From 2012, the banks were overflowing with cash and made massive purchases of the bonds issued by their own countries. Sovereign debt securities do not require equity, as they are considered to be non-risk. [1]
South Korea : the miracle unmasked
4 December 2014, byThe supposed South Korean success story has been achieved thanks to policies that run contrary to the economic model advanced by the World Bank. Far from being a virtuous accumulation of wealth through the advantages of free-market forces, the economic development of South Korea came about by "a brutal primitive accumulation achieved by the most coercive methods, in order to produce virtue by force" (J-P Peemans). Korea has obtained its economic results under the yoke of a very repressive regime that had the support of the United States in the framework of its containment of the so called "socialist" regimes. South Korea has adopted a production-driven economic system that has little respect for the environment. The South Korean example is not to be recommended, nor is it repeatable, but it deserves to be analysed.
Theoretical lies of the World Bank
24 November 2014, byThe World Bank claims that, in order to progress, the Developing Countries [2] should rely on external borrowing and attract foreign investments. The main aim of thus running up debt is to buy basic equipment and consumer goods from the highly industrialised countries. The facts show that day after day, for decades now, the idea has been failing to bring about progress. The models which have influenced the Bank’s vision can only result in making the developing countries heavily dependent on an influx of external capital, particularly in the form of loans, which create the illusion of a certain level of self-sustained development. The lenders of public money (the governments of the industrialised countries and especially the World Bank) see loans as a powerful means of control over indebted countries. Thus the Bank’s actions should not be seen as a succession of errors or bad management. On the contrary, they are a deliberate part of a coherent, carefully thought-out, theoretical plan, taught with great application in most universities. It is distilled in hundreds of books on development economics. The World Bank has produced its own ideology of development. When facts undermine the theory, the Bank does not question the theory. Rather, it seeks to twist the facts in order to protect the dogma.
The World Bank and the IMF in Indonesia: an emblematic interference
5 November 2014, byThe World Bank’s, and the IMF’s policy on Indonesia is a textbook case in many ways. Everything is there: interference in a country’s internal affairs, support for a dictatorial regime guilty of crimes against humanity, backing for a regime responsible for an aggression against a neighbouring country (the annexation of East Timor in 1975) and the development of mega-projects which simultaneously imply massive transfers of population, the plundering of natural resources for the profit of transnational corporations and aggressions against indigenous populations.
The Kurdish Question, the PKK and the tasks of the radical Left
3 November 2014, byThe West has suddenly begun supporting various Kurdish organisations in its fight against the Islamic State. So why is the largest Kurdish organisation of all, the PKK, still outlawed? This article discusses current developments in Kurdistan and gives a brief overview of the history of the Kurdish liberation movement and the PKK’s illegal status in Germany. It argues for a radical left strategy focused on defeating the ban on the PKK.
The World Bank’s support of the dictatorship in Turkey (1980-1983)
23 October 2014, by"The World Bank tried very hard to make the the Turkish military appear salutary, and to avoid criticising their interventions.The official comments from the Bank, that the 1980 coup d’état would not jeopardise the Bank’s intention to lend, were very courteous". [3]
BCE / LTRO : what’s that ?
23 October 2014, byIn 2010 institutional investors (including banks) and hedge funds attacked Greece, the weak link in the European chain of debt, before turning their attention to Ireland, Portugal, Spain and Italy. In so doing, they made juicy profits by forcing these countries to increase their interest-rate on their bond issues in order to refinance their debts. Among investors, private banks made the biggest profits, by directly obtaining funds from the ECB at 1%, while at the same time making quarterly loans at 4% or 5%. As far as securities are concerned, they only agreed to buy Irish and Portuguese ten-year bonds if the interest-rate rose to 10%.
The World Bank and the Philippines
8 October 2014, byThe 1946 US decision to grant the Philippines its independence inaugurated a period of prosperity in the country. For a number of geo-strategic reasons, in the wake of the Second World War the Americans were willing to let the Philippine government pursue policies that they ruled out elsewhere.
Early Soviet Commitment to Environment Protection and its Decline
8 October 2014, byThis paper argues that while the environmentalist movements have often charged that Marxism has been productivist and has ignored the ecological concerns, the reality is more complex. The focus has actually been on Stalinist industrialisation and similar processes. It will be necessary to look at the early Soviet period, when a wide ranging attempt was made at conservationism.
United States : the Fed Bails Out Wall Street
29 September 2014, bySince 2008, the Fed has granted unlimited credit to banks at an official rate of 0.25%. In fact, as the General Accounting Office (GAO) has revealed, the Fed has lent close to $16 trillion at an interest rate below 0.25%. [4] The report shows it has not followed its own prudential rules and has not notified Congress.
Footnotes
[1] This situation is explained hereCe dispositif est à mettre en relation avec la pondération des actifs par le risque qu’ils représentent. J’ai expliqué cela dans http://cadtm.org/Banks-bluff-in-a-completely-legal published on 4 July 2013; http://cadtm.org/Banks-Fudged-health-report published on 6 August. See also the soon to be published book, Bankocracy, Merlin press, London 2015.
[2] The terms used to designate the countries targeted for World Bank development loans have changed through the years. At first, they were known as “backward regions”, then “under-developed countries”, and finally, “developing countries”. Some of these have gone on to be called “emerging countries”.
[3] Kapur, Devesh, Lewis, John P., Webb, Richard. 1997. The World Bank, Its First Half Century, Volume 1: History, Brookings Institution Press, Washington, D.C., 1275 p. This book was financed by the World Bank for its 50th anniversary.
[4] GAO, “Federal Reserve System, Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance”, July 2011, http://www.gao.gov/assets/330/321506.pdf. This report, was made possible by an amendment to the Dodd-Frank act that had been introduced by Ron Paul, Alan Grayson and Bernie Sanders in 2010. Bernie Sanders, an independent Senator made it public http://www.sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf
