Activists Target IMF, World Bank on Their 60th Birthday

Vol. 7, No. 2

April, 2004

by Soren Ambrose
50 Years Is Enough Network

The internet is again buzzing with talk of protest. For people in the U.S., the targets are many in 2004: the Democratic Party convention in Boston in July; the Republican Party convention in New York City in September; the Group of 8 industrialized countries meeting off the coast of Georgia in June.

Before those, however, come the joint meetings of the architects and enforcers of corporate globalization, the International Monetary Fund (IMF) and the World Bank. They will be convening in Washington on April 24, and thousands of demonstrators are planning to be there as well. The serendipitous timing of the March for Women’s Lives in Washington on April 25 – scheduled before the institutions announced the timing of their meetings – means that many thousands more potential allies, well-acquainted with the disproportionate burdens forced on women by corporate globalization, will be in town.

At the World Social Forum in Mumbai, India in January, the IMF and World Bank were popular candidates for global justice groups’ discussions and agendas. People from across Asia, Africa, Latin America, and the Pacific and Caribbean islands – the regions where the IMF and World Bank impose their economic austerity policies in exchange for loans to indebted governments – endorsed a call to action that included the April mobilization in Washington, international days of action in both April and September, and four core demands. Those demands, familiar to many global justice campaigners, include (1) cancellation of impoverished country debt claimed by the IMF and World Bank; (2) an end to the imposition of economic austerity and deregulation (“structural adjustment”) programs; (3) an end to financing for environmentally- and socially- destructive projects; and (4) an opening of the hyper-secretive institutions’ board meetings to public observation. (Additional endorsements are welcome at www.50years.org.)

The Spirit of Cancún

The meetings, and the opposition activities that will accompany them, come roughly five months after the last big globalization summit in the U.S., the meeting of trade ministers from the western hemisphere (excluding Cuba) in Miami in November to negotiate the Free Trade Area of the Americas (FTAA). The police repression that dominated headlines out of Miami should not obscure the fact that the meeting was the site of a substantial defeat for the Bush Administration’s corporate globalization agenda. Put on notice by the collapse of the World Trade Organization meeting in September in Cancún, the U.S. in Miami gave up on its dream of an FTAA in which every country would be obligated to uniformly open markets to U.S. goods and adopt pro- corporate legal codes on patents and investments. Instead it accepted a compromise “cafeteria” plan that would allow each country to declare what provisions it would “opt in” for – a plan that drew immediate fire from its usual friends in the corporate lobby.

The WTO Cancún collapse, however, fuelled an atmosphere of optimism that pervaded Mumbai. The refusal of developing countries there to accept the U.S./E.U. agenda -- Africans demanding the U.S. end its cotton subsidies that have crippled African growers; about 70 states that refused to go along with the European agenda for expanding the scope of the WTO; a high-profile group of countries led by Brazil and India which demanded more access to U.S. and European markets -- has buoyed the global justice movement, which at last sees governments refusing to submit to oppressive agreements just because the powerful countries declare them the only game in town. Calls to bring the spirit of Cancún to the IMF and World Bank resonated in Mumbai. The Washington-based institutions, where the rich countries control all the levers of power and no space is provided for democratic debate, remain tougher nuts to crack.

A History of Outrages

The urgency is unmistakable, however. Even in an era of unilateralism, the Bush Administration is content to let the multilateral institutions (at which the U.S. can exercise nearly unlimited influence when it wants to) continue to do the dirty work of restructuring and monitoring the economic programs of most developing countries. Indeed, the institutions have a long history of serving the governments that contol them by providing a bland, “scientific” face for the imposition of economic policies that preserve the privileges of wealthy corporations, investors, and countries at the expense of more vulnerable peoples.

IMF/World Bank programs have resulted in devastated healthcare systems in Africa, making it more susceptible to the scourge of HIV/AIDS. When the World Bank claims to be the largest funder of AIDS programs, its claims should be put in the context of the devastation it wrought in years past – and with a recognition that the loans they make to countries, like those in the Caribbean, that do not qualify for grants for HIV/AIDS programs, add to their client countries’ mountainous debt burdens.

The institutions have long insisted on trade liberalization and export- dependency – the cornerstones of corporate globalization. Since most of their clients grow the same cash crops – coffee, tea, cotton, flowers, cocoa – and because the law of supply and demand has not been repealed, many in the Global South have wondered if the historic bottoming out of world commodity prices is really an unfortunate accident or a calculated gift for the multinational corporations positioned to benefit from the permanent buyers’ market. World Bank officials’ protests in the last couple years about the North’s rigging of the global trading system seem particularly disingenuous after 20 years of re-structuring global markets. Are we really to believe the Bank is only now noticing that the policies it has imposed don’t work in the face of Northern dumping, subsidies, and closed-off markets?

Ten Years of Opposition

The IMF and World Bank have attracted opposition for decades in the countries where they do business. The first big demonstration against them in the North occurred when they held their joint annual meetings in West Berlin in 1988. But they first attracted broad public attention in the U.S. ten years ago, on the 50th anniversary of the founding of the IMF and World Bank. The 50 Years Is Enough campaign focused on the debt crises, the structural adjustment fiascos, the lack of transparency at the institutions, and the destructive dam, oil, and other infrastructure programs of the World Bank. It helped set in motion a focus on corporate globalization that led to the Seattle demonstrations against the World Trade Organization in 1999, and a few months later brought 25,000 opponents of the IMF and World Bank to Washington.

Now, ten years later, the IMF and World Bank face their 60th anniversary having changed disappointingly little.

Some improvements have been made in transparency and provision of information – their websites are full of data, and the IMF now says it will release reports on their meetings after 5 years (as opposed to 30 years). But most of the information is in English, and very little of it gets translated into the languages spoken by the people most likely to be affected by a dam, power plant, or road-building project.

Pushed by the Jubilee campaigns which reached an international peak in 2000, the IMF and World Bank introduced their own debt management scheme, which has failed to provide the promised levels of relief, leaving many countries in officially “unsustainable” debt situations even after graduation. Suspicions among campaigners that the program was a sophisticated system of bribery to keep countries considering default from opting out of the debt treadmill have been confirmed by World Bank reports that the program never had a prayer of doing what it promised.

The institutions have responded to the universal disrepute of “structural adjustment” by changing its name. Fifteen years after 1984, they did the adjective “Orwellian” (and the noun “chutzpah”) proud by announcing the programs would henceforth be known as “poverty reduction and growth.” By requiring that governments involve civil society organizations in the drafting of their own structural adjustment programs, the institutions attempted to respond to the charge that they did not solicit the participation of affected peoples. The participatory processes have largely been shams, however, and in none of them have people been allowed to argue against the trade and investment liberalization, interest rate hikes, privatization, and other policies that are the core of structural adjustment. The initiative is now widely considered a public relations stunt and a clumsy attempt to co-opt civil society into appearing to sign its own death warrant.

Reaching Out to Civil Society: Manipulation or Opportunity?

The World Bank in particular has been eager to burnish its reputation in the last ten years by participating in participatory reviews of the impact of its policies. By setting up independent panels in conjunction with civil society groups, business representatives, and government officials, it has managed to appear open-minded, seeking the best answers to the development dilemmas it is supposed to be addressing. But after the initial burst of publicity at the formation of such panels, the Bank has failed to walk its talk. With the first and most exhaustively-designed such process, the Structural Adjustment Participatory Review Initiative, launched in 1997, the Bank walked away when it became apparent that the results would condemn the austerity policies it has pushed for 25 years. The World Commission on Dams reached a consensus recommendation in 2000 that large dams should be built only after a number of rigorous criteria were met, leading the Bank, which had helped create the commission, to announce it would not abide by its results. Indeed in the past year the Bank has announced it will re-energize its infrastructure building, including large dams, which it now brazenly calls “high-risk, high-reward” projects (a slogan which has led activists to ask “whose risk? And whose reward?”).

The most recent effort by the World Bank to show off its fair-minded attitude is the Extractive Industries Review, an examination of the impact of its support for oil and mining projects which it played a leading role in every step of the way – until the composition of the report. Now that the recommendations have been made, the Bank is predictably unhappy that they call for a phase- out of its involvement in the dirty industries, on the grounds of environmental destruction, climate change, and the finding that far from helping alleviate poverty, extractive industries exacerbate it. The Bank’s draft response to the report was a near-total rejection, but activists have turned up the heat, saying that a public institution that rejects the findings of a review it initiated and participated in will have sacrificed any claim left to accountability. The final decision on how the Bank will treat the recommendations is due shortly before the April meetings, though it may be delayed. Either way, it could become an explosive question as finance ministers from around the world gather in Washington to try to preserve the credibility of the global economic system.

In a presidential election year, the IMF/World Bank meetings may seem like a sideshow. But with international trade already playing a prominent role in the Democratic primaries, and with the power and damage done by the institutions growing daily, global justice activists are hoping that increased attention to the U.S. role in the world will cause voters, and candidates, to conclude that the institutions’ 60th birthday is a good time to start planning for their retirement.

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