Skip to content or view mobile version

Home | Mobile | Editorial | Mission | Privacy | About | Contact | Help | Security | Support

A network of individuals, independent and alternative media activists and organisations, offering grassroots, non-corporate, non-commercial coverage of important social and political issues.

Gold market and TW debt

sara | 14.06.2005 19:19 | Analysis | Globalisation

This is an article looking at the link between Third World debt, the IMF and the gold industry, there is also an appeal at the end to put mail/fax the largest corporation involved.

(article taken from  http://www.fpif.org/commentary/2005/0506gold.html)

Sell the Gold, Free the Poor
By Russell Mokhiber and Robert Weissman


When historians look back over the past 25 years, one of the great crimes they will identify is the Third World debt crisis.

Now, finally, the rich countries have agreed to cancel the debts of the poorest countries to the International Monetary Fund (IMF) and World Bank. But they continue to differ over how to do it.

It is now clear a compromise agreement among the rich countries over cancellation of IMF debt can only be reached if the sale of IMF gold is a component of the financing package for debt cancellation.

But a decision to sell some of the IMF's stock of gold is being blocked by the gold industry, led by the world's largest gold-producing corporation, Newmont Mining Co. Newmont and the industry say that IMF gold sales will lower the world gold price, but they ignore a proposal from the IMF itself that would ensure IMF gold sales have no net impact on the world gold market.

"We are calling on Newmont to reverse its position," says Neil Watkins, national coordinator of Jubilee USA, the debt cancellation network. "That will enable progress toward debt cancellation, which is such a critical piece of efforts to eradicate poverty around the world."

Here's how critical debt cancellation is: Every year, sub-Saharan Africa pays about $13 billion to the IMF, World Bank, and others in wealthy countries. Poor countries in Africa spend an average of $14 per person on debt service payments to international financial institutions and only $5 per person on healthcare.

To qualify for new loans needed to pay off old ones, poor countries must submit to the policy mandates of the IMF and World Bank. These pro-corporate, market fundamentalist policies--things like unqualified privatization, orienting their economies to exports, downsizing government, eliminating labor protections, charging user fees for healthcare--have further worsened life throughout the developing world.

The situation is so dire that almost everyone agrees that debt cancellation for poor countries is imperative, and last year the rich countries in the G7 finally reached consensus on the issue. But then they embarked on a contentious dispute about how to do it. And now the dispute about how to cancel the debt may result in no cancellation whatsoever, or at least no cancellation of IMF debt.

There has been an extensive back-and-forth between the Bush administration and the Europeans on the issue. Agreement may be near on cancellation of World Bank debt. But the sides remain far apart on IMF debt.

Cancellation of IMF debt is in many ways the most strategic step. While IMF debt represents only 10% of total debt from the poor countries, about one third of these countries' debt payments go to the IMF. Canceling IMF debt would also reduce significantly the reach of the IMF--the harder-line supporter of corporate-friendly economics--into poor countries.

The available compromise position for cancellation of IMF debt is for the IMF to sell some of its gold reserves and use the proceeds to cancel debt. The UK favors this position. The hold-up is the United States . The reason for U.S. obstruction is not primarily the administration, however, but Congress. Gold sales would require congressional approval.

And the reason for congressional opposition is the Colorado-based Newmont Mining Co. Newmont and the gold industry have lobbied Congress hard on this issue. Earlier this year, the industry orchestrated a letter signed by 12 Western state senators opposing IMF gold sales.

The reason for industry opposition is the fear that IMF gold sales will depress the world price for gold. But the fear is misplaced: the way to do such gold sales, as the IMF itself has stated, is in the context of the Central Bank Gold Agreement. The European central banks annually sell a significant amount of gold, according to a schedule that the market has already taken into account. The IMF sales would be made in the context of this agreement. The central banks would simply sell less, so there would be no net increase in gold sales.

We asked Newmont spokesperson Doug Hock: Doesn't the IMF's proposal, which would preserve the gold price, address the company's concerns?

But an initial comment that it might, in theory, was quickly qualified by a statement that he hadn't seen the IMF proposal.

So we sent it to him.

Subsequent calls and emails haven't been returned.

Meanwhile, the World Gold Council, an industry association, says it can't comment on the IMF proposal because it hasn't been made public. But IMF Managing Director Rodrigo de Rato has specified that IMF gold sales would be conducted in the context of the Central Bank Gold Agreement to preserve gold prices. And while the IMF's technical proposal hasn't officially been made public, it is widely available. (You can see it at: .)

Newmont's misguided and groundless opposition is on the brink of sabotaging IMF debt cancellation--thus ensuring millions of poor people will suffer needlessly. This is a life-and-death matter.

Time is running short for Newmont to reverse its position: A deal on debt cancellation is likely to be announced at the G8 summit in July, and if IMF debt is not part of the deal, it may fall off the radar screen for the foreseeable future.

There is hope. Since Newmont has no discernible, material interest in opposing IMF gold sales, with enough public outrage, it might be persuaded to reverse its position.

To contact Newmont, and for more information on the issue, go to:

.

To send a free fax to Newmont via Global Exchange, go to:

.


sara

Upcoming Coverage
View and post events
Upcoming Events UK
24th October, London: 2015 London Anarchist Bookfair
2nd - 8th November: Wrexham, Wales, UK & Everywhere: Week of Action Against the North Wales Prison & the Prison Industrial Complex. Cymraeg: Wythnos o Weithredu yn Erbyn Carchar Gogledd Cymru

Ongoing UK
Every Tuesday 6pm-8pm, Yorkshire: Demo/vigil at NSA/NRO Menwith Hill US Spy Base More info: CAAB.

Every Tuesday, UK & worldwide: Counter Terror Tuesdays. Call the US Embassy nearest to you to protest Obama's Terror Tuesdays. More info here

Every day, London: Vigil for Julian Assange outside Ecuadorian Embassy

Parliament Sq Protest: see topic page
Ongoing Global
Rossport, Ireland: see topic page
Israel-Palestine: Israel Indymedia | Palestine Indymedia
Oaxaca: Chiapas Indymedia
Regions
All Regions
Birmingham
Cambridge
Liverpool
London
Oxford
Sheffield
South Coast
Wales
World
Other Local IMCs
Bristol/South West
Nottingham
Scotland
Social Media
You can follow @ukindymedia on indy.im and Twitter. We are working on a Twitter policy. We do not use Facebook, and advise you not to either.
Support Us
We need help paying the bills for hosting this site, please consider supporting us financially.
Other Media Projects
Schnews
Dissident Island Radio
Corporate Watch
Media Lens
VisionOnTV
Earth First! Action Update
Earth First! Action Reports
Topics
All Topics
Afghanistan
Analysis
Animal Liberation
Anti-Nuclear
Anti-militarism
Anti-racism
Bio-technology
Climate Chaos
Culture
Ecology
Education
Energy Crisis
Fracking
Free Spaces
Gender
Globalisation
Health
History
Indymedia
Iraq
Migration
Ocean Defence
Other Press
Palestine
Policing
Public sector cuts
Repression
Social Struggles
Technology
Terror War
Workers' Movements
Zapatista
Major Reports
NATO 2014
G8 2013
Workfare
2011 Census Resistance
Occupy Everywhere
August Riots
Dale Farm
J30 Strike
Flotilla to Gaza
Mayday 2010
Tar Sands
G20 London Summit
University Occupations for Gaza
Guantanamo
Indymedia Server Seizure
COP15 Climate Summit 2009
Carmel Agrexco
G8 Japan 2008
SHAC
Stop Sequani
Stop RWB
Climate Camp 2008
Oaxaca Uprising
Rossport Solidarity
Smash EDO
SOCPA
Past Major Reports
Encrypted Page
You are viewing this page using an encrypted connection. If you bookmark this page or send its address in an email you might want to use the un-encrypted address of this page.
If you recieved a warning about an untrusted root certificate please install the CAcert root certificate, for more information see the security page.

Global IMC Network


www.indymedia.org

Projects
print
radio
satellite tv
video

Africa

Europe
antwerpen
armenia
athens
austria
barcelona
belarus
belgium
belgrade
brussels
bulgaria
calabria
croatia
cyprus
emilia-romagna
estrecho / madiaq
galiza
germany
grenoble
hungary
ireland
istanbul
italy
la plana
liege
liguria
lille
linksunten
lombardia
madrid
malta
marseille
nantes
napoli
netherlands
northern england
nottingham imc
paris/île-de-france
patras
piemonte
poland
portugal
roma
romania
russia
sardegna
scotland
sverige
switzerland
torun
toscana
ukraine
united kingdom
valencia

Latin America
argentina
bolivia
chiapas
chile
chile sur
cmi brasil
cmi sucre
colombia
ecuador
mexico
peru
puerto rico
qollasuyu
rosario
santiago
tijuana
uruguay
valparaiso
venezuela

Oceania
aotearoa
brisbane
burma
darwin
jakarta
manila
melbourne
perth
qc
sydney

South Asia
india


United States
arizona
arkansas
asheville
atlanta
Austin
binghamton
boston
buffalo
chicago
cleveland
colorado
columbus
dc
hawaii
houston
hudson mohawk
kansas city
la
madison
maine
miami
michigan
milwaukee
minneapolis/st. paul
new hampshire
new jersey
new mexico
new orleans
north carolina
north texas
nyc
oklahoma
philadelphia
pittsburgh
portland
richmond
rochester
rogue valley
saint louis
san diego
san francisco
san francisco bay area
santa barbara
santa cruz, ca
sarasota
seattle
tampa bay
united states
urbana-champaign
vermont
western mass
worcester

West Asia
Armenia
Beirut
Israel
Palestine

Topics
biotech

Process
fbi/legal updates
mailing lists
process & imc docs
tech