Envío Digital
Central American University - UCA  
  Number 161 | Diciembre 1994



World Bank and IMF: Guilty as Charged

In October the IMF and the World Bank were 50 years old. The Permanent Peoples’ Tribunal, a prestigious international organization, met in Madrid to render judgment on these institutions. It analyzed evidence and heard expert witnesses. The sentence issued was: GUILTY. The IMF and World Bank policies violate human rights and the rights of the peoples They are homicidal policies.

Envío team

The session of the Permanent Peoples' Tribunal was convoked by the International Lelio Basso Foundation for the Liberation and Rights of Peoples, in collaboration with the Coordinating Body of Spanish Development NGOs, to follow up on the commitment made in the previous session in Berlin in 1988 to evaluate IMF and World Bank policies with respect to international law and the right to self determination. The session issued the following verdict.

The International Context

The Permanent Peoples' Tribunal last met in Berlin in 1988, exactly six years before its Madrid meeting on October 1 3, 1994. Over those six years, transcendental changes took place in the world that have created a completely different framework for the Tribunal's deliberations.
1. The most important event was the dissolution of the Soviet bloc and the end of the Cold War. The IMF and the World Bank, institutions born out of the Bretton Woods meetings 50 years ago, played an important role in Western containment policies, and have now lost part of their original function. With the crumbling of the Soviet empire new states were born, and some old stated disappeared, the most dramatic case being Yugoslavia. These events are not only political and it is not an exaggeration to say that the dissolution of the Yugoslav state was influenced by the efforts of some regions of the former Yugoslavia to increase the efficiency of their markets specifically, under IMF pressure by unlinking themselves from the country's other, less efficient regions.

2. With the disappearance of "real socialism," the Western market system appears to be, here at the "end of history," the only economically viable model. Is humanity once again now under the free market system "without an alternative" as Letszek Kolakowsky proclaimed in his critique of Stalinism at the end of the 1950s? The IMF and World Bank political model is much more attractive today for many countries, governments and social movements than it was six years ago. The reason, however, is not political. It is the lack of alternatives.

3. The Uruguay Round of GATT, begun six years ago, ended in April of this year with the decision to create the World Trade Organization. Instead of finding ways to regulate commerce flows and control capital transactions which reach more than US$1 billion daily what seems to be on the agenda is more trade deregulation for goods, services, investments and intellectual property. The result will be to strengthen the transnational corporations, which today dominate more than 25% of world trade as "intra enterprise commerce" (OECD) and international private banking. The effect will be an extreme destabilization of the international financial system. A serious economic breakdown cannot be discarded, with a considerable impact on the real economy, employment and social relations.

The economic data are clear:
* The world is dominated by transnational corporations (TNCs) that have a degree of global integration never before reached by any world empire or nation state. Twenty five percent of the world's productive stock is concentrated in 300 corporations and in only one decade (1982 1992) those companies increased their participation in world production from 24.2% to 26.8%. In other words, the 15 largest transnationals have net incomes greater than 120 countries and the 100 largest ones control more wealth than half the member states of the United Nations. Wealth is increasingly concentrated, while poverty expands.

The World Trade Organization will not be able to control the TNCs, which are not directly subject to arbitration mechanisms. Furthermore, the responsibility of TNCs to the governments in countries where they have operations already significantly diminished due to their great size and economic power will be even more weakened by what was agreed to for the investment sector in the new GATT accords, which require "national treatment" of all investments, regulated by an international linking agreement regarding international capital mobility.

In this and other ways, the Uruguay Round has institutionalized the free market model already being pushed by the IMF and World Bank. It has created new international trade and investment rules that undermine the right of peoples to determine their own development and other fundamental human rights.

* Personnel reduction in the 27 key US transnationals States was 631,084 between April 1991 and April 1994 (Forbes, April 1994).

* In these same 27 transnational companies, the annual salary of general managers in 1993 was US$1.85 million, an average 30% increase over 1992 (Business Week, April 1994).

* Only 7% of world trade is undertaken in conformity with free trade principles. The rest is an administered market. Of the 24 OECD countries, 20 today have more protectionist regulations than they did 10 years ago (UNDP, Report on Human Development, 1992).

* World military spending is equivalent to the annual income of fully half the world's population. In 1992, it was US$815 billion, close to the combined income of 49% of the world's population.
The Cold War system was built on the fear of communism, the Soviet Union and the nuclear threat. Today, this culture of fear continues, but now the militarism is directed towards the South, towards the poor of the earth, towards emigrants: Somalia, Rwanda, Haiti. "Humanitarian" or "friendly" in the Haitian case interventions respond to this new rationale.

* The liberalization of trade, linked to GATT decisions (Marakesh, 1994), stimulated drug trafficking, which now moves US$400 billion annually. Of this total, US$100 billion is "laundered" by international private banks (data from Interpol, Second International Conference on Cocaine Trafficking and Organized Crime, Santiago, Chile, El Comercio, Lima, June 1994).

4. In 1992, the UN Conference on the Environment and Development (UNCED) was held in Rio de Janeiro. It was the first and most important world summit regarding the future of humanity held after the Stockholm conference in 1972. The Declaration of Rio, Agenda 21 and the conventions regarding climatic changes, biodiversity, desertification and forestry norms are all criteria that should be respected at the private level and particularly by international institutions. Ecological restrictions must be integrated into the decision making procedures of the Bretton Woods institutions. The 1988 verdict issued in Berlin criticized the World Bank for its "ecological farce." Six years later and taking into account the UNCED process this posture is more intolerable, because the planet's ecological situation is even worse. There is overwhelming evidence that neither the World Bank nor the IMF have changed their socially and ecologically destructive philosophy adopted as part of the Washington Consensus, which perhaps only makes sense according to strictly financial criteria. Structural adjustment programs must be developed with a sense of ecological sustainability and social equity to improve people's living standards.

Given its record of services contrary to the environment, the World Bank is not the appropriate organization to manage the GEF ecological funds.

"Starting with the Rio Conference, the key international financial administrator of the strategy of sustainable development has been the World Bank, responsible for financing what is called Program 21, a kind of world action program to guide the transition towards sustainability, with 40 chapters and 115 priority action areas. It is enough to compare the US$2 million the Bank has earmarked for financing programs designed to reduce carbon dioxide in China with the US$310 million it has set aside for the construction of a coal based electricity generating plant, or the US$1 billion it is allocating for transportation based on the use of fossil fuels." (Bruce Rich)
Environmental Defense Fund studies indicate that, of the 46 loans granted by the World Bank to energy programs, with total resources reaching US$7 billion, only 2 included energy efficiency or conservation criteria.

In sum, the fact that one of the current pillars of the world's current economic model has been chosen as a promoter of change would seem to be just as "unsustainable" as appointing the International Atomic Energy Agency to head up programs to replace nuclear energy sources with renewable sources. (Robert Guimaraes. Sustainable Development: Alternative Proposal or Neoliberal Rhetoric?, presented to the Forum on Sustainable Development and the Reform of the State in Latin America and the Caribbean, organized by the Colegio of Mexico and PNUMA, April 1994).

5. In the period since 1988, the world economy has undergone its most profound economic decline of the last half century. By the same token, in the industrial world unemployment rates have climbed, real wages for the majority of workers have fallen and the welfare state in the majority of countries has been partially dismantled. Poverty has spread in the rich world, with the effect that the distribution of both income and health has deteriorated significantly.

In the United States, which has the largest world economic system and is an aggressive champion of imposing a free market model on the rest of the world, real unemployment in 1993 was 13.8%, almost double the official unemployment rate. Real salaries of US workers are today lower than they were in 1973 and the distribution of income is more unequal than it has been at any time since World War II. Today one in four people in the United States lives in poverty, the highest rate since 1960.

The regressive distribution of welfare and income is even more accentuated at the world level. In 1992, the richest 20% of the population controlled 83% of total world income, while the poorest 20% had to survive on 1.4%. The World Bank states that 1.2 billion people live on less than US$1 a day. In 1960, the gap between the richest 20% and the poorest 20% was 30 to 1. By 1991, it was 61 to 1. (UNDP, Report on Human Development, 1994).

The number of people in the world with a fortune greater than US$1 billion climbed from 145 in 1987 to 358 in 1984. These billionaires accumulated US$761.9 billion, equivalent to the annual per capita income of 45% of the world's population, more or less 2.6 billion people (Forbes, July 1994).

The growth rate of multimillionaires has been more rapid in the poor countries. In Latin America, the number increased from 12 in 1987 to 47 in 1994. Mexico, often presented as a successful structural adjustment paradigm, had 24 billionaires in 1994, with total assets of US$44.1 billion (Forbes, July 1994) the highest growth rate in the world. It is not surprising that 1994 saw two explosions in Mexico: that of the multimillionaires and the uprising in Chiapas, begun the very day the North American Free Trade Agreement (NAFTA) took effect.

While social indicators in some countries are improving, that improvement is not transferred to the majority of the population. There is no trickle down, but rather a trickle up.

The IDB states, in the case of Latin America, that "although much has been accomplished with respect to economic reactivation and macroeconomic stability, poverty rates continue to be adverse and the regional distribution of income is still the most unequal in the world. During the 1980s, poverty became even more acute due to the economic crisis.
Economic growth and modernization will hardly be lasting if there is no political and social stability, which depends in turn on a more equitable distribution of the benefits of growth" (IDB, Annual Report, 1993).

Some 75 million people leave their countries annually as refugees, displaced people or emigrant workers (UNDP Report on Human Development, 1994).

Unemployment, inequality and poverty are not only scourges of the Third World, but are also common in the North, as can be seen by the widening income gap in the United States. In the 1949 89 period, the average income of a US family fell for certain sectors of the population and increased in others, according to Congressional Budget Office statistics, which indicate that the income of the poorest 20% of all families fell 10%, while that of the richest 1% of families increased 105%. The rate of income growth for the poorest 20% of the US population was 0.5% in the 1979 1989 period, while that of the richest 20% was +1.2% during this same period (Gustavo Fernández, Poverty, Democracy and Market Economy, South American Peace Commission (Chile) and DESCO (Peru), August, 1994).

Oral and written testimonies were presented to this tribunal from populations and communities in crisis due to IMF and World Bank policies and actions. These crises offer an incredible opportunity, even an obligation, to take the necessary steps to reduce such economic and social disasters and environmental destruction.

The Bank is negotiating a huge hydroelectric dam project in Nepal (Arun III) which is a parody of the policy formulated by the Bank itself with respect to characterizing the environmental impact, as well as exemplifying the lack of transparency and grassroots participation in decision making.

6. Since 1988, the world economy has seen a significant increase in competition among trade blocs. In the world of industrialized countries, the emergence of the "Trinity," formed by North America (NAFTA), Western Europe and the Pacific region under Japan's unquestionable leadership has led to the increasing use of military terms: the next "economic war," the "battle" within the Triad, etc.
The existence of a free market system does not necessarily mean more peace and harmony in the world. The Bretton Woods institutions are increasingly more functional in the framework of this new competitiveness, the result of which is even greater marginalization of the world's developing countries. The response of forming trade blocs (Mercosur, Caricom, Aladi, Ecowas, etc.) does not seem very promising.

7. One of the key reasons for these frustrating results is the still growing indebtedness of the majority of Third World countries. Although the debt service has been positive and the flow back to the Bretton Woods institutions has been greater than new credit, the net debt amount of the developing countries grew in the last six years from approximately US$1.3 trillion to more than US$1.7 trillion.

Two specific cases have been brought before the Tribunal. Guyana is suffering the crisis of a per capita debt of US$2,400, which, in current exchange terms means that an unskilled worker in that country would have to work 10 years to pay it off. Unions, businesses, agricultural organizations, women's groups, religious groups and other sectors of Guyana's civil society are valiantly trying to create an "Alternative Structural Adjustment Program," based on democratic participation, and which includes a Tribunal on the international debt with the objective of offering a just solution to the debt crisis.

Nicaragua is similarly undergoing a profound crisis, with a huge foreign debt that is strangling its economy, which we will describe in detail later on. The document presented to the Tribunal also includes numerous examples from the Philippines and other countries of Asia, Africa and Latin America.

The petition to cancel or reduce the debt according to what was specified in the sentence handed down by this Tribunal in Berlin in 1988 is today even more urgent. Even within the limited logic of the Bretton Woods institutions themselves especially the World Bank the accumulation of the net debt is presented more and more as a counterproductive element, given that the debt service continues to increase with the current debt, as do the Bank's difficulties at the moment of identifying appropriate projects to which it can allocate resources.

Although the World Bank's apparent purpose is to improve the well being of people in the Third World and Eastern Europe, the current distribution of the benefits of its operations follows a different course. Two thirds of the World Bank's current loans come from private capital markets through the sale of bonds, mainly in the industrialized countries, which makes the Bank one of the greatest public sector lenders in the world as well as one of the key clients of investment banks in the world's financial centers.

In 1993, the World Bank's net disbursement in the Third World and Eastern Europe was US$6.5 billion, but the projects that received financing from the World Bank in the OECD countries totaled US$6.7 billion, giving those countries a net income of some US$200 million. A substantial part of that reimbursement went for goods and services provided by the largest transnational corporations in connection with this and other sectors, thus turning the TNCs into the World Bank's principal beneficiaries.

Legal Foundations of Responsibility

Since the beginning of the 1980s, an authentic modification has taken place in the objectives of the Bretton Woods institutions, dedicated since then to try to resolve the foreign debt crisis in the interest of the creditors. The control that the world's most industrialized countries have always wielded in the IMF and the Bank has become institutionalized through the Group of Seven, which has become the virtual motor force of its decision making process. In this way, the most industrialized countries have used the legitimizing cover of supposedly technical and formally multilateral institutions to generalize the application of policies whose results are contradictory to some of the objectives established in IMF and World Bank statutes.

While the United Nations and other specialized organizations have been considering the problem of development as the center of their attention from a perspective increasingly connected to respect for human rights, the Bretton Woods institutions which have never in practice accepted the coordinating function that the United Nations Charter grants the UN nor submission to the general principles of international law have taken one more step, and this time a decisive one, in distancing themselves from the basic norms governing the system as a whole. Backed up by the force they wield over almost all foreign financing, they have imposed contrary to the principles of the sovereignty of states, non intervention in internal affairs and the self determination of peoples a structural adjustment strategy whose most relevant result is the massive and ongoing violation of human rights, especially economic, social and cultural rights, and above all the right to development.

This is the profound contradiction in the United Nations system. At the same time that this system reaffirms with great solemnity its desire to favor economic and social progress and effectively respect human rights, some of its own institutions are working in the opposite direction. On the one hand, they reinforce and deepen the bases of poverty, and on the other, undertake emergency activities for humanitarian assistance when it is already too late.

The incompatibility of IMF and World Bank behavior with the objectives defined in its constitutive treaties, the objectives of the United Nations Charter and the basic principles of International Law is in the first place attributable to said organizations insofar as it derives from decisions drawn up and adopted by those entities or in measures to implement the policies imposed by both institutions on the lender states. The consent of developing countries cannot liberate the IMF or the World Bank from their responsibility, when they are violating imperative norms of general international law.

But these policies simply reflect the interests of the large transnational corporations and the governments of the most industrialized countries. It could be said that the IMF and World Bank are acting at the behest of these governments or have put their entities at their disposition. It is important to speak of the concurrent responsibility of the governments of the most industrialized countries.

It is also appropriate to speak of responsibility on the part of the governments of the developing countries themselves, to the degree that they make agreements with the Bretton Woods institutions that incorporate commitments and obligations incompatible with those related to the United Nations Charter and, by their own decisions, contribute to aggravating the consequences of imposed policies. Although they are certainly negotiating from positions of weakness, this does not eliminate all their responsibility for the consequences, in that they are affected by the same foundations of state sovereignty and the fundamental rights of persons.
It is difficult to personalize the attribution of responsibility and determine how much corresponds to each party intervening as a relevant subject in the decision making process. In this forum of judgment it is not a question of formulating imputations against specific individuals. It is sufficient to point out that the demonstrated results of the adjustment policies have as antecedents actions of a complex authorship, but they are not without a subject; at least the circle of owners of these actions is sufficiently determined. It is thus a question of taking one more step forward in the allocation of legal responsibility.

Verdict: Guilty of Homicide

The cause of all this is perfectly identified: it is the decisions, translated into economic policies, that give preferential consideration to the interests of lender institutions/commanding states, adopted with no thought to the real needs of the borrower nations' populations, which the statutes of those institutions commit them to protect. This has not happened. Events prove that the lending institutions have operated exclusively with the logic of the banking market, as if the kind of relations they impose were strictly legal formal, as if the counterparts were negotiating on a level playing field and as if the loans agreed to had strictly financial dimensions.

The way in which these decisions affect and are manifested in the concrete situations in the affected countries is well known and demonstrated. Thus there is no doubt but that we must evaluate the way in which the adjustment policies have led to truly eloquent social indicators of their consequences in terms of the drastic fall in the standard and quality of living and in life expectancy in the developing countries.

The adjustment policies have contributed actively and effectively to increasing morbidity mortality rates acknowledged as avoidable. The heavy drain of a substantial part of the scarce resources of the victim countries, generally situated below the poverty line, translates almost immediately into a reduction in life expectancy in other words, into more deaths, even though they are only represented in cold, benign statistics.

If an assessment of the decisions resulting from such policies is made with evaluation criteria similar to those normally regulating legal conduct throughout the world when damage is done to human beings or life, one must in fact speak of homicidal policies. They are not only imprudent policies, but are premeditated homicidal ones, since measures have been insistently prescribed whose disastrous consequences have been previously experienced.

This is the case because those who occupy decision making positions in the pertinent institutions, despite having formally assumed the commitment to improve the living conditions of people in the developing countries, have designed concrete policies that have nothing to do with those commitments, and have done so with full awareness of the real impact these policies have. Moreover, they have implemented these policies knowing that other courses of action were always feasible, yet refusing to take them after meticulous calculations, pondering all the variables available.

It must thus be definitively concluded that those whose concrete actions have contributed and continue to contribute in a relevant manner to integrating the decision making process regarding adjustment policies adopted in the context of IMF and World Bank policy are well aware of the particular nature of their results. They had ample information regarding the most negative aspects from a human social point of view, but continued to act, and still act, in the known way, to the final consequences.

The Tribunal therefore holds that the IMF, the World Bank and the governments of states making up the Group of Seven are responsible for the violations of the human rights of individuals and peoples to which reference has been made.

Perspectives and Proposals

But condemnations are not enough. For the mobilization of people in growing numbers in both the North and the South, who are becoming ware of the processes and realities that have been described here, the Tribunal points to some immediate objectives derived from the proposals presented by experts from NGO and alternative movements during the session. These are minimum objectives that do not exclude other proposals.

* Nicaragua is an emblematic example of the devastation caused by the debt mechanism, of the irrationality to which the international financial institutions' management of the debt leads, and, at the same time, of the concrete possibility of avoiding the disaster.

A few statistics that speak for themselves:
Foreign debt per capita GDP ratio: 5 to 1
Exports debt service: 2 to 4
Debt interest exports: 1 to 3
Per capita debt: US$2,300
Per capita GDP: US$420
Annual increase in debt: US$500 million
50% of the current US$11 billion debt is interest arrears
The impact of this situation generates a vicious circle: it strangles the economy, condemning it to recession in a context of political ungovernability. The ongoing recession, largely a result of the debt, makes any attempt to deal with the debt in purely economic terms illusory and an attack on the entire Nicaraguan people, including future generations.

So many sectors of Nicaraguan society concur with this evidence that the National Assembly sent a unanimous proposal to the IMF and World Bank: Apply the Terms of Naples suggested by the Group of Seven to cancel 85% of the bilateral debt of the SILICs (Severely Indebted Low Income Countries), among which Nicaragua is first on the list. Transform the rest of the debt into a fund for national reconstruction, administered jointly by the government, civil society, creditor nations and the UNDP. Give triangular treatment to Nicaragua's debt with Russia (US$3.5 billion): partial cancellation negotiated between Nicaragua and Russia (war debt), after which other Western countries would buy up the remaining debt and pardon Nicaragua from its payment. Purchase of the US$1.8 billion commercial debt at the parallel market rate of US$100 million (with US$25 million offered by the World Bank and the rest by friendly countries). Taking up this proposal constitutes an obligatory emergency intervention.

* In the poorest countries, it is senseless to speak of economic growth, human development or ecologically sustainable development if the obstacles of debt and interest payments are not first removed. This means that the following measures should be adopted immediately, in a multilaterally agreed upon way:
The debt service burden of any country should not be such that it impedes a minimum per capita GDP growth of at least 2 3% annually, and should not exceed a certain percentage of export income.

The net flow of resources to the developing countries should be positive for each country.

The principle of equal treatment of all creditors governments, commercial banks, multilateral institutions should be reaffirmed. This implies recognizing that the multilateral debt, for a large part of which the IMF and World Bank are creditors, is part of the problem and should not be exempt as it has been until now from debt reduction operations.

The resources freed up through debt reduction operations should be destined to human development priorities health and primary education, potable water, sanitation and ecological sustainability.

* All adjustment programs currently underway and those to be proposed should be examined by the ECOSOC to evaluate their compatibility with the objectives pursued by this UN structure in the framework of the Charter's aims. The programs should be public and should include:
Assessment of the environmental impact, including the loss of biomasses and the possible detrimental effect this can have in the future.

Assessment of the socioeconomic impact, including the creation or loss of employment, the social, cultural and ethnic impact, emigration, etc.

Assessment of the impact on health, including that of workers directly and indirectly, as well as the cost to public health, reproductive health, pyschosocial health and literacy.

Assessment of the cumulative impact, including that caused by the interaction of the factors discussed in the three previous points, as well as the cumulative geographical impact of all projects located in a single zone.

The Tribunal is aware that the objectives it has laid out represent only "urgent measures" imposed by the dramatic situation created in the majority of the poor regions of the world.

But the underlying problem that cannot be avoided is that of a growing world disorder in which those international institutions born after the Second World War are increasingly distinct in both ends and consequences from the overarching principles that constituted the hard core, the "legal bloc" enshrined in the normative structure of the UN Charter.

Reorganizing all the international institutions with a world vocation based on such principles of order is the urgent task facing peoples and governments today, if they wish to escape a future of growing anomie, of globalization without rules other than those that are ephemeral, cruel and imposed by the strongest, of an irremediable distancing between the growing number of impoverished people and the small groups that possess extreme wealth, and of the plunder of the planet's resources.

The need to assess the international institutions and their behavior in light of the Charter's higher legality has been sustained by the most authoritative internationalist doctrine and has been consecrated in the dissenting opinion of the current president of the International Court of Justice, of the edict issued in the case of the provisional measures insisted on by Libya with regard to the United States and Great Britain around the Lockerbie case.

International Court Should Respond

Based on this position and underscoring a proposal already contained in the Berlin verdict, the Tribunal proposes that the UN General Assembly request the International Court of Justice to immediately declare itself through a consultative opinion regarding the following questions:
1) What, in the Court's opinion, are the limits of the respective competencies of the World Bank and International Monetary Fund? With the goal of setting limits on the sphere of action of these organizations, what is the relevance of their constitutive documents, of the principle of specialization of international organizations as a criterion for interpreting them, of respect for the UN Charter and the constitutive texts of other organizations of the UN system as a basis for the respective spheres of action of these organizations and of the principle of non concurrence of competencies in the UN system?
2) In the Court's opinion, can the member states that have turned to IMF and World Bank financing and loans refuse to implement the conditions imposed by that financing, particularly the structural adjustment programs, when the implementation of such conditions necessarily brings with it the violation of higher principles of the UN Charter and of the economic and social rights defined and guaranteed by the International Human Rights Pacts, which should be considered as imperative norms of general international law?
3) Does the Court consider that the agreements negotiated by the International Monetary Fund and the World Bank with different nations are subject to the rules of validity regarding treaty law, and, in particular, should they be declared null or terminate when they enter into contradiction with general norms of international law?

Changing the United Nations

With this objective, the Tribunal invites all governments, NGOs and movements to make an effort to obtain the majority required in the UN General Assembly.

If that step is taken, the way would be open for a general reconsideration of the whole UN system, in line with what is a fundamental achievement of these last 50 years: the universal primacy of the individual, assumed in the fullness of his/her human social condition and fundamental rights over any other principle of national or international law.

This primacy should constitute the cornerstone of a new United Nations system, through a structuring of international order and its institutions as a system of guarantee for human beings vis a vis governments, economic agencies and the structures they generate, with the aim that these artificial creations not subvert their own role as instruments for human beings and become ends in themselves, or primordial entities in the international community. A guarantee as well vis a vis de facto powers, so that they not become unlawful detainers of a national sovereignty which, denied to states by the human rights doctrine, could be transferred to bodies that lack even democratic political legitimacy.

It is a question of modeling the international order according to the framework of the rule of law, of also introducing constitutionalism into the arena of international law.

This strategic objective is made the order of the day by the current state of the world.

The United Nations system cannot be maintained as it is currently structured. On the one hand, some are pressuring for it to adjust even its formal structures to the existing concentrations of power and wealth, to thus sanction inequality and the division of the world into a few powerful, many obedient and most excluded. In this regard, the proposal of Germany and Japan to reform the Security Council is emblematic.

On the other hand, some are pushing for the creation of institutions directed towards imposing the law even on the powerful. The demands for the creation of a permanent international criminal court, which would carry out a reform of the UN institutions to make them more egalitarian, and for the submission of all Security Council decisions to legal control by an impartial entity are moves in this direction.

It is necessary to include in this debate the future of the IMF, the World Bank and the GATT, to rethink these organizations and effectively insert them within the framework of a new United Nations, remodeled in the interest of an international legality that would restitute international coherence founded on individual guarantees.

In this perspective, the vicissitudes of the debt, with its implicit irrationality and atrocities, could function as one more element of this great spark to mobilize awareness and intelligence to demand the founding of an authentically new international order.

Sessions of the Permanent Peoples' Tribunal

The Permanent Peoples' Tribunal (TPP) held public sessions
in the School of Medicine of the Autonomous University of Madrid on October 1 2, 1994. The TPP informed the IMF and the World Bank of its session, according to articles 14 and 15 of its statutes, and invited the IMF and World Bank to speak in their defense. The Tribunal took into consideration for its verdict:
* The sentence from the Berlin session of 1988.

* The legal documents and resolutions from the United Nations General Assembly taken into consideration during the Berlin session.

ThesTribunal heard on October 1, 1994:
* The inaugural communique of Francois Rigaux, President of the Permanent Peoples' Tribunal, with special reference to the context and implications of the verdict on the statute of international law (Padua, Venice, October 1992).

* The opening speech by Elmar Altvater, Professor of Political Economy at the Free University of Berlin, relating to the articulation of the Madrid session with the preceding session in Berlin regarding the IMF and World Bank (Berlin, 1988).

* Information provided by Gianni Tognoni, General Secretary of the Permanent Peoples' Tribunal, relative to the continuity of this session with the precedents dealing with impunity (Bogota, 1991) and industrial and environmental risks (Yale and Bangkok, 1991 and Bhopal, 1992).

Presentation of the Accusation:
* Updating and analysis of IMF and World Bank policies (1988 1994) by Humberto Campodónico, DESCO, Peru.

* IMF and World Bank responsibilities in the case of Nicaragua, by Xabier Gorostiaga, Central American University, Nicaragua.

* IMF and World Bank policies in Southeast Asia and the Philippines, by Leonor Briones, Freedom from Debt Coalition, the

* Testimony regarding the impact of adjustment policies in Africa, by Opa Kapajimpanga, AFRODAD, Zimbabwe.

Presentations by Experts:
* The Articulation and Linkage of IMF and World Bank Policies with International Agencies and Treaties, by Bruce Rich, Environmental Defense Fund, United States.

* The World Bank and Sustainable Development, by Tatiana Chaoud, Economist, Free University of Berlin.

* The Implications of GATT and the Uruguay Round on Third World Countries and the Dangers of the Future International Trade Organization, Myriam Vander Stichele, ICDA, Brussels.

* The Social Impact of IMF and World Bank Structural Adjustment Policies, by Franco Prausello, University of Genoa, Italy.

* Adjustment Policies and the Case of Rwanda, by Michael Chossudosky, Professor of Economics, University of Ottawa.

* The Transformation of the Role and Practices of the IMF and World Bank, by Samir Amén.

On October 2, 1994:
* Analysis and Proposals by NGOs Regarding IMF and World Bank Policies, by Gustavo Massiah, CEDETIM, Paris.

* The Role of NGOs from the Perspective of the South, by Kamal Malhotra, member of the Executive Committee of the NGO World Bank Working Group, India.

* Assessment of Violations and Responsibilities, by Antonio Pigrau, Professor of International Law, Universitat Rovira i Virgili, Tarragon.

* Testimony by Pierre Galand, General Secretary, OXFAM Belgium.

More than 30 documents and publications with abundant information and analysis were provided to the Tribunal as evidence.


* Francois Rigaux, President of the Permanent Peoples' Tribunal,
Emeritus Professor of International Law. Belgium.

* Elmar Altvater, Professor of Political Economy, Free University of Berlin. Germany.

* Perfecto Andrés Ibáñez, Magistrate, Judges for Democracy. Spain.

* Rosalie Bertell, International Institute of Concern for Public
Health. Canada.

* Luciana Castellina, Member of European Parliament. Italy.

* Monique Chemillier Gendreau, Professor of International Law,
University of Paris. France.

* Ward Morehouse, President of the Council on International and
Public Affairs. The United States.

* Vilma Núñez de Escorcia, President of the Nicaraguan Human Rights Center. Nicaragua.

* Josep Ribera, President of the NGOs for Development Coordinating Body. Spain.

* Salvatore Senese, Magistrate, Member of Parliament. Italy.


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