Committee for the Abolition of Third World Debt
CADTM

Press release

CADTM finds the G8 announcements pathetic and denounces the fierce repression peaceful demonstrators fell victims to

9 June 2007

CADTM finds the G8 G8 Group composed of the most powerful countries of the planet: Canada, France, Germany, Italy, Japan, the UK and the USA, with Russia a full member since June 2002. Their heads of state meet annually, usually in June or July. announcements pathetic and denounces the fierce repression peaceful demonstrators fell victims to

Year after year the G8 has been content with empty announcements those countries have no intention to put into practice while displaying fierce repression against peaceful demonstrators. Nine members of CADTM France and of CADTM Belgium were detained for over 48 hours, without any valid reason.

Regarding aid to Africa, the G8 again formulates a promise that hardly costs anything. The promise made at Gleneagles in 2005 was repeated, namely that aid subsidies would double by 2010, but the latest figures are disastrous: according to the OECD OECD
Organisation for Economic Co-operation and Development
OECD: the Organisation for Economic Co-operation and Development, created in 1960. It includes the major industrialized countries and has 34 members as of 2014.

http://oecd.org
and the World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 180 members in 1997), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

http://worldbank.org
, aid to Africa irrespective of debt relief had fallen in 2006. On the other hand the 60 billions dollars that have been promised to fight AIDS, tuberculosis and malaria, without any specific deadline, had already partly been announced over the past months, this is thus hardly anything new. Simultaneously the health sector is severely deteriorating in Africa and the number of starving people is steadily rising. Let us remember too that as soon as 1970 rich countries had committed themselves to spending 0.7 % of their GNI to development aid. Nearly 40 years later, the percentage G7 countries actually spend is only 0.26%.

On the climate issue, the G8 was content with saving face without facing up to what is actually at stake for the environment in the coming decades. Acknowledging the need to substantially reduce greenhouse gas emission is the least they could do, but cannot have any effect since the eight countries did not specify any common specific objective even though they are responsible for most emissions while people in developing countries suffer the consequences.

The present G8 summit was also marked by a resumed arms race prompted by the United States. Global military spending were estimated at USD 1,000 billions in 1990 and 1,200 billions in 2006; they are likely to soar to 1,500 billions in 2007. The US alone spend over 500 billions every year. CADTM considers that the demand for general disarmament must be met and cannot be negotiated.

As to the resumption of the Doha Round within the WTO WTO
World Trade Organisation
The WTO, founded on 1st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.

http://wto.org
, the G8 claims it is necessary for the development of poor countries whereas the logic of these negotiations, in perfect accordance with the structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).
policies that had been enforced since the 1980s, is deeply harmful to poor people in developing countries.

On the other topics that were discussed the G8 kept to a strict minimum that will not even be met, or made vain announcements that can fool none.

For CADTM, it is pitiful to see eight heads of state secluded in an overprotected place with impressive armed forces officially flouting citizens’ freedom of movement and right to peaceful protest pretending they rejoice in non-existent advances.

CADTM considers that the G8 is illegitimate. Like the WB, the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for globalised capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments that are going bankrupt.

As for the World Bank the votes resulting in decisions are based on the amount paid as contribution by each member states. 85% of the votes are required to modify the IMF Charter (which means that the USA with 17,35% of the votes can paralyse any decision).

The institution is dominated by five countries: the United States (16,75%), Japan (6,23%), Germany (5,81%), France (4,29%) and Britain (4,29%).
The other 177 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
or the WTO, the G8 is currently facing a severe legitimacy crisis. We at CADTM consider that we have to build asap an alternative based on a UN development funds and integrated in a network of Banks of the South, the absolute priority of which would be to guarantee fundamental human rights.

Contacts: Damien Millet, President of CADTM France, france at cadtm.org
Eric Toussaint, President of CADTM Belgium, international at cadtm.org
Sushovan Dhar, VAK India, dhar.sushovan at gmail.com
Victor Nzuzi, NAD-CADTM DR Congo, victor_nzuzi2000 at yahoo.fr

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