Otago Daily Times, Dunedin, 29 September 2000
Third World poverty and IMF's iron rule
[Photo] Aziz Choudry
[Photo] Anti-IMF protesters armed with sticks and chains stand in tear gas
smoke in the streets outside the Congress Centre in Prague, where the IMF and
World Bank were holding their annual meeting on Wednesday.
Anti-capitalism activists hurled stones and home-made petrol bombs at police
guarding the meeting, after a week of demonstrations.
Gatt Watchdog activist AZIZ CHOUDRY explains why thousands of people took to
Prague's streets and in cities worldwide, including Wellington, this week in
a "Global Day of Action" against economic globalisation. This activity
followed last year's mass mobilisations against the World Trade Organisation
in Seattle, April's Washington demonstrations during the IMF-World Bank's
mid-year meetings and the recent World Economic Forum protests in Melbourne.
THE stark polarisation of views about these institutions and the economic
agenda they promote is hardly surprising. It mirrors the growing gap between
rich and poor at national and global levels.
United States policy analyst Mark Weisbrot describes the IMF-World Bank
record on economic growth as "their most spectacular failure". Over the last
20 years, low and middle income countries have implemented the economic
policies of the World Bank and the IMF. Russia and the former federation
states lost more than 40% of their national income in the 1990s.
Income per person in sub-Saharan Africa has declined about 20%, while in
Latin America it has grown only around 7%.
Yet both regions showed vastly superior economic growth in the previous two
decades, before IMF-World Bank "structural adjustment" policies became the
norm. From 1960 to 1980, income per person grew 34% in Africa and 73% in
Latin America.
Apec, the WTO and the Singapore free trade agreement have focused much of the
local opposition to globalisation. But the IMF and World Bank have played a
longer, more dominant role in shaping the global economy.
Liberalisation of trade, finance and investment as well as privatisation and
deregulation were implemented mainly through IMF-World Bank structural
adjustment programmes for many developing countries.
For many, trade and investment liberalisation has been adopted not because of
any demonstrated success in reinvigorating national economies, but as an
IMF-World Bank requirement for obtaining desperately needed credit. These
institutions' enormous leverage creates a mistaken impression that
deregulation and liberalisation form the only possible path of development.
The opposition movements against this economic model were not born at Seattle
or on the Internet. In the Third World, there have been mass movements
against IMF-World Bank policies and globalisation for years, backed by
rigorous independent research and community education campaigns.
Economic austerity programmes imposed as loan conditions have resulted in
massive lay-offs, cuts to social services and wages, dramatic hikes in living
costs and a raft of other harsh "shock therapy" measures, undermining
national development initiatives.
Last month, I attended a research conference on poverty and financing
development in Jakarta on behalf of Gatt Watchdog. Academics, unionists and
activists swapped alternative acronyms, capturing popular sentiments about
the impact of the IMF in Asia. In Thailand, it stands for "I'm Finished". In
South Korea, it's "I'm Fired". In Indonesia, it's "Indonesia Mati
Felan-felan" (Indonesia dying slowly). One Indonesian speaker told us: "The
impact is clear: people have to pay more for health and educational
facilities. We find it an irony that, while development is meant to attack
poverty, it has resulted in creating more poverty."
With intensified scrutiny of these financial institutions have come
much-vaunted promises of reform and greater transparency from within. But the
continued intolerance of critics inside the World Bank suggests such
commitments are merely cosmetic.
Former World Bank chief economist Joseph Stiglitz repeatedly criticised the
free-market economic-policy prescriptions of both the Bank and the IMF. He
resigned under pressure last November. His subsequent contract as a
consultant was terminated in May, shortly after his article in The New
Republic , which claimed: "[t]he older men who staff the fund . . . act as if
they are shouldering Rudyard Kipling's white man's burden. IMF experts
believe they are brighter, more educated and less politically motivated than
the economists in the countries they visit".
In June, fellow bank economist Ravi Kanbur felt forced to resign when ordered
to rewrite its annual World Development Report to be more "pro-growth".
An August report on globalisation's impact on human rights to the United
Nations Sub-commission on Human Rights maintains that, even after the
wide-ranging criticism of the IMF's approach to the Asian financial crisis,
its policies remain virtually unchanged. "It is still a case of counselling
the swallowing of a bitter pill for the present with the promise of recovery
and robust health in the future," said the report.
Let's hope there is some serious coverage of the many substantive studies on
the negative impacts of economic liberalisation and the efforts to build
alternative models of development around the world. Or is that too much to
ask?
Friday, 29-September 2000
(* This article was sent to KoPA by GATT-Watchdog activist, Aziz Chouldry.
You can contact him by following address, notoapec@clear.net.nz)
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