Resources

A Global Justice Perspective on the Irish EU-IMF Loans: Lessons from the Wider World, Debt and Development Coalition Ireland, 28th November 2010

Publication cover - A Global Justice Perspective on the Irish EU IMFThis document outlines lessons from the global debt justice movement, provides a background to the Irish EU-IMF loans (up to the 28th November 2010), and offers some recommendations based on these lessons from DDCI. It also flags up recommendations from other groups.

Key lessons From the wider world include

  • The legitimacy of the IMF as a lending institution is deeply questionable - due to its undemocratic governance structure, the devastating impacts of its policy conditions on the world's poorest people, and its lack of transparency. Unfortunately the IMF has not adequately reformed its policy conditionality practices since the recent global financial crisis. Since becoming a member of the IMF in 1957, Ireland has failed to influence the IMF to reform in these areas.
  • The practice of lender policy conditionality hides who are the driving forces behind policy actions taken by borrowing governments.
  • The precedent of the EU-IMF lender combination has shown the EU to have adopted a tough position toward EU countries in crisis. New proposals on lending practices within the EU are already forthcoming from government and civil society sources and need to be monitored in terms of their implications for international lending practices and any impact on Southern nations.
  • It has been possible for Southern borrowing countries in debt crises to stand up to lenders and survive. Justice campaigners in Southern countries and some governments, have also demonstrated that there are alternatives to lenders' policy conditions and the importance of fighting for them.

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Eurodad Responsible Finance Charter

Responsible Finance CharterIn the absence of an international insolvency regime and in the face of the continuing ad hoc and haphazard treatment of the sovereign debt of developing countries, we are demanding a series of contractual changes in loan contracts issued to sovereign states. These measures aim to provide guidance, fairness and certainties to borrower states and lenders as well as protect the citizens and environments of developing nations. The proposal moves away from institution or sector specific approaches to dealing with concerns over 'responsible lending' and ‘fair resolution of debt crises' towards internationally recognised legal standards for responsible financing.

Eurodad's Charter on Responsible Financing outlines the essential components of a responsible loan. These aim to ensure that terms and conditions are fair, that the loan contraction process is transparent, that human rights and environments of recipient nations are respected and repayment difficulties or disputes are resolved fairly and efficiently. Many of the provisions outlined in Eurodad's charter are drawn from international treaties and conventions to which lender and borrower nations are signatories.

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Kicking the Habit: How the World Bank and IMF are still addicted to policy conditions, Oxfam, 2007

Kicking the habitIf the world is to make poverty history, governments in poor countries have to have anti-poverty plans. And these plans must be supported by aid from rich countries. Of course, this aid should come with some terms attached. Rich countries have the right to expect their aid to be clearly accounted for. They - and citizens of poor countries - are also entitled to expect this aid to be used to fight poverty. What rich countries are not entitled to do is use their aid to push economic policy reforms such as privatisation and liberalisation on poor countries.

But this is exactly what the World Bank and the IMF continue to do, with the tacit support of their rich-country shareholders. Economic policy conditionality stops aid working. It undermines national decision-making, vital for successful development. It can lead to unpredictable 'stop-start' aid flows. And it can mean poor countries have to implement policies based on dogma and ideology rather than on evidence. Over the last five years there has been a growing international consensus that economic policy conditionality does not work. 'Policy conditionality...is both an infringement on sovereignty and ineffective' noted the Africa Commission in 2005. The European Commission and the British and Norwegian governments have developed policies to end the tying of their aid to privatisation and liberalisation conditions.

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