The Boards of Governors of the World Bank Group (WBG) and the International Monetary Fund (IMF) convene annually to discuss their institutions’ activities. In general, these Annual Meetings occur in September/October and are usually held in Washington for two consecutive years before moving to a different member country in the third year. This year marks a significant milestone as it is the first time that such a meeting is held in North Africa, specifically in Morocco. Additionally, it is only the second time that the meeting took place on the African continent, the first being in Kenya in 1973.

On the sidelines of the annual meetings, international civil society organizations and social movements, from all over the world and especially from the Global South, organized “The Global Social Movements Summit against the International Monetary Fund (IMF) and World Bank meetings,” in Marrakech on October 12-15, 2023. This Counter-Summit was a great success in terms of participation and content, with more than 170 organizations that included representations from global social and climate grassroots movements, from all over the world, working on issues such as Climate Justice, Debts Cancellation, and feminist movements.

A march, which started from Bab Dekkala Square to Al-Koutoubya, alongside the opening conference at Noujoum Jemaa El Fna space, marked the beginning of the counter-summit. The march witnessed a broad and diverse presence from the Global North and South, and a significant participation from indigenous peoples from Asia and Africa, who waved slogans for the cancellation of the debt of the South, called for reparations for historical, ecological, and climatic debts, and expressed their solidarity with the victims of the tragic earthquake that struck the regions of Marrakech, denounced the growing repression against political prisoners, and voiced their support and solidarity with the Palestinian population under attack in Gaza by raising Palestinian flags, and wearing kufiyas.

This march was succeeded by an inaugural conference entitled ‘IMF and World Bank: 79 Years of Destruction, Enough!’ which scrutinized the role of these institutions in amplifying instances of social injustice and sharpening the inequalities between the Global South and the Global North, as well as the exploitation of the working class around the globe. It was then followed by four days of workshops, debates, plenaries, and cultural events. The gathering culminated with the issuance of the Marrakesh final statement, directed toward the aforementioned institutions. Additionally, a set of demands and a call to action were articulated, by and for the global civil society, representing the deliberative outcomes of the counter-summit discussions around debt, microcredit, climate justice, food sovereignty, social movements, migration, feminism, and imperialism.

RLS North Africa was present at the Counter-summit, participated in the debates, and conducted this interview in order to amplify the voices of the international and Global South grassroots movements and organizations, and experts to clarify their visions, positions, and promote their joint actions. This interview was conducted with Fadhel Kaboub, who gave a keynote at the third plenary conference Environmental Injustices and Financial Colonialism.

Fadhel Kaboub is a Tunisian-American economist with expertise on designing public policies to enhance monetary and economic sovereignty in the Global South, build resilience, and promote equitable and sustainable prosperity.

“You can’t decarbonize a system that hasn’t been decolonized yet!”

Thank you Fadhel for being with us today. You took part in the panels organized by civil society organizations at the official Summit, but your presence at the Counter Summit also speaks volumes about your commitment to challenging the status quo? What message you wanted to stress at the official summit and in the counter summit?

I participated on Thursday morning with the official annual meetings on a civil society panel. The theme of the panel was Financing a Just Transition for Africa, and the main message that I wanted to deliver is that you can’t decarbonize a system that hasn’t been decolonized yet.

We must remember that the Bretton Woods institutions, the World Bank and the IMF were created in 1944 when the majority of the continent was still colonized, and the setting of these institutions during colonial times by colonial powers was not meant for economic development, because there is no point in talking about economic development in the Global South when the Global South was colonized. This global financial architecture was not established by us, it was not established for us, so it cannot be the financial architecture that will help us today. The impact of the dominance of this global financial architecture on a global scale is tremendous. If you divide the world in two blocks, the global North and global South, in terms of global financial transactions, a net amount of $2 trillion is annually moving from the global south to the Global North. That is neo-colonial wealth extraction. The Bretton Woods institutions are colonial institutions; they came to Marrakech as colonial financial institutions, and they’re leaving at the end of this week as colonial financial institutions.

 Put this in the context today of the global climate crisis, the World Bank and the IMF are declaring to transform themselves into climate finance institutions, at least in the next decade why do you think these Institutions cannot transform our reality? Can you give us some examples?

Despite the big discussion about reforming the World Bank and the IMF, these institutions will do nothing to transform our future. Here some examples, in 2009, the Global North made a commitment in Copenhagen to provide $100 billion annually to combat climate change. However, most of this pledge has not been fulfilled, and of the portion that was delivered, 80% came in the form of loans, exacerbating debt traps.

Furthermore, the Green Climate Fund, established specifically for this purpose, had a mere $12 billion for the entire Global South. Even after recent pledges made last week in Germany by countries from the Global North, the additional contributions to the Green Climate Fund fell short of $10 billion. Additionally, the Loss and Damage Fund, created last year at COP27, remains empty with $0. Meanwhile, the IMF and the World Bank continue to promote neoliberal rules of trade, finance, and investment, the $2 trillion in net wealth currently flowing from the poorest countries to the wealthiest is likely to increase to $3, $4, or even $5 trillion in the near future. This is revealing of the fallacy of any transformative impact by these institutions.

Can you elaborate more on how decarbonization, as advocated by these institutions speaks to the concept of green colonialism and how this will impact on the communities in the Global South?

Let’s take another case : The African Carbon Market Initiative, which is arguably one of the most perilous neo-colonial initiatives promoted by the IMF and the World Bank,-along with some private foundations and countries from the Global North- merits careful examination. To simplify the concept for those unfamiliar with carbon markets and carbon credits, they are more accurately described as pollution permits rather than carbon credits. Large-scale polluters in the Global North essentially purchase a license to pollute, resulting in continued emissions rather than reduction. Conversely, countries in the Global South, particularly in Africa, are left with financial crumbs for selling carbon credits. The establishment of the market is facilitated by numerous intermediaries, who ultimately reap the most significant financial benefits through the collection of commissions and fees. Meanwhile, developing countries and African communities, particularly those on the frontlines, lose access to their territories, ancestral lands, pastoral lands, and forests due to displacement caused by carbon markets. Furthermore, polluters, now faced with additional operational costs from purchasing permits, often transfer these expenses to their customers. Many of these customers, residing in the Global South, end up shouldering these costs indirectly.

In summary, these carbon markets serve as a distracting, incomplete solution that does not effectively reduce global emissions. This is why we’re calling it pollution permits: They perpetuate pollution, displace communities, and provide governments with minimal financial compensation without any reparations or grants.

Along with decarbonisation, the world bank and other development banks and EU institutions are particularly pushing green deals with countries in Africa, promoting a win-win strategy by “creating good jobs in the Global South and securing the energy security in the Global North.” Do you think these green investments can help the Global South develop in a more sustainable way?

We need to stand against the green colonialism practices seen in countries such as Tunisia, Egypt, Namibia, and South Africa, as the majority of the planned green investments, encompassing wind, solar, and green hydrogen, are almost entirely intended for export. Green hydrogen production presents a significant risk for countries like Tunisia, which is grappling with severe water shortages and scarcity due to recent droughts. Producing green hydrogen is water-intensive, with estimates suggesting that approximately 28 liters of fresh water is required to produce just one liter of green hydrogen. Currently, Tunisia lacks sufficient fresh water for both irrigation and human consumption. The EU proposes the construction of water desalination plants to address this issue. However, water desalination is an energy-intensive process that necessitates substantial solar and wind electricity production. This process demands significant land allocation to produce the clean water needed for green hydrogen for Europe.

A further issue with green hydrogen production through water desalination is the toxic brine that remains—the salt byproduct of the process—which is typically discharged back into the ocean. This action negatively impacts the blue economy by raising the salinity of the water, increasing water temperatures, and thereby damaging the ecosystem. The elevated salinity levels also make subsequent batches of water more energy-intensive to filter through the desalination system.

This approach is unsustainable for a country like Tunisia, where water dams are currently operating at 25% capacity. And where farming communities and households are deprived of water access for extended periods, particularly during the summer months.

You’ve highlighted the need for systemic transformation and a radical reimagining of the trade, financial, and investment system. What does this transformation look like in your vision, and why is it imperative for us to dismantle and rebuild these systems from the ground up?

First, let me stress that we cannot afford to waste time on these false solutions, we have no time for “the tranquilizing drugs of gradualism and incrementalism” (as Martin Luther King Jr. said in his speech in 1963). Our governments need to address the underlying structures of the problems we face by addressing the root causes of the problem, rather than merely focusing on the surface issues that result in superficial interventions (we discuss this in detail in the Just Transition report). If our governments are accepting these tranquilizing drugs, we as civil society as thinkers and communities on the front lines of the struggle, need to push back against this colonial greenwashing exercise.

Second, to understand what needs to be transformed, we need to rethink our role as Global South, historically the African continent and the Global South in general, have been perceived over the last few centuries as the place for cheap raw materials, dumping grounds for industrial output from the Global North, including trash and toxic waste, low-cost tourist destinations, and the place for obsolete technologies and assembly-line manufacturing can be outsourced with low-cost labor. These roles, imposed during colonial times, have been perpetuated by global trade, finance, and investment architectures since independence. And perpetuated the postcolonial economic dependency, locked our countries in a vicious debt circle, exacerbated by loan conditionalities imposed by financial institutions. These conditionalities intentionally keep our countries in a weak position, in terms of food and energy sovereignty, they didn’t help us to transform our industrial base, and escape the bottom of the global value chain underscoring the colonial nature of these institutions.

Addressing the root causes of external debt is crucial to prevent future sovereign debt crises and perpetuating global imbalances. While debt restructuring, concessional finance, and debt cancellation are important, they are insufficient if the underlying economic deficiencies are not addressed. The Global South must continue to demand a more just global financial architecture, including allocations of Special Drawing Rights, climate finance, favorable terms of finance, and funding for the Green Climate Fund and Loss and Damage Fund. The Global South must strategically invest in food sovereignty and agroecology, renewable energy sovereignty, and South-South industrial policies that prioritize high value-added manufacturing. This will enable the Global South to present a united front and a strong commitment to collective action in debt negotiations, climate finance negotiations, financial architecture negotiations, and access and use of strategic minerals with true partnership with the Global North on non-colonial/abusive terms.