While Sri Lanka has been busy distancing themselves from China, Europe including U.K. Germany, France and Italy join the Bank.
This is a must read, with Sri Lanka mentioned. The interviewer is Sharmini Peries of Real News Network
Excerpts from Michael Hudson: Europe Tilts East Towards China
From the very beginning, the World Bank has been basically an extension of the U.S. Defense Department, from the first president, John J. McCloy, who is assistant secretary of defense, down through Robert McNamara, 1968 to ’81,Excerpts from Diplomatic disaster: Obama humiliated by allies’ rush to join China’s new bank
So you have the purpose of the World Bank lending essentially for plantation export crops, for export crops to make countries avoid producing anything that might compete with American exports, above all grain, although every single mission of the World Bank, country mission, has recommended that countries undertake land reform and agricultural extension to help promote family farming and countries to feed themselves. The World Bank has not made loans for this.
The World Bank, under U.S. congressional pressure, has said, look, we’re not going to finance countries becoming independent of the United States; our function is to make them export more to the United States and to buy from the United States. So the funding of the World Bank has mainly been to fund infrastructure developments, vastly overpriced, to Third World countries to create money for American engineering firms; also to lend out dollars and to indebt countries to it; and worst of all, to promote privatization.
The World Bank is pressured everywhere for privatization of public utilities, of basic infrastructure, and then it will make loans to the governments to develop this infrastructure or the roads and the external economies, and then sell them cheap to American buyers, who essentially will create monopolies and turn infrastructure into a rent extraction to squeeze out interest, dividends, management fees that are all going to be paid to the Americans. And this has been raising the price of basic utilities–communications, transportation, water, and other things throughout the Third World. And this has made these economies uncompetitive with the United States that has a mixed economy where the government subsidizes infrastructure.
The good standards that Kerry talked about is Orwellian rhetoric for the standards that are thoroughly corrupt, thoroughly insider dealing. They’re the standards that led the IMF to make the military loan to Ukraine last week.
In Ukraine, for instance, it said, try not to pay the debt that you owe to Russia. It’s gone to Sri Lanka and said, let’s back a right-wing dictatorship or a right-wing group that doesn’t pay China. So China has had great trouble collecting on the vast infrastructure investment that it’s made and is supposed to be paid for by these countries.
whereas under the United States, when countries can’t pay to dollars, then the IMF comes in and imposes austerity. There’s no indication that China’s going to come in and impose the same kind of crippling austerity that the World Bank and the IMF have been imposing on countries.
The reason for the stampede is clear: China’s market and its huge hoard of cash to invest override any concerns voiced by the U.S. Treasury Department and State Department over Beijing’s half-ownership stake in the bank. “Simply put, if you partake, you have a stake,” Thomas Koenig, a policy analyst with the European Union Chamber of Commerce, told the German broadcast service Deutsche Welle.
“New players are challenging U.S. leadership in the multilateral system,” Mr. Lew said, pleading for passage of the IMF reform package. “Our international credibility and influence are being threatened.”
But private analysts say that credibility and influence have taken major hits from the rush to join the Asian Infrastructure Investment Bank.