------- Forwarded Message Follows ------- From: "Michael Albert" <sysop at zmag.org> Here is today's ZNet Commentary Delivery from Patrick Bond.
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Run on the Bank by Patrick Bond
"We can't REALLY aim to shut down the International Monetary Fund and World Bank, you know, Patrick. What would we do without them? What would take their place?"
I hear this too much in the run-up to the mid-April Mobilization for Global Justice in Washington, DC. Are activists getting the detailed information needed to take on the IMF and Bank with the militancy that Seattle-East deserves?
Even some well-intentioned, smart progressives involved in defining international movement strategy don't have the imagination to think of a world free of an enemy they have grown perhaps a bit too comfortable with, or alternatively too fearful of to consider life without. Worse, some in the Jubilee 2000 US movement view the current debate as an opportunity to lobby for a greater, not lesser role, for the IMF, Bank, their discredited "Highly Indebted Poor Countries" debt relief initiative, or the new IMF "poverty reduction" scam.
The comradely criticism below is meant to bolster the folk who'll be on the streets of Washington and who may want, in contrast, a few good reasons to shut down the IMF and World Bank--not just for a couple of days, but for good.
For the specter haunting the Bank was remarked upon by its president, James Wolfensohn, in a speech to Western Hemisphere finance officials in Mexico last month: "Let us not let radicals in Seattle scare us from the task of adjusting to globalization and giving greater opportunities to our people."
_Fix it or nix it?_
Should we adjust the IMF/Bank, or instead seek to abolish these big, undemocratic, inefficient, corporate-oriented dinosaurs? While retaining unity in the upcoming mass protest, it's still useful to clarify strategic differences, so that lines of demarcation don't occur over trivia such as whether or where to break windows, but instead over the arguments we deploy, and the demands we make.
The right is also mulling this over. A gaggle of conservative economists in the congressional Meltzer Commission pronounced, earlier this month, that the IMF, Bank and three regional development banks in Asia, Africa and Latin America are so badly warped that they must shrivel, quite dramatically, before being straightened out.
On the left, the choices have been reduced-- crudely but helpfully, I'd say--to the slogans "fix- it" versus "nix it."
Fixers correctly argue that the IMF and Bank have been pressured to adopt reforms over the past 15 or so years. Nixers rebut that these must be measured against the worsening scale of eco-socio-economic damage done by the terrible twins over the same period.
In five areas--environmental protection, gender awareness, transparency, community participation and post-Washington Consensus economics--the reformers can claim victories, yes. But those very wins have allowed the Bank, especially, to whitewash itself, disguising a thorough-going commitment to hardcore neoliberalism with happy talk about sustainability, in the process dividing opponents and hiring famous ex-critics. Empowered by the Bank's plagiarism of NGO rhetoric, some inside-Beltway policy wonks are even suggesting that Wolfensohn switch the focus of lending to sectors like basic education. The slogan invoked from time to time--"Public funds for public good"--is fundamentally misguided, I will conclude below.
How far can reform go? Reflecting the realpolitik of institutional constipation, it is now widely acknowledged that late last year, maverick Bank chief economist Joe Stiglitz--who during his 1997-99 term was roundly despised by IMF and US Treasury bigwigs-- got pushed overboard. (Stiglitz diplomatically claimed to have jumped ship, in order to have more freedom to launch his critiques.)
According to a reliable Bank insider quoted in the February issue of Doug Henwood's Left Business Observer, "Summers made it clear that if Wolfensohn wanted a second term as World Bank president--to start on June 1, 2000--Stiglitz had to go."
Serious campaigners acknowledge the point: reforms won to date are deeply unsatisfying. But matters get more complicated yet.
_Inside-Beltway strategy_
Straddling the reform/abolition fence is a "fix-it or nix-it" faction, who make demands on the international institutions that are going to be awfully difficult, if not impossible, to meet--and if after a year they're not, pressure will be ratcheted up towards abolition. In a letter last week from the indefatigable Public Citizen and its allies to the WTO, the latest version calls for the enemy to "shrink or sink."
Although this might be a wise baby-step, tactically, so as to solidify alliances (especially with AFL-CIO heavies) before attempting more rapid progress, the danger is that both as a slogan and a strategy, it confuses the grassroots base.
The base militants, after all, lack the time and patience to follow the latest public relations gambits and fake reforms, and have every good reason to mistrust some of the Washington-based strategists, especially in the debt relief movement (for the Jubilee South network's powerful critique of the weakness of Northern debt campaigning to date, see the link at http://www.aidc.org.za).
I admit to having a hard time keeping up, myself, with the continual permutations on reform that flit through my e-mail inbox. What I do know, however, is that highly questionable deals regularly get done between international NGOs and the Bank's sophisticated NGO flack-catching unit (led by former Oxfam anti-Bank guru John Clark).
Fixers should acknowledge that power relations don't yet afford the possibility of real reform through a negotiated surrender (as was achieved here in Johannesburg against apartheid officials in talks that lasted from 1990-94). Under current conditions, it is delusional for environmental, developmental and human rights NGOs, and organised labor, to formally meet their 18th and H Street foes during the mid- April IMF/Bank sessions, in the expectation of realising meaningful concessions.
Recognising this, the excellent "50 Years is Enough Network" is asking colleagues for a moratorium on backroom consultations because of the likelihood of "`divide and conquer' or `good' NGO/`bad' NGO tactics on the part of Bank and Fund officials."
Perhaps Mobilization organizers like Njoki Njehu and Soren Ambrose (both based at 50 Years, and extremely well regarded throughout the world movement) can continue keeping reformers and abolitionists marching in step. But once the Washington dust settles, this debate is worth settling conclusively.
_Do we need the Bank and IMF?_
It revolves around competing visions of a democratic global state, on the one hand, and on the other, the reality that the economic institutions operating at world scale (IMF, Bank, WTO) will in the foreseeable future be rigidly controlled by malevolent economists. The man running the show, after all, Summers, signed a memo with the most famous sentence in development-industry history, when he was Bank chief economist in December 1991: "I think the economic logic of dumping a load of toxic waste on the lowest-wage country is impeccable and we should face up to that."
I'll return to the world state theme in a later Z-Net column, drawing on academic debates which are gravitating towards the same conflict. Meantime, the abolitionist position emerging especially from South sources should be given maximum credence. Third World movements are struggling under very difficult conditions, even for the freedom to simply demand, without fear of persecution, that the IMF/Bank leave their countries.
Personally, I speak for no one in particular, except to say that the key institutions in my own activist circuits--the Campaign Against Neoliberalism in South Africa, Jubilee 2000 SA and the Alternative Information and Development Centre (CapeTown and Jo'burg)--are adamant, first, that Bank staff must leave Pretoria immediately, given the awesome damage they've done over the past decade; and second, that progressive northern allies should be working to lift the boot of the IMF/Bank off southern necks. That means, in short, that the Bretton Woods Twins must be delegitimized, defunded and decommissioned.
Experience in post-apartheid South Africa has provided three universal reasons for nixing the IMF/Bank (there are also reasons drawn from specific project experiences too numerous to explore here):
* virtually all possible core value reforms in key areas of eco-socio-economic advocacy have been explored, and their profound limitations unveiled;
* there is a greater urgency to restore economic sovereignty to nation-states, mainly through releasing IMF/Bank pressures, than there is time to convince several tens of thousands of hardened economists to change the Washington Consensus policy advice that has defined their worldview since grad school; and
* the hard-currency component of Bank and IMF lending is generally not required, and indeed is damaging to balanced development.
_In what currency can you measure development?_
It may be useful to justify the latter argument, and in the process answer the opening question. Consider the viewpoint of the African National Congress in its 1994 Reconstruction and Development Programme (RDP), in a sentence won only after much left-wing lobbying: "The RDP must use foreign debt financing only for those elements of the programme that can potentially increase our capacity for earning foreign exchange." (The ANC broke more than one such promise, but it is the principle here that is worth careful consideration.)
The motivation for rejecting hard-currency loans for "development" was the ANC left's fear of the rising cost of repayment on foreign debt, once the currency declines, and the use of hard currency not to pay for a basic education project but instead to a) repay illegitimate apartheid debt, b) import luxury goods for the rich, and c) replace local workers with inappropriate job-killing technology from abroad. In sum, why take a US dollar loan for building and staffing a small rural school with virtually no foreign input costs?
This point was conceded even by former Bank chief economist Anne Krueger (an arch-neoliberal) in her Meltzer Commission input: "Questions also arise as to the `foreign exchange component' of some of the social sector (and other) projects." Citing the 1998 Bank Annual Report, Krueger queried "the foreign exchange expenditures associated, for example, with a Bank loan of $5 million, described as a `learning and innovation loan... [to] test and promote community-based child care and reintegrating Bucharest's street children more fully into society'."
If real development comes from local resources (only a tiny fraction of basic-need inputs in most developing countries require foreign loans), and if the hard currency needed to import petroleum or other vital inputs can usually be supplied by export credit agencies, the basic rationale for the World Bank begins to fall away. We don't need a World Bank and IMF, and without them, financial markets should and can finally be tamed (and development finance provided) within national borders, using tried-and- tested exchange controls.
_Bankrupt the Bank_
That is why, in addition to defunding the IMF/Bank through pressure on Congress (and indeed all parliaments) to deny them further resources (the AFL- CIO inexplicably backed the last IMF recapitalisation), the Bank's extreme dependency upon international bond markets--where it raises most of its funds for onlending--is now the most compelling pressure point we have for the medium-term struggle.
Hence, a "World Bank Bond Boycott" initiated by Haitian, South African, Brazilian and many other activists and debt campaigners across the world, will be launched during the mid-April protests. All investors of conscience--pension funds, churches, university endowments, individuals--are being asked not to profit from poverty and ecological destruction through their portfolio's World Bank bond holdings. There's a clear echo, here, of targeting companies active in South Africa for disinvestment during the 1960s-90s anti-apartheid campaign.
If A-16 gives activists an initial opportunity to run on the Bank and IMF, the nix-it challenge afterwards will be to keep the institutions running, until they drop of exhaustion.
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Patrick Bond's "Elite Transition: From Apartheid to Neoliberalism in South Africa," was published this month by Pluto Press (http://www.plutobooks.com), and contains two chapters on the important Bank/IMF role in denying the country a fully-fledged liberation.
Patrick Bond email: pbond at wn.apc.org * phone: 2711-614-8088 home: 51 Somerset Road, Kensington 2094 South Africa work: University of the Witwatersrand Graduate School of Public and Development Management PO Box 601, Wits 2050, South Africa email: bondp at zeus.mgmt.wits.ac.za phone: 2711-488-5917 * fax: 2711-484-2729