Since its foundation in 1946 the World Bank has been used by Western governments and corporations to extract wealth from the poorest countries. Eric Toussaint, president of the Committee for the Abolition of Third World Debt (CADTM), explains in this book how the World Bank plays this role and why the enormous amount of “debt” paid to it each year should be cancelled immediately.
The bank was set up by the US government and is run by “the hardcore of the US capitalist class”. It makes several billion dollars of profit every year. Its loans have high interest rates and short repayment periods. Loans to developing countries must be spent on producing goods and extracting raw materials demanded by the industrialised countries, and on importing goods which they could otherwise produce for themselves much more cheaply. In the bank’s first 17 years over 93 percent of the money it loaned to developing countries found its way back to the West.
Toussaint shows how capitalists in the developing countries are willing accomplices, regularly passing their debts on to the public and encouraging quick repayment so as not to jeopardise their savings stored in Western banks.
By studying 15,000 pages of World Bank documents Toussaint reveals some devastating new facts. In the early 1960s the newly independent African countries were forced to pay back the debts of their former colonial masters (Britain, Belgium and France). This was a heavy burden for the new African governments.
Toussaint argues that the bank exercises a “permanent coup”. The list of democracies it has destabilised, coups it has supported and dictatorships it has funded is long. Typical was its heavy backing of Indonesian dictator Suharto’s regime, which on coming to power in 1966 killed up to a million civilians.
When a mass movement of workers and the poor overthrew Suharto’s regime in 1998 his debt was passed on to the Indonesian people. Half of their taxes now goes towards paying back the debt of the dictatorship which repressed them for 30 years.
Toussaint’s book is an indictment of the World Bank and he is clear that any financial institutions that take its place “must be subservient to a social movement totally opposed to capitalism and neoliberalism”.
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