[Editor's Note: In observance of the global week of action against illegitimate debt, international financial institutions (IFIs) and climate change from 13 to 19 October 2008, social movements led by Jubilee South renewed calls against the World Bank, the International Monetary Fund and other IFIs, which have facilitated odious loans incurred by most peoples in the global South. Much of these loans have been instrumental in projects contributing to environmental degradation and climate change. For more information, visit, http://www.debtweek.org/ images/stories/call_woga.pdf]
Debts that were used for harmful projects or to impose harmful policies are illegitimate. And illegitimate debt has been a major factor to the escalation of the climate crisis. International Financial Institutions (IFIs) such as the World Bank and the IMF bear a significant part of the responsibility for illegitimate debt and harmful debt-related projects and policies.
Every year, hundreds of millions of dollars of loans are used to finance projects that are environmentally destructive and greatly exacerbate climate change. These include oil, coal and gas and other extractive industries, infrastructure projects that result in massive deforestation such as large-scale dams, road development in tropical forests, and agrofuel or biofuel production. The loans are extended to governments and are being paid for by public funds but transnational corporations are the main beneficiaries of many of the projects.
The World Bank and other IFIs are the major lenders to projects involving fossil fuel industries. Since the signing of the Climate Convention in1992, and even after instituting "environmental policies," the World Bank approved more than 133 financial packages to oil, coal and gas extraction projects. The total amount exceeds US$28 billion dollars. Regional development banks and export credit agencies also provide financing to these industries.
The World Bank is also one of main pioneers in using loans to impose conditionalities on borrowing countries. For decades now, IFIs used loans to impose policies that reinforce the concentration of wealth on the elites, perpetuate the plunder of the countries of the South by northern economies and transnational corporations, keep the net flow of resources from the South to the north, and promote a "development" paradigm that is characterised by overconsumption, overproduction, dependence on fossil fuel and the pursuit of carbon-intensive growth.
It is condemnable that with such a record, the World Bank is attempting to assume pre-eminent role in global financing of climate mitigation and adaptation and the promotion of "clean technology" and "clean development.” The World Bank recently unveiled its Climate Investment Funds (CIFs), the concept and design of which are as fundamentally flawed as the Bank itself.
People's movements, citizens groups, environmental campaigns and NGOs from all over the world will observe October 13 as Global Day of Action against Illegitimate Debt, International Financial Institutions (IFIs) and Climate Change as part of the Week of Global Action vs Debt and IFIs. Together we will express our demands for governments and IFIs to:
- Cancel or stop payment on all illegitimate debt.
- Stop financing projects and policies that exacerbate climate change.
- Oppose World Bank Climate Investment Funds and other climate programmes under the control of the WB & other IFIs.
- Stop loan-financing of climate programmes.
- Pay restitution and reparations for the ecological and historical debts owed to the South.