Around 65 participants from all global regions joined the APMDD webinar, which focused on the particular impacts and the continuing adverse consequences of IMF and World Bank lending policies on Global South countries in Asia.
Alvic Padilla, from the Debt Justice Program of APMDD, opened the webinar “IMF-WB: 8 Decades of Debt and Destruction in Asia” by addressing the profound and enduring impact of the International Monetary Fund and the World Bank on the Global South, with a special emphasis on Asia. He highlighted that for the past eight decades, these Bretton Woods Institutions, dominated by wealthy nations, have promoted market-based and private-sector-led solutions as remedies for social, economic, and environmental crises. However, Padilla pointed out that these strategies have merely deepened the cycle of unsustainable debt and dependency, while structural adjustment and austerity measures continue to harshly affect the most vulnerable populations, particularly women and girls. He introduced an esteemed panel of activists, policy experts, scholars, human rights defenders, and climate leaders who will provide insights into how these institutions have maintained a profoundly unequal and profit-driven global order. Padilla concluded by thanking the participants and setting the stage for a critical exploration of these issues.
A trail and legacy of destruction
Scoring its 80-year trail of destruction, speakers and reactors from different Asian CSOs and social movements spoke on various aspects of the IMF and World Bank’s trail of destruction.
Chee Yoke Ling, Executive Director of Third World Network, emphasized the deep-rooted and pervasive impacts of International Financial Institutions (IFIs) on the Asian region and other Global South countries. She critiqued the underlying ideology that prioritizes market efficiency and deregulation, leading to harmful austerity measures and increased vulnerability to the global financial system. Chee highlighted how this system is inherently unequal, now more so than in past decades, and how it has stripped countries of their policy development space. She reflected on Malaysia’s experience, noting that the country’s decision to reject IMF advice and implement capital controls, although initially vilified, is now seen as a necessary move. Chee stressed the importance of civil society making the rejection of austerity and the mission creep of IFIs a top agenda, as these measures have been internalized to the detriment of the region.
Joe Athialy, Executive Director of the Centre for Financial Accountability, underscored the need to continually remind the world of the detrimental footprint left by the International Financial Institutions (IFIs) over the past eight decades. He critiqued these institutions for being undemocratic and promoting corporate welfare, particularly highlighting how India has aggressively pursued privatization, leading to corporations exploiting natural resources under the guise of business. Athialy pointed out the watering down of labor standards and challenged the World Bank’s claim of adopting progressive policies, arguing that these shifts are the result of long-standing people’s struggles, not benevolence from the Bank. He stressed that while the IFIs may offer concessions, they remain fundamentally aligned with pro-capitalist and pro-big business interests. Athialy called for a united struggle against these institutions, emphasizing that this is a shared fight for both the Global North and South.
Misun Woo, Regional Coordinator of the Asia Pacific Forum on Women, Law and Development, focused on the severe and disproportionate impacts of IMF and World Bank policies on women in Asia. She highlighted that women, who make up 70% of the workforce, are particularly affected by reduced access to services, with a reported 42.5% decrease in service availability. The burden of household needs has become overwhelming as inflation has nearly tripled prices, especially for food, forcing women to take on multiple jobs. As a result, cheaper junk food is often the only option, leading to further nutritional deficits. Woo also pointed to the alarming rise in private and household debt, which exacerbates the systemic barriers faced by women. She called for immediate action to challenge the IMF and World Bank, stressing that this issue must be a key part of the popular agenda, as highlighted in the 14th National Conference.
Dr. Eduardo Tadem, Convenor of the Program on Alternative Development at the University of the Philippines Center for Integrative & Development Studies and UP Professor Emeritus, provided a critical analysis of the growing domestic debt burden in the Philippines, which now surpasses foreign borrowings. Over-reliance on domestic borrowings bottoms out local investments and starves public expenditures for social services. He highlighted the hidden costs associated with government borrowing, revealing that developing countries face a staggering $500 billion in collective debt payments due over the next four years. With a debt-to-GDP ratio of 60%, the Philippines’ total debt as of 2023 stands at $249.3 billion, with debt servicing alone accounting for $10.7 billion or 30.44% of the national budget. Tadem criticized the role of institutions like the World Bank, Asian Development Bank, and Japan International Cooperation Agency and donor countries in exacerbating this crisis through various charges such as commitment fees, front-end fees and service/management fees, which add significant costs to loans. He also pointed out the additional burden of tied aid, which inflates the prices of goods by 20% and reduces their value by 10%, further straining public debt liabilities.
Sharing their insights on the inputs of the speakers were Farooq Tariq, General Secretary of the Pakistan Kissan Rabita Committee, and Titi Soentoro, Executive Director of Aksi for Gender, Social, and Ecological Justice.
Farooq Tariq provided a sobering account of Pakistan’s entanglement with the IMF and World Bank, holding these institutions responsible for the country’s environmental degradation and economic stagnation. He traced the history of IMF agreements, noting significant loans in 1994, 2008, and 2019, totaling billions of dollars. Despite these loans, Pakistan remains under severe economic strain, with the IMF imposing four stringent conditionalities, including tax base expansion, leading to the imposition of new taxes amounting to over $13 billion in June alone. Tariq highlighted that Pakistan’s debt to China stands at $79 billion, with deferred repayment only adding to the burden. He condemned the IMF’s control over Pakistan, which he argued has led to increased poverty and destruction, especially following the 2022 climate disaster. Tariz called for reparations, a suspension of foreign debt payments, and the provision of free solar power for the people, as electricity costs have become exorbitant. He stressed that Pakistan’s economy has seen no real growth in the past 75 years, underscoring the devastating impact of these policies.
Titi Soentoro delivered a powerful critique of the IMF and World Bank, framing them as tools of continued exploitation and imperialism by colonial powers, particularly the EU and US. She questioned the necessity of governments continuing to engage with these institutions, emphasizing that the IMF and World Bank are not charitable entities but mechanisms for perpetuating global capitalism through investment, debt, and technical assistance. Soentoro highlighted the severe costs of these loans, which are deeply felt by the countries burdened by them. She argued that the prevailing belief in economic growth as the sole path forward is flawed, as it often leads to deeper debt. Instead, she called for a fundamental shift in mindset, urging that the economic growth model should be abandoned and that the legitimacy of these institutions should be challenged to prevent them from furthering their exploitative agendas.
Open Forum
The open forum following the webinar featured a lively exchange of ideas, with participants and speakers delving into the complex and often detrimental role of the IMF and World Bank in shaping the economic landscapes of countries in the Global South. A major point of discussion was the misuse of loans by corrupt political elites, which has led to widespread economic stagnation rather than the intended economic growth. Participants expressed frustration that these funds, which are meant to foster development, often end up in the hands of a few, fueling corruption and further entrenching inequality. This sentiment was echoed in questions that highlighted the disconnect between the loans acquired and their actual benefits to the general population, particularly in Pakistan, where despite significant borrowing, millions of children remain out of school, and the public sees little improvement in their quality of life.
The discussion also turned to the systemic issues perpetuated by the IMF and World Bank, with speakers emphasizing that these institutions are not charitable organizations but rather instruments of global capitalism and imperialism. They argued that the policies enforced by these institutions, such as austerity measures and privatization, are designed to maintain the economic dominance of wealthy nations, particularly those in the EU and US, over poorer countries. The audience resonated with the idea that the IMF and World Bank serve as tools for these powers to continue their exploitation under the guise of development assistance, thereby perpetuating a cycle of debt and dependency that hinders true economic sovereignty and growth in the Global South.
Another critical topic was the environmental and human costs associated with the policies of these financial institutions. The audience raised concerns about the continued support of the World Bank for fossil fuel projects, even as it positions itself as a leader in sustainable development. This contradiction was highlighted in discussions about the World Bank’s “Evolution Roadmap,” which was criticized as a superficial attempt to remain relevant while continuing to push a neoliberal agenda that fails to address the root causes of underdevelopment and inequality. Participants questioned the legitimacy of these institutions, arguing that their approach to development is inherently flawed and calling for a reevaluation of the global economic order.
In light of these discussions, there was a strong call for new strategies to challenge the dominance of the IMF and World Bank. Participants stressed the need for civil society to take a more active role in holding their governments accountable for continued borrowing from these institutions. The forum underscored the importance of building solidarity across movements in the Global South to resist the financial and ideological control imposed by these institutions. There was a clear demand for justice, including the cancellation of odious debts and reparations for the social and environmental harm caused by decades of harmful policies. The open forum highlighted the urgency of collective action to dismantle the current global financial system and create a more equitable and sustainable future.
The struggle continues
In closing, Mae Buenaventura of APMDD’s Debt Justice program thanked the speakers and reactors and all the audience for their lively participation in the open forum. She announced the ongoing preparations for the Global Days of Action on the IMF and World Bank from October 15-27, which also serve as a counterpoint to the annual meetings of these international financial institutions during that time. She invited everyone to be active in this initiative.
Links:
- Tadem-SEA-debt-update-PH-debt.pdf
- FB Live Link: https://fb.watch/tPX8LjZC-N/
- Youtube Link: https://youtu.be/hnWmMaKfFpo