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UMW Action Alert: An UnHappy Birthday: The World and International Monetary Fund Turn 60

by by Washington DC Office of Public Policy

 
 
Contact: Office of Public Policy GBGM-Women's Division 100 Maryland Avenue, NE Room 530 Washington, DC 20002 (202)488-5660 Fax:(202) 488-5681
Contact:
Office of Public Policy
GBGM-Women's Division
100 Maryland Avenue, NE Room 530
Washington, DC 20002
(202)488-5660
Fax:(202) 488-5681

After World War II, the World Bank was created to aid war-torn countries with the process of reconstruction and development th

March 2004 

To mark the 60th Birthday of the World Bank and the International Monetary Fund (IMF), Jubilee USA is leading an Un-Happy Birthday Card campaign to draw attention to the devastating effects that the policies of these institutions have had on the economies of the developing world (see back for more details.)  For years, the Women’s Division and United Methodist Women have supported the efforts of those working to achieve economic justice for the indebted countries of the developing world.  In 1997, United Methodist Women began participating in a multi-year campaign to petition heads of government and international banking institutions to “cancel or drastically reduce the debts of poor countries, and to re-direct funds to neglected social, education, environmental needs.”[i]  The Women’s Division is a donor to both Jubilee USA and Jubilee South, sister organizations working in the United States and around the world to end the global debt crisis.  In April 2000, seven UMWs came to Washington, D.C. to participate in the Jubilee 2000 Drop the Debt March, where they encouraged the U.S. Congress to make a greater commitment to debt relief.

 

After World War II, the World Bank was created to aid war-torn countries with the process of reconstruction and development through loan assistance.  The International Monetary Fund (IMF), also developed after World War II, was created to stabilize foreign currency exchange rates, regulate the international monetary system, and eliminate currency restrictions relating to trade in goods and services.  Since then, both the World Bank and IMF have shifted from their original focus on post-World War II economies of Western Europe to their current focus on the highly impoverished nations of the developing world.  The observance of the World Bank and IMF’s 60th birthday this year is an opportunity to shed light on the role that these international organizations have played in contributing to poverty in the developing world.

 

The World Bank currently offers loans to the governments of developing countries for a variety of development projects, including the construction of bridges, highways and power plants, the development of local industries, and loan assistance.  The Bank manages a loan portfolio totaling US$200 billion and in 2002 loaned US$28.9 billion to over 80 countries.[ii]  Over the course of the past few decades, developing countries have accumulated astronomic debts to the World Bank.  Efforts to repay those debts, and the interest that has accrued on them, drain billions of dollars away from poor countries each year, leaving them unable to provide services like health care and education to their citizens.  An estimated $10-15 billion a year could turn back AIDS in Africa, which claims 7,000 lives a day.  However, sub-Saharan Africa pays almost $15 billion in debt service payments to developed nations and financial institutions every year, leaving little resources with which to address this dire public health crisis.[iii]  The IMF offers funds to developing countries facing problems with their financial markets or economic imbalances between their imports and exports.  However, this funding is only made available after borrowers agree to make significant changes to their economies.  Often these changes come in the form of structural adjustment programs (SAPs.)  An SAP is a policy package geared to open up a developing country’s economy to free trade and foreign investment.  SAPs call for the privatization of government-run goods and services (like public utilities), the easing of labor regulations, an emphasis on exports, and overall cuts in government spending.[iv]  Structural adjustment programs have wreaked havoc on the developing world.  IMF budget restrictions on the economy of Brazil led to a 50% reduction in funding for the enforcement of environmental regulations and supervision programs.[v]  Industries dominated by women are particularly hard hit by the high interest rates and economic slowdowns that result from SAPs.  In 1998, IMF-imposed policies in South Korea led to the closing of approximately 53,000 business where women made up the largest proportion of workers.[vi]

 

Decisions at the World Bank and the IMF are made by a vote of the Board of Executive Directors, which is made up of representatives from member countries.  Unlike the United Nations where member states each have an equal vote, voting power at the World Bank and IMF is determined by each country’s financial contribution.  Since the United States is the largest donor country, it wields roughly 17% of the vote.  The world’s seven largest industrialized countries make up 45% of the vote.  Developing countries, whose economies and societies are deeply impacted by World Bank and IMF programs and policies, do not have the access to make their voices heard or to affect the decision-making processes in these institutions.

 

Developing countries facing massive debt burdens benefit greatly from debt relief, funding from wealthy countries that can be applied toward debt payments.  Tanzania received $3 billion in debt relief and has used the savings to increase education spending and eliminate school fees for elementary school education.  Almost overnight, roughly 1.6 million children returned to school.[vii]  Debt relief made it possible for Mozambique to increase health spending by $13.9 million.  The Mozambican government has spent $10 million on extending electricity services to rural schools and hospitals and $3.2 million to increase the number of girls attending school.

                                                                                                                                                           

ACTION:

  • Join the Jubilee USA’s Un-Happy Birthday Card campaign!  The Jubilee USA Network, a coalition of over 60 organizations in the U.S. working for a debt-free world, is asking individuals to send “birthday cards” to the World Bank and IMF for their 60th birthday.  Through these cards, individuals can voice their concern about the global debt crisis and its effects on the world’s poorer countries.  Here’s how you can participate:

 

1.       Buy a birthday card (either from your local store or through the Service Center at 1-800-305-9857.)

2.       Write the following greeting inside:

‘IMF and World Bank, On Your 60th Birthday, I call on You to Cancel 100% of the Debts of Impoverished Countries Without Harmful Conditions!

For A True Jubilee Celebration, Let Us Join Hands to Break the Chains of Debt!’

3.       Be sure to write your name, city and state on the inside of the card.  On the outside of the card in your return address, make sure to indicate that you are a United Methodist Woman.

4.       Mail your World Bank/IMF birthday cards directly to the Jubilee USA Network at the address below:

                                                            Jubilee USA Network

                                                            222 E. Capitol Street, NE

                                                            Washington, DC 20003

 

For any questions regarding the World Bank/IMF birthday card campaign, contact Sung-Ok Lee, the Women’s Division’s Executive Secretary for Community Organizing at (212) 870-3766.

 

  • Review the following Women’s Division background materials on the World Bank, International Monetary Fund, and the global debt crisis:
    • Action Alert, May 2000 – ‘Finish the Job: Support Debt Relief for the Poorest Countries’
    • Action Alert, July 2001 – ‘Jubilee has not come!  Debt is not done!’
    • Action Alert, June 2002 – ‘Jubilee Debt Campaign Update – IDA-13’
    • Action Alert, October 2003 – ‘Debt Relief and Girls Education’
    • Legislative Letter, December 1999/January 2000 – ‘Debt Relief: Some Success for Jubilee Advocates,’ p. 2.
    • Legislative Letter, October 2000 – ‘Religious Summit at UN Discusses Third World Debt,’ p. 12.
    • Legislative Letter, February 2001 – ‘Jubilee 2000/USA: Celebrate! Rest. Restore community. And prepare…,’ pp. 12-13.
    • Legislative Letter, April 2002 – ‘United Nations Conference on Financing and Development,’ p. 22.
    • Legislative Letter, November 2002 – ‘IDA-13 Update,” pp. 14-15

 

  • Review the Women’s Division’s Social Policy Statements on Trade and the Debt Crisis (1985), the Global Debt Crisis (1987), Women’s Eyes on the Bank Campaign (1995), Jubilee 2000 (1997 & 1998), and Moral Imperatives for Addressing Structural Adjustment and Economic Reform (1998).

 

* To obtain copies of these materials contact the Women’s Division’s Washington Office of Public Policy at (202) 488-5660. Or write us at: Washington Office of Public Policy – GBGM-Women’s Division, 100 Maryland Avenue, NE #530, Washington, DC  20002


[i] “Make Plain the Vision: 1998 Report of the Women’s Division,’ GBGM-Women’s Division.

[ii] “World Bank/IMF Questions and Answers,’ Global Exchange, http://www.globalexchange.org/campaigns/wbimf/faq.html

[iii] Ibid.

[iv] “IMF and World Bank: Out of Control,’ Russell Mokhiber and Robert Weissman, Jubilee USA, http://www.jubileeusa.org/jubilee.cgi?path=/learn_more/articles/&page=out_of_control.html

[v] ‘How Structural Adjustment Destroys the Environment,’ Essential Action, http://www.50years.org/action/s26/factsheet4.html

[vi] ‘Bailouts for Bankers, Burdens for Women,” 50 Years Is Enough, http://www.50years.org/factsheets/bailouts.html

[vii] ‘Debt Relief Success Stories,’ Jubilee USA, http://www.jubileeusa.org/jubilee.cgi?path=learn_more&page=SuccessStories.html


Date posted: Apr 01, 2004