IN THIS ISSUE: If you have ever wondered how corporations benefit from World Bank policies, Shalmali Guttal gives you the answers, and if you have ever suspected that there is more to the EU's "economic partnership agreements" than concern over labour standards and the environment, Joseph Purugganan shows that your suspicions are well-founded.
Every year, the World Bank (Bank) channels US$ 18-20 billion to developing countries in the form of loans and grants with the ostensible aim of reducing poverty and promoting economic growth. The Bank always acts in tandem with its sibling agency, the International Monetary Fund (Fund), even in countries that no longer borrow from the Fund. Not all Bank financing and support goes to governments. A significant amount goes directly to the private sector, especially large corporations, in the form of loans, technical assistance and mitigation of investment risks.
International Financial Institutions (IFIs) are international institutions that provide financing to governments and private companies for social and human development, physical infrastructure projects, trade, investment, establishing new businesses, services delivery, etc. Many IFIs are private corporations such as Citicorp, Merrill Lynch, ICICI and Ing Vysa. Some are government run institutions that operate trans-nationally such as Export Credit Agencies (ECAs) and export-import (ex-im) banks. IFIs are often viewed as the main 'agents' of economic globalization in developing countries since they facilitate one of the most important pre-requisites for globalisation, i.e., capital.