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What the IMF claims it’s doing to address the crippling debt load of the world’s poorest nations:
The IMF’s Heavily Indebted Poor Countries (HIPC) initiative is helping to reduce poverty by approving debt reduction packages for 24 countries (20 of them in Africa). This will lift $36 billion in debt servicing.
These 24 countries were previously spending more on debt servicing than on health and education combined. The IMF says this is no longer the case.
The affected countries now have a say, as well as their creditors, in devising poverty reduction strategies.
What the critics say:
HIPC is not enough. A network of NGOs for economic justice want the cancellation of 100 per cent of debt in all countries whose debt is unsustainable.
At the end of the six-year HIPC process, these 24 countries will only have had their debt service reduced. They are not getting sufficient relief on their principal.
Fourteen countries with severe debt problems have not yet been considered under the program.
HIPC is being used to impose market reforms on the economies of poor countries (including privatization and user fees).
Just a few of the World Bank’s questionable infrastructure projects:
Provided a million-dollar (U.S.) loan to support Shell Oil’s operations in Nigeria. Critics say it will only lead to more human rights violations and environmental degradation in the Niger Delta.
Supports the construction of an oil pipeline (largely by a private oil consortium) through Chad and Cameroon, despite skepticism about claims that revenues will go toward poverty alleviation and that the project won’t adversely affect the environment, local communities and indigenous peoples.
Considering funding the Bujagali dam in Uganda, which critics charge will lead to privatization and ultimately major hikes in electricity costs.
Thai communities around the bank-funded Pak Mun dam in Thailand have been fighting for reparations since 1994. The dam did not deliver the power promised and has devastated local fisheries.
