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South Africa: World Bank Bond Boycott
South Africa: World Bank Bond Boycott
Date distributed (ymd): 010619
Document reposted by APIC
Africa Policy Electronic Distribution List: an information
service provided by AFRICA ACTION (incorporating the Africa
Policy Information Center, The Africa Fund, and the American
Committee on Africa). Find more information for action for
Africa at http://www.africapolicy.org
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Southern Africa
Issue Areas: +political/rights+ +economy/development+
+US policy focus+
SUMMARY CONTENTS:
This posting contains the text of a leaflet from the World Bank
Bond Boycott campaign in South Africa. For more information see
the web sites cited in the posting. For previous documents and
additional background on apartheid-caused debt, see previous
postings at:
http://www.africafocus.org/docs00/debt0004.htm
http://www.africafocus.org/docs99/debt9904.htm
http://www.africafocus.org/docs98/debt9807.htm
Also in this posting find a summary of upcoming events related
to the Africa Action "Africa's Right to Health" campaign.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
MESSAGE FROM AFRICA ACTION
The next two weeks will see two major events at which the world's
governments will be making critical decisions affecting Africa's
Right to Health. What emerges from these meetings and what does
not will be one measure of the impact of public pressure to date
and of the distance still to go to ensure Africa's Right to Health.
- On June 20 in Geneva the World Trade Organization (WTO), at the
request of the African Group within the WTO, will devote one day to
consideration of global patent rules and affordability of essential
medicines. According to a statement by NGOs presented by Oxfam UK,
Third World Network and Medecins sans Frontieres at a press
conference in Geneva today, "The key principle that should guide
the discussions in the WTO is that access to essential and
vitally-needed medicines is a fundamental human right."
http://www.oxfam.org.uk/cutthecost/news5.html
http://www.twnside.org.sg/title/joint4.htm
- The United Nations General Assembly Special Session on HIV/AIDS
will take place in New York June 25-27. The official session web
site is at http://www.un.org/ga/aids/. Additonal background on
the session, including the on-line civil society discussion
preceding the session, is available at http://www.hdnet.org.
Both sites have the latest version of the draft declaration made
public (May 11, 2001). The last month of informal consultations
has included intense negotiations among governments on wording,
combined with marginalization of civil society participants. At
present these consultations seem more likely further to weaken
the declaration than to strengthen it in response to civil
society critique of earlier drafts.
Africa Action is among NGOs registered for participation at
UNGASS, with four representatives.
On Saturday June 23, beginning at 11 am at Washington Square
Park, Africa Action is among the sponsors of the "Stop Global
AIDS Now" march and rally, along with African Services Committee,
Health GAP Coalition, Global AIDS Alliance, ACT UP New York,
Jubilee USA Network and American Jewish World Service. For more
information, downloadable leaflets, and additional organizations
participating in the march, see http://www.stopglobalaidsnow.org
Also see the press release at:
http://allafrica.com/stories/200106180480.html
On Sunday June 24, churches in Africa Action's Religious Action
Network are hosting AIDS Orphan Sunday. For more information:
http://www.africapolicy.org/adna/aa0106.htm or contact Relgious
Action Network Program Director Aleah Bacquie
(aleahbacquie@igc.org).
Also on Sunday, June 24, Africa Action will hold a press
conference launching the Africa's Right to Health campaign. More
details to come in a future posting.
The World Bank Bond Boycott
Comes to South Africa!
[Distributed by World Bank Bonds Boycott, Center for Economic
Justice, 1830 Connecticut Ave., NW, 4th floor, Washington, DC
20009. Tel: (202) 299-0020 / Fax: (202) 299-0021 Web:
http://www.worldbankboycott.org
To receive occasional updates on the World Bank Bonds boycott,
join our listserve: Send blank e-mail to
<bank-boycott-subscribe@yahoogroups.com>.
(In South Africa) For more information, and to get involved,
contact Patrick Bond (pbond@wn.apc.org), 083-633-5548; Molly
Dhlamini, 082-811-9874; David Masondo, 082-886-3525; Darrell
Moellendorf, 717-4351; David Monyae, 717-4384; or Trevor Ngwane
083-293-7691. Further information is available at the Alternative
Information and Development Centre (Jhb: 339-4121, CT: 685-1565)
(http://aidc.org.za)]
Why should we add another voice to the global protest against
World Bank and IMF policies?
In 1944, the World Bank and its partner, the International
Monetary Fund, were founded in Bretton Woods, a resort town in
the northeast United States. White-ruled South Africa was given
special treatment, and was one of the first member-states within
the two institutions. The Bank and IMF were then--and are
still--mainly controlled by the US government, which happily
promoted apartheid because it served the interests of large US
companies. The World Bank traditionally has a US citizen as its
president (today, James Wolfensohn) and the IMF is headed by a
European (Horst Koehler).
Instead of carrying out their mandates to "reconstruct" and
"develop" countries in need of assistance and to assure orderly
flows of capital, the World Bank and IMF have presided over
disaster. The past two decades have witnessed unbearable Third
World debt crisis, and periodic financial collapses (for which
the Bank and IMF provide commercial bank bailouts that protect
the rich at the expense of the poor). The Bank and IMF are
deeply implicated.
From the very commencement of apartheid in 1948, straight through
the struggle for liberation, and even after, the World Bank and
IMF consistently sided with the interests of the white, wealthy
population. The Bank and IMF made loans to prop up colonialism
across Southern Africa during the 1950s-60s, and then from the
1960s-90s lined the pockets of corrupt dictators like Mobutu
Sese Seko and Hastings Banda. The Bank supported foolish
white-elephant projects which did nothing to uplift the poor.
The huge dams it promoted at Kariba and in Lesotho mainly benefit
big corporations, displace tens of thousands of poor people, and
are environmentally disastrous.
We therefore endorse the demand by Jubilee South Africa for total
Third World debt cancellation, plus reparations for World Bank
and IMF crimes against the people of the region. Specific damage
done by these two institutions during South Africa's apartheid
era includes:
- the World Bank's US$100 million in loans to Eskom from 1951-67
that gave only white people electric power, but for which all
South Africans paid the bill;
- the World Bank's point-blank refusal to heed a United Nations
General Assembly instruction in 1966 not to lend to apartheid
South Africa;
- IMF apartheid-supporting loans of more than $2 billion between
the Soweto uprising in 1976 and 1983, when the US Congress
finally prohibited lending to Pretoria;
- a World Bank loan for Lesotho dams which were widely
acknowledged to "sanctions-bust" apartheid South Africa in 1986,
via a London trust; and
- IMF advice to Pretoria in 1991 to impose the regressive Value
Added Tax, in opposition to which 3,5 million people went on a
two-day stayaway.
Subsequently, neo-apartheid lending and policy advice by the
Bretton Woods twins included:
- an $850 million IMF loan to South Africa in December 1993 which
carried conditions of wage restraint and cuts in the budget
deficit, which in turn hampered the transition to democracy;
- World Bank promotion of "market-oriented" land reform in
1993-94, which established such onerous conditions (similar to
the failed Zimbabwe policy) that instead of 30% land
redistribution as mandated in the RDP, less than 1% of good land
was redistributed;
- the World Bank's endorsement of bank-centred housing policy in
August 1994, with recommendations for smaller housing subsidies;
- World Bank design of South African infrastructure policy in
November 1994, which provided the rural and urban poor with only
pit latrines, no electricity connections, inadequate roads, and
communal taps instead of house or yard taps;
- the World Bank's insistence that corrupt Lesotho Highlands
Development Authority boss Masupha Sole stay in his job in
December 1994 (six years after he began taking bribes from
international construction corporations), in a threatening
letter to the Lesotho government;
- the World Bank's promotion of water cut-offs for those unable
to afford payments, opposition to a free "lifeline" water
supply, and recommendations against irrigation subsidies for
black South Africans in October 1995, within a government
water-pricing policy in which the Bank claimed (in its 1999
Country Assistance Review) it played an "instrumental" role;
- the World Bank's conservative role in the Lund Commission in
1996, which recommended a 44% cut in the monthly grant to
impoverished, dependent children from R135 per month to R75;
- the World Bank's participation in the failed Growth, Employment
and Redistribution (GEAR) policy in June 1996, through
contributing both two staff economists and its economic model;
- the World Bank and IMF's consistent message to South African
workers that their wages are too high, and that unemployment can
only be cured through "labour flexibility";
- the World Bank's participation in Egoli 2002, through research
support and encouragement of municipal privatisation;
- the World Bank's repeated commitments to invest, through its
subsidiary the International Finance Corporation, in privatised
infrastructure, housing securities for high-income families,
for-profit "managed healthcare" schemes, and the now-bankrupt,
US-owned Dominos Pizza franchise;
- the consistent failure of World Bank and IMF "structural
adjustment programmes" in Southern Africa; and
- the stubborn refusal by the World Bank and IMF to cancel debt
owed by our impoverished neighbours since the mid-1990s, except
in tiny amounts--and only on the condition that, for example in
Mozambique, public health service charges increase by 400% and
all water systems be privatised.
Some say the World Bank and IMF are reforming themselves, and are
more attuned to poverty, environment, gender, public health,
educational and other social concerns. The Bank's
new-and-improved image includes its alleged role as a "Knowledge
Bank"--using South Africa as the main pilot project--to impart
international best practice.
In reality, however, the minor reforms to date have made no
difference. Environmentally-destructive, politically-repressive
projects like the Chad-Cameroon Pipeline still receive funding
(in June 2000), and neoliberal policies continue to be imposed
on Third World countries. In a March 2000 "Sourcebook on
Community Driven Development in the Africa Region," Bank staff
wrote of water,
"work is still needed with political leaders in some national
governments to move away from the concept of free water for
all... Promote increased capital cost recovery from users. An
upfront cash contribution based on their willingness-to-pay is
required from users to demonstrate demand and develop community
capacity to administer funds and tariffs. Ensure 100% recovery
of operation and maintenance costs."
Following such advice, more thousands of South Africans would get
cholera, women-headed households would continue to pay a
devastating personal price when they cannot afford water, and
municipal officials would further alienate themselves from the
public.
Ironically, the World Bank is now proposing a R1,6 billion
hospital rehabilitation loan, which would give South Africa
unnecessary foreign debt, and introduce Bank-style neoliberalism
even deeper into the healthcare system. Because of GEAR-related
budget cuts, promoted by the Bank, many South African hospitals
are in dire shape. Do we need a Bank loan and advice to fix
them? Do we need the arsonist to tell us how to put a fire?
The international movement for social and economic justice is
making simple demands of the Bank/IMF:
- Cancel all Third World debts!
- Pay reparations for decades of lending that kept the Third
World suffering from poverty, corruption and dictatorship!
- End the neoliberal "Washington Consensus" which is responsible
for the worst inequality ever recorded in human history!
In South Africa, numerous civil society groups protested in five
cities on 26 September, 2000, adding this demand:
- The World Bank, IMF and International Finance Corporation must
immediately close their SA offices and withdraw their missions!
South Africa doesn't need these "multilateral institutions,"
whose main aim is promoting the interests of the US, Europe,
Japan and their transnational corporations! Instead, we
need to change neoliberal policies at home, which the World
Bank, IMF and World Trade Organisation have pestered our
government to adopt!
To do these things, we need to encourage all our
institutions--pension funds, churches, municipalities,
universities--to join the global "World Bank Bonds Boycott" so
that their international fund managers do not invest in Bank
Bonds.
The World Bank Bonds Boycott has already been endorsed by three
US city councils (San Francisco, Oakland and Berkeley) and all
the major US-based Socially Responsible Investment funds. It is
simple, as these investors have shown, to instruct international
investment managers not to invest in World Bank Bonds, which
provide the Bank with 80% of its operational funds.
The signal that this sends to the financial markets is critical.
We need to ensure that all South African-based fund managers--who
invest up to 15% of their monies abroad (as is presently
allowed)--receive a strong message: to profit by investing in
World Bank Bonds--in view of the Bank's ongoing destructive
lending--is simply immoral.
But it is also financially irresponsible to invest in the World
Bank. The more that large investors around the world join the
Bonds Boycott and commit not to buying World Bank Bonds, the
less demand there will be for those Bonds. Anyone buying World
Bank Bonds is therefore buying an asset which will decline in
value.
Joining the Boycott will not cost our institutions anything.
Existing endowments will not be affected, since we are not
calling for "divestment" of existing Bank Bonds, but instead, a
commitment not to invest in future. (There are no shortage of
other international investment choices.) The need for economic
democracy--especially when it comes to investment decisions--has
never been more urgent, and the need to watchdog our funds so
they are not used to support oppression by the World Bank, is
one small but vital step for bringing our institutions into line
with values of social justice.
A committee is being established at Wits University in
Johannesburg to ask Wits and the entire society, whether World
Bank Bonds should be placed on a boycott list in future.
Celebrate June 2001-- the fifth anniversary of GEAR by joining
the campaign against World Bank bonds, and against the Bank's
R1,6 billion hospital loan.
This material is being reposted for wider distribution by
Africa Action (incorporating the Africa Policy Information
Center, The Africa Fund, and the American Committee on Africa).
Africa Action's information services provide accessible
information and analysis in order to promote U.S. and
international policies toward Africa that advance economic,
political and social justice and the full spectrum of human
rights.
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