Activists call for focus on poverty in world financial institutions

The International Monetary Fund and the World Bank are holding annual meetings in Washington, DC. World leaders are discussing their increased role following the global financial crisis. While much attention inside the meetings is on a possible currency war, demonstrators outside are calling for concrete reforms that would improve conditions for poor countries. Michael Lawson reports.

Leaders of both organizations grapple with their role after the global financial crisis. IMF chief Domonique Strauss-Kahn recently cited the challenges the crisis has brought to meeting a Millennium Development Goal to halve the number of people living on less than $1 a day by 2015.

Strauss-Kahn: "As a result, about 70 million fewer people will have escaped from the chains of poverty by 2020. Many millions more will suffer the consequences of unemployment or underemployment."

But many disagree with the IMF and World Bank on the methods for decreasing poverty.

(((Break the chains of debt, break the chains of debt…)))

Demonstrators gathered in a park across from the IMF and World Bank meetings on Friday to continue calls for debt cancellation for the poorest countries.

(((These chains were made in union halls, these chains have been made in church basements, these chains that symbolize debt have been made in grade school classrooms…)))

Demonstrators carried a large paper chain representing the slavery of debt from the IMF and World Bank complexes to the White House. One of the organizers - Jubilee USA - has successfully helped to cancel more than $100 billion in debt for 28 poor countries. Jubilee’s Deputy Director Melinda St. Louis discussed the real-life consequences that debt conditions impose.

St. John: “In the short term they may have a lower inflation rate but it means they’re not able to invest in healthcare, in education, they have to lay off teachers...and these are in the poorest countries in the world. There’s no social safety net.”

Activists say IMF lending conditions often result in cuts to social programs, because countries are required to balance budgets. Wahu Kaara is with the Kenyan Debt Relief Network. She says financial institutions have let the world down and the United States should take the lead to pressure financial institutions to adjust.

Kaara: “…to transform the financial institutions to become compatible and compliant to service to human life, to social development but not the GDP and foreign direct investment that they continue polluting the world with.”

The World Bank has come under fire lately for its investments in coal and oil projects. A report by Oil Change International found that none of the World Bank’s 26 fossil fuel projects even identified energy access for the poor as a goal. The World Bank recently granted a $3 billion loan to build the world’s 4th largest coal plant in South Africa, which, according to St. Louis, was opposed by the population. St. Louis said the projects contradict the simultaneous push for climate change action and serve the interests of industry rather than the poor.

St. Louis: “Unfortunately in Africa there are millions of people who don’t have access to energy and they say this is the quick fix this is the cheaper way in the short term to increase the electrical grid in Africa. We would argue this is a very short sighted approach.”

St. Louis says the United States should also use its voice and funding in the IMF to discourage large fossil fuel projects. The United States abstained from the vote granting the loan for the South African coal plant.

Michael Lawson, FSRN, Washington.