The World Bank and IMF meetings afford Ireland a chance to advance the cause for justice, writes Nessa Ní Chasaide
THE WORLD Bank and International Monetary Fund (IMF) annual meetings taking place in Washington are supposed to discuss global poverty. But the impact the financial crisis will have on global poverty and inequality is yet to be seen.
What is clear, though less talked about, is the devastation already caused in impoverished nations by unregulated, opportunistic financial actors and by the reckless promotion of damaging economic policies by international financial institutions.
For generations, people of impoverished nations have been living in extreme crisis.
This is not least due to the effects of wildly irresponsible lending to their governments by the World Bank, IMF, commercial banks and richer governments. The result has been a drain of vital resources from impoverished countries through debt repayments. Many of the loans being repaid are illegitimate as they were given for dubious developmental purposes, on unfair interest rates, and with punitive conditions attached to them.
Moreover, debt repayments are just one form of an array of unjust financial outflows from impoverished countries. For example, an estimated US$500 billion to $800 billion leaks from these nations each year due to criminal activity and corporate tax evasion.
Wealthy nations bear responsibility for facilitating such unregulated movement of funds.
Justice campaigners are proposing alternatives to this kind of fiscal exploitation. For example, Debt and Development Coalition Ireland, along with the global debt cancellation movement, is demanding the auditing of debts of impoverished countries so that lender irresponsibility, if present, can be exposed and illegitimate debts cancelled.
We call on governments to devise principled and responsible lending standards.
Governments of impoverished countries are formulating alternatives too. For example, the government of Ecuador established a national debt audit commission which appears to have found that much of Ecuador's public debt is illegitimate and illegal.
Their report argues that debt was used by international lenders to extract economic and environmental resources, to damage Ecuador's sovereignty, and to weaken the state. Some Latin American countries are working on creating their own, regional, financial institutions - such as the Bank of the South - intended to counter the power and ideological economic orthodoxy of the international financial institutions.
Whether these government initiatives pose genuine challenges to the system of global inequality is yet to be seen. In the medium-term, rich countries and the international financial institutions continue to call the shots. However, their legitimacy is now undermined and the double standards of wealthy nations has been exposed.
For example, despite the extreme suffering of people in impoverished countries, it took decades of campaigning by people around the world to achieve some $90 billion in multilateral debt cancellation from rich countries. In stark contrast, in the current crisis, political leaders have shown a capacity to respond to emergencies within days by offering massive debt relief schemes to their banks.
At the meetings this weekend, Ireland must voice the urgent need for justice to be brought to the centre of international financial relationships.
Wealthy nations must act in the interests of the majority.
Nessa Ní Chasaide is co-ordinator of Debt and Development Coalition Ireland and is attending the World Bank/IMF meetings