Refusing to share: How the West created BRICS New Development Bank

Published on Russia Today RT, by Dr. Roslyn Fuller, July 21, 2014.

… For example, the IMF and World Bank repeatedly loaned to Mobutu Sese Seko, dictator of the Democratic Republic of Congo (then Zaire) in order to keep him – and the enormous natural resources within his country – out of the communist camp during the Cold War. Mobutu blew the cash on whatever struck his fancy and the people of the Congo spent decades trying to pay back the money – in fact, by the late 1980s they had paid billions of dollars just in fees related to the nation’s debt, never mind the debt itself. Such irresponsible and short-sighted lending trapped the citizens of the DRC, and many others like them, in a perpetual debt cycle.  

When powerful Western states working in tandem with corporate banks, began to set down increasingly harsh loan conditions through the IMF and World Bank, there was little these nations could do about it. The practice of setting conditions on loans is often dressed up with various justifications in official rhetoric, but at bottom, the IMF, the World Bank and the countries and companies behind them, operate in a way that many petty drug dealers would recognize. They hook a victim with cheap goods and a lot of talk and later they up their demands. It’s not an endearing modus operandum.

And some of these IMF and World Bank conditions were not a great deal more pleasant than having one’s fingers cut off. One core demand over the past 20 years has been privatization. This meant that nations who received loans from the IMF and World Bank were forced to privatize public services, even when doing so made no economic sense. For example, it was not uncommon for the World Bank to demand that a developing country entice private companies to bid for infrastructure contracts. These incentives usually included allowing the company to work in a completely tax-free environment and promising a certain level of profitability for the enterprise. In the case of a power plant, a country might literally oblige itself to pay for a minimum amount of power produced regardless of how much energy was actually used by its population.

That meant that private companies, usually based in Western countries, landed fat contracts to build and run something that there was literally no demand for, but for which the people of a nation ultimately had to foot the bill.

People in these nations could, of course, always hope that schemes like the privatization one were somehow magically inspired and that the combination of non-tax-paying, overproducing private ownership would, for inscrutable reasons, prove the unerring fertilizer of economic growth. They could hope this, in much the same way that you could hope to throw a few beans out the window and end up with a magic beanstalk.

But eventually hope dies, even if it does die last, and these heavily indebted peoples quite naturally begin to ask themselves what could possibly be worse than another World Bank or IMF loan. When people start thinking like that they will only continue with what they are doing if there is really, truly no other choice. In other words, if you are going to ignore the winners of the global economic game (i.e. the BRICS) and subject the losers (developing nations like the Democratic Republic of Congo) to an impossible web of harsh conditions and crony capitalism, it shouldn’t be too surprising that these two camps might someday get together.


BRICS’ development bank: … //

… (full long text, photos, a graph and comments).

(Currently a Research Associate at the INSYTE Group, Dr. Roslyn Fuller has previously lectured at Trinity College and the National University of Ireland. She tweets at @roslynfuller).

Other Links:

The National Security Archive: Declassified Documents Reflect the Covert Side of Lunar Programs, on Humanitarian Texts, July 22, 2014;

Video: The Fight for the Freedom of Information, 11.29 min, on The Real News, July 21, 2014: Jeff Cohen discusses several freedom of information issues, including a new campaign encouraging whistleblowing, the case of journalist James Risen, and net neutrality …;

The Boomerang Effect: Sanctions on Russia Hit German Economy Hard, on Spiegel Online International, by Matthias Schepp and Cornelia Schmergal, July 21, 2014: The United States and Europe last week announced the imposition of stronger sanctions against Russia in response to the ongoing crisis in Ukraine. German industry may be among the losers …;

80% of British Jews feel blamed for Israeli actions, on Russia Today RT, July 21, 2014: An ultra-Orthodox Jew holds a Palestinian flag during a protest against Israel’s air strikes in Gaza in London July 11, 2014 … // … It (the study) found the experience of anti-Semitism is often bound up with perceptions of the political and military decisions of the Israeli government. Publication of the survey has coincided with the Israel Defense Forces’ air and ground assault of the Gaza Strip, which has drawn tens of thousands of protestors onto the streets worldwide …;

Gaza reverberations in Kashmir, on Kashmir and IDPs, by K.N. Pandita, July 20, 2014;

Malaysia MH17 crash: 10 questions Russia wants Ukraine to answer, on Russia Today RT, July 20, 2014;

Emerging Caliphate in Middle East, on Geoolitical Analysis, by K.N. Pandita, July 16, 2014;

Ukraine Timeline, on Russia Today RT, July 13, 2014;

Nonracialism Through Race (and Class), on New Socialist Webzine, by Betsy Esch and David Roediger, June 23, 2014: This article challenges us to go beyond an either-or approach to race and class. It is a very slightly edited version of an article originally published in 2006 in issue 56 of the print magazine New Socialist …;

Austerity with a Smile – The 2014 Ontario Election, on New Socialist Webzine, by Betsy Esch and David Roediger, June 23, 2014;

… and this:

… und noch das:

Comments are closed.