[stop-imf] NGOs: The World Bank and the IMF: Hidden Makers of the Global Trade System?

[Robert Weissman]

Action Aid
Center of Concern
Environmental Defense

PRESS RELEASE
For immediate release: 12 September 2003, 15:00 GMT


The World Bank and the IMF: Hidden Makers of the Global Trade System ?


As Trade Ministers from WTO member countries gather in Cancun for the
WTO 5th Ministerial (September 10-14), it is important that the World
Bank and the IMF take their share of responsibility for a trading system
that is putting increasing pressure on the world=92s poor and the global
environment which sustains life on this planet.

The Cancun Ministerial takes place amidst massive protests by activists
and NGOs from around the world who are exposing the non-transparent
decision-making process of the WTO and its trade policies that are
condemning a growing share of the world=92s population to slow and erratic
economic growth while eroding the Earth=92s natural life-support systems.
These policies fail to take into account the rising inequality, social
disruption and the depletion of the world=92s natural resources which they
entail.

However, long before the current round of negotiations, euphemistically
named the Doha Development Round, the World Bank and the IMF were key
actors shaping the international trade system, and they continue to be
so today. Over the past decades, the IMF and the World Bank have
systematically promoted controversial policy reforms in developing
countries. Typically these include liberalization of trade and financial
flows, deregulation, privatization and fiscal austerity. Since the
establishment of the WTO, under the rubric of achieving greater
"coherence," the three organizations have embarked on a formal
partnership geared towards having a joint economic policy approach.

Structural and sectoral adjustment loans have been the main instruments
by which the World Bank and IMF have supported, for many years, trade
liberalization, deregulation and other policies aligned with the goals
of the WTO. According to Rick Rowden of Action Aid USA: "It is the same
misguided and failed policy reforms promoted by the World Bank and IMF
which are being progressively locked-in through WTO trade law backed by
the threat of economic sanctions."

But adjustment loans are not the only instrument by which these
institutions shape the trade policies of the developing countries. The
most pervasive influence comes through their near-monopoly over
development policy research and the design and provision of
trade-related technical assistance programs.

According to a survey, 84 % of policy-makers in developing countries
tend to rely on World Bank policy research and analysis for designing
their policies. The World Bank has sought to position itself as the
"Knowledge Bank", because of its purported capacity for  "high-quality"
data-gathering and analytical capacity. However, the methods and models
that are used for data-gathering and analysis are never politically
neutral. World Bank research, especially the reports that need to be
institutionally endorsed, are invariably tainted by the ideological
belief on the tenets of neoliberal orthodoxy. For instance, an annual
World Bank report released a few days before Cancun, the Global Economic
Prospects, asserts that a successful outcome in Cancun would enable 144
million additional people to escape from poverty by 2015.  Aldo Caliari,
from the Washington-based Center of Concern, says: "When you see those
figures being thrown out you can=92t help but recall the Bank figures that
predicted huge income gains for developing countries coming out from the
Uruguay Round. And then, what happened ? The Bank research machinery is
at the service of one thing: torture the numbers until they confess what
the interests of the most powerful members want them to confess=85"

A further problem is that an increasing share of World Bank and IMF
financing is going to trade-related technical assistance programs.
Portrayed in the benign light of projects to "help" developing countries
"take advantage of the opportunities" brought by globalization, these
programs tend to focus on teaching developing countries how to live with
the existing trade rules and policies, rather than on how to negotiate
better ones. They are also underpinned by ideological assumptions about
the benefits of liberalization, and driven by the interests of the
countries that provide the funding for them. The main existing vehicle
to catalyze technical assistance funding from donors and international
financial institutions, the Integrated Framework, is led by the World
Bank. While fourteen countries are already at different stages of using
it, the first generic evaluation of the Integrated Framework has been
poorly defined, carried out in haste and lacked even the minimum degree
of openness that could have provided it with some credibility.

"Coherence in international policy-making is indeed desirable," states
Korinna Horta of Environmental Defense, "but it is coherence of
international economic and trade policy-making with considerations of
environmental sustainability, social equity and human rights." This is
the alternative kind of coherence that social and environmental
activists gathered in Cancun seek to discuss.

For more information on coherence between trade and finance go to
http://www.coc.org/focus/?ID=3D902&show=3DCurrent_Activities

Contacts:
Rick Rowden (Action Aid USA, Washington). T. (in Cancun): 1 (202) 247 - 155=
8
Korinna Horta (Environmental  Defense). T (in Cancun): 1 (202) 431 - 9406
Aldo Caliari (Center of Concern). T: 1 (202) 635 - 2757 x 123 E: aldo@coc.o=
rg