Activists demand debt cancellation on side-lines of IMF and World Bank meetings

Activists gathered on the side-lines of the annual meeting of the IMF and World Bank in Washington DC yesterday to demand “deep, wide and urgent debt cancellation” for Global South countries. Demonstrations were also held in the Philippines, Pakistan, Bangladesh, Sri Lanka and Nepal. “While these meetings of the IMF and World Bank are happening, a worsening debt crisis is crushing developing countries across the world. This dire situation is proof of the flawed and futile debt relief schemes of the G20 that the IMF and World Bank avidly support and promote,” Asian Peoples’ Movement on Debt and Development (APMDD) Coordinator Lidy Nacpil said. 

Nacpil said the debt problem is not only about liquidity but a systemic problem requiring systemic changes.

“For eight decades, the IMF-WB has been instrumental in shaping an international financial architecture that systematically extracts the wealth of the Global South, perpetuating a cycle of indebtedness, poverty, and environmental degradation,” said Nacpil. “Then and now, they are major actors in exacerbating both the climate and debt crisis, as they persist in fossil fuel lending and in pushing more loans for climate action.”

She added, “We call out the hypocrisy of the IMF and World Bank in pushing for debt relief measures when they exempt themselves from participating in those very schemes to protect their credit ratings. They have not lifted a finger to compel the participation of commercial and private lenders in public debt reduction, knowing the heavy burden that this represents for developing countries. 

They have also never owed up to their responsibility for the damaging impacts of their loans, from propping up corrupt, repressive regimes and violating human rights to fuelling the climate emergency,” Nacpil added. 

The protesters also called for the cancellation of debts related to fossil fuel projects. Mae Buenaventura of APMDD, said the IMF and WB’s lending for coal, oil, and gas extraction and infrastructure projects across the Global South is contributing to increasing greenhouse gas emissions and accelerating climate change. These projects in turn have caused forced displacement, loss of livelihoods, and destruction of ecosystems, exacerbating social inequalities and perpetuating cycles of poverty and vulnerability in the Global South.

“If the IMF-WB’s avowed shift away from fossil fuels is to have credibility, they must cancel their loans for fossil fuel projects, which are illegitimate, and leverage their resources to compel other lenders to do the same. We assert the illegitimacy of fossil fuel loans, some of which have been paid fully over the decades despite their harmful impact on people and communities now and in the future,” she added.

In Sri Lanka, protesters gathered in Colombo to call out austerity conditionality attached to the Fund’s bailout loan negotiations with the Government. Rising reports of hunger and unemployment, as electricity prices skyrocket, run counter to IMF reports of progress. Previously, CSOs and trade unions condemned the IMF consultations as “cosmetic”, as the odious debts incurred by the previous administration and the call for debt cancellation of these illegitimate debts have not been seriously considered.

“The failure of the IMF-WB to provide effective pathways out of the debt crisis is the reason why developing countries like Sri Lanka are in debt distress,” Centre for Environmental Justice Executive Director Dilena Pathragoda said.