By Patrick Keaney
Boston PhoenixJune 7, 2002
James Wolfensohn, the president of the International Bank for Reconstruction and Development, better known as the World Bank, will deliver the commencement address at the Massachusetts Institute of Technology. Because Wolfensohn heads an international financial institution, one that has been criticized by those in the "anti-globalization" movement for pushing a corporate-focused agenda, his appearance at MIT will provoke the kinds of protest that are now commonplace wherever international-financial elites pop up: teach-ins, rallies, and boisterous marches featuring chants, songs, placard-waving, street theater — and the possibility of nonviolent direct action and multiple arrests. An MIT group calling itself "Students for a Democratic Commencement" has been organizing the response to Wolfensohn's visit since March. MIT president Charles Vest, conceding that "some in the community are concerned that controversies over some World Bank policies" will make Wolfensohn and the university targets of protest, has tried to defuse the situation by allowing a small number of students to air their grievances with the World Bank president prior to his address.
But students aren't the only ones questioning the appropriateness of MIT's choice. Wolfensohn will face an altogether different kind of rebuke when he steps to the lectern to inspire the outgoing Class of 2002. He will be speaking in a municipality whose city government decided on April 29, by a vote of 9-0, that it would join the nascent movement to boycott World Bank bonds, citing many of the conditions the bank attaches to its loans as the rationale for its decision. Cambridge mayor Michael Sullivan said it would be "inappropriate for our dollars to support an organization like the World Bank that doesn't respect labor standards." To date, six other municipalities have taken similar votes (Milwaukee, Boulder, San Francisco, Oakland, Berkeley, and Takoma Park, Maryland). Friday's speech by Wolfensohn will mark the first time a World Bank official has given a public address in a city that has formally declared it wants nothing to do with the bank's bonds.
The lead sponsor of the resolution, Cambridge city councilor Marjorie Decker, declared after its passage that "the World Bank has had harmful effects on local communities and peoples around the globe. With this resolution, we are saying that our community does not approve." Taking things a step further, the Cambridge City Council also called on the state legislature and the governor to "use their best efforts and influence to ensure that the Commonwealth of Massachusetts divests of any bonds it may currently hold that have been issued by the World Bank." The unanimous vote by the council came after more than a year of work by a group of local activists, who embraced the idea of the bond boycott as another way to raise awareness about globalization, including the role of the World Bank, in their community.
To the average anti-globalization activist, the prospect of lobbying the local city council doesn't exactly inspire the same sort of enthusiasm as taking part in a massive protest demonstration does. The fact that some activists are now pursuing more mainstream approaches, however, is a significant development — a sign that the movement against globalization is broadening its tactics. Basav Sen, a member of the anti–World Bank political-action group BankBusters, points out: "80 percent of the World Bank's funding comes from investments by public agencies, such as city governments and labor unions and churches." By fighting the World Bank on the local level, the activists are following the example of Third World countries like Haiti, where citizen-led movements against the bank's policies have been under way for more than 20 years.
THE BOYCOTT resolution passed by the Cambridge City Council minces no words about the terms the World Bank imposes on the developing world in exchange for access to development funding. Accusing the bank of being "the principal architect and enforcer of corporate globalization," which critics say favors international investors and protects corporate profit-making at the expense of workers and the environment, the resolution lists a number of justifications for the boycott. The bank, it declares, refuses to respect internationally recognized labor standards, pushes developing countries to restructure their economies for the benefit of transnational corporations, aggressively promotes privatization, and refuses to cancel debt claims against poor countries. The resolution further objects to the bank's coercive lending policies. As the "lender of last resort" for countries whose economies typically have been ruined by the legacies of colonialism, communism, and the Cold War, the World Bank requires participation in "structural-adjustment programs" (SAPs) as one of the conditions for receiving loans. The non-negotiable economic reforms contained in the SAPs can be controversial. To offer just one example, SAPs often require implementation of "user fees" for primary-health-care and education programs, which routinely results in a massive drop-off in participation by the poorest — and usually most needy — citizens.
The World Bank's origins go back to the Bretton Woods conference of July 1944, where economic and political leaders from 43 of the world's nations assembled to start building a global economy in the aftermath of World War II. The US treasury secretary at the time, Henry Morgenthau, blamed worldwide depression in the previous decade for the rise of fascism, and called for the creation of institutions that would create "a dynamic world community in which the peoples of every nation will be able to realize their potentialities in peace." The International Monetary Fund (IMF) was created at the same time, and the two institutions were supposed to facilitate the kind of global economic relations needed to foster peace and security. The IMF would enhance international trade by standardizing its members' monetary policies and maintaining exchange stability, while also providing temporary financial assistance to countries that had difficulty with their balance of payments. The World Bank would assist global trade by lending money to war-ravaged and impoverished countries for reconstruction and development projects.
Critics of the bank, the most vocal of whom are from developing nations, point out that the lofty hopes that filled the meeting rooms at that historic New Hampshire resort have not been fulfilled. They say the Northern industrialized countries, led by the US and Europe, used the international lending institutions developed at Bretton Woods to impose their vision of the global economy on the developing world. Whereas the World Bank's original mandate was to make project loans for infrastructure development, it soon expanded its mission to include SAPs, which are not linked to development projects but rather provide loans in exchange for major free-market economic-policy reforms. They also take issue with the undemocratic nature of the World Bank's decision-making, in which the amount of influence a country has is directly related to how much money it puts into the system. For example, the US, which provides more funding than any other country, has 20 percent of the vote, while all 47 of the countries in sub-Saharan Africa have a combined seven percent.
The Center for Economic Policy and Research (CEPR), a left-leaning Washington, DC–based watchdog group that focuses on international-financial institutions, reports that gross-domestic product (GDP) per capita is stagnant in Latin America and falling in Africa, two regions that have undergone repeated intervention by the two leading international-financial institutions created at Bretton Woods. "The past two decades have been mostly lost to the developing world," according to CEPR's 2000 review of the World Bank and IMF. "While there are undoubtedly economic gains to be had from international trade and foreign investment, there is clearly something wrong with the way these and other policies have been promoted in most developing and transition economies by the IMF and the World Bank. To reverse these trends, there will have to be an honest debate over what has gone wrong over the last 20 years."
THE CITY OF CAMBRIDGE doesn't actually have any money invested in World Bank bonds, and the members of BankBusters concede that people might therefore see the resolution as a mere hollow gesture. But that charge would miss the significance of the resolution, they insist, because it prevents the city from ever purchasing World Bank bonds and adds to the bank's growing public-relations problems. "People jump to the conclusion when they hear [Cambridge holds no World Bank bonds], that therefore, the resolution is symbolic," says Sen. "It's not. Just because [cities] don't own any World Bank bonds right now, does not mean that they have an expressly stated policy never to buy them."
Councilor Decker sees another tangible result of the boycott — it elevates awareness about the World Bank. "It's not a hollow gesture if it inspires other communities around the country to take up the same issue, or if it makes other people ask, ‘Why would the city council decide unanimously to take this issue up?' Part of our role as policymakers is to also raise consciousness." It's unlikely, however, that the Cambridge resolution will have an effect on the bank's AAA Moody's bond rating (the highest possible) anytime soon.
Nevertheless, Neil Watkins, the coordinator of the World Bank Bonds Boycott effort at the Center for Economic Justice, in Washington, DC, is impressed by the campaign waged by Sen and his colleagues. "Cambridge was a place where a lot of intense work and outreach pulled together a pretty significant cross section of folks," Watkins says, calling the group that pushed for the resolution "probably the broadest coalition pulled together so far." Watkins also says that World Bank officials are beginning to worry about the impact of the boycott movement on their public image. In fact, prior to the Boulder City Council vote, bank executives sent the councilors a 15-page report, urging them to vote against the boycott. Council members were also personally lobbied by bank officials. They nonetheless voted, unanimously, to join the boycott.
The "intense work" in Cambridge included gathering more than 900 signatures on a petition to the council, going to various community-based organizations and educating their members about the World Bank and its policies, and lobbying leaders of the Cambridge city government. According to the BankBusters, talking to people about neoliberal-economic policies (which stress the need for little or no regulation on international trade and investment) and their effects on developing countries was made easier by the fact that this was, after all, "The People's Republic of Cambridge." Even so, it required developing a message that reduced a set of very complex issues to a more easily accessible one.
By all accounts, it was the World Bank's policies with respect to organized labor and human rights that inspired the Cambridge City Council to act. "It was about making the assertion that when we do business outside of this country, we've set certain labor standards here that value employees and respect human rights," says Decker. "We must make a point of asserting those standards." The Bank's reputation as an enemy of workers' rights was the primary reason the bond boycott passed without opposition. "We did very much emphasize the fact that the World Bank drives down labor standards worldwide," Sen explains. "Ever since the passage of one of the strongest living-wage ordinances in the country, Cambridge has been very proud of its reputation as a city that stands up for workers' rights." The Cambridge Carpenters Union, Local 40, was one of 25 area groups that supported the bond boycott, as was Massachusetts Jobs With Justice, a Boston-based nonprofit that focuses on issues of global economic inequality from the perspective of organized labor. By working with organized labor at the grassroots level, the BankBusters have done their part to revive the fabled "blue-green" alliance (blue-collar workers and environmentalists) that made the 2000 Seattle demonstration against the World Trade Organization (WTO), the global institution for trade regulation, such a success.
None of the activists who successfully steered the World Bank bond boycott through the Cambridge City Council is prepared to renounce organized protests, however. Despite their success in the legislative arena, they will keep the heat on policymakers by taking to the streets on occasion to make their point. All of them plan to take part in the anti-Wolfensohn activities at MIT, distributing flyers to students, parents, and alumni about the recent city-council decision. But they are realistic about the prospects for change that those tactics, by themselves, hold. "We can assert that street demonstrations are not enough," Sen says.
Councilor Decker agrees. "I think that [street protest] raises consciousness," she says. "After Seattle, people at least started hearing a vocabulary they weren't familiar with." She explains that she believes in the need for what she calls the "inside/outside agitator" dynamic as a way of creating change. "As a policymaker and someone who is involved on the inside, I may not appreciate what the groups on the outside are doing, but I think it's got to be done," she says. Rallies and protests, Decker observes, create the opportunity for elected officials to discuss topics, such as global-economic policy, that otherwise wouldn't be on the public agenda. She bears no ill will, noting, "Ultimately, there's a common goal for change, but there are different channels and different roles."
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