questions about international financial institutions

What are International Financial Institutions?

International financial institutions (IFIs) use public (taxpayers') money to undertake or support investments in other countries. There are two categories of IFIs: the multilateral development banks and the export credit agencies.

The mission of most multilateral development banks is 'poverty alleviation' and as such they set the development agenda for Latin America, Asia, Africa and Eastern Europe. These institutions include the World Bank Group, the Asian Development Bank , the European Bank for Reconstruction and Development, the European Investment Bank and the Interamerican Development Bank .

Export credit agencies (ECAs) are industrial nation's bilateral finance agencies. They are established to facilitate and support exports to and investments in other countries. ECAs are now the world's biggest class of IFIs, collectively exceeding in size the World Bank Group.

What's wrong with IFIs?

Loans from IFIs have caused grave environmental and social problems for millions of people all over the world. Ill-conceived programs and large-scale development projects like hydroelectric dams, roads and bridges, nuclear power plants, mining and oil and gas exploitation have often caused irreversible environmental impacts, displaced entire communities, and destroyed indigenous cultures. IFIs force a neoliberal development model upon communities all over the world, often without their consent.

Do IFIs not care for people and the environment?

In theory, IFIs are established to generate economic growth, and contribute to sustainable development and poverty alleviation. Therefore, some IFIs adopted safeguards: environmental and social guidelines. However, these vary from institution to institution. And the actual practice is often far from complying with the good intentions on paper. Export credit agencies are lagging behind most. Their mission could perhaps best be described as 'unsustainable development': to create jobs in the country where they are from without regard for the environmental and social impacts.

what does the IFI programme of FoEI do about it?

FoEI strives to protect the environment and create sustainable societies. In that context, the IFI programme is seeking changes in the power balance in these institutions, in the projects they finance and in the role they play in the construction and maintenance of the current economic world order. FoEI exposes the increased role of development banks in supporting the private sector; campaigns against the privatization of public services, calls for an end to the financing of harmful fossil fuel and mining projects , strives to enhance civil society control over the institutions, and works for the recognition of the ecological debt.

Which FoE groups are part of the IFI programme?

Friends of the Earth groups from all over the world are active in the IFI programme, including FoE Australia, Cameroon, Nigeria, Mali, Slovakia, Czech Republic, Estonia, Lithuania, Colombia, England, Paraguay, Papua New Guinea, Peru, Costa Rica, Argentina, Sri Lanka, Japan, Indonesia, France, Netherlands and the United States.

The common activities of these groups take place through meetings and conferences, actions and protests, advocacy efforts and joint publications. FoEI groups work together in task groups on issues, for example:

• ifi's out of fossil fuel and mining
• export credit agencies
• european investment bank
• asian development bank

Who can I ask for more information?

Contact Janneke Bruil at the FoEI secretariat