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Mobilization Against Corporate Globalization: Round II
The demonstrations against the WTO in Seattle were probably among the most effective protests in modern American history. The sequelon April 16 in Washington DC, at the IMF/World Bank spring meetingsmay have an even greater impact on the world.
The main reason that these demonstrations can be so effective is that U.S. foreign economic policy cannot withstand the kind of public scrutiny that is brought to bear when protest reaches a certain critical mass.
The point was brought home when President Clinton made his speech endorsing the concept of labor rights enforceable by trade sanctions, the day after Seattle protesters made good on their promise to shut down the WTO. That speech effectively ended the millenium round of WTO negotiations, at least for some time.
And it did more than that. Hand-wringing by the worlds financial and economic elite dominated the World Economic Forum in Davos a month later. Those who heard a wake-up call in Seattle got the right message, said Clinton. Others expressed similar viewsthey had discovered that they would have to make some concessions to the opposition if they were to proceed with their project.
These pronouncements represent an important development, but not because any substantive reforms are on the agenda. Clintons plan for including labor rights in the WTO would take decades to implementanything that far off in the future can hardly be taken seriously enough to be called reform. Indeed, the WTO is not set up to regulate trade in the interests of the environment or labor, and it would surely be scuttled before it took on responsibilities so completely alien to the goals of its creators.
The globalizers new willingness to talk to their opposition is important because it represents an impasse in the process, and one that they have now been forced to come to terms with. This shows the power of a united opposition, and what it can accomplish if it continues along its present path.
Now another wake-up call has been scheduled, this time directed to the IMF and the World Bank, with large-scale protests planned for April 16 (see www.A16.org). The Fund and the Bank are many times more powerful than the WTO, in that they actually dictate the most important economic policies adopted by more than 50 countries. The damage that these institutions do is incalculable. Their programs have caused and worsened economic crises, and toppled governments. (Lacking a sense of irony, the Fund actually tried to claim credit for helping to bring down Suharto in Indonesia; which they did do, in their own roundabout way, by wrecking the economy to the point that the country became ungovernable). They have exacerbated unemployment and poverty, and perhaps most harmful over the long run, they have helped to prevent most of the underdeveloped world from pursuing the economic strategies that they would need to pull themselves out of poverty.
But the same relations that make the IMF the most powerful institution in the world are also the source of its vulnerability. Its power rests on a mostly informal arrangement in which nations that are poor or in economic crisis must agree to implement the Funds economic policies, or be denied credit from the World Bank, other multi-lateral agencies, and often private sources as well. If the IMF is subjected to the kind of public criticism that followed the Seattle protests, this agreement will surely begin to unravel.
Readers of this magazine do not need to be reminded of our governments long and sordid history of destroying scores of movements or governments that were dedicated to democracy or national economic development. But the violence that Washington has used to snuff out these flames of hopefrom Sandinos Nicaraguan resistance in the 1930s to Haitis first democratically-elected government in 1991is their last resort. The IMF is the CIA and Pentagon of international finance.
Moreover, the Fund is also by far the most powerful and damaging adversary of the labor movement in the United States. For all the reasons that labor opposed NAFTA and the WTO, the IMF is even more threatening to the direct needs and interests of American workers.
The IMF imposes NAFTA-like conditions on countries wherever it can. Just as NAFTA made it easier for U.S. corporations to move their operations to Mexico, the IMF makes it easier to them to move almost anywhere in the world. It forces governments to rewrite their laws, as NAFTA did to Mexico, so that they are more favorable to foreign investors. This drives down wages everywhere, and especially in countries like the U.S., where businesses can threaten to move when workers try to unionize or demand higher pay. It also leads to job losses when these employers actually move their operations out of the country.
The IMF also pressures countries to produce for export rather than for domestic markets. This can cause a glut of manufactured or agricultural goods on world markets, driving down prices, encouraging dumping, and putting more downward pressure on wages. Many of the thousands of steelworkers who lost their jobs over the last two years are casualties of IMF policies in countries like South Korea, Russia, and Brazil.
Many union activists are aware of the damage that the IMF does to labor, and there is a great deal of support for the April 16 actions especially among those unions who were most strongly opposed to the WTO, such as the Steelworkers and Teamsters. The protests will help to highlight these issues.
As the IMF gets dragged into the spotlight, the nature of the discussion will change. This is what happened with the WTO: although much of the press coverage of Seattle missed the point of the protests, there were also advances in the way some of the issues were framed. The New York Times, for example, ran articles that explained the protesters point of view on labor and environmental issues. The WTOs aggressive attempts to expand the monopolistic protection of intellectual property rights (e.g., pharmaceutical patents), as the WTO does through its TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement, was increasingly noticed to be inconsistent with its supposed commitment to free trade and international competition.
The IMF will be more difficult to defend than the WTO. While the rich countries dominate the WTO, power is even more concentrated in the Fund, which is mainly run by the U.S. Treasury department.
Currently, the press still treats the Fund as though it were an international lender of last resort that bails out countries in trouble, encouraging them to adopt sound macroeconomic policies. But its fiascoes on three continents over the past two and a half yearsin Asia, Russia, and Brazilhave already begun to undermine this myth. In Asia, the Funds major accomplishment was to force the governments of major borrowers like South Korea and Indonesia to guarantee the debt of private banks and corporations. Its macroeconomic policies were anything but sound, and roundly criticized by prominent economists such as Joseph Stiglitz (who, not coincidentally, was forced to resign from his position of Chief Economist at the World Bank last December). The Funds expensive, counter-productive, and ultimately futile attempts to fix the exchange rates of the Russian ruble and the Brazilian real also raised further questions about its competence.
These cracks in the consensus that has shielded the Fund and the Bank from public criticism will widen after April 16. Since Washington is the leader of the effort to remake the world according to the needs of global corporations, protests on the home front have an enormous impact. It is also possible that the dissension among the developed countries, which was a significant factor in the collapse of the WTOs ambitious agenda in Seattle, will increase. Europe and Japan have long wanted to have more of a voice in the Fund; at present they have very little, despite having a combined voting power that is formally greater than that of the U.S. North-South conflict within the IMF and the Bank may also widen, as it has within the WTO, with Southern governments increasingly challenging the colonial nature of these institutions.
The World Bank has also become the target of a newly launched international campaign to boycott its bonds, through which it raises 80 percent of its capital. Organized on the model of the divestment movement that helped bring down apartheid in South Africa, the movement has already attracted more than 100 organizations from 29 countries. Our intention is to turn the weapon of denial of fundsthe same weapon the Bank uses so frequently and with such destructive effect against the Bank, announced 50 Years is Enough, the U.S. coalition that has been fighting IMF and World Bank policies since 1994. The April protests will also be a rallying point for this promising campaign.
There will be other battles in Washington that week, many of whose participants and leaders are working closely with the April 16 coalition. One is the movement for Third World debt relief, which will bring thousands of people to Washington on April 9 to form a symbolic human chain around the Treasury, the Capital, the IMF, and the World Bank. Led by Jubilee 2000 organizations through- out the world, this movement has been gathering increasing support for canceling the debt of the worlds poorest countries. The mobilization this spring will boost this worthy cause as well. A word of caution, however: debt relief administered by the IMF and the Bank, in which poor countries are forced to submit to years of structural adjustment programs in order to qualify for limited debt relief, could easily do more harm than good. That is the current arrangement under the IMF/WBs Heavily Indebted Poor Countries (HIPC) program, and most of the organizations fighting for debt relief in the global South have gone on record against it.
The other major battlefront will be over Chinas entry into the WTO, and here there is again enormous overlap and joint events with the IMF/WB protests. Although there have been concerns raised from within the progressive community that this opposition not degenerate into China-bashing, there is no reason that it should. There was a solid coalition of labor, environmentalists, and other progressives against expanding the U.S.-Canada Free Trade Agreement to include Mexico. It was not a struggle against Mexicoquite the contrary, Mexican trade unionists and progressives allied with their U.S. counterparts to fight an agreement that now appears to have lowered real wages (and increased environmental destruction) on both sides of the border. Similarly, this is not a battle against China, but rather against an enormous and downward-harmonizing expansion of the WTO. Business groups are spending millions of dollars to lobby for this expansion, in the hope that it will breathe new life into the gravely wounded WTO.
The weakening of the stranglehold that the IMF, World Bank, and WTO now have on economic policy in much of the world will open up new possibilities for countries to pursue the many paths to economic development that are currently blocked. If history is any guide, even one or two successful examples will inspire many others. The deathly slogan, There is No Alternative, that Washington made the epitaph of the last two decades may well give way to a new century of hope.
Mark Weisbrot is co-director of the Center for Economic and Policy Research in Washington, DC.