HORST KÖHLER, NEW MANAGING DIRECTOR OF THE IMF.

Köhler, the former head of the European Bank for Reconstruction and Development (the rough equivalent of the Inter-American Development Bank, Asian Development Bank, and African Development Bank, focusing on Eastern Europe and the former Soviet Union), took over the position from Michel Camdessus on May 1. Saying that he had to tie up loose ends at his old position, he chose to postpone taking office until after the April demonstrations at the spring meetings of the IMF and World Bank. In a virtual re-play of James Wolfensohn‚s strategy after taking over the World Bank, Köhler embarked on trips to each of the regions where the IMF‚s influence reigns: Latin America, Asia, and Africa. He has engaged in some talk of reform of the institution, setting up a new committee to look into how the IMF chooses its Managing Director ˜ a reflection of how divisive the process of his own selection was. In his most concrete signal during his trips to the South of the pressure being felt by the institution to change its ways, Köhler said in Mozambique "The IMF is not here ... to lecture, to force, to dominate with something governments do not want," though he immediately qualified this with the telltale comment that the IMF only wants to offer the best expertise it has, but has to be serious about safeguarding its money. On July 7, in South Africa, Köhler was met by protesters who challenged him at his press conference. Trevor Ngwane, a Soweto city council member and part of the Johannesburg Anti-Privatisation Forum (and a guest of 50 Years at the April demonstrations in Washington), told Köhler, "Your visit is an example of the IMF attempting to push an agenda that is not in the interests of the majority of the people of South Africa and to make IMF policies to be mainstream in the third world. The IMF and World Bank have had long enough to reform. Away with you. We want new international institutions."

REAL REFORM AT THE IMF?

On June 29, the New York Times, Financial Times, and the Washington Post all published stories on revelations by an unnamed senior IMF official. (Presumably either Deputy Managing Director Stanley Fischer or Köhler himself called a trio of journalists in for a chat to try to portray a new, post-Camdessus IMF.) No specific commitments were made by this unnamed person; the general idea is that the IMF has heard the complaint that its programs are used for demanding too many and too far-reaching economic conditions. In the future, perhaps there will be more room for the borrowing country to determine its own fate. "Dictating more sweeping economic changes as the price for assistance potentially works against th[e] goal" of restoring investor confidence, reported the New York Times. The IMF Board is to go on a retreat in mid-July, reported the articles, where this new direction will be hashed out. (It was on such a retreat last summer that the facelift for the Enhanced Structural Adjustment Facility ˜ renaming it the Poverty Reduction and Growth Facility ˜ was concocted, reportedly against the will of African and other borrowing countries.) There is also to be a retreat of IMF and World Bank officials to work out how to more effectively divide their responsibilities. The New York Times article ended with a curiously amusing paragraph in which the unnamed IMF official is credited with claiming that many of the more controversial conditions the IMF has been imposing have in fact been designed by the World Bank ˜ particularly privatization. This allegation did not appear in the other two accounts, and indeed the notion that the IMF has been carrying water for the Bank no doubt caused giggles throughout the Treasury Department and the corridors of the institutions themselves.

STIFLING DISSENT AT THE WORLD BANK:

Joseph Stiglitz suffered one final indignity at the end of April. After serving as a maverick Chief Economist for a little over two years at the World Bank, criticizing the "Washington Consensus" (from which structural adjustment programs spring), Stiglitz was forced to resign at the end of 1999, in what was rumored to be a deal to gain Treasury Secretary Larry Summers‚s approval of a second term for World Bank President James Wolfensohn. He was retained, however, as a "special advisor" in the interim period before his successor took office. That appointment ended abruptly after a Stiglitz article timed to coincide with the April demonstrations appeared in The New Republic. There he capped his long-running denigration of the IMF in the wake of its disastrous prescriptions for East Asian countries during their financial crisis by labeling its staff mostly "third-rate economists." Stiglitz is now relegated to a fellowship at the Brookings Institution and his professorship at Stanford University. The Stiglitz episode(s) served as good preparation for the resignation of Ravi Kanbur in protest of the Bank‚s insistence that the 2000 World Development Report on Poverty, which he was authoring, take a more positive view of globalization than he was willing to countenance (see separate news brief). The Bank‚s hard line on globalization and the WDR reportedly came as a result of pressure from Larry Summers.

OPPOSITION TO THE IMF AROUND THE WORLD

Zambia: On April 25, dozens of protesters were dispersed by armed riot police as they picketed outside a Lusaka hotel where IMF and officials of the Zambian government were meeting. At a donors‚ conference in mid-July, Zambian President Frederick Chiluba called for immediate and total debt cancellation for his country and the rest of Africa.

Malawi: On May 15, riot police broke up a peaceful demonstration in Lilongwe by firing teargas and arresting two activists. The protestors were outside a meeting of donors to Malawi with President Bakili Muluzi, a one-time critic of the World Bank and IMF, which were the specific targets of the protestors. One sign at the demonstration read: "World Bank/IMF change policies and look for alternatives, SAPs kill the poor man." Muluzi said, "I remain convinced that the World Bank and the IMF mean well and are genuinely interested in assisting poor nations."

Turkey:

An IMF delegation was the target of demonstrations in Istanbul on May 22. Demonstrators chose to protest outside the U.S. consulate, apparently because of the U.S. government‚s perceived links to the IMF. Turkish police scuffled with detained 19 university students who criticized the austerity program overseen by the IMF.

Argentina:

The General Labor Confederation and the Roman Catholic Church joined forces for one of the largest demonstrations against IMF policies in recent memory. An estimated 80,000 people took to the streets of Buenos Aires on May 31, the day after the arrival of a delegation of economists from the IMF. Fernando de la Rúa, who took office as President at the end of 1999, has presented an economic austerity plan calling for increased taxes, reduced social spending, and cuts in government employees‚ salaries ˜ all part of a bid to win loans from the IMF. Nearly 30% of the workforce is unemployed or underemployed, according to official figures. The main labor unions in the country also called a general strike for June 9. Labor leader Hugo Moyano identified the culprit for Argentina‚s economic problems: "the enemy is not the government, the enemy is on the other side," he said, referring to the IMF.

Paraguay:

A 48-hour general strike was called on June 22 in response to the government‚s plans to privatize its telephone, water, and railroad companies. The privatizations are conditions of an IMF program that Paraguay must meet in order to access $400 million in World Bank loans. Police met the protesters with violence almost immediately, resulting in 20 injuries and at least 10 arrests. About 300 protesters in Fernando de la Mora were dispersed by police with water cannons.

HAITIAN PRESIDENT CALLS FOR TOTAL DEBT CANCELLATION:

Jubilee 2000 Haiti held a week of events focusing on debt, June 5-11. Organizations from around the country participated in conferences and workshops on debt and its relation to health and food security, education, agriculture, and human rights, and concluded with a huge concert in Port-au-Prince. A delegation of activists met with President Preval on June 8; he left the meeting calling for total and immediate debt cancellation for Haiti and for a united and forceful alliance of Southern governments and organizations.

MOZAMBIQUE: IMF THREATENS SUGAR INDUSTRY.

After using the promise of debt relief to force Mozambique to lift duties on raw cashews, thus shutting down the country‚s cashew-processing industry, the IMF is now threatening to do the same to the sugar mills. The Pan-African News Agency reported on May 25 that investors were threatening to pull their money out of the mills if the IMF forced the government to withdraw tariffs on imports of cheap sugar. On June 7, 12 members of the U.S. House of Representatives wrote to President Clinton urging him to pressure the IMF to back off its destructive recommendations.

STUDY FAULTS IMF/WB FOR PRESSURE TO CUT DOWN FORESTS:

A study commissioned by the European Commission on forestry policy and practices and carried out by researchers affiliated with the World Resources Institute and World Wildlife Fund was suppressed for three years because of anxieties about the impact of "naming names." Even revised versions which removed the names of multinational logging companies accused of rampant corruption and destructive practices have gone unreleased, reported the Guardian (U.K.) on May 29. The Guardian summarized part of the report: "[T]he World Bank and IMF make things worse by imposing monetary reform on the countries, the report says. These countries are urged to allow in multinational companies and governments are urged to sell their forests for cash to pay back debts."

WB REPORT ACCEPTS BLAME FOR DEVASTATION IN AFRICA:

The World Bank issued a 280-page report at the beginning of June that documents sub-Saharan Africa‚s reversals since the 1960s, concluding that its people are worse off now than they were 35 years ago. In a New York Times article on June 1, Joseph Kahn writes: "The report says the bank and its sister agencies have wasted billions on ill-conceived projects. Even when projects were carefully managed, they sometimes competed with national governments, drawing talented bureaucrats and leaving nations Œproject rich and cash poor.‚" Although the report apparently steers clear of reconsidering structural adjustment, Kahn does say: "Protesters who ran noisy demonstrations in Washington at the spring meetings of the bank and the fund said the two institutions had made Africa poorer through failed policies, a position that the bank‚s analysis partly vindicates."

WB APPROVES CHAD-CAMEROON PIPELINE PROJECT:

Despite years of campaigning by human rights, anti-corruption, indigenous rights, and environmental groups in Chad, Cameroon, and a broad range of countries North and South, the World Bank Board approved funding for a controversial pipeline project to bring oil from fields in Chad to an Atlantic port in Cameroon. The project involves the U.S. oil companies ExxonMobil and Chevron and the Malaysian oil company Petrobas. The Bank‚s private-sector arm, the International Finance Corporation (IFC), can no invest in the project ˜ a move seen as vital political and financial assurance for the oil companies. The main division of the Bank is also providing risk insurance on the project. Opponents charge that the project has inadequate environmental safeguards, will dislocate communities, including disadvantaged ethnic minorities, and that the proceeds from the project are likely to prop us notoriously corrupt governments in both Chad and Cameroon. In response to the opposition, the Bank did institute a list of requirements designed to assuage criticism, but activists, who were calling for a two-year pause to evaluate the impact of the project, remain far from satisfied.

VILLAGERS OCCUPY WB-FINANCED DAM IN THAILAND; SOLIDARITY PROTEST IN DC:

In May, long-simmering protests against the impact of two large dams financed by the World Bank in northeastern Thailand resulted in the occupation of the dam sites by villagers, demanding that the dam gates be opened and their access to the Mun river‚s fish restored. Many of the villagers were re-located by the dam projects without adequate provision being made for their livelihoods. The campaign to restore the river to its original state, led by the villagers‚ organization, Assembly of the Poor, has gained great momentum in Thailand. In May, the Thai Interior Minister established a committee to come up with recommendations on a course of action in 45 days. In Washington, the 50 Years Is Enough Network and International Rivers Network sponsored a demonstration out side the Embassy of Thailand on June 14, in solidarity with the villagers and their negotiating teams. Protesters chanted outside the embassy and marched to the World Bank, where they delivered letters from the villagers to World Bank President James Wolfensohn. On July 7, the government-established committee presented its recommendation that the dam spillways be opened for four months each year during the rainy season to allow fish migration and spawning. The Interior Ministry has refused to comply with the recommendation. Frustrated by the lack of response from the government, 700 villagers decided to go to Bangkok to protest, arriving on July 12. On the evening of July 16, more than 200 Pak Mun villagers broke into Government House.  Police fired tear gas and wielded batons at the protesters. Almost 50 people were injured, 10 of whom were admitted to the hospital, and 225 villagers were arrested and charged with trespassing and illegal assembly. Most of those arrested were senior citizens, women, and children, one of whom was only two years old. Some of those arrested were not even allowed to consult with attorneys and those that were allowed meetings were closely monitored and videotaped by the police. The leaders of the protest could face up to five years in jail.  The protesters were released on July 19 and have been ordered to report back on July 28. More than 30 groups representing academics, human rights and democracy activists, and senators-elect released statements condemning the government for using force to suppress the unarmed and poor villagers.  They demanded the unconditional release of all detained villagers and opening of the sluice gates at Pak Mun dam.

SUMMERS VISITS NIGERIA, OFFERS LIMITED DEBT RELIEF:

U.S. Treasury Secretary Larry Summers visited Nigeria June 12 and responded to its government‚s appeal for debt relief by saying that the U.S. would support multilateral debt rescheduling at the Paris Club of creditor nations ˜ if Nigeria makes "significant progress on meaningful economic and financial reform." While a small advance in the U.S. position on Nigerian debt, this moves falls far short of the total cancellation called for by the Jubilee 2000 Nigeria Coalition, or even inclusion in the IMF/World Bank Heavily Indebted Poor Countries debt initiative (HIPC). The Coalition called Summers‚s offer "too cautious, promising too little, too late." It also laid the blame for rioting over fuel price hikes and labor discontent squarely on the IMF: "So far, IMF reforms have resulted in ongoing rioting and a mass public strike following the government‚s decision to remove fuel subsidies as demanded by the IMF. [] As Nigeria faces further disruption and chaos, creditors should act decisively, and stop collecting the debt now, while insisting that the resources freed up are ring-fenced for the poor." The Nigerian government relented on most of the fuel price hike during Summers‚s visit, leading the Nigeria Labor Congress to call off its national strike.

MERCURY SPILL AT IFC MINE IN PERU:

About 330 pounds of mercury spilled as it was being transported from the Yanacocha gold mine, near the town of Chorapampa, on June 2. The World Bank‚s private sector lending and investment arm, the International Finance Corp. (IFC) has a stake in the mine, which is managed by the Peruvian division of the U.S. company Newmont Mining. The IFC reports that an intensive effort to recover the mercury and protect residents has been underway.  However, between 50 and 70 area people have exhibited signs of mercury poisoning, and eight have been hospitalized.  One of those was airlifted to Lima and remains in critical condition.  The IFC and Newmont Mining say they are arranging for an "independent review of the circumstances surrounding the occurrence" which will report to the local community, the company, its shareholders, and the Peruvian government.

WORLD COUNCIL OF CHURCHES SLAMS U.N. FOR COOPERATION WITH IMF/WB:

The World Council of Churches led 80 non-governmental organizations in harshly criticizing the United Nations for co-producing a report with the World Bank, IMF, and OECD. The report, "A Better World for All" was presented at a U.N. conference in Geneva on poverty and social development, the five-year followup to the "Social Summit" held in Copenhagen in 1995. The WCC described the report on June 28 as "a propaganda exercise for international finance institutions whose policies are widely held to be at the root of many of the most grave social problems facing the poor" and lamented the U.N.‚s participation as it lends the other organizations legitimacy.

JAPAN PLEDGES 100% DEBT RELIEF FOR MOST IMPOVERISHED COUNTRIES:

At the Geneva U.N. conference on poverty and social development, the Japanese government announced that it would cancel all debts resulting from its overseas development assistance to the countries designated by the World Bank as "heavily indebted poor countries." Japan was playing catch-up with the other G-7 countries in advance of the G-7 Summit, which it is hosting this year; Jubilee 2000 Japan termed it "a 180 degree change of its previous attitude." Japan‚s position on bilateral debt cancellation is particularly important because the impoverished countries are further indebted to Japan than to any other country. Japan is notorious for insisting on giving "tied" aid ˜ assistance that requires that funds be spent on goods and services from Japan.

ITALY BREAKS NEW BARRIERS IN PLEDGE ON DEBT CANCELLATION - NO SAPs!: 

On July 14, the Italian government raised the stakes in the G-7‚s debate on debt relief by pledging to cancel between $4 billion and $6 billion in debts owed it by 62 countries. The number of countries affected is far greater than that covered by other creditor governments, and the terms of the cancellation are much more reasonable. Rather than insisting that beneficiary countries implement macroeconomic programs approximating IMF/World Bank structural adjustment programs, Italy will require only that governments demonstrate respect for civil liberties, renounce war, and pledge to direct their freed-up resources to health, education, and poverty reduction. Jubilee 2000 U.K. hailed the news as "the first piece of [debt relief] legislation by a major creditor that makes humanitarian considerations paramount." Italian Prime Minister Giuliano Amato was reported to be planning to challenge the other G-7 heads of government to adopt similar policies at the Okinawa

WDR AUTHOR RESIGNS FROM WB IN FRUSTRATION OVER REVISIONS

Ravi Kanbur, a Cornell University economist who spent several years on the staff of the World Bank, resigned from his position as lead author of the 2000 World Development Report on Poverty in late June. The WDR is the Bank‚s annual statement on some aspect of the world economy, its most visible document, and one widely looked to for signs of the direction not only of the World Bank but of the field of economics in general. The 1990 report was also on poverty, and became a cornerstone document for the Bank; indeed, the 2000 report was seen as an effort to create a similarly high-profile document, one suggesting that the Bank could be expected to comment on poverty every ten years. For this effort, Kanbur was hired on a temporary contract, taking leave from Cornell, and allowed to conduct a very broad, unlimited dialogue with international civil society through the Internet, a dialogue controlled not by the Bank but by respected NGOs. Reports indicate that Bank management was insisting that Kanbur‚s second draft of the report, which incorporated the civil society perspectives, be revised again to adopt a tone and perspective more favorable to current "globalization" trends. The same reports suggested that in doing so the Bank was responding to pressure from U.S. Treasury Secretary Larry Summers. Kanbur, who had earlier pledged to his NGO counterparts that he would not countenance any interference in reporting what he learned from civil society or in his conclusions, found the changes intolerable and resigned. (Kanbur himself has made no public statements on the situation.) Alex Wilks, coordinator of the U.K.-based Bretton Woods Project, one of two NGOs coordinating the electronic dialogue, said "The resignation of the lead author of this flagship Bank report confirms our view that the World Bank is unable to accept dissenting views, whether from insiders or outsiders. Coming soon after Joe Stiglitz departed as Chief Economist this is a major blow for an institution trying to position itself as a Œknowledge Bank‚ and a Œlistening Bank.‚ It raises questions of who really calls the shots at the Bank and what evidence or opinions about the impacts of globalization they are trying to suppress." Members of the U.S. Congress sent a letter to Secretary Summers in late July asking for clarification of his role in the affair and for a copy of Kanbur‚s second draft, as well as the comments offered by Treasury.

WB VICE PRESIDENT: "DEREGULATION HAS GONE TOO FAR"

While World Bank President James Wolfensohn public remarks since April have been studiously conciliatory to anti-corporate-globalization forces, they have lacked real substance. Probably the most substantive remarks suggesting possible change to come out of the Bank were those of its vice president for poverty programs, Kemal Dervis, to the French newspaper Liberation. He said on June 26 that financial deregulation ˜ the liberalization of investment rules advocated by both the Bank and the IMF ˜ has gone too far, and that governments need to re-assert more control. This position contradicts recent policy and practice at the institutions, though there have been other, more subtle, acknowledgements that more regulation might be called for. Dervis framed his comments in the context of the East Asian financial crisis, and directly contradicted the IMF‚s rosy assessment that the crisis is over and that the resumption of growth validates not only the Fund‚s hardline prescriptions but retired Managing Director Michel Camdessus‚s assessment of the crisis as a "blessing in disguise." Dervis, by contrast, said, "if the financial crises of 1997 and 1998 have been absorbed, this has been achieved in terms of macroeconomics. The social damage is still there. Today western banks have emerged quite well but not tens of millions of people who, in Asia, have fallen into extreme poverty." Regarding South Korea, viewed by the Fund as its clearest vindication, Dervis commented, "It cannot be denied that some protection and some action by the state can bear fruit." He concluded: "When everything is unequal from the bottom, market forces can accentuate inequalities and the marginalisation of the most vulnerable." These positions are notable less for breaking with Bank policy (the same things have been said by Joseph Stiglitz, and, more mildly, by others) than for the directness of Dervis‚s tone and his willingness to say them in the wake of the departure of both Stiglitz and Ravi Kanbur. Do Dervis‚s remarks portend any change in policy at the Bank, or perhaps conflict with the Fund? Does he stand to become the next high-profile dissenter at the Bank, and so risk a quick escort to the exit? Stay tuned!