Blog the Debt

Happy Friday: IMF Loses Turkey as a Borrower

By Sameer Dossani | 50 Years Is Enough

Today's news that Turkey is unlikely to renew its standby agreements with the IMF is huge. As many of you will remember, back in 2003, the IMF was receiving more than 60% of its revenue from interest repayments from its four major clients - Brazil, Argentina, Indonesia and Turkey. The first three of those four were unhappy enough with the IMF that they did not renew their loans and even went so far as to repay outstanding debt early, thereby saving themselves considerable interest payments. These moves were enough to precipitate a serious financial crisis for an institution that has had its hand in nearly every major financial crisis around the globe since 1980.

In April, the IMF announced that it would be cutting 15% of its staff and selling $11 billion worth of gold as part of its own "structural adjustment" program; the institution's budget had already decreased by about 20% since 2005. The IMF's financial plan will likely have to be revised yet again - and further budget austerity measures put in place - if they lose their last major client. And if Turkey goes one step further and repays its debt early (like Brazil, Argentina and Indonesia before it) this could signal the end of the end for an institution that once dictated economic policies the world over.

Jesse Jackson urges Haiti debt relief

On his visit to Haiti last week, Rev. Jesse Jackson pleaded to governments and International Financial Institutions to collaborate to cancel Haiti's debt. Joseph Guyler Delva reports from the Reuters:

Jesse Jackson urges Haiti debt relief

Tue Apr 29, 2008 5:49pm EDT, By Joseph Guyler Delva

PORT-AU-PRINCE (Reuters) - U.S. civil rights leader Jesse Jackson called for urgent debt relief for Haiti on Tuesday to ease the burden of a food crisis that sparked violent protests in the impoverished Caribbean nation earlier this month.

Jackson said Haiti owed the World Bank and the Inter-American Development Bank about $1.5 billion, with debt service payments reaching some $70 million a year.

Jubilee On the ONE Blog

Check out the ONE Campaign's blog for our post about Desmond Tutu's op-ed on debt, Lesotho and health care in The Baltimore Sun. Tutu uses some strong language, calling debt "modern-day apartheid."

Desmond Tutu Op-Ed in today's Baltimore Sun

Debt cancellation a victory for the world
By Desmond Tutu | The Baltimore Sun

Last month, the House of Representatives showed leadership in the fight against global poverty by passing the Jubilee Act for Responsible Lending and Expanded Debt Cancellation, which would extend lifesaving debt cancellation to more poor nations around the globe.

Too many of the world's poor children needlessly starve or go without education because too many impoverished nations - even after the laudable debt relief provided to date - are still funneling scarce resources to multilateral banks instead of paying for needs at home.

The world community has found crushing debt to be akin to a modern-day apartheid, and has responded with debt cancellation. Unjust debt leaves developing nations at the behest of the powerful. Shall we let the children of Africa and Asia die of curable disease, prevent them from going to school and limit their opportunities for meaningful work - all to pay off unjust and illegitimate loans made to their forefathers?

When I think of the crisis of international debt, I think of my African neighbor, Lesotho. Many of Lesotho's people cannot afford basic nourishment. The AIDS epidemic has plagued the nation, but needed medicine is out of reach for too many.

Make Mom Proud

This Mother's Day, give the best gift of all: bold action on climate change.

Mother's Day weekend (May 9 - 11) is our chance to expand the climate movement—to invite parents, young people and community groups to come together and send a powerful message that resonates with our political leaders. We all share the same cause—the welfare of future generations—and together, we can make climate action a moral imperative for our elected officials. Join together with members of your community this Mother's Day to to draw or paint a picture of what's most important to you in the face of climate change. You'll send a personal and compelling portrait for climate action to members of Congress.

LEARN MORE ABOUT THE CAMPAIGN AND 1SKY.

Jubilee USA Grassroots Conference Coming in June! Register Today!

Register Today for Jubilee USA's 3rd Annual Grassroots Training & Action Conference! Early Bird registration ends in less than a month!

Keep the Letters to the Editor Coming!

In the past few weeks Jubilee supporters have been sending Letters to the Editor to their local papers. Here are a few of the ones that have been published within the past few weeks. If you haven't sent a Letter to the Editor of your newspaper, you can send one using our pre-written LTE or by writing your own.

May 1
Senate Urged to Back Debt Cancellation
LTE from Nathan Everhart, Erie Times-News

May 4
Debt relief
LTE from Jim Bracke, South Bend Tribune

Urge support of debt-relief bill
LTE from Mary-Nona Hudson, Santa Cruz Sentinel

May 5
Feeding Haiti
Op-Ed By Dr. Joia Mukherjee and Donna Barry, The Boston Globe

May 6
Jubilee Act may save impoverished
LTE By Paul and Adrienne Kalmes, Chicago Daily Herald

Tune Into News & Notes on NPR Today

Imani Countess, Jubilee USA Board co-chair and TransAfrica Forum's senior director of Public Affairs, will be on NPR's News & Notes w/ Farai Chideya today at 1 p.m. EST (here in DC) discussing the Jubilee Act, debt cancellation and Zimbabwe among other things. If you miss the broadcast, you can visit the News & Notes website and listen to it there after 3p.m. EST.

Note: So debt cancellation wasn't discussed, but Imani did talk about Zimbabwe's post-election crisis. Last year Imani and Briggs co-wrote an article on the American Friends Service Committee Website explaining some of the links between Zimbabwe's current political crisis and IMF debt repayments. Read the full article and take action.

You can also read an article written in early April by Patrick Bond, director of the Durban-based Centre for Civil Society, where he compares Zimbabwe and Kenya's elections and talks about the possibility of new loans coming to Zimbabwe.  In early April, Patrick Bond, director of the Durban-based Centre for Civil Society, wrote about what's happening with Zimbabwe's elections within the context of the debt crisis:

Meanwhile, an ominous dance began between Tsvangirai and the forces of imperialism. According  to a Reuters report today, the MDC would gain access to US$2 billion per year in 'aid and development' ­ which normally is top-heavy with foreign debt and chock-full of conditions.  Amongst these, most likely, are dramatic cuts to the civil services, so that the Zimbabwe central bank stops printing so much money, fueling inflation. But the downside is the potential deepening of the country's economic crisis in the short term, as effective demand falls while more luxury goods become available thanks to foreign exchange inflows.

The key players are the International Monetary Fund, World Bank, European Union and the United Nations. No doubt Bush's White House is also involved in negotiations, which, if Tsvangirai persuades Mugabe to depart, may even reach fruition next week at the IMF/Bank spring meetings in Washington.

More In depth about the IMF

Todd Tucker over at the Public Citizen’s Blog, Eyes on Trade, posted a blog today about the Jubilee Act passing the House (he just returned from vacation, but we can celebrate again) and an even bigger conversation many people in the NGO community are having about the IMF’s impending death.

So, the IMF ain’t dead, but with so many middle income countries like India and China paying off their loans, the IMF isn’t making as much money as it did before when they were very much in need of loans to survive. In order to save staff jobs, the IMF is banking on shareholder authorization to sell its gold. The IMF has the third-largest gold reserve in the world (behind the U.S. and Germany).

We think the money is better used on funding debt cancellation for impoverished countries like Lesoto than funding staff salaries and posh meetings. I’m sure the bill racked up from luxury hotel rooms, cars and food could probably fund a few education, water, road and health care projects in some of the impoverished countries they’re asking to repay loans.

FOE: World Bank Carbon Plan 'A Protection Racket'

By Daniel Nelson | OneWorld UK

A World Bank-backed carbon-reduction programme in which concessional loans would be offered to developing country governments was compared to a “protection racket” by Friends of the Earth Director Tony Juniper at a meeting in London at the weekend.

He said it would be like smashing the windows of a car and then demanding money to stop further damage.

“A deep injustice in the development model is being put together,” he said of the plan. READ FULL ARTICLE