The IMF and World Bank hurt poor countries and undermine democracy.
By Robert Weissman*
Washington PostSeptember 10, 2003
For more than 20 years, people from Argentina to Zambia have conducted mass protests against the policies of the International Monetary Fund (IMF) and World Bank. Because those demonstrations have occurred in developing countries, to which the IMF and World Bank are not accountable, the institutions have largely ignored them. Americans knew little of the protests and little about the policies of the institutions. That is now changing as a worldwide global justice movement is increasingly linking citizen movements in industrialized and developing countries. In Washington, Mobilization for Global Justice has presented to the IMF and World Bank four interrelated demands that follow from priority concerns of developing country labor unions, debt campaigners, environmentalists and other allies.
First, we call on the IMF and World Bank to open all their meetings to the public and media. So long as the decision-making meetings of the two institutions -- especially the regular board of director meetings -- remain secret, there is no way for citizens to know what their government representatives are doing. So long as key lending documents of the IMF and Bank remain secret until after approval, people in borrower countries will lack effective input on lending programs. The U.S. Congress operates in light of day; federal regulations are proposed for public comment before adoption. Why shouldn't similar sunlight shine on the IMF and World Bank?
Second, the IMF and World Bank must cancel the debts owed them by impoverished countries. Poor countries, including those that have passed through the institutions' debt relief program, routinely spend more money servicing foreign debt than they do on health care or education. U.N. Secretary General Kofi Annan has called on rich countries to provide $10 billion a year to assist poor countries ravaged by AIDS, tuberculosis and malaria. By what logic should the people of these same countries be forced to transfer money to rich countries? The IMF and World Bank have sufficient funds and assets in their coffers to undertake debt cancellation without additional money from U.S. taxpayers.
Third, the IMF and World Bank must end policies that hinder people's access to food, clean water, shelter, health care, education and the right to organize -- the ideologically driven economic austerity or "structural adjustment" programs that include charges known as user fees for basic health care, indiscriminate privatization and prioritizing exports over production for local needs. Even small charges deter people in poor countries from using critical services. For example, introduction of small fees for a sexually transmitted disease clinic in Nairobi led to a decline in attendance of 40 percent for men and nearly two-thirds for women. Another common mandate is the privatization of water and sanitation services -- which overwhelmingly remain in the public sector in the United States -- despite evidence that privatization leads to higher charges, decreased access for the poor to clean water and the spread of disease.
Finally, the World Bank must end all support for socially and environmentally destructive projects, such as oil, mining and gas activities, and large dams. From 1992 to the present, the various arms of the World Bank have approved funding of more than $18.5 billion for oil, mining and gas projects. Many of them, such as an oil project in Chad and Cameroon, effectively channel public subsidies to large corporations. Resource extraction projects are frequently associated with human rights abuses and environmental destruction, as well as contributions to global warming. Thanks to international grass-roots pressure, World Bank support for large dams has diminished significantly over the past decade. But the bank continues to support several large dams that force the relocation of large numbers of people. And it has failed to follow the recommendations of an independent commission it helped establish to ensure the meaningful input of affected communities before dam projects proceed.
Each of these demands could be implemented if advocated by the U.S. government. Some version of each of the demands is under consideration in the U.S. Congress.
When pressed, the two institutions will sometimes admit they have made mistakes. But they continue to insist their policies are necessary to promote economic growth. During the past two decades, however, when IMF and World Bank influence has been on the ascent, Latin America has experienced stagnant growth, and African countries have seen incomes plummet. The only developing countries that have done well in that time are Asian countries that largely ignored the standard prescriptions of the IMF and World Bank.
In fundamental ways, the IMF and the World Bank undermine democracy. Their conditional lending establishes a cookie-cutter framework for poor countries' economic policies, irrespective of the preferences of the populations or of national conditions. Another world is possible. If the IMF and World Bank operated transparently, if poor countries were relieved from the straitjacket of debt, if the institutions did not impose user fees for health care and other harmful policies, then countries would be much freer to pursue different economic strategies in accordance with the democratic determinations of their people. We share these modest democratic aspirations with people across the globe.
About the Author: Robert Weissman works with the Mobilization for Global Justice and is co-director of the Washington-based organization Essential Action.
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