World Bank, Car freedom, oil

Doug Henwood dhenwood at
Tue Sep 26 09:27:02 PDT 2000

Barry Rene DeCicco wrote:

>I guess the official neoliberal 'Washington Consensus' line
>is that the WB and IMF are dominated by fuzzy, pooer-loving liberals.

Today's NYT has an extraordinary piece of propaganda along these lines.



New York Times - September 26, 2000

NEWS ANALYSIS International Lenders' New Image: A Human Face


PRAGUE, Sept. 25 - Deepa Narayan, a Indian woman with a steely gaze who spends much of her time in the poorest villages on earth, speaks of power, voice and equality as the keys to ending poverty. Keeping men from beating women does far more to raise living standards than any dam project ever did, she argues.

She would make a fine spokeswoman for protesters who plan to blockade World Bank and International Monetary Fund officials in their hotels here on Tuesday, when they hope to send a message that global lending agencies hurt the poor.

But Ms. Narayan, 48, works for the World Bank, and seems to like it there. And therein lies one of messages emerging from the meetings here: the World Bank and the International Monetary Fund are successfully repelling the attacks.

Like those who disrupted the World Trade Organization's meeting in Seattle last year and the bank and the fund's meeting in Washington last spring, the protesters here view the World Bank and the monetary fund as retrograde institutions that carry water for multinational corporations. But increasingly the protesters are aiming at moving targets. The bank and the fund are, by the standards of huge bureaucracies, changing quickly, largely because of outside pressure.

In fact, Ms. Narayan just completed a two-year, two-volume survey of 20,000 people who live on less than $1 a day. She and others at the bank say the study is one of several revolutionizing who gets the bank's $30 billion in loans each year.

"I think some of the protests have been helpful in bringing about changes," Ms. Narayan said on the sidelines of the bank's annual meetings here today. "But they are also worrying. You can destroy overnight what has taken so long to build."

Ms. Narayan's study, called "Voices of the Poor," is one example of how James D. Wolfensohn, an American who is the World Bank's president, has tried to reinvent poverty programs. But equally telling is how he and Horst Köhler, the German who is managing director of the I.M.F., have cast themselves as allies of governments and charity groups in poor countries, sometimes taking stands against the rich nations that provide most of their financing.

The Prague meetings may be remembered among globalization experts as the time when the two institutions, so much under attack, managed to gain some footing. Their tormentors on the streets, always at a disadvantage because of their small budgets and mixed messages, seem to be taking the blows.

"Wolfensohn and Köhler have become extremely important allies for us," said Trevor A. Manuel, South Africa's finance minister and the chairman of the Prague meetings. "Our real problem is the U.S., Britain and France. The protesters seem not to understand these things."

He was referring to the reluctance of lawmakers in the rich nations, especially in the United States Congress, to provide more money to the bank and the fund that could be used to relieve the old debts of developing countries.

Mr. Manuel also criticized the reluctance of industrial countries to share power at the two lending agencies. Mr. Wolfensohn and Mr. Köhler have quietly pushed ministers of wealthy nations, especially Europeans, to give up some voting power.

Many critics are actually spending more time inside the Congress Center in Prague than on the streets this year. Mr. Köhler and Mr. Wolfensohn gave entry passes to some 300 charity and watchdog groups so that they could attend the annual meetings, and the outreach seems to be working. Many protesters now call the two lending agencies potential friends or, at worst, ciphers.

"They are civil servants," Ann Pettifor, organizer of the Jubilee 2000 coalition of debt-relief groups, said of Mr. Wolfensohn and Mr. Kohler. "We know who the bad guys are. It's the G-7," referring to the Group of 7, the organization of seven leading economic powers.

To some outside protesters, a mix of anarchists, Marxists, student activists and environmentalists, hers is a distinction without a difference. But their lack of discrimination is a handicap.

Their main protest event is scheduled for Tuesday, when the bank and the fund hold their formal meeting ceremonies. The Group of 7 ministers, including Treasury Secretary Lawrence H. Summers, attended sessions on Saturday at the German Embassy here unhindered. Some ministers have already left.

The bank and the fund, along with the World Trade Organization, make appealing protest targets as symbols of globalization. Their leaders are hand-picked, not elected, and they have historically been secretive. They make tens of billions of dollars of loans each year.

But they are accountable to nations who are members, rich ones most of all, but also poor ones. And, like any bureaucracy, they are scrambling to survive in a new era, making themselves imperfect proxies for multinational corporations or other presumed forces of evil.

Take Mr. Kohler, the new managing director at the fund. He took over the reins of the Washington-based monetary fund at perhaps the low point of its reputation last spring, when it was under attack for mismanaging bailouts in Asia and Russia in recent years.

He quickly departed on what he called a listening tour of 16 developing countries and when he returned he began talking about changes in how the fund makes loans. He says he will streamline the much criticized conditions its attaches to its money.

For instance, when the fund provided $40 billion in emergency financing to Jakarta during the Asian crisis, it attached a list of more than 100 conditions. It required, for example, that the government disband its clove monopoly and eliminate price subsidies on basic foodstuffs, seen as ways of using the lending as leverage toward a free market.

Mr. Köhler said the conditions went too far, alienating Indonesians. "I will not have another Indonesia," he said.

He also agreed to eliminate a requirement the fund had imposed on Mozambique. There, fund officials had told the government to eliminate import tariffs on sugar, which the government had imposed to help the troubled industry. Mr. Köhler now says he will no longer force developing nations to adopt trade liberalization that rich countries like the United States or those in Europe have not yet undertaken.

At the World Bank, Mr. Wolfensohn routinely points out that almost half the world's population lives on less than $2 a day. He readily admits that many of the bank's traditional clients have not done much to improve the lives of the poor.

Although Mr. Wolfensohn is a former investment banker, he is proving hard to outflank on the left. He gave Ms. Narayan's team of economists latitude to write what the bank calls its World Development Report, a flagship document that - after much internal debate - threw stones at the orthodox temple of development economics by challenging the notion that all loans should aim to stimulate growth. Freeing trade, privatizing government companies and limiting government spending were once seen as main ingredients.

The latest report does not attack those ideas. Instead it focuses on "empowering" poor people, addressing dysfunctional family structures, and cutting government middlemen out of aid distribution. It reads like something written by people Mr. Wolfensohn himself once described as the "Berkeley Mafia."

Bank officials promise that their loan portfolio will look radically different in five years, reflecting the report's new priorities. But it already looks quite different than it did when Mr. Wolfensohn took power five years ago when the bank spent one in five of its aid dollars on electrical infrastructure projects. Today that ratio is 1 in 50.

This year the bank is spending hundreds of millions of dollars to fight AIDS and malaria. It has begun a $500 million pilot program in Indonesia examining how to channel aid directly to villages where poor people live, rather than entrusting authorities to do that for them.

All this talk raises pressure on the bank and the fund to make far more progress in fighting poverty in the next decade than they did during the last, when living conditions for the poor in Africa, the former Soviet Union and much of Latin American actually deteriorated.

But now, at least, the protesters have worthy challengers in the battle for public opinion.

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