[stop-imf] Stephen Lewis: Smug World Bank and IMF Sabotaged Poor Countries' Development

[Robert Weissman]

          http://www.embassymag.ca/html/index.php?display=3Dstory&full_path=
=3D/2005/november/30/worldbank/

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Embassy, November 30th, 2005
NEWS STORY
By Stephen Lewis


  *Smug World Bank and IMF Sabotaged Poor Countries' Development *


        UN special envoy for HIV/AIDS in Africa, Stephen Lewis, says
        trade inequities can only be resolved at the WTO in two weeks.
        But there seems little likelihood that the distorting trade
        subsidies will be abandoned.

I remember being in Malawi in 2002 at a roundtable discussion with the
vice-president and a number of civil servants from the Ministry of
Finance. They were complaining bitterly about the limits imposed by the
International Monetary Fund on Malawi's public sector pay levels and
hiring intentions. It was surreal: here you had a country with huge
human capacity problems that wanted desperately to retain its
professionals in health and education, and increase their numbers, but
the IMF wouldn't allow them to do so. We're talking about a sovereign
government, fighting the worst plague in history, with but a handful of
professionals: according to the minister of health, Malawi has one-third
of the nurses it needs (4,000 instead of the 12,000) and perhaps 10 per
cent of the doctors (300 rather than 3,000) for a population of 12
million. And they weren't being allowed --I repeat, this sovereign
government wasn't being allowed -- to hire more staff and pay better
salaries, because it would breach the macroeconomic straitjacket.

As I was leaving Malawi, I held a press conference and explicitly
criticized the IMF for what I felt were wrongheaded policies. Sure
enough, within a few days I received a formal letter (copy to my boss
Kofi Annan) from the African director of the IMF pointing out, amongst
other things, that the IMF was a member of the UN family, and the
Secretary-General himself and decreed that one member of the family
should not attack another in public. Talk about raising "chutzpah" to
new levels.

Lest it cause concern amongst you of compassionate heart, I replied
pretty strongly, making the point, which I truly believe, that the IMF
has no adequate sense of the struggle for survival in so many countries
over which it holds sway. I didn't hear back. And there was no
admonition from the Secretary-General.

It's interesting to see just a couple of years later how far the world
has come. As recently as March 2005, the UK secretary of state for
international development, Hilary Benn, has published a new monograph
titled /Partnerships for Poverty Reduction: Rethinking Conditionality
/-- I shall elaborate on this document in a future lecture. It amounts
to a rejection of the categorical assumptions which have driven the
International Financial Institutions over the course of the years.
Almost simultaneously, British Prime Minister Tony Blair released his
massive Commission for Africa report and criticized the World Bank and
International Monetary Fund policies in words and argument rarely seen
before in an establishment government document. And as if that weren't
enough, Jeffrey Sachs published in April 2005 his remarkable new book,
/The End of Poverty/, in which, taking no intellectual prisoners, he
excoriates the destructive policies of the Bank and the Fund. The
message is clear: terrible mistakes were made in dealing with Africa.

What makes me nearly apoplectic -- and I very much want to say this --
is that the Bank and the Fund were fully told about their mistakes even
as the mistakes were being made. They were so smug, so all knowing, so
incredibly arrogant, so wrong. They simply didn't respond to arguments
which begged them to review the human consequences of their policies.
The fact that poverty became increasingly entrenched, or that economies
were not responding to the dogma as the dogma predicted, made no
difference. It was a form of capitalist Stalinism. The credo was
everything; the people were a laboratory.

What makes all of this so important is the need for radically new
policies if Africans are to be given the opportunity to rescue their
continent. The achievement of the MDGs has become a pipe dream in the
minds of many because, in the five years since they were promulgated, we
have learned that HIV/AIDS has sabotaged all the socio-economic indices,
and the continued damaging western policies in trade and aid and debt,
serve to drive the nails into the coffins. In the bizarre circumstances
of the pandemic, nails and coffins aren't just metaphors.

Take trade. There is absolutely no guarantee that the Doha round,
presently in intense (if so far futile) negotiation, will be successful.
Doha is the capital of the Gulf State Qatar, where the most recent
rounds of international trade talks was launched by the World Trade
Organization (WTO) in November 2001. It's nearly four years later and
we've made glacial progress. The outstanding items are legion, ranging
from intellectual property rights as they are tied to pharmaceuticals,
right through to western agricultural subsidies, which most analysts
seem to agree are destroying economic growth in Africa. As things now
stand, there's simply no way for Africa profitably to export its own
agricultural commodities.

The resolution of trade inequities cannot be met by the G8, as the
summit in Gleneagles definitively confirmed. It can only be met by the
December meeting of the WTO. But there seems little likelihood that the
distorting trade subsidies will be abandoned. At present the European
Union and the United States together subsidize their farmers to the tune
of $350 billion (US) a year; it equals five times the amount that is
ploughed into foreign aid. If I may offer an evocative juxtaposition:
Every cow is subsidized to the tune of $2 a day, while between 400 =AD500
million Africans live on less than a dollar a day.

/This article is excerpted from Stephen Lewis' Massey Lectures,
published with permission by House of Anansi Press/.