Run on the Bank
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
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?
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
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.
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."
it or nix it?
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.
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
the left, the choices have been reduced-- crudely but helpfully, I'd say--to the
slogans "fix- it" versus "nix it."
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
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.
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.
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.)
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
campaigners acknowledge the point: reforms won to date are deeply unsatisfying.
But matters get more complicated yet.
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."
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.
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).
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
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
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."
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.
we need the Bank and IMF?
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."
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.
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.
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):
all possible core value reforms in key areas of eco-socio-economic
advocacy have been explored, and the profound limitations unveiled;
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
hard-currency component of Bank and IMF lending is generally not required,
and indeed is damaging to balanced development.
what currency can you measure development?
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.)
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?
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
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.
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
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.
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.
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.