amazing what an organized group of people can accomplish when their cause is
just and they are willing to be stubborn and creative about it. Last December
they knocked the wind out of the WTO in Seattle. Now this diverse and expanding
movement has got the world’s two most powerful financial behemoths– the IMF and
the World Bank– running scared.
past week’s demonstrations in Washington, DC are just the beginning of the IMF
and World Bank’s troubles. While they have many friends in high places, they
have little support — and a lot of opposition– among the world’s people.
of the Group of 77– an organization representing countries with 80 percent of
the world’s population– expressed their support for the demonstrators. They
noted that "many countries have rejected the results of various policy
initiatives of the World Bank and the IMF," including crushing debt
burdens, privatization of state-owned industries, and a "one- size-fits-all
than a decade after the end of the Cold War, there are signs that the Global
South may be resuming its centuries-long struggle against the North for the
right to determine how it will participate in the international economy. And
there is no greater threat to that right than the IMF and the World Bank. These
are undeniably colonial institutions, in which the hundreds of millions of
people who lives are affected by their decisions have no voice or effective
representation. They have made many people around the world very cynical about
electoral democracy– for what good is the right to vote for the party of your
choice in El Salvador or Russia, when the most important economic decisions are
being made by foreign bureaucrats on H street in Washington?
combination of resistance in the heart of the empire, with increasing opposition
from its victims abroad, may be just what the world needs to win a new deal for
the three billion people– half the planet– who now survive on less than $2 a
battle is over, the war goes on. One of the new fronts that has opened up is a
grassroots campaign to boycott World Bank bonds, through which the Bank raises
most of its capital. This movement is truly international, with organizations in
35 countries. In the United States, it provides a way for activists to educate
their communities about what the Bank does, and also empowers them to do
something about it.
the divestment movement that helped bring down the system of apartheid in South
Africa, this campaign will bring its message to local governments, universities,
churches, unions, and other institutional investors that might otherwise
consider the World Bank’s bonds a safe and reasonable investment.
Bank and the Fund have mounted a defense, often winning support among newspaper
editors and commentators who know little about their actual policies and impact.
"There is no organization on earth that is doing more for the poor than we
do," James Wolfensohn, president of the World Bank, told the media last
would be hard-pressed to defend this statement, not least because most of the
Bank’s lending is dependent on the borrower meeting the IMF’s conditions. This
is not just a technicality– it means that the Bank is just as responsible as
the IMF is for all the social and economic destruction caused by the Fund’s
commands. This includes the tens of millions of people pushed into poverty in
countries such as Indonesia, Russia, and Brazil. The Fund’s policies, and the
Bank’s role in enforcing them, prompted the World Bank’s chief economist, Joe
Stiglitz, to resign in frustration last December.
week Stiglitz cast his lot with the protesters, saying that they "were
trying to bring to the fore a set of values that a large number of people,
particularly young Americans, feel strongly about– issues that go beyond just
making a living and materialism– that they care about the environment and about
the poor in developing countries, and that they care about democratic
Bank and the Fund claim that they are in favor of debt relief for the world’s
poorest countries. But they have been dragging their feet so slowly that it is
difficult to take them seriously. Four years after the launch of their Heavily
Indebted Poor Countries initiative, only five of the 41 potentially eligible
countries have met the requirements for partial debt reduction. Others will have
to go through years of the Fund’s destructive "structural adjustment"
programs in order to qualify for debt relief that, in many cases, will not
significantly reduce their annual payments.
protesters, along with major religious denominations from throughout the world,
have demanded cancellation of the poor countries’ debt. This debt is now worth
only about 10 cents on the dollar, since financial markets recognize that most
of it can never be paid. So it is within the means of the IMF and World Bank to
forgive this debt. But Wolfensohn refuses to consider this option, stating
recently that to do so would "screw up the market" for debt. Given
that the markets have already discounted the vast majority of this debt, it is
not clear what he could mean. A more likely explanation is that he, along with
other Fund and Bank officials, see the debt as a means to control these
countries’ economic policies, and are in no hurry lose that leverage.
on the home front, the latest Business Week/Harris poll shows that the American
people are a lot closer to the views of the protesters than to the intellectuals
who sneer at them from the op-ed pages. When asked to describe their views on
trade, only 10 percent chose "free trader." Fifty percent chose
"fair trader," a label rarely used by anyone outside the labor or
protest movement. And 37 percent chose "protectionist"– a word that
is never granted a positive connotation in the press, and has probably become as
discredited in mainstream opinion as "communist." Although there were
mixed feelings about globalization in general, people most often chose
"protecting the environment" and "preventing the loss of US
jobs" as a major priority for trade agreements– putting them very much at
odds with our policy makers and trade officials.
demonstrations are a way of helping our leaders catch up with public opinion.
Weisbrot is co-director of the Center for Economic and Policy Research in
E-mail: <[email protected]>
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