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The World Bank Boycott is an international campaign that demands an end to socially and environmentally destructive World Bank policies and projects through grassroots financial and political power. The campaign targets a key source of World Bank finance, international bond sales. The Bank receives most of its resources to finance lending to over 100 developing countries from the sale of World Bank bonds on private capital markets. Bonds are bought by governments, universities, mutual funds, pension funds, trade unions, life insurance companies, churches, and civic groups. Employing the tactics of the anti-apartheid movement, ordinary people are organising locally to boycott these bonds, effectively threatening the Bank’s primary source of funding. The boycott campaign has three central demands, which were established by the boycott’s international coordinating committee, with representatives from organizations and social movements from 14 countries. The campaign demands:
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IN THIS SECTION FAQS on the World Bank World Bank Bond Boycott Campaign |
People around the world have been opposing the policies and practices of the World Bank for decades. Here are some of the reasons why:
- The World Bank, together with its sister institution, the International Monetary Fund, has more economic and social policy influence in the developing world than any other institution.
- The World Bank has imposed a neo-liberal economic model of forced privatization, user fees, fiscal austerity, deregulation and liberalization (collectively known as “structural adjustment”), undermined job security, food security, worker’s rights, public health, primary education, environmental protection and people’s livelihoods for the past sixty years, with particularly harmful effects on women.
- The World Bank’s adherence to narrowly defined export-led growth model has widened the gap between the rich and poor globally and within developing countries.
- By keeping the governments of less developed countries dependent on new infusions of capital from rich countries, the World Bank has made governments more accountable to Bank managers than to their own people, undermining both democracy and meaningful development.
- The World Bank refuses to cancel 100% of the staggering debt of impoverished countries, despite the illegitimate nature of the debt and the inability of countries’ to both pay debt and provide for the most basic human rights to food, shelter, health care and education.
World Bank lending for oil wells, gas pipelines, mines, and large dams has displaced millions of people and resulted in human rights abuses, impoverishment of local communities and nations and damaged the environment all over the world. - The World Bank refuses to adopt measures of transparency and remains unaccountable and undemocratic both to the majority of people in the developing countries where it operates, and to investors and Canadian taxpayers who fund it.
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What are World Bank Bonds and who buys them?
A bond can be described as a loan agreement in which a bond buyer lends money to the bond issuer, who repays both the bond and an agreed amount of interest back to the buyer at some date in the future. Investors make money on the interest and by re-selling the bonds; the Bank uses the money raised by bond sales to finance its investments and operations. By raising money in this way (ie. on private capital markets), the Bank has been able to evade the public oversight that should accompany the use of taxpayer funds.
The World Bank issues approximately US$20 billion in bonds each year. The bonds are guaranteed by major banks and financial institutions and sold to corporations, large mutual funds and central banks. In addition, bonds are bought by institutional investors that we can directly influence, including:
- Mutual and retirement funds
- University endowments
- Trade union pension funds
- Investments of religious or civic organisations
- Municipal government
You or your pension fund or institution may own some and not even know it. Make sure to check if your mutual funds have signed socially conscious statements against purchasing these bonds. If not, go to How do I start a boycott?
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Why do investors buy World Bank bonds?
World Bank bonds are considered a very safe or ‘AAA rated’ investment as they carry virtually no risk – the Bank has never defaulted on bond repayment. The Bank has profited on underdevelopment every year since its creation. Investors have never “lost their shirt” on World Bank bonds. Bank bonds have always been paid out in full and on time, making them a perceived ‘reliable’ investment by investors around the world.
As progressively larger investors join the boycott, however, the Bank’s ability to borrow on the private financial market is challenged. By building pressure to lower the Bank’s AAA bond rating and decrease their desirability as investments, the Bank will be forced to respond to public pressure.
Learn more about the risks associated with World Bank bonds.
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The target of the boycott is the World Bank's Achilles heel: its public perception and its financing. The Bank, throughout its history, has shown itself to be very vulnerable to public and financial pressure. Given the Bank’s past record of responsiveness, this campaign can force real change.
The boycott is effective in opposing the World Bank because it:
- Draws public and political attention to the World Bank’s public image through the education of people and investors globally;
- Threatens the World Bank's primary source of financing by reducing investor commitments to purchase bonds;
- Threatens the AAA bond rating favoured by investors by drawing attention to the abysmal track record of the Bank on social, economic and fiduciary grounds;
- Builds solidarity between people directly affected by World Bank practices and investors who can affect the flow of money to the Bank with a goal of halting those practices;
- Empowers citizens to demand a say over how their money is used by others.
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You can. Anyone can begin to organise within her/his own community to educate and gain support for the growing international movement against the harmful policies and practices of the World Bank.
The campaign is based on the power of citizens working together to assert their right to control how their money is invested by others. Working people, public employees, students, the religious and non-governmental community and taxpayers all have a right to exercise democratic and moral authority over investment choices made in their name.
You can approach your own organisation, university, trade union, or place of employment or local city council to . Since these places are supposed to be responsible to you, they are often the best place to begin. Take some of these steps to Pass a Resolution. You can share what you learn with other organizations that may wish to join the Boycott.
Even if an organisation has never previously invested in World Bank bonds (or has never invested at all), it can still pass a resolution affirming that it will not invest in the World Bank in the future. It is also important to note that even if an organisation does hold World Bank bonds, it does not have to divest them. Instead it can resolve not to buy such bonds in the future. These steps send the same strong message to the World Bank.
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Citizens, local groups and activists on campuses, in unions, in municipalities, in religious groups and in foundations are organizing to pass resolutions or adopt formal policies that endorse the campaign by refusing to buy new World Bank bonds.
If you are interested in starting a local boycott resolution campaign, start with the materials on our site as well as excellent toolkits produced by our partner organizations, Center for Economic Justice and A SEED Europe.
Note that the US campaign has been active now for almost four years and many activists have strategies, experiences and successes to share. See their “How To Guide”.
Contact the Halifax Initiative Coalition at wbb@halifaxinitiative.org and join our World Bank Boycott Network. The group is composed of activists across Canada working to pass resolutions at their organizations and institutions. We meet electronically and by phone to share strategies, materials and experiences, as well as to provide support and coordinate activities.
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Sample resolutions and steps to pass them
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Who has joined?
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Fraser Reilly-King, Coordinator, Halifax Initiative
wbb@halifaxinitiative.org
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Links
World Bank Boycott – USA - includes links to International Coordinating Committee and excellent resource materials
World Bank Boycott – Europe - includes links to Global World Bank Boycott Groups and excellent resource materials
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Launched in April 2000 by organizations in 36 countries, the campaign links people directly affected by World Bank practices with organizations and investors who can affect the flow of money to the Bank with a goal of halting those practices.