Bilderberg.org

[Shultz]

Кредит позволяет жить не по средствам. Банковская статегия- ставить
государтсво и народ в безвыходное положение,до тех пор пока они будут не в состоянии расплатиться.
Те, кто будут победителями в войне под названием "глобализация" заберут реальные богатства в счет долга.
Это правда или нет?
_________________
Good is never good enough.

[bip bip]

Как приближаться к сокровище? Например :
( in english

Open Russia Foundation
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In 2003, the Open Russia Foundation initiated another project, called the Regional Schools of Public Politics, aimed at establishing Schools based on the model of the Moscow School of Political Studies in regions throughout Russia. Twelve regional Schools will start functioning in October 2003 but plans exist to extend the number of regional schools to fifty. The Open Russia Foundation is making extensive use of the network of the Moscow School of Political Studies to set up these regional schools.

[edit]Organisation
Board of Trustees

Mikhail Khodorkovsky
Dr Henry Kissinger
Lord Jacob Rothschild
Dr Mikhail Piotrovsky
Arthur Hartman
[edit]Articles
Open Russia' Foundation launched in US

The elegant halls of the Library of Congress do not often host outside events. The evening of September 18, 2002 was a rare exception. Over a hundred members of Washington's elite gathered in the stunningly restored 18th century Members Room, with its unsurpassed view of the Capitol dome lighting up the night across the street, to be part of a truly historic event - the US launch of the Open Russia Foundation, the first-ever international corporate philanthropic foundation in Russia's history.

Open Russia is the brainchild of Mikhail Khodorkovsky, CEO of the YUKOS Oil Company, the largest corporation in Russia. YUKOS is a major corporate giver, whose philanthropic philosophy is that Russia's next generation needs to be well-educated, healthy, and strong. The company sponsors a number of extremely large-scale philanthropic initiatives within Russia. These include New Civilization - a cross between Scouting and Junior Achievement which has taught several hundred thousand teens the basics of life in a modern, democratic, market-oriented society - and the Federation of Internet Education - which has established training centers throughout Russia and beyond and will give half a million high school teachers the skills needed to use the internet in the classroom, which in turn will provide millions of schoolchildren in the most remote corners of Russia with access to a world of knowledge and personal contacts.

These YUKOS philanthropic programs and others like them aim to integrate the new Russia with the rest of the civilized world through education, communication, and personal contacts. For too long, Russia has been isolated and somehow "different". Khodorkovsky firmly believes that the time has come for Russia to become an integral part of the world, and he is willing to put up his money to see that it happens.

The crown jewel in this endeavor is the Open Russia Foundation, which takes the YUKOS corporate philanthropic mission beyond Russia's borders. The Foundation was officially launched in December 2001 in London with an endowment of £10 million. The motivation for the establishment of the Open Russia Foundation was to foster openness, understanding, and integration between the people of Russia and the rest of the world.

Open Russia undertakes a range of activities and programs supported by grants awarded to academic institutions and not-for-profit organizations. The Foundation believes that openness is the first principle of substantial and mutually enriching communication between the peoples of Russia and the West. The knowledge, experience, and culture of each country represent a priceless heritage. The opportunity to share common values, and understand each other's, forms the basis of economic, social, and political partnerships to the benefit of the international community at large.

The Open Russia Foundation has been in existence for nearly a year, and has already given out several hundred thousand dollars' worth of grants to projects that will help bridge the gap between Russia and the West. Some of these include: the Chevening Scholarships, awards for advanced study by Russians in the UK, coordinated through the British Council; the Young Leaders Program, which brings together young British, American, and Russian leaders to discuss global issues; the Somerset House-Walpole Collection, which will bring back to Britain for the first time in over 200 years a collection of masterpieces from the Hermitage purchased from Britain's first Prime Minister, Sir Robert Walpole, by Catherine the Great; and the Thor Heyerdahl Research Center, which is conducting a multi-national archaeological project near the southern Russian city of Azov, mentioned in the Norse sagas, in order to demonstrate the existence of ancient cultural links between this region and Scandinavia.

The US launch of Open Russia marks a new phase in the Foundation's development. Present at the Library of Congress event were the members of Open Russia's illustrious Board of Trustees - Mikhail Khodorkovsky himself, Dr. Henry Kissinger, Lord Jacob Rothschild, and Mikhail Piotrovsky, Director of St. Petersburg's fabled State Hermitage Museum, as well as numerous Members of Congress and other Washington luminaries.

The gala evening opened with welcoming remarks from the host, Librarian of Congress Dr. James Billington, a long-time friend of Russia. Billington stressed the importance of Russia in world culture and the need for the country to be a full member of the world's family of nations once again. Next to speak was World Bank President James Wolfensohn. He chided Billington for his modesty, saying that the Librarian, more than just about anybody else present, was personally responsible for so much that has happened in the recent past to bring Russia and the West closer together.

Taking the podium, Khodorkovsky started his keynote remarks by putting the evening into historical perspective. "A year has gone by since the tragedy and it is September once again, yet none of us have changed our plans, and we continue to work together. They say that the world has changed. I too feel the changes: we have begun to understand one another better, we have finally realized that Russia and America are part of the same indivisible world, and partnership relations between our two countries in many different areas are now developing at a rapid pace."

As examples of these developing relations, he mentioned the first-ever direct shipment of Russian oil to America, which YUKOS had made earlier in the summer; a six-week training course for young Russian regional leaders at the Yale School of Management in the spring; and the summer spent by American students and teachers at a New Civilization camp in Russia.

Khodorkovsky believes that all of these milestones signify something very important: "In addition wanting to change the world for the better, we also have the opportunity to actually make these changes. And in creating and supporting such foundations as Open Russia, we can give other people the opportunity to realize their own ideals and creative projects. `New opportunities to create that is how I would define the essence of this philanthropic activity."

Then it was time to present the Open Russia Foundation's first Leadership Award. The Leadership Award is bestowed on an individual who has worked to develop international relationships, who has come to embody the values of openness, understanding, and integrity that the Foundation honors, and who has had a long-standing commitment to improving relations with Russia.

This year's recipient was Senator Ted Stevens of Alaska, who has done much to establish closer ties between his state and its immediate neighbor to the West-Russia. Senator Stevens is the ranking Republican on the Senate Appropriations Committee and Vice-Chairman of the Joint Committee on the Library of Congress. He serves as Honorary Chair of the Center for Russian Leadership Development at the Library of Congress. Stevens was instrumental in ensuring continuation of the Center's Open World Russian Leadership Program, which brings young Russian leaders into communities across the United States to gain insights into American government and free-market economics. He was also a guiding voice in creating the Library of Congress's Meetings of Frontiers program, a bilingual, multimedia English-Russian digital library that tells the story of the Russian-American frontier in Alaska and the Pacific Northwest.

"To be honest, it is a great pleasure to be able to do good," said Khodorkovsky in presenting the award. "I think that Senator Ted Stevens will agree with me. In the name of the Open Russia Foundation, I am honored to present him with this engraving with a scene of the old Kremlin. The award is given in recognition of his outstanding contribution to educational, cultural, and leadership programs. Senator Stevens deserves this honor because of his longstanding commitment to improving US-Russian relations. He has dedicated himself to programs which seek to bridge the divide between Russia and the United States by providing in-depth introductions to American society, democracy, and free enterprise."

In accepting the Leadership Award, Stevens remarked: "It's an honor to be recognized by the Open Russia Foundation. We have a common goal: improved US-Russian relations. The Open Russia Foundation offers many opportunities for people of each nation to learn from one another, exchange ideas, and develop a greater understanding of democratic institutions. I am especially pleased to help foster the relationship between Alaska and the Russian Far East because of our cultural ties, shared interests, and close proximity."

The evening ended with a special musical treat, courtesy of an Open Russia Foundation grant: two extremely gifted young Russian musicians, 12-year-old pianist Margarita Trif and 15-year-old violinist Sergey Pudalov, who would otherwise have not had the opportunity to demonstrate their talents beyond their home towns, delighted the audience with a demanding repertoire that included works by Rachmaninoff, Tchaikovsky, and Gershwin.

Source: http://www.yukos.com/exclusive/exclusive.asp?id=6107


http://www.global-elite.org/index.php/Open_Russia_Foundation

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Structural adjustment and the Washington Consensus: are they
things of the past

Éric Toussaint, Damien Millet1

During the 1980s, the International Monetary Fund (IMF) and the World Bank earned themselves the
highly justified but less than enviable reputation of being responsible for very unpopular measures
forced upon governments of developing countries - in short, of being the bane of the poor. It must be
said that the governments themselves, often in cahoots with the ruling classes, found it convenient to
place the blame on these distant institutions located on 19th Avenue in Washington. This dangerous
reputation spread like wildfire and newspapers in the South began to give it ample coverage.
Accustomed to making blunt recommendations for cuts in social expenditure or the privatization of
public companies, these two institutions came to realize that plain speaking did not serve their
interests. Very quickly, people recognized their leading role in unfolding economic and human
disasters. Very quickly, the riots that followed price increases in essential goods were coined “anti-
IMF riots”. Very quickly, public opinion put pressure on governments to resist the decrees of the IMF
or the World Bank. In short, it was becoming more and more difficult to get people to swallow such a
bitter pill.
A major communication plan was therefore launched in the 1990s to deal with the serious and rightly
deserved legitimacy crisis that the IMF and the World Bank were then facing (and still are). The
argument focused on debt reduction and the fight against poverty. We have learned and we have
changed, was the message. But the notorious ultra-liberal conditionalities that marked the structural
adjustment programmes of the 1980s are still being practised. A series of recent examples on every
continent testifies to the contradictions of these two institutions and the resistance movements that
have ensued.
In Sri Lanka, the government refused a $389 million loan conditioned on political reforms such as the
restructuring of pension schemes and the privatization of water resources.2
In Ecuador, a popular uprising was responsible for the fall of President Lucio Guttierrez in April
2005. The government of the new president, Alfredo Palacio, has proved to be more touchy on the
subject of economic sovereignty, much to the displeasure of the IMF and World Bank. It must be
noted that in 2000, Ecuador ditched its domestic currency and switched to the US dollar, thus
becoming totally dependent on Washington’s monetary policy. In July 2005, the government decided
to reform the use of oil resources. Instead of being entirely earmarked for paying back the debt, part of
those resources would now fund social programmes, notably for the often under-privileged Indian
communities. To show its displeasure, the World Bank withheld a $100 million loan to Ecuador.
Rafael Correa, the popular finance minister who had initiated the reform, stated: “It is an offence
against Ecuador”, noting that “no one has the right to punish a country for changing its own laws” 3.
In response, Ecuador looked for funding elsewhere: in Venezuela (where President Hugo Chavez,
willing to support such measures, granted a $300 million loan)4 and in China (whose flourishing
economy requires increasing amounts of raw materials). This only highlighted the pressure exerted by
1 Damien Millet is president of CADTM France and Eric Toussaint is president of CADTM Belgium. See
www.cadtm.org
2 See the Sunday Observer (Sri Lanka), 6 November 2005, www.sundayobserver.lk/2005/11/06/ne...
3 Quoted by Le Figaro, 11 August 2005
4 It should be said in passing that after the April 2002 coup d’état in Venezuela, which brought Carmona to
power for less than two days, the IMF, through its spokesperson, Thomas Dawson, immediately offered
assistance to this illegitimate government: (“We would hope that these discussions could continue with the new
administration, and we stand ready to assist the new administration in whatever manner they find suitable.”
(www.imf.org/external/np/tr/2002//tr0...)
Washington, ending in Correa’s resignation. He was replaced by Magadalena Barreiro, who accepted
the position on the condition that Correa give her his public support.
In Haïti, during 2003, the IMF put an end to government-controlled fuel prices, thereby making them
“flexible”. Within a few weeks, fuel prices rose by 130%. The consequences were dramatic: problems
boiling water for drinking or cooking food; an increase in transportation costs, which small producers
passed on to the market, thus increasing the price of numerous basic commodities. But as inflation is
one of the IMF’s bugbears, it promptly imposed a salary freeze. The daily minimum wage plummeted
from $3 in 1994 to $1.50, which, according to the IMF, would attract foreign investors. It also served
geopolitical interests, weakening President Jean-Bertrand Aristide and leading to his departure from
office on 24 February, 2004 - something the big powers had been pushing for.5
Even in oil-producing countries such as Iraq or Nigeria, the IMF imposed the same system of flexible
pricing. Tariffs increased, leading to organized protests by the people affected, for example in
Bassorah in December 2005.
In Ghana, former President Jerry Rawlings refused to adopt the Heavily Indebted Poor Countries
Initiative, but since John Agyekum Kufuor took power in January 2001, Ghana has been complying
with conditions imposed by the IMF. One of these conditions - a significant one - concerned the water
sector, for which the IMF demanded total cost recovery. In other words, households must bear the
total cost of access to water, without the benefit of state subsidies. The price of a cubic metre of water
had to be sufficient to recover total operating and management costs. Electricity was next in line and
the same principle was applied. The goal was clear: to get the public company on an even keel before
privatization… In May 2001 the price of water rose by 95%, and it didn’t stop there. The populations
seriously affected by this measure formed the National Coalition against the Privatization of Water.
With one out of three Ghanaians having no access to drinking water, the World Bank made another
fateful move: in 2004, it granted Ghana a $103 million loan in exchange for the privatization of the
water supply to its main cities – awarding this prize to a multinational corporation. The privatization
process is under way, but the people’s struggle continues, backed by numerous international activist
organizations.
In Mali, the cotton industry is in the line of fire. For decades, the entire cotton sector was controlled
by the Compagnie malienne de développement des textiles (CMDT), jointly owned by the Malian
government (60%) and the French company Dagris (40%). The CMDT, the real backbone of the
Malian economy, was the biggest currency earner for the Malian state through profits and taxes. Its
role extended beyond the mere production of cotton. It provided public services, from maintaining
rural roads or eliminating illiteracy among rural communities, to the purchase of agricultural tools or
the construction of vital infrastructures. Until 1999, production was constantly on the increase:
200,000 tonnes in 1988, 450,000 in 1997, 520,000 in 1998, 522,000 in 1999. But CMDT’s dubious
management and very low prices triggered unrest among peasants, who refused to harvest in
1999/2000. Production that year fell by almost 50%. The cotton sector’s forum, the Etats généraux de
la filière cotonnière, was held in April 2001, where it was decided to introduce a series of drastic
reforms, including a 23% reduction in total expenditure on wages, partial or total debt cancellation for
smallholders, layoffs (500 to 800 people out of 2400), freeze of a planned 7% increase in salary,
increase in the guaranteed price paid to farmers from 170 FCFA/kg of cotton to 200 FCFA/kg,
opening up of capital, re-centering of activities and progressive withdrawal of the Malian state from
the CMDT. In spite of the failed privatizations in the neighbouring countries (in Benin or in Ivory
Coast), the World Bank advocates outright privatization, causing great concern among the affected
villagers. The first reorganizations, notably in the transport and management of fertilizers and
pesticides, have already led to massive disruptions, seriously penalizing Malian producers and putting
harvests at risk in 2003 and 2004.6
5 See http://endehors.org/news/4518.shtml
6 See Millet D, L’Afrique sans dette, CADTM/Syllepse, 2005.
In order to accelerate the process even more, and dissatisfied with the CMDT’s guaranteed price of
210 FCFA/kg, which it found too high, the World Bank put pressure on the government by freezing a
$25 million aid payment. By so doing, it disregarded the two factors responsible for the success of the
Malian cotton sector: a guaranteed minimum price and vertical integration. A World Bank study7
published in May 2005 is explicit: “In order to implement this strategy the plan of action was to create
3 or 4 different cotton processing companies by selling the state-owned share of the CMDT to private
investors.” But the Malian government asked for a reprieve until 2008, “so as not to be accused of
dumping national industries in favour of foreign investors”. Pressure from the World Bank then
increased: “the privatisation agenda is not set, the schedule is not clear and some decisions are made
out of the blue, which is no guarantee of economic rationality or transparency”, and then calling for
“open talks on reforming the sector, adopting a firm schedule and a reasonable scenario towards
privatisation, as well as a plan to limit the impact of the company’s deficit on the budget”. Here too,
the people continue their struggle in order to prevent the CMDT from paying the price of dubious
management and the blindness of international organizations - the IMF and the World Bank being at
the top of the list.
Will the cotton industry go the same way as water and electricity? Maybe, and the example is
interesting because Mali has just regained its majority share in EdM (Energie du Mali), which was
privatized to the benefit of la Saur, a Bouygues subsidiary, five years ago. But the privatized EdM
never fulfilled its contractual obligations (developing water and electricity networks by investing at
least 600 million euros; reducing prices).8 Advocated by the IMF and the World Bank, this
privatization turned out to be a failure, even though it was presented as a showcase to neighbouring
countries. Could re-nationalization be the way out?
In Niger. There was no period of grace for Niger following the re-election of President Mamadou
Tandja in December 2004. In January 2005, on IMF instructions, a law amending finances was
enacted increasing VAT to 19% on basic goods and services (wheat, sugar, milk, water and
electricity). There was massive social mobilization. In March, the population, already impoverished by
years of bad harvests (caused by droughts, invasions of desert locusts) and structural adjustment
programmes (privatizations, cuts in social expenditure, layoffs and salary freezes in the civil service,
etc.) took to the streets to express its dissatisfaction. The social movement, organized around three
consumer organizations, succeeded in creating a large unified front for a “coalition against the high
cost of living”, bringing together 29 organizations and the 4 trade union federations. After several days
of “dead town” demonstration and arbitrary arrests by police, their mobilization forced the government
to back down: the 19% VAT no longer applies to milk and flour, and water and electricity are only
concerned in the highest consumption brackets. Only sugar is still affected, but at the price of fierce
social struggles to counter the wishes of the IMF, dutifully passed on by Niger’s leaders.
In the Democratic Republic of the Congo (DRC), a parliamentary report published in February 2006
denounced the action of the World Bank with respect to the mining industry. Trouble broke out over
the operation of a copper and silver mine in Dikulushi controlled by the Australo-Canadian company
Anvil Mining. In October 2004, Mai-Mai militants occupied the neighbouring town of Kilwa, from
where extracted minerals are sent to Zambia. The Congolese army then launched an operation to
repress this uprising, causing the death of several dozens of individuals suspected of supporting the
rebels (at least 100 people, according to the UN). Summary executions and plunder marked this
strong-arm operation. It was against this background that the Anvil Mining company provided
vehicles and equipment to the Congolese army, with a view to ensuring unhampered continuation of
exports.
This did not prevent the Multilateral Investment Guarantee Agency (MIGA, an affiliate of the World
Bank) from approving an insurance contract in April 2005 offering a guarantee of $13.3 million to
7 Craig D (World Bank Director of Operations for Mali), The Present Situation of Challenges and Issues of the
Cotton Industry in Mali. www.afribone.com/article.php3?id_ar...
8 See www.acme-eau.com
cover political risks related to the expansion of this mining operation. Thus we see that the World
Bank did not hesitate to support Anvil Mining’s dubious activities: a report by the Congolese National
Assembly Special Commission, entrusted with examining the validity of economic and financial
agreements, written by 17 Congolese MPs from different parties, and led by Christophe Lutundula,
severely criticized “the policy of splitting up the mining portfolio of the State” in which Anvil
Manning was implicated, essentially “to satisfy the immediate financial needs of governments”.
According to this report, the collusion between the Congolese authorities and Anvil Mining was
flagrant: “tax, customs and para-fiscal exemptions were granted in an exaggerated fashion and for
long periods, some 15 to 30 years. ?…? The Congolese State has therefore been deprived of significant
revenue resources indispensable to its development.” In spite of everything, control of Anvil Mining’s
operations was destined to fail: “The public servants affected by the mining concessions were
flagrantly being taken care of by the private operators whom they were supposed to audit. ?…? These
public servants also lacked full autonomy, independence and effectiveness.” To cap it all, until March
2005 a significant shareholder of Anvil Mining was First Quantum, a Canadian company (17.5% of
shares), exposed in a 2002 UN report on the DRC for not respecting OECD guidelines governing
multinationals. How can the World Bank, via MIGA, continue to offer guarantees to a company that
has demonstrated how little it respects the fundamental rights of the people of the Kilwa region? To
offer a guarantee in such circumstances is to make oneself a direct accomplice of the reprehensible
actions of Anvil Mining.
In Chad, since the start of the project, numerous ecological, human rights and international solidarity
organizations have been concerned by World Bank support for the construction of a 1,070 kilometre
pipeline linking the oil-producing region of Doba (Chad) to the maritime port of Kribi (Cameroon).
From the outset, the ecological, human and financial risks were so great that Shell and Elf preferred to
pull out. However, the final consortium consisting of Exxon Mobil, ChevronTexaco (U.S.A) and
Petronas (Malaysia) have carried the 3.7 billion dollar project through, thanks to powerful strategic
and financial support from the World Bank.
To justify its support, the World Bank committed to a pilot programme designed to allow Chadians to
benefit from the profits made. In making this investment - the largest in Sub-Saharan Africa - it
imposed its conditions: the Chadian President, Idriss Déby, must devote 90% of the revenues earned
from oil sales to social projects selected with its approval and to investments in the Doha region. The
remaining 10% must be reserved for future generations: they were deposited in a blocked account at
Citibank London, under World Bank control.
This arrangement failed since Déby appropriated the sums allocated for future generations: it is
estimated that he helped himself to at least $27 million. Moreover, he changed the rules of the game
by including security expenses in the definition of priority sectors to be financed by oil revenues.
Weakened by high social tensions, attempts to overthrow him and army desertions, Déby sought to
reinforce his military and repressive machine. In December 2005 the World Bank reacted by blocking
existing loans to Chad, pretending to discover the authoritative and corrupt nature of the regime,
whereas this project, supported by the Bank for a decade already, has allowed Déby to strengthen his
power base and bolster his personal fortune.
While the big winner in Chad-based oil operations is the consortium, Chad earns 12.5% in royalties on
direct oil sales, as well as various taxes and bonuses paid directly into the Treasury. Out of the first
bonus, deposited in advance, $7.4 million were misappropriated. A further $4.5 million were diverted
by the president’s son for the purchase of helicopters. The World Bank, aware of the situation but
heavily involved in the project, turned a blind eye.
All the bombast by World Bank experts on good governance, corruption and reducing poverty is a
dismal farce. It was clear from the beginning that this project would end up allowing a notorious
dictator to get even wealthier, with total impunity. Each side did just what was expected of it. The
World Bank enabled the construction of a pipeline that allows oil multinationals to help themselves to
a natural resource and their shareholders to reap juicy profits. Meanwhile Chad’s president helps
himself to the wealth that belongs to the people.
Corruption and dictatorship in Chad must be denounced and fought, but that will not be enough. The
World Bank is the determining element in a project that places a heavy burden of debt on Chad,
increases corruption and poverty, damages the environment and allows a natural resource to be
abusively exploited. In short, in Chad as elsewhere, the World Bank knowingly supports a predatory
model and a corrupt dictatorship.
HIPC. The announcement in June 2005 by the G8 Finance Ministers9 regarding the cancellation of a
$40 billion debt owed by 18 poor countries to the World Bank, the African Development Bank (ADB)
and the International Monetary Fund (IMF), was also a consequence of this logic. Erasing the debt of a
small number of countries (representing only 5% of the people in the 165 developing countries) is no
gift: it is merely a compensation for the neoliberal strait jacket that has been imposed on them for
years through the HIPC Initiative. For at least 4 years, these 18 countries have had to implement
neoliberal economic reforms strictly in line with structural adjustment policy: increased schooling
costs, higher health care costs, increased VAT, and the removal of subsidies for basic goods - four
measures which particularly affect the poor; privatization, liberalization of the economy and the
creation of unfair competition between local producers and transnationals. In other words, it’s the
carrot of debt cancellation after the stick of structural adjustment, which today still takes a heavy toll.
9 Canada, France, Germany, Great Britain, Italy, Japan, the US and Russia

http://www.cadtm.org/texte.php3?id_article=247


http://www.cadtm.org/texte.php3?id_article=22

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Putting the cart before the horse
Rightsizing the IMF’s budget
News|Bretton Woods Project|20th February 2007|url|printable version
The expert committee tasked with devising a solution to the IMF’s looming budget crisis proposed a set of technocratic fixes involving investing reserves and selling gold to fund an endowment, but explicitly ignored the Fund’s mission expansion and concurrent increase in administrative expenses.

The committee, chaired by US investment banker and former chairman of the Bank for International Settlements (BIS) Andrew Crockett, was constituted by the IMF’s managing director Rodrigo de Rato to propose long-term financing mechanisms for the Fund. The IMF is projected to have a shortfall of more than $100 million in the current fiscal year, rising to more than $365 million by fiscal year 2010. The committee’s mandate specifically excluded consideration of measures to reduce the Fund’s administrative expenses.

The committee’s end-January report, known as ‘the Crockett report’, characterised the Fund’s current financing arrangements as inequitable, inflexible, illogical and unpredictable. It proposed several measures to improve the Fund’s income position: expanding its investment activities using existing reserves and paid-in quota contributions; the creation of an endowment, funded by sales of the IMF gold stocks, to cover administrative expenses; and the imposition of user service charges for some of the IMF’s activities. The committee “recommends that its proposals be viewed as a package rather than as individual measures to be implemented independently from one another.”

It stressed that the Fund should avoid cross-subsidies based on a breakdown between the Fund’s major areas of activity: credit intermediation, provision of public goods and provision of bilateral services. By separating the financing of public goods (such as global economic surveillance) and services (such as technical assistance and concessional lending) from credit activities, the proposal would end the practice of the interest payments of debtors paying for the Fund’s entire administrative budget. The report also rejected the imposition of periodic levies on IMF member states and lowering the proportion of member country balances on which the Fund must pay interest.

However, the committee ignores one of the most important issues: the exorbitant costs of running an institution which is perceived by many as being illegitimate and as having exceeded its mandate. While the report did note that “spending restraint remains of central importance, and new revenue sources should not lead to the creation of new missions”, it could not recommend specific cuts in expenditure. In November, Peruvian economist Jürgen Schuldt suggested that the IMF look more closely at its own expenses and apply some of the same advice it has given to countries facing financial crises over the years: “it will have to swallow its own medicine. Self-medication will call for a drastic reduction of excess staff and, following the Peruvian lead, could cut salaries and per diems by half.”

The Crockett report’s recommendations may in the end allow the Fund to avoid that prescription. The committee's technical fixes to the Fund's budget crisis mask a greater problem, how to align the incentives for the Fund's financing model with both the global public good of a stable global economic environment and a just system of paying for that public good.

Celine Tan, writing for Third World Network, commended the report for finally addressing some of the “critical asymmetries” in the Fund’s financing model, stating “that middle-income developing country members have been shouldering the costs of running the institution, including that of maintaining concessional lending facilities and bilateral technical assistance projects to low-income members, costs that should have been borne by developed country members.” Tan continues, “Developing country members have also been defraying the costs of the expansion in the IMF's range of activities, most of these originating from the developed country membership, such as the IMF's increasing work on standards and codes and financial sector assessments.”

Without a thorough reassessment of the role the Fund should be playing in managing the global economy, and thus a determination of which Fund activities are useful, supplementing the Fund’s income through the committee’s recommendations may end up relieving the pressure on the Fund to reform.

Debt campaigning groups were taken aback by the suggestion that gold be sold to pay administrative expenses. For years they had campaigned for gold sales to be used to fund debt relief for low-income countries, only to be told that gold sales were not a possibility. Sony Kapoor, a UK-based consultant on international development finance wrote, “The use of scarce international public resources to bail out what is widely regarded as an increasingly irrelevant, bloated institution, complete with a shiny and expensive new building, is both economically and morally indefensible. The case for the use of gold to finance under-funded international public goods or to provide some of the missing resources to meet the Millennium Development Goals remains as strong as ever.”

Nancy Birdsall of the US-based think tank Center for Global Development agreed that the administrative expenses of the IMF was not the first place that proceeds from gold sales should be used. “The US Congress ought to look kindly on any request for a limited gold sale meant to enable the IMF to write off its unrecoverable loans to Liberia, upholding the principle of creditor accountability, before other uses for the IMF's gold are debated.”

The IMF executive board will discuss the Crockett report this spring but given de Rato's comments that “these Committee recommendations will need a period of internal discussion”, it is unlikely that the board will be able to do more than submit a progress report to the Spring meetings of the IMF in April.

Related articles
IMF outsources to abate cash crunch
News|Bretton Woods Project|31st January 2007|update 54|url

http://www.brettonwoodsproject.org/article.shtml?cmd[126]=i-126-43451315388018e88b1b506cccfb9bbb

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http://www.larouchepac.com/pages/audio_video_files/2007/070307_webcast.html

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Mortgaging Iraq’s oil wealth
News|Bretton Woods Project|31st January 2007|update 54|url|printable version
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As a "key ingredient" of IMF lending and debt relief, Iraq's government has just presented a new draft petroleum law to its cabinet that could permit up to two-thirds of Iraq's known reserves to be exploited by multinational oil companies under contracts lasting for 20 years.

The law could also dictate the future of the country's oil sector and determine the future shape of the Iraqi federation, as regional governments battle with Baghdad over resource revenues. Approval by parliament is expected in the coming weeks. Quietly negotiated outside of the country by the IMF, government ministers, US officials and multinational oil companies, this policy would be a radical change for Iraq's oil industry, which has been in the public sector for more than three decades. It would also break from normal practice in the Middle East.

The 'Standby Arrangement' (SBA) signed between Iraq and the IMF in December 2005 (see Update 49) committed Iraq to draft a new petroleum law by end 2006 to allow foreign investment in the country's oil industry. The arrangement was signed before the new Iraqi government had been appointed and one week after the December 2005 elections thus denying Iraqi voters a chance to react through the ballot box. It provided a future financing facility, allowed the cancellation of 30 per cent of Iraq's debt owed to the Paris Club of creditor nations and included requirements for the controversial and sudden slashing of public fuel subsidies. The latter led to a hike in fuel prices, subsequent street protests and the resignation of the oil minister. After his appointment in May 2006, the new oil minister, Husayn al-Sharistani, began drafting legislation to govern Iraq's oil sector.

Provisions of the draft law are based around a system of long-term contracts with international companies - they would invest in infrastructure and operation of the wells in exchange for a significant share of revenues, as well as control over production and development decisions.

The precise details of the draft law are yet to be made public, but most policymakers have referred to a type of contract known as production sharing agreements (PSAs) - the form favoured by multinational oil companies. PSAs are legal agreements, designed to replace a weak or missing legal framework as in the case of Iraq. PSAs have recently generated headlines in Russia for the unfavourable economic deal the government received in relation to the Sakhalin 2 oil and gas project, signed in the mid-90s when the country was undergoing rapid economic liberalisation and political turmoil.

According to Greg Muttitt, a researcher for UK-based oil industry watchdog PLATFORM, "Along with the US and UK governments, the IMF and World Bank are forcing a policy on Iraq which favours the interests of oil multinationals at the expense of the Iraqi people."

The degree of regionalisation in the control of oil and resulting revenues is crucial to the country's future stability and national cohesion. While the Kurdish and Shia populations want independent control of their oil-rich territories, Sunni Arabs located in the oil-poor centre of the country want the federal government to guarantee they're not excluded from the profits. The Kurdish Regional Government has already signed agreements of its own with oil companies which have since been declared invalid by Baghdad.

The UK newspaper The Independent, which obtained an earlier copy of the draft, stated in a January editorial that the draft law was presented to parliament in December 2006 following three consultations - with the US government and major oil companies in July and with the IMF in September. The Iraqi people and parliamentarians were not given the same opportunity to scrutinise it. As late as December, Muttitt asked at a meeting of Iraqi MPs how many of them had seen the draft oil law: "Out of twenty, only one had seen it."

At a meeting in Jordan, also in December, leaders of Iraq's five trade union federations — between them representing hundreds of thousands of workers — called for a fundamental rethink of the forthcoming law. They criticised the major role for foreign companies in the draft law and rejected "the handing of control over oil to foreign companies, whose aim is to make big profits at the expense of the Iraqi people, and to rob the national wealth, according to long-term, unfair contracts, that undermine the sovereignty of the state and the dignity of the Iraqi people". Angry at their exclusion from the drafting process, they called for a delay to the law, to allow proper consultation and public debate. "The Iraqi people refuse to allow the future of oil to be decided behind closed doors".

Bank-Fund collaboration
The World Bank is also heavily involved in Iraq's petroleum sector strategy. Appendix III of Iraq's request for an SBA from the IMF clearly states that the World Bank is the lead institution for sectoral strategies including the petroleum sector. In violation of the World Bank's good governance and anti-corruption rhetoric, PSAs could prolong and exacerbate poor governance by allowing investors in the oil and gas sector to effectively bypass the weak or absent legal and regulatory frameworks. Heike Mainhardt-Gibbs, consultant to US-based NGO Bank Information Center said ""PSA-driven development of the oil sector stands to make it even more difficult to ensure that the necessary changes will be made to improve overall governance, such as the creation of checks and balances across government agencies and economic and social sectors. Given this potential, the PSA contract model promoted by the World Bank may lead Iraq down the path of the resource curse".

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Bank and Fund in-roads into Iraq
News|Bretton Woods Project|23rd January 2006|update 49|url

The Bank approves the first development loan to Iraq at the same time as the IMF signs a stand-by agreement, leading to a dramatic increase in fuel prices. read article...

http://www.brettonwoodsproject.org/article.shtml?cmd[126]=i-126-54ef6872c7d8073077609815712b8526



http://www.clubdeparis.org/fr/presentation/presentation.php?BATCH=B01WP04Les accords en Club de Paris peuvent contenir une clause offrant aux créanciers qui le souhaitent la possibilité d'avoir recours aux conversions de créances. Ces opérations peuvent se traduire par des conversions en nature, en aide, en créances ou dans d'autres opérations en monnaie locale. Ces opérations impliquent souvent la cession de la dette par un pays créancier à un investisseur qui, en retour, vend la dette au pays débiteur en échange de parts dans une entreprise locale ou en échange de monnaie locale utilisée pour le financement de projets dans le pays concerné.

Afin de préserver la comparabilité de traitement et la solidarité entre créanciers, les montants de dette pouvant être convertis sont limités à un pourcentage maximum du stock de créances de chaque créancier.