Spring Protests in Washington, D.C: Another Seattle?
Clinton administration claims to have learned something from the outpouring of
protest against the World Trade Organization (WTO) last December. "Those
who heard a wake-up call in Seattle got the right message," said President
Clinton. Maybe so, but then they hung up the phone and went right back to sleep.
for the world, the administration and its allies will not slumber for long. In
just a couple of weeks, thousands of protesters will take to the streets of the
other Washington -- the District of Columbia -- for a week of events that will
probably rival Seattle in its impact on the institutions of globalization.
groups will lead a rally for debt relief for poor countries on April 9.
Organized labor will gather its troops and others to oppose the expansion of the
WTO on April 12. And on April 16, the International Monetary Fund (IMF) and
World Bank will face the first major demonstrations ever to take place on their
home territory. In addition to a rally and march, many protesters will attempt
to shut down the spring meetings of the Fund and the Bank with non-violent civil
disobedience -- as they did with the WTO meetings in Seattle.
roots of discontent
is a movement that is not going away. In some ways it is reminiscent of the
early stages of protest against the Vietnam War. Those who understand this
movement know that unless there is a drastic change in our government's policy,
it will continue to grow in numbers and in strength.
analogy is appropriate along a number of dimensions: For years the American
public was told that we were fighting for the freedom of Vietnam, and that
victory was around the corner. As the casualties mounted and official lying was
exposed, and the horror and cruelty of the war became more widely known, people
began to question the prosecution of the war. Then they began to question the
justification, and finally the motives of our entire foreign policy.
time it is our foreign economic policy that is being held up to scrutiny, and
for millions of Americans it has already become discredited. That this could
happen at the peak of our longest-running economic expansion, with unemployment
at a 30-year low, is further evidence that this movement is deeply rooted.
Seattle protests plucked the WTO from its cozy obscurity and dragged it out into
the daylight, where ordinary citizens could see the impact that it has on their
lives, and the lives of other people around the world. This forced President
Clinton to scuttle the WTO's Millennium round of negotiations.
April protests will cause many people to learn about the IMF and the World Bank
for first time, and others to find out more about what they do. This is almost
certain to diminish support for these organizations.
case against the IMF
IMF is the most powerful financial institution in the world. It is arguably the
most powerful institution of any kind, in terms of its impact on the lives of
hundreds of millions -- and indirectly, billions -- of people. This is due to an
informal arrangement under which borrowing countries must first reach agreement
with the IMF, in order to get credit from other multilateral institutions,
governments and often private sources as well. This gives the IMF the power to
choose finance ministers and central bankers, and even to topple governments
that do not comply with its conditions.
U.S. Treasury Department is the overwhelmingly dominant influence in the IMF and
holds this system together. So anything that weakens support for the IMF in its
home base has the potential to collapse the whole arrangement. The recent report
of a congressional commission that sharply criticized the IMF, and called for
downsizing its mission, has contributed to this weakening. And the fight between
the Clinton administration and Europe over who would head the IMF recently
resolved with the administration agreeing to support Germany's No. 2 choice,
Horst Koehler -- is another sign of strain.
IMF is commonly portrayed as a global rescue operation -- an international
"lender of last resort" analogous to our own Federal Reserve at the
national level. But this is not true, even in those instances in which the IMF
intervenes in a crisis situation. The Federal Reserve will provide funds to a
failing financial institution in the United States, in order to prevent the
collapse from spreading. The IMF does something quite different: It helps to
form a creditors' cartel, so that the lenders can collect as much as possible on
their debt from the government that is facing a crisis. In the Asian crisis, for
example, the main result of their intervention was to get governments such as
those of South Korea and Indonesia to guarantee the debt of private borrowers.
the IMFs most destructive policies are carried out in the poorer countries,
they also hurt working people in the United States. For these reasons a growing
portion of organized labor here is joining the movement to curb the power of the
IMF. After all, unions opposed NAFTA because the agreement made it easier for
American corporations to relocate to Mexico, drive down wages and undercut
labor's bargaining power. The IMF does all of the things that NAFTA did, in
dozens of countries, making it labor's most powerful adversary.
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 steel workers who lost
their jobs in the wake of the Asian economic crisis are casualties of IMF
for another wake-up call
Treasury Secretary Larry Summers is now jumping on the reform bandwagon, it
appears that he is simply trying to preempt demands for real change. He refuses
to support cancellation of the poorest countries' debt to the IMF and the World
Bank, a basic demand of the worldwide movement for debt relief. This debt is
widely known to be unpayable, and it is within the means of these institutions
to let go of these claims. But they refuse to do so, preferring instead to use
the debt to maintain control over the economic policies of these countries.
James Wolfenson, the head of the World Bank, and Koehler, soon to approved as
the new managing director of the IMF, concur with Summers.
going to need a few more wake-up calls.
Mark Weisbrot is co-director of the Center for Economic and Policy Research in Washington, D.C.