and its impacts, but paradoxically they come with the usual conditions, measures such as the liberalization of the financial and banking sector or the imposition of limits on social spending and public deficit. Several reports from social organizations show how the loans the IMF has granted to cope with the crisis have conditions in the purest Washington Consensus style. A study done by the European network Eurodad on the post-crisis loans granted to 10 impoverished countries reveals the existence of conditions to cut or freeze wages, reduce the deficit and cut back social spending or pass on the increases in the price of petrol and food to the people in the form of indirect taxes and price rises.
New forms, new topics, new countries … the usual interests
But let us be under no illusions, not everything is the same as it was ten years ago at the Bank and the IMF. The World Bank, for example, has been coming into line with the new times, broadening its field of action, adapting its discourse to the new tendencies and renewing its strategies.


So, for example, it has placed itself as a key player in the management of funds to meet the challenges of climate change. Despite the opposition of a large part of civil society, the World Bank is already administering up to twelve carbon market funds, with a value of over 2.5 billion dollars, and a large number of investment funds related to climate change (clean technology, renewable energy, forests, clean development mechanisms). Of the 30 billion dollars climate funding committed by the rich countries at the Copenhagen summit in December 2009, about 8 billion have been made effective. Of those 42% have been channelled through the World Bank, and a good part of them will be applied in form of loans.


The World Bank’s interest in the fight against climate change responds basically to its interest in laying its hands on this new financing cake. Proof of that is that in recent years it has continued to finance projects that contribute to that climate change. So, according to Jubilee South, between 1992 and 2004 it approved over 11 billion dollars in loans for over 120 fossil fuel projects, which represent 20% of current global emissions. Between 2007 and 2008 alone the Bank financed an additional 7.3 billion dollars in fossil fuel projects, and only 5.3 billion for renewable energies and energy efficiency.
The World Bank is not only adapting to the new times by putting on green make-up; it is leading a process of transformation of finances for development in which the private sector will be the dominant force. In effect, the Bank has gradually strengthened the International Financial Corporation (IFC). This organism, which belongs to the World Bank Group, was created in 1956 to promote investment in the private sector in Global South countries, providing technical assistance and taking part in the funding of private or public-private initiatives. The IFC budget has quintupled since 2002, with over 18 billion dollars committed this year. It leaves in the hands of financial intermediaries (banks, investment funds, risk capital funds) nearly half its loans, intermediaries that have dubious experience or interest in promoting sustainable development. Therefore, through the CFI the World Bank is rewarding the main sector responsible for the financial and economic crisis we are living today.
The principle the IFC acts under is the promotion of private investment, of whatever kind, provided it is economically viable. Priority is given to commercial and financial criteria rather than social or environmental ones when it comes to choosing the projects for investment or support. A large part of the resources end up going to big infrastructure projects and the main beneficiaries are the transnational companies of the rich countries. Around two thirds of the companies that have received the support of the IFC in recent years have been OECD countries. Moreover, the IFC has been denounced by civil society organizations for supporting companies that operate or have their headquarters in tax havens, thus fostering capital flight from the countries of the South. It has also been denounced for the lack of control, assessment, transparency and civil society participation mechanisms.
In short the World Bank, and specifically the IFC, is promoting a private turn in development finance. A model that is being imposed all over, as in Spain, where mechanisms of support for the private sector are created and strengthened, among them the new Fund for the Internationalization of Spanish Companies (FIEM). A model that raises private companies to the category of development agents, without taking account of the negative impacts their actions may have on the welfare of the people and the defence of human rights, both in the case of the FIEM and the new Promotion for Development Fund (FONPRODE).
Lastly, and this will come as no surprise to anybody, the IFIs are crossing boundaries which years ago looked impenetrable. The IMF is a key player in the definition of the adjustment policies which the Spanish, Greek or Irish governments are applying, just as they did with Argentina or the Democratic Republic of Congo, among many other countries in the Global South, years ago. The boundary between North and South, between developed and impoverished countries, disappears when it is a matter of defending the interests of capital. The line separating public and private is blurred when those same interests have to be secured.
As stated in the mobilizations in Prague in 2000, “the links between the IMF, the Bank, the WTO and the transnational corporations seek to maximize private profits and limit the power of people to protect the environment, to determine their economic model and guarantee human rights“. Now, just as a decade ago, there are still reasons for opposing the policies and even the existence of institutions such as the World Bank and the IMF. The style changes but not the content.