12/YOUR MONEY OR YOUR LIFE!
from the poorest and most indebted countries go to the interna
tional financial institutions, which take in more than they lend.
Such countries devote an increasing share of the Public
Development Aid they receive to paying off their multilateral
debt with the IMF and World Bank. To add insult to injury, a
portion of the loans made by the International Development
Association (IDA, one of the divisions of the World Bank; see
glossary) is immediately used to pay back the International Bank
for Reconstruction and Development (IBRD, the main division of
the World Bank; see glossary) and the IMF. The money from one
till at the World Bank - ostensibly earmarked to improve the lot
of the people in debtor countries -comes back to the World Bank
via another till through foreign debt repayment. As a general
rule, these sums never actually leave Washington, where the
IDA and IBRD (World Bank) and IMF headquarters are located
(Chapter 14). To top it off, Public Development Aid has fallen
precipitously as a result of government spending cuts in the
North.- In the face of criticisms from sections of the social movements in
the North and South, the World Bank has decided to improve its
public image by providing loans for healthcare, education and
water treatment projects. Increasingly, these loans go to local
governments and non-governmental organisations (NGOs). In
addition, in 1996 the World Bank publicised a programme for
easing the debt burden of the HIPCs. This initiative received
enormous support in political and media circles. Its goal is to
make debt servicing more 'sustainable' for 41 countries
(Chapter 14). According to the UNDP, the World Bank and IMF
initiative (the HIPC initiative) involves a smaller investment
than it cost to build Euro Disney on the outskirts of Paris. The
'initiative' has been greeted with open arms by a number of
NGOs in the North and South, by the governments of the
concerned countries and by the media. However, it offers no real
solution to the problems of debt burden and the drastic cuts
being made in social spending in the debtor countries. The two
real objectives of the IMF and World Bank are, first, to ensure
that debtors can maintain regular debt payments and, second,
to keep the countries in question in their clutches.