Financial crisis a boon for ECAs
While hefty public bailouts of the financial and auto industries have stimulated debate on the role of governments in commercial markets, one form of government subsidy has flown beneath the proverbial radar: export credit. Confronted by an increasingly dire financial crisis, Western governments are using their export credit agencies (ECAs) to boost liquidity and rescue faltering industries. At an extraordinary World Trade Organization meeting last month, participating governments reported a 30% increase in ECA business over the previous 12 months. The WTO called for even greater reliance on public credit to lessen the burden on commercial banks. Shortly afterwards, the OECD announced an agreement with non-members, including Russia and Brazil, to provide markets with publicly-sourced export credit.
Financial crisis a boon for ECAs
What is the Bank of the South?
On December 9th, 2007, representatives from Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay, and Venezuela met in Buenos Aires, Argentina, to launch “el Banco del Sur” or the Bank of the South (BoS). With the creation of the Bank, the leaders of Latin America envisaged a new development institution to help promote growth and tackle poverty. The BoS was originally proposed in 2006 by Venezuelan president Hugo Chavez. Chavez, along with other South American leaders, wanted a Bank that would allow them to assert their political and financial independence from traditional international financial institutions (IFIs), like the International Monetary Fund (IMF) and the World Bank, and put an end to decades of structural adjustment policies imposed by the IFIs on countries in Latin America.
G-20 Summit – financial response to a development crisis
With the global economy continuing its downward spiral, ambitions for the first Group of 20 (G-20) “Summit on Financial Markets and the World Economy” in Washington were sky high. In contrast, expectations in terms of concrete outcomes, with diverging opinions on key issues going into the meeting and a pretender at the throne in DC, couldn’t have been lower.
IMF back in business, but still politically bankrupt
Even before US President George Bush announced plans for next month’s G-20 Summit on the financial crisis (see “Just the Facts”), International Monetary Fund (IMF) Managing Director Strauss Khan has been pushing for the IMF to be front and center in addressing the crisis. In a complete about-face from one year ago, Strauss Khan now sees the IMF not just fighting fires through new flexible emergency loan arrangements to address food, fuel and finance crises, but as a “global regulatory coordinator” or world central bank.
New undemocratic “Washington Consensus” won’t fix global crisis, state over 630 groups from 104 countries
International, October 29th, 2008 – The day before the United Nations (UN) meets to discuss its new high-level taskforce on the global financial crisis, chaired by Nobel Laureate Joseph Stiglitz, and two weeks before the US hosts members of the Group of 20 to address the same issue, a coalition of 630 organizations from 104 countries have issued a statement demanding a truly global response to the global crisis and laying out a set of principles for doing so.
The World Bank
Washington, D.C. 20433
Edith Grace Ssempala
Acting Senior Vice President External Affairs
October 26, 2008
Thank you for your letter regarding voice and participation of developing and transition countries in the governance of the World Bank Group. Mr. Zoellick asked me to respond, and I am therefore requesting that the Bretton Woods Project transmit this to all those who signed the letter.
For pdf, click here.
The Hon. David Emerson
Minister of Foreign Affairs
Foreign Affairs and International Trade Canada
125 Sussex Drive
Ottawa, ON K1A OG2
October 10, 2008
Re.: Canadian priorities leading up to the Doha Financing for Development Review.
Dear Minister Emerson:
The World Bank and Climate Change
The World Bank is one of the most powerful financial institutions in the world. Created in 1944, the Bank has now become the world’s largest public “development” agency, influencing the policies of the majority of the world’s developing and emerging economies. In recent years, noting the significant impact that climate change is already having on developing countries and the gap in financing mechanisms available for addressing these impacts, the World Bank has increasingly staked a claim for itself as a key player on the issue – with widespread criticism from developing country governments and civil society around the world.
Bank pulls out of disastrous Chad-Cameroon pipeline
In early September, in a rare move, the World Bank pulled out of the $4.2 billion Chad-Cameroon pipeline due to ongoing tensions with Chad over oil profits the government had promised to spend on social programs. The exit was finalized when Chad prepaid the outstanding $65.7 m balance of its $140 m loan.