Table Of ContentDebt, the IMF, and the World Bank
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Debt, the IMF, and the World Bank
Sixty Questions, Sixty Answers
By Éric Toussaint and Damien Millet
Translated by Judith Abdel Gadir, Elizabeth Anne, Vicki Briault,
Judith Harris, Brian Hunt, Christine Pagnoulle and Diren Valayden,
with the collaboration of Francesca Denley, Virginie de Romanet
and Stephanie Jacquemont
MONTHLY REVIEW PRESS
New York
Copyright © 2010 by Éric Toussaint and Damien Millet
All rights reserved
Toussaint, Eric.
Debt, the IMF, and the World Bank sixty questions, sixty answers / by Éric
Toussaint and Damien Millet; translated by Judith Abdel Gadir . . . [et al.].
p. cm.
Millet's name appears first in the French ed.
Rev. ed. of: 60 questions-60 riponses sur la dette, le FMI et la banque
mondiale / Damien Millet, Eric Toussaint. 2008.
Includes bibliographical references.
ISBN 978-1-58367-222-8 (pbk.: alk. paper) — ISBN 978-1-58367-223-5
(cloth: alk. paper)
1. Debts, External—Developing countries—Miscellanea. 2. Debt
relief—Developing countries. 3. Developing countries—Economic policy. 4.
International Monetary Fund. 5. World Bank. I. Millet, Damien. II. Millet,
Damien. 60 questions—60 riponses sur la dette, le FMI et la banque mondiale.
III. Title.
HJ8899.T677 2010
336.3'435091724—dc22
2010033420
Monthly Review Press
146 West 29th Street, Suite 6W
New York, NY 10001
www.monthlyreview.org
5 4 3 2 1
Contents
Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
1. HUMAN RIGHTS, DEVELOPMENT, AND DEBT............13
1. What is meant by “developing countries”?..............15
2. Why is the term “development” ambiguous? ............19
3. What is the link between debt and poverty? .............22
4. What are the “Millennium Development Goals” (MDG)?...27
5. What are the different kinds of debt
for developing countries? .........................44
2. THE ORIGIN OF THE DEBT IN DEVELOPING COUNTRIES 47
6. What part did private banks play in the
development of developing countries’
external debts in the 1960s & 1970s?..................49
7. What part did the World Bank play in the
development of the developing countries’
external debts in the 1960s and 1970s? ................51
8. How does the World Bank function? ..................54
9. What part did the governments of countries
of the North play in the evolution of the developing
countries’ external debt in the 1960s and 1970s? .........61
10. How was the borrowed money used in the
developing countries? .............................63
3. THE DEBT CRISIS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11. How did the price of commodities evolve during
the last quarter of the twentieth century? ...............73
12. What role did the evolution of interest rates play
in the 1982 debt crisis? ............................75
13. Are the World Bank, the IMF, and private banks
somehow responsible for the debt crisis? ...............79
14. How did creditors respond to the debt crisis?............82
15. Are there any similarities with the 2007 subprime crisis? ...88
4. THE IMF, THE WORLD BANK,
AND THE LOGIC OF STRUCTURAL ADJUSTMENT........93
16. How does the IMF function?........................95
17. What are the short-term or shock measures imposed by
structural adjustment, and what are their consequences?...106
18. What are the long-term or structural measures imposed by
structural adjustment, and what are their consequences?...109
19. What is the impact of the IMF/World Bank logic
on the world food crisis of 2007?....................119
5. OTHER INTERNATIONAL PLAYERS:
THE PARIS CLUB AND THE WTO . . . . . . . . . . . . . . . . . . . . . . . 125
20. What is the Paris Club?...........................127
21. Are all the developing countries treated in
the same way by the Paris Club?.....................131
22. What is undermining the Paris Club?.................135
23. What is the role of the World Trade Organization (WTO)?.138
6. THE STRUCTURE OF DEVELOPING COUNTRIES’ DEBT..143
24. Of what does the external debt of
developing countries consist?.......................145
25. How has the debt changed since 1970? ...............150
26. Do developing countries repay debts? ................152
27. What about the external public debt of
developing countries? ............................155
28. How are the debt-related financial flows directed? .......161
29. What about the domestic debt of developing countries?...164
7. DECIPHERING THE OFFICIAL DISCOURSE
ON DEBT RELIEF .......................................171
30. How did the debt relief initiative come about? ..........173
31. What is the Heavily Indebted Poor Countries
(HIPC) initiative? ...............................175
32. Has the HIPC initiative achieved its goal?..............178
33. What was contained in the latest debt relief
announced by the G8 in 2005? .....................188
8. THE SHAM OF THE DOMINANT MODEL . . . . . . . . . . . . . . . . 195
34. Does Official Development Assistance (ODA)
help to mitigate the effects of the debt?................197
35. Is micro-credit a solution to the excessive debt
of developing countries? ..........................204
36. Have the policies promoted by the World Bank and
the IMF contributed to the fight against climate change?...206
37. What is NEPAD?................................211
9. DEBT CANCELLATIONS AND SUSPENSIONS
OF PAYMENT IN THE PAST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
38. Is it impossible to cancel debt?......................217
39. Why do the governments of the South
continue to repay the debt? ........................228
40. What are vulture funds?...........................230
10. THE CASE FOR CANCELING THE DEBT
OF DEVELOPING COUNTRIES . . . . . . . . . . . . . . . . . . . . . . . . . 237
41. What are the moral arguments in favor of canceling
the debt of developing countries?....................239
42. What are the political arguments in favor of canceling
the debt of developing countries?....................241
43. What are the economic arguments in favor of canceling
the debt of developing countries?....................244
44. What are the legal arguments in favor of canceling
the debt of developing countries? ...................246
45. What are the environmental arguments in favor of
canceling the debtof developing countries? ............254
46. What are the religious arguments in favor of canceling
the debt of developing countries?....................257
47. Who owes what to whom?.........................261
48. Who has the right to impose conditions
on debt cancellation?.............................262
49. Can the development of emerging countries
be ensured simply by repudiating their debt?...........264
11. ISSUES RAISED BY CANCELING THE DEBT
OF THE DEVELOPING COUNTRIES. . . . . . . . . . . . . . . . . . . . . 267
50. Would canceling the debt of developing countries
cause a global financial crisis?......................269
51. If developing countries’ debts were canceled,
would the citizens of the North end up paying the bill?....273
52. Will canceling the debt help reinforce
existing dictatorial regimes?........................276
53. Should borrowing be avoided at all cost? ..............281
12. CONSTRUCTING RADICAL ALTERNATIVES . . . . . . . . . . . . . 285
54. What are the alternatives for human development in
the developing countries?..........................287
55. If and when the debt is canceled, how can a new round
of indebtedness be avoided?........................302
56. What is debt auditing?............................304
57. Are China, sovereign funds, or the Bank
of the South valid alternatives?......................307
58. Can the developing countries’external public debt
be compared to the public debt of the North?...........315
13. INTERNATIONAL CAMPAIGN FOR
DEBT CANCELLATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319
59. How did the international campaign
for debt cancellation start?........................ 321
60. What is CADTM and how was it born?..............324
Appendix 1: The 145 Developing Countries in 2008. . . . . . . . . . . 329
Appendix 2: Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347
A Denise Comanne (1949-2010),
ma compagne d'amour et de lutte
—Éric Toussaint
