FDC derided bank’s offer to protect the poor against the crisis as a “cure worse than the disease”
14 October 2008
Debt & Public Finance
– Members of the Freedom from Debt Coalition (FDC) today staged a protest rally in front of the World Bank office here to demand the unconditional and total cancellation of all debts it is claiming from the Philippines and all south countries. The call was made in response to the financial institution’s recent offer to protect the poor and developing countries against the financial turmoil through the availability of more aid and loans.
In a statement, the debt watchdog branded World Bank’s offer of help as a “cure worse than the disease.”
“Lest we forget, the role of international financial institutions such as the World Bank in this unfolding economic crisis is not in anyway negligible,” FDC said.
The group said the large debt service payment on external debts as claimed by financial institutions such as World Bank resulted in a scarcity of resources greatly siphoning needed funds which could have been used to finance important social services and productive sectors to fully develop and strengthen developing nations’ real economies.
“As such, developing countries in a dire need to religiously honor debts claimed from them and mobilize new resources at the same time exposed themselves to the international financial markets through massive investment and speculative trading,” FDC said.
FDC also pointed out the vulnerability of many developing countries to the crisis can be significantly traced to the policies endorsed by the said financial institutions. The group said the country’s implementation of trade liberalization and privatization and its firm loyalty to an export-oriented economic paradigm were the consequences of using debt, aid, access to credit and even debt relief as instruments of domination.100% debt cancellation
“Truly, if World Bank is sincere in helping poor countries mitigate the onslaught of the financial crisis, the best way it can help is through the total and unconditional cancellation of all debts it is claiming, many of which are challenged as illegitimate,” FDC said.
The group also demanded World Bank to cease from pushing loans and false aid, which it said, would only contribute to the further contraction of the said countries’ social and economic spending especially during a grueling international economic crunch.
FDC said that aid must be given as a form of reparation and as redistributive justice by World Bank to the south instead using it as tools to further aggravate the international debt burden.Illegitimate World Bank-claimed debts
FDC said as of end of 2007, World Bank-claimed debts accounts for the second largest multilateral external debts the Philippines is servicing amounting to $ 1.646.7 billion.
The group claimed many of these debts are in fact illegitimate. It cited the $ 121.8 million Small Coconut Farms Development Project (SCFDP), the $ 100 million Textbook Procurement Project, and the IBRD-funded Agrarian Reform Communities Project (ARCP) as some examples.
It was reported that the SCFDP had been beset with inefficiency and widespread corruption among government officials and the private contractors involved in the project. The irregularities ranged from complete non-delivery, to the sale of fertilizers to private companies engaged in trading or manufacturing fertilizers. Yet, World Bank declared it as a successful project.
Conversely, the Textbook Procurement Project under Second Social Expenditure Management Project (SEMP2) was marred by accusations of rigged bidding results, defective school textbooks, bribery and World Bank intrusion.
Meanwhile, the ARCP was reportedly implemented without a clear and thorough study much more, environmental and health protection. It was also accused of not meeting its required targets. It was reported that only 39 percent of the total number of agrarian reform beneficiaries in the ARCs have been fully trained on ARC development.Week of Global Action Against Debt And IFIs
The protest rally is part of a weeklong activity dubbed as the “Week of Global Action against Debt and International Financial Institutions” which started last October 13 and will end on the 17th.
It is an international event organized by peoples’ organizations and movements around the world which pledged to mount activities aimed at awareness building and education, policy advocacy and direct action to challenge IFIs, transnational corporations and governments everywhere to acknowledge responsibilities for the enduring debt domination.
FDC is a member of Jubilee South – Asia Pacific Movement on Debt and Development (JS-APMDD), one of the main organizers of the global event. -30-