In 1944 when it became clear that Nazi Germany and Japan would lose the Second World War, top political and financial leaders of the West particularly the United States and United Kingdom met at Bretton Woods to rebuild the international economic system that was decimated by the war.
Thus, the World Bank Group (WBG) and the International Monetary Fund (IMF) were created, and the twin intergovernmental financial institutions began to dominate the task of shaping the structure of the world’s development and financial order.
The US and the UK dominated the decision-making process in these Bretton Woods Institutions, and because “to the victors belong the spoils,” America flexed its geopolitical strength throughout the globe, and where would this strength be utilized to the max than in controlling other countries’ economies.
Because the World Bank and the IMF are creations of the Bretton Woods Summit, later generations of political activists and even journalists thought that these two are the same.
Despite their similarities, the WB and the IMF remain distinct. The fundamental difference is that the WB is primarily a development institution, it loans out money to poor countries to help them grow and develop economically; on the other hand, the IMF is a cooperative institution that seeks to maintain an orderly system of payments and receipts between nations.
With the US having a dominant vote in both institutions, there is the perception (which is also a reality) that the BWIs are an effort to expand the reach of western capitalism. Under President Robert McNamara from 1968 to 1981, the World Bank’s mission began to shift to focus on income inequality and poverty.
The policies of the twin institutions from the 80s to the 90s toed the line of the so-called “Washington Consensus” which focused ideologically on promoting free-market economic policies such as deregulation, privatization and trade liberalization, as well as targeting unlimited economic growth, and were implemented primarily through Structural Adjustment Programmes (SAPs). These policies have enduring devastating impacts, as various authors have verified.
Today, the work of the Bank is currently framed by its twin goals, established in 2013: “eliminating extreme poverty by 2030 and boosting shared prosperity.” These are primarily targeted in principle through: direct lending for development projects; direct budget support to governments; and financial support to the private sector.
Both the World Bank and IMF have been criticized for imbalances in their governance structures where, as a result of voting shares being based principally on the size and “openness” of countries’ economies, poorer countries—often those receiving loans from the BWIs—are structurally under-representated in decision-making.
There is also the long-standing critique of the Bank and Fund: that the economic policy conditions they promote—often attached or recommended as part of loans, projects, technical assistance, or financial surveillance—undermine the sovereignty of borrower nations, limiting their ability to make policy decisions and eroding their ownership of national development strategies.
—o0o—
Both the IMF and the World Bank Group are on the radar of the International Peoples’ Tribunal (IPT) which will have an initial launching in the Philippines today, October 26, at the UP Film Center in Diliman, Quezon City.
The Asian Peoples’ Movement on Debt and Development (APMDD) organized the IPT together with 30 international groups, including those from Asia, Africa and Latin America. They called the gathering a "historic moment" for social justice movements to "charge and prosecute the two institutions for the economic and social harm they have inflicted on countries and communities across the Global South.”
The IMF and the World Bank are being charged with accountabilities for the following:
Accumulation of unsustainable and illegitimate debts, forcing countries in the Global South to prioritize loan repayments over social welfare, leaving many in deep poverty.
Loan conditionality that compels borrowing government to slash public spending for essential services
Climate chaos and destruction through continued fossil fuel lending support for fossil fuel projects
Widespread hunger through economic conditionality that weakens food systems and undermine the production of food staples
Exploitation of women’s care labor and violation of women’s rights.
The tribunal will be presided over by an International Panel of Judges composed of distinguished and respected economists, lawyers and academicians. These include Filipino lawyer and climate law professor Tony La Vina; Stanford University lecturer Kumi Naidoo; Prof. CP Chandrasekhar of Jawaharlal Nehru University, India; former Malaysia member of Parliament Charles Santiago; Prof. Fadhel Kaboub, senior adviser of Power Shift Africa; Society for International Development senior advisor Manuel Montes; Third World Network Director Chee Yoke Ling; Prof. Anuradha Chenoy of Jindal Global University, India; and Law and Society Trust (Sri Lanka) Executive Director Sakuntala Kadirgamar.
APMDD coordinator Lidy Nacpil said: "For decades, the IMF and World Bank have hidden behind their deceiving façade of development and poverty alleviation. But in reality, their policies have deepened inequality, fostered corruption, and prioritized the interests of wealthy nations over the needs of vulnerable communities. This tribunal provides a space to speak truth to power, especially for grassroots and ordinary working people who are often denied access to justice in formal legal systems and processes.”
She added that in the face of multiple crises of inequality, debt, and climate change, the Tribunal represents a bold attempt to shine a light on the IMF and the World Bank and the adverse impacts of their programs and policies on communities and the environment. “It is a call for justice, for reparations, and demanding a new model of development—one that centers on people and the planet, not profits,” Nacpil said.
Atty. Luke Espiritu, one of the Tribunal’s prosecutors, stressed: "This is more than just pointing fingers at the IMF and World Bank. It’s about holding them accountable and demanding reparations. The deception is glaring in the way they proclaim their mission to eradicate poverty while pursuing failed measures such as pushing more loans as the solution to crises, including the crisis of climate which developing countries did not cause.”
The Tribunal’s first session in Manila will be followed by sessions in Nepal, India, Africa and Latin America. The final verdict will be passed in April 2025.
Comments