This year marks the 80th anniversary of the Bretton Woods Institutions (the International Monetary Fund (IMF) and the World Bank). They were set up at a meeting of 44 countries in Bretton Woods, New Hampshire, USA in July 1944, with disingenuous promises of global stability and prosperity.
So let’s peel back the layers and their real motivation. The United States and its allies sought to consolidate their economic dominance after World War II. The IMF and World Bank were tools to maintain control over the post-war financial order and their policies favoured Western interests, while the Global South bore the brunt.
The Bretton Woods system was set up to regulate the global monetary order and the United States Dollar was made the global reserve currency, secured with gold, which would inevitably continue a legacy of exploitation and secure more geopolitical power. Their mission to prevent economic war meant keeping powerful currencies stable, which required new credit and economic growth that demanded the discovery and exploitation of markets and the regular repayment of international debts and interest. Unlike rich nations, financially poorer countries are prohibited from uniting to repudiate debts (non-payment) to create new exchanges (lending to their neighbours) or pay their debts in their own national currencies - anything that could affect the dominance of European and American markets and currencies.
How do they do this? The answer lies in the set-up of the internal voting power basis inside the institutions. The principle is simple: the stronger your economy, the stronger your position in the IMF and the World Bank. The United States, with its disproportionate influence, wields a veto over major decisions. European countries follow suit, perpetuating an outdated hierarchy. Meanwhile, countries from Africa, Latin America, and Asia—despite their collective weight—remain marginalized.
The presidency of the World Bank has always been an American privilege, while the IMF’s leadership is reserved for a European. It is time to acknowledge this historical reality and question the legitimacy of institutions built on such foundations.
Their lending practices ensnare Global South countries in a cycle of perpetual indebtedness. Loans given come with strings attached: harsh austerity measures, privatization mandates, and structural reforms, and leave no funds left to respond to the worsening effects of an already deadly climate crisis for which they have no responsibility. Instead of fostering any progressive change, these institutions play a continued role in worsening the climate crisis by pushing countries of the Global South ever deeper into fossil fuel extraction, agribusiness and deforestation in order to generate the much-needed currencies to repay illegitimate debts, and perpetuating dependency and hinder progress through their domination over the Global South through debt.
These Bretton Woods institutions, and their entrenched power structures, need dismantling as it’s crystal clear: the IMF and the World Bank are not part of the solution; they are part of the problem. They've kept countries in the Global South under their neocolonial rule of debt for decades, trapping them in a cycle of exploitation, environmental degradation and economic crises.
80 Years of Colonial Debtocracy are enough! We demand immediate unconditional debt cancellation for the Global South to pave the way for a self-determined, just transition!