On the 80th anniversary of the Bretton Woods institutions, World Bank and IMF, Indian civil society groups call for creation of a ‘new, democratic, decentralised’ global financial system.

Close to 200 individuals and civil society groups have called for the creation of a new democratic and decentralised financial system that prioritises sustainability and equality.

Representing a wide range of social movements, campaigns, and grassroots organisations and campaigns, a statement endorsed by close to 200 signatories has demanded the shutdown of the two Bretton Woods institutions – World Bank and International Monetary Fund (IMF) – to pave the way for ‘more democratic, public- spirited institutions.’

Below we publish their statement:

THE Bretton Woods institutions – the World Bank and the International Monetary Fund (IMF) – have completed 80 years of existence and operations.  As people of the global south, who continue to bear the brunt of the impacts of colonial expansion, resource extraction, wealth concentration, climate change and deepening inequality, we demand that these institutions be shut down and make way for a new global democratic and decentralised economic system which protects both people and the planet.  For far too long, the World Bank and IMF have been instrumental in entrenching a system of global financial governance that perpetuates poverty and inequality, displaces people and communities, and destroys nature, livelihoods and life itself. 

The World Bank and IMF were created in 1944 at the end of the Second World War to ostensibly rebuild war-torn economies and countries newly liberated from colonialism through international economic cooperation. In truth, however, they have globalised a model of development and financialisation that is rooted in the colonial logic of extraction and exploitation and have been vehicles for the continued extraction and transfer of wealth from the global south to the global north. 

The Structural Adjustment Programmes (SAPs) and austerity measures imposed by the World Bank and IMF respectively included the privatisation of essential public services including water, electricity, education, healthcare and transportation, steep cuts in spending on social protection and welfare programmes, labour market deregulation, drastic wage cuts and labour contractualisation, and the reduction and/or elimination of subsidies in food and agriculture resulting in hunger and food and nutrition insecurity. Not only was the existing public sector substantially shrunk across the global south, but the very conditions of building/rebuilding robust public sectors were eliminated.  Rural and urban working classes, poor communities, women, small-scale food producers, indigenous peoples and other marginalised groups were the hardest hit by these policies.  

The policy conditionalities at the core of SAPs, austerity measures and so-called development policy and fiscal stabilisation loans aligned with the economic and financial interests of western countries that were former colonial powers. These policies, commonly known as the Washington Consensus, boosted the market power of western transnational corporations and established forms of financial-economic governance that have snared countries in vicious debt traps, undermining national sovereignty and people’s democratic control over their resources in the global south.  

Projects funded by the World Bank such as big dams, mines, ports, and other large infrastructure projects have displaced entire communities and villages, caused deforestation, and accelerated ecological destruction and degradation. The earth has been plundered, and countless peoples have been dispossessed of their means to dignified livelihoods and lives. 

People across the world in the global south and north have risen up against the World Bank and IMF, leading to massive protests challenging their policies and conditionalities.  In India, protests by affected communities against the World Bank-supported Sardar Sarovar hydropower project that resulted in large-scale displacement without adequate resettlement and rehabilitation forced the World Bank to withdraw its support, citing social and environmental impacts. 

Likewise, the fisher people in Mundra, Gujarat challenged the immunity of the World Bank after their sea and fisheries were destroyed by a thermal power plant funded by the World Bank Group.  The tea garden workers of Assam have been questioning the complicity of IFC in perpetuating the low wages, and poor living conditions of tea workers giving rise to poverty and child labour. The policies of the World Bank and the push for privatisation and deregulation have impacted people’s access to health and quality education on the one hand and impacted the collective bargaining right of the labour and environmental regulations. 

Despite the destruction that they have wreaked on people, societies, economies and nature, the World Bank and IMF have faced no consequences. Their respective founding charters provide them with full immunity from legal and material accountability – they are literally above the law.  The introduction of inspection panels and social safeguard policies has not changed their policies and operations in any Meaningfull manner, and has reduced all accountability measures to toothless instruments. 

Given their origins, history and track records, we believe that the World Bank and IMF are beyond reform. Their governance, policies, and market obsessed economic paradigm are too deeply entrenched in the status quo to allow for meaningful change and their transformation from forces for evil to forces for good.

We need a fundamental paradigm change through new institutions founded on principles of democratic and decentralised economic governance, prioritizing equality, sustainability, and the needs of all nations, not just a select few. 

These new institutions must be committed to truly inclusive development, ensuring that all voices are heard – especially of those who bear the brunt of financial, economic and social insecurity – and that policies are designed to meet the needs of the world’s poorest and most vulnerable populations. They should promote development approaches that are embedded in human rights, protect the environment, and ensure the abilities of future generations to live in dignity, harmony and peace. The new institutions should support genuine debt relief initiatives as a matter of urgency and provide favourable financing that helps countries break free from the vicious cycles of debt dependency.

The new paradigm of financial and economic governance must recognise the interconnectedness of economic, social, environmental, climate and political justice. It must end the financialisation of nature, protect the rights of indigenous peoples, local communities, workers, women and youth, and legally regulate the economic power of transnational corporations. 

It is time for the World Bank and IMF to realise that their time is over. These outdated institutions should be replaced by ones that reflect the needs and aspirations of all communities and nations. Only by doing so can we build a more just, equitable, and sustainable world.