[stop-imf] BGlobe: Critics say IMF, World Bank leave struggling nations dependent

[Robert Weissman]

Critics say IMF, World Bank leave struggling
                  nations dependent 

                  By Charles A. Radin, Globe Staff, 4/13/2000 

                      With hunger and unemployment rampant in Haiti,
international lenders,
                      including the World Bank and the International
Monetary Fund,
                  pressured President Jean-Bertrand Aristide in 1995 to
adopt to what Haitians
                  called ''the death plan.''

                  The proposal to integrate Haiti into the global economy
called for privatizing
                  rice, sugar, and cement production and dropping tariffs
on imports. But the
                  result, according to Haitian and international activists,
was to wipe out
                  domestic production of these vital commodities, leaving
the impoverished
                  country more import-dependent than ever, and its people
less able to pay.

                  There have been other dire results from IMF and World
Bank programs
                  across Africa and in the former Soviet Union, say critics
and developmental
                  economists. Even when their programs led to environmental
calamities, like
                  major cyanide spills at bank-funded mining projects in
Kyrgyzstan and Guyana,
                  the governments of the world's most impoverished nations
must obey, they
                  say.

                  It is this increasingly vocal critique of the two
agencies, which until recently
                  ran their global programs in relative obscurity, that is
expected to bring
                  thousands of activists to Washington this weekend in an
effort to disrupt their
                  quarterly meeting. The activists hope, through
demonstrations and civil
                  disobedience, to focus the kind of attention on the bank
and the IMF that they
                  focused on globalization and the World Trade Organization
in Seattle last
                  December.

                  ''No matter how many times they fail,'' the IMF and the
World Bank can
                  make policy in poor nations ''because they are the only
game in town'' for
                  countries that cannot get credit elsewhere, Jeffrey
Sachs, director of Harvard
                  University's Center for International Development, said
in a telephone
                  interview yesterday. ''They hold the purse strings.

                  ''There is a very, very good reason for the intense
scrutiny'' of the IMF and
                  World Bank, said Sachs, who has advised governments from
Bolivia to
                  Eastern Europe to the former Soviet Union on economic
restructuring and
                  modernization.

                  The agencies are not accountable to anyone but top
financial officials of the
                  wealthiest nations, they make decisions in closed
meetings, and they fail to
                  produce the desired results, Sachs said. ''If they were
fulfilling their missions in
                  a better way, you wouldn't have this kind of protest,''
he said.

                  Widening the worldwide gap between rich and poor,
installing ''terminator
                  genes'' in crops so that poor farmers cannot save seed
from year to year,
                  jeopardizing monarch butterflies in an effort to grow
pest-resistant corn - all
                  are examples of what the protesters now gathering in
Washington see as a
                  global corporate mentality running wild at the expense of
self-determination
                  and self-sufficiency of ordinary people.

                  Some of the complaints have been around for years; others
are of recent
                  vintage. What is changing, apparently rapidly, is the
number of Americans
                  who are concerned and who are becoming aware that the
World Bank and
                  IMF are major agents of globalization.

                  ''There is a great deal of insecurity about
globalization,'' said Caroline Anstey,
                  chief spokeswoman for the World Bank. ''There is the
thought among people
                  in the streets that they would like to be a part of the
process.

                  ''Globalization has become a pejorative,'' she said.
''The bank would say it is a
                  great opportunity, but there are also risks'' - and she
insisted the bank is giving
                  a high priority to addressing those risks. ''There are
people in the streets who
                  don't know what the bank does, who see us as a part of
global capitalism. We
                  would like to see a leveling of the playing field in
favor of developing
                  countries.''

                  IMF spokesman David Hawley said globalization is the
public's overriding
                  concern, and ''it is plain that the fund and the bank are
seen as emblems of
                  globalization.'' He said the fund is accountable to its
member governments,
                  which decide by consensus such issues as whether
proceedings will be open
                  or closed.

                  Their assertions are ridiculed by critics like professor
Noam Chomsky of the
                  Massachusetts Institute of Technology, who believes the
bank and IMF are
                  not trying to alleviate poverty and stabilize
international currencies - the tasks
                  assigned by their charters - but are helping rich nations
and individuals get
                  richer, and making it impossible for poor nations ever to
pay off their debts.

                  The poor nations became deeply indebted to private banks
in the rich nations
                  during the Cold War, Chomsky said; often the borrowers
were authoritarian
                  regimes, supported by the West because of their
opposition to communism,
                  and spent the borrowed money on armaments.

                  A high percentage of current borrowing by debtor
countries goes to pay off
                  the private banks, he said, ''transferring private debt
into public debt'' and
                  shifting the risk to the public, whose taxes underwrite
the two agencies.

                  At the same time, he said, they ''impose costs on the
poor who didn't borrow''
                  by insisting on privatization.

                  Privatization, according to Chomsky and other critics,
often broadens the gaps
                  between rich and poor, because people who already are
rich are most able to
                  buy when a nation sells off its telephone company or - as
in Haiti's case - its
                  cement company and sugar processors.

                  Critics as diverse as Republican Senator Jesse Helms of
North Caroline and
                  Michael Prokosch, a Boston-based organizer of the weekend
protests, have
                  another complaint about globalization. It is making
end-runs around democratic
                  governments, they say.

                  Globalization ''moves decision-making from an arena in
which we have some
                  influence, like Congress, to an arena where we have no
influence and no idea
                  what's going on'' until after decisions are made,
Prokosch said.

                  Jagdash Bhagwati, a Columbia University professor of
economics, said there
                  is ''a tremendous upside to globalization,'' but the road
in that direction will
                  grow rougher unless the US administration and the IMF
take a more
                  sophisticated view of the process and a more sensitive
attitude toward
                  affected people.

                  ''They think of globalization in its totality as one big
blob, rather than
                  distinguishing its parts,'' Bhagwati said. ''Free trade,
free love, free
                  immigration, free capital flows, free everything.''

                  This caused the IMF to bungle the Asian financial crisis
and ''put in the hands
                  of the foes of globalization the dagger they were
seeking,'' he said. ''We also
                  have been coming on strong in our push for markets,
ignoring the effects on
                  people and their cultures. That is an American thing. ...
We always fail to
                  appreciate how this feels to people who feel we are out
to impose ourselves.''

                  The most important recent development, many observers and
activists say, is
                  that serious debate on problems related to globalization
has jumped the
                  Atlantic.

                  Chomsky noted that genetic modification of food had long
been an issue in
                  developing countries, but global corporations pursuing
the technology forged
                  ahead with support from the US government and
international organizations.

                  Only when the ''terminator gene'' - which would block
farmers from saving
                  seed for future planting - became an issue in the United
States did Monsanto,
                  the principal corporation working on the gene, back down.
Monsanto
                  apologized to the public and pledged to discontinue the
research.

                  Sachs said change will not come easily, noting that 15
years of resistance to
                  easing the debt burden of the poorest nations is evidence
that international
                  financial institutions will defend the system that gives
them power.

                  ''However,'' Sachs said, ''attention is beginning to be
focused where it needs to
                  be.''