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IMF’s Bribery Scheme To Save COP26

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EIRNS—Since 2015 the “advanced economies” have been pledged to provide $100 billion/year in concessionary loans or grants to the developing nations in exchange for those nations’ agreement to abandon economic development of various kinds, from fossil fuel-based electricity to mechanized agriculture. But these “advanced economies” have never since come up with the committed funds. This fuels resistance to the Paris Agreements and the Green New Deal, since the advanced economies generate most carbon “emissions” while the underdeveloped nations get whipped to give up carbon fuels and economic sectors.

On Aug. 23 the IMF stepped in on this broken promise, announcing the release of $650 billion in new IMF Special Drawing Rights (SDRs) to more than 200 member countries. The IMF had not issued SDRs since 1972. Managing Director Kristalina Georgieva bragged that these rights to borrow would include $270 billion for all the developing nations—although only $21 billion for low-income countries. Against tens of trillions in needed new infrastructure investment in the underdeveloped nations this is a pittance; and the fact that the borrowers are constrained to keep the funds in major-country hard currencies, will earmark them for repaying existing foreign debts, and otherwise for flight capital and corruption.

But Georgieva, in announcing the SDRs, claimed to have a solution: The 22 “advanced” nations, which have the right to borrow nearly $400 billion of these SDRs, should put them into an IMF “Resilience and Sustainability Trust,” which could “use channeled SDRs to help the most vulnerable countries with … confronting climate-related challenges.” Thus, bribe the poorer nations with IMF money with a new kind of “conditionalities”: climate conditionalities. Let the 22 industrialized nations—which would otherwise have no interest in using their SDRs—claim this as the aid they promised in 2015 to the underdeveloped countries for abandoning industrialization.

COP26 president Alok Sharma followed up immediately Aug. 31 with an editorial on the IMF site, “The Golden Opportunity”: “The world needs to redirect the sums … toward climate action: to secure the trillions of dollars required to protect people and nature…. That’s why I support the IMF’s $650 billion allocation of special drawing rights (SDRs). This move will help generate crucial liquidity and give countries the breathing space to invest in tackling climate change.”

With Argentine President Alberto Fernández, for example, the blackmail/bribery has worked. With unpayable debts left him by a right-wing misgovernment, and trying to get a real IMF loan in addition to Argentina’s SDRs, Fernández organized a Latin American Climate Change Summit Sept. 7-8. There, he obediently offered to trade development for a debt rollover: “The lessons learned with vaccines have to be applied to the next pandemic that we already suffer, that of climate change, and we need to apply the issuance of special drawing rights of the International Monetary Fund to a great pact of environmental solidarity … to extend the terms to meet the debt payments and the application of lower rates than the current ones, due to … ecological stress.” [pbg]