IFIs are major barrier to development effectiveness

Speakers at a discussion yesterday said that international capitalist mode of productions, speculative capital, unjust and ndemocratic role of International Financial Institutions (IFIs) and multinational corporations are the major causes of recent financial crisis. The discussion titled `IFIs are the Major Barriers to Development Effectiveness: Linking Financial Crisis to Food, Debt and Climate Change' has been held at the Cirdap auditorium, Dhaka on 16 October. The discussion was moderated by Ahmed Swapan Mahmud, executive director of VOICE while eminent economist and also a teacher of Dhaka University Prof. Abu Ahmed, eminent leader of Workers Party of Bangladesh Haider Akber Khan Rono, economist, leading economist Dr. Piash Karim, renowned leader general secretary of Biplabi Workers Party Saiful Haq spoke as panel discussants.

Ahmed Swapan Mahmud said the IFIs sit at the heart of the global aid architecture. The World Bank is a major source of finance for developing countries and the IMF has a crucial function “signalling” which countries receive more funding from both official and private sources. These roles yield incredible power for the two institutions which have spread their wings well beyond their original mandates. The governance of the Bank and the Fund is severely skewed towards rich countries which dominate decision-making in these institutions. He said imposing unjustifiable conditions on the government, the financial institutions like the WB and IMF had created a negative impact over people’s life and livelihood.

Bangladesh should look forward to formulating its own policies independently to make the country self-reliant he added. He urged to stop all illegitimate debts, making all information about bilateral or multilateral agreements public, compensation for climate change, and formation of a national body to regulate the multi-donor trust fund for climate change.
 
Prof. Abu Ahmed, an eminent economist said government should have its control over multinational companies (MNCs) operating in Bangladesh. There should be no subsidized rate for the MNCs, rather they should pay the economic cost to operate in the country. He proposed to a new special economic zone instead of ex[oort processing zone (EPZ) which is an old concept . He emphasized that people should have their ownership over their own resources and if people are the share-holders, they can invest in the share market that can reduce economic dependency on IFIs.

Prof. Abu Ahmed stressed not to blanketly privatize education, health and banking sector following the prescription of the World-Bank and the IMF. He suggested government to reduce revenue budget wastage and prepare development budget with country’s own resources mobilizing domestically. He criticized IMF to prescribe for increasing the bank interest rate while globally interest rate is prescribed for decreasing. He said to uphold the public interest at all respects to make a self- reliant country.
Eminent economist and sociologist Dr. Piash Karim criticized the international financial institutions for their domination over global financial architecture. He said that international capitalism and the deregulation from the state are causing the financial crisis. He suggested reforming the global financial architecture based on justice and equality. He urged all to form alternative democratic institutions drawing the examples from Latin America and Nepal.

Haider Akber Khan Rono an eminent political leader of Workers Party of Bangladesh said that the global financial crisis happened due to internationalization of capitalist mode of production and speculative capital. He said the World Bank and IMF is undermining the democratic process of the country and impeding the economic development. He emphasized the role of political leadership and patriotism opposing the unjust development paradigm.

Saiful Haq, the renowned political leader of Biplobi Workers Party said that foreign aid has damaged a lot in the country and urged to bring those financial institutions into people’s tribunal.

The discussion was attended by civil society organizations, NGO`s, human rights groups, women and students activists, government officials and journalists. Among others Tapon Kumar Nath, Deputy Secretary of RAJUK, Arifur Rahman from Manuser Jonno Foundation, Prodip Kumar Roy from SUPRO, Aminur Rasul from Unnayan Dhara Trust also spoke at the discussion.

For more information Farjana Akter, Programme Coordinator, VOICE, email:farjana@voicebd.org