excerpted from ALARM Update http://is7.pacific.net.hk/~amrc/alarm.htm No. 37 October - December 1999
The World Bank's Bigger Brother? The Japan Bank for International Cooperation (JBIC) by Gerard Greenfield
Created on October 1st, 1999, the Japan Bank for International Cooperation (JBIC) is now the largest publicly-funded lending agency in the world - and is bigger than the World Bank.
In the last six months of 1999, widespread protests against Third World debt, genetically-modified crops, APEC, and the WTO demonstrated growing popular opposition to globalisation. The failure of both the APEC and WTO trade talks suggests a partial victory for this opposition, although the battle is far from over. Less victorious was our inability to prevent the IMF from increasing its powers to include part of the MAI agenda of expanding and protecting the rights of TNCs. Meanwhile, a false victory was claimed by those NGOs, civil society organisations and trade union leaders who embraced the “reformed” World Bank, and were co-opted into the Bank’s strategy of an “effective state” that strengthens state-capital collusion while managing the lower classes more effectively (see ALARM Update No. 21, February 1998). Similarly, international NGOs calling for Third World debt relief claimed victory for themselves in mid-1999 with the re-scheduling of the debt of the poorest nations, even though local mass movements around the world were demanding the cancellation of Third World debt.
While these mass protests, victories (imagined and real), and outright defeats were taking place, a new agency of capitalist globalisation was created, and went largely unnoticed. Between APEC in Aotearoa/New Zealand and the WTO in Seattle, the Export-Import Bank of Japan (JEXIM) and Japan’s Overseas Economic Cooperation Fund (OECF) merged to form the Japan Bank for International Cooperation (JBIC). With an annual budget of US$29 billion per year, the JBIC has surpassed the World Bank’s budget of US$28 billion, making it the largest single source of public financing in the world.
The JBIC was created as part of the Japanese government’s “New Initiative to Overcome the Asian Currency Crisis” (dubbed the New Miyazawa Initiative) launched a year earlier. At this time JEXIM and the OECF disbursed the first stage of loans to Southeast Asian countries, with US$1.85 billion to Thailand, US$1.5 billion to Malaysia, and US$1.4 billion to the Philippines. In conjunction with the US government and the World Bank and IMF, these loans were used to “mobilise private sector capital.” This essentially meant that public funds were expended as public loans to governments (adding to national debt) to finance the activities of private corporations and underwrite their losses. The result was the nationalisation of private sector debt on the one hand, and the guarantee of private profit with public risk on the other. In addition, these loans were contingent on extensive corporate restructuring that led to mass lay-offs. ...