No More Money to the World Bank
For immediate release
Ottawa – April 23, 2004 – Today, Halifax Initiative, a Canadian coalition for global economic democracy, announces that the Council of Canadians, Canada's pre-eminent citizens' watchdog organization, comprised of over 100,000 members, has joined the growing global campaign to refuse to purchase World Bank Bonds. The announcement comes as officials and protesters from around the world gather in Washington to celebrate and criticize the 60th anniversary of the World Bank and the International Monetary Fund.
“When Canadians, through our pension and mutual funds, purchase World Bank bonds, we become partners in the Bank’s global campaign to forcing countries to privatize their water systems, jeopardizing people’s fundamental human right to water”, said Maude Barlow, National Chairperson of the Council.
Originally launched in April 2000, the boycott has now spread to more than 30 countries including the US, Britain and Europe. In the US, one hundred institutions, municipalities and organizations have committed to purchasing no new bonds. Ten of the largest socially responsible investment funds, for example, controlling more than US $16 billion in assets, have adopted the boycott. The Canadian World Bank Bond Boycott campaign was launched by Halifax Initiative Coalition in October 2003.
“Many World Bank bond holders are large public institutions like municipalities and universities – or pension funds representing millions of individuals,” said John Mihevc, Chair of Halifax Initiative, “Collectively we have the power to influence what the World Bank does by making simple choices about where we put our money.”
The World Bank raises approximately US$ 20 billion annually through the sale of bonds in private financial markets.
Representatives from Halifax Initiative are in Washington to participate in activities associated with the World Bank and IMF 60th anniversary until April 26th and can be contacted at the number below. Halifax Initiative representatives will participate in the massive street Rally and March for Global Justice is planned for Saturday, April 24 in Washington.
For more information contact:
Michael Bassett, Interim Coordinator, Halifax Initiative Coalition, cell: 613-266-8100
The World Bank Bond Boycott is modeled on the successful South African anti-apartheid divestment movement of the 1980’s and invites institutional investors to refuse to purchase World Bank bonds.
The World Bank raises most of its resources by selling bonds on private capital markets in North America, Europe, and East Asia. The Bank issues approximately US $20 billion in bonds each year. The bonds are guaranteed by major banks and financial institutions and sold to insurance companies, central banks, mutual funds, pension funds, unions, churches, universities, and other institutional investors.
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. Bank bonds have always been paid out in full and on time, making them a perceived ‘reliable’ investment. The Boycott aims to build public pressure to lower the Bank’s AAA bond rating, thereby decreasing the desirability of Bank bonds as investments and fostering fundamental change at the institution. As more and progressively larger investors join the boycott, the Bank’s ability to borrow on the private financial market is challenged and its need to respond to its critics, heightened.
In the US, where the Boycott initiative has been operational since 2000, one hundred institutions, municipalities and organizations have committed to purchasing no new bonds. Ten of the largest socially responsible investment funds in the US, for example, controlling more than US $16 billion in assets, have adopted the boycott. Seven US municipalities, including San Francisco, have passed resolutions in support of the Bank Boycott.
In 2002, TIAA-CREF, the largest pension fund in the US, divested over $7 million of Bank from its portfolio citing “insufficient returns”. TIAA-CREF was the target of a Bank Bond Boycott campaign throughout 2001. The fact that a growing number of institutional investors are selling their World Bank bonds for market reasons is an indication of an important trend. Non-social, fiduciary concerns associated with World Bank bonds are growing as a number of Bank borrowers default on their payments or hold unsustainable levels of debt – increasing the risk of non-payment.
The boycott campaign has three central demands, which were established by the boycott’s international coordinating committee, comprised of organizations and social movements representing millions of citizens in fourteen countries. The campaign demands:
v an end to the World Bank's harmful structural adjustment policies;
v 100% debt cancellation;
v an end to environmentally destructive projects, especially for oil, gas, mining, and dams.
For more information:
Robin Round, Policy Analyst