[stop-imf] Protesters 2, Multinational Monsters 0 (fwd)

[Robert Weissman]

Protesters 2, Multinational Monsters 0
By Mark Weisbrot

         It's 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.

         The 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.

         Leaders 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 attitude."

         More 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?

         This 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 day.

Breaking the Bank

         The 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.

         Like 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.

Friends or Foes?

         The 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 week.

         Wolfensohn 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.

This 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 processes."

         The 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.

         The 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.

         Meanwhile, 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.

         These demonstrations are a way of helping our leaders catch up
with public opinion.

Mark Weisbrot is co-director of the Center for Economic and Policy
Research in Washington, D.C.



Name: Mark Weisbrot
E-mail: <weisbrot@cepr.net>
Co-Director
Center for Economic and Policy Research
1015 18th Street NW, Suite 200
Washington, DC 20036
Phone (202) 822-1180 x228
Fax (202) 822-1199
(202) 333-6141 (home)
www.cepr.net