Global Policy Forum

By Hussaina Isa Ahmed

The twin Bretton Woods institutions, namely, the International Monetary Fund (IMF) and the World Bank, have continued to suffer image setback following the disruption of their summit by protesters in Praque, Czeck Republic. The protest which was spearheaded by two Non-Governmental Organisations (NGOs), Initiative Against Economic Globalisation (INPEG) and Jubilee 2000, all based in the United Kingdom, brought to the fore a very fundamental question to all third world nations. How relevant are the multi-lateral financial Institutions to the needs of developing nations?

The IMF and World Bank from their aims and objectives are supposed to be developmental institutions that assist poor nations through their various economic resuscitation programmes. However, this thinking seems to be only a theory as the action of the duo in different parts of the world has raised serious doubts as to their sincerity towards improving the living conditions in third world nations. It is an undisputed fact today that the Bretton Woods institutions are the most famous as financial bodies in the world. Their popularity, however, does not stem from their positive contributions to the world economy, but rather from the bitter and painful scars they have left on the economy of a good number of third world countries.

According to the UK-based Jubilee 2000's report, the World Bank has been doing little or nothing to bail Africa out of its economic woes and thus requested for its scrapping. "The aid intended for development is sometimes used for debt repayments to the International Financial Institutions. Worthy of mention here is the part of the US$10 million in British aid funds to war-town Sierra Leone which was recently used for the repayment of the country's debts to the IMF and the World Bank debtors. Western tax-payers expect their aid to be used for development, for building hospitals, providing clean water, sanitary facilities and paying school teachers.

Tax-payers in developing countries hope that their taxes will be used to finance development. Why should elected politicians in the G-7 nations agree to use tax-payers' funds to finance the IMF and World Bank when these institutions already have healthy reserves?", asks Ann Petitor, director of Jubilee 2000.

The Praque protest was not the first in the series since the commencement of the anti-globalisation campaign around the world. However, what baffles everybody is the bitter truth which the IMF and the World Bank continue to run away from, that is the allegation of exploitation and stagnation of economic development programmes of third world countries. It beats one's imagination if there can be anything more damaging than what is happening to institutions which are believed to possess the tools capable of influencing economic policies of developing nations and possibly shaping their future.

Back home in Nigeria, where the people are anxiously yearning for the fruits of democracy after many years of looting by the military, a situation that has reduced the citizens to "mere refugees" in their own country, the IMF and the World Bank have no better reputation. For example, during the debate on the now jettisoned $100 million IMF standby facility, proposed to assist the country to bring her economy back on track the situation was not different. Stakeholders in the Nigerian society like the Academic Staff Union of Universities (ASUU), Nigerian Labour Congress, National Association of Nigeria Students (NANS), members of the National Assembly and a host of others came up to condemn the time being proposed, which eventually led to the "death" of the proposal at least for the time being.

This is because in everything in the country there is always the Nigerian "factor" where government says one thing only to do a different thing. As if the Bretton Woods institutions are not deterred by their bruised image, they have commenced another round of on-the-spot assessment tour to work out modalities on how to assist states in Nigeria. The reaction of Nigerians can be predicted which has been outright condemnation or even total boycott. It will do them a lot of good if they realise they have taken enough for the owner to notice.

The reason for this negative reactions may not be far fetched as similar gestures in the past have only buttered the bread of those in government leaving the majority of the people in the shackles of poverty and starvation. The Guardian editorial of August 17, 2000, titled Timely clarification on IMF, states: "The general perception is that all the woes that befall Nigerian economy over the years were the handiwork of these bodies. Since 1985, when President Ibrahim Babangida subjected the issue to a public debate, attitude have hardened against doing business with the International Monetary Fund (IMF) and the World Bank.

The International Monetary Fund (IMF) and the World Bank are nothing but agents of neo-colonialism who have nothing to offer Africa and her distressed people. This can be easily seen from their questionable globalisation agenda as summed up by Kellner (1997): "Globalisation can be seen as a complex and multi-dimensioned phenomenon, that involves different levels. Flows, tensions and conflicts, such that a trans-disciplinary social theory is necessary to capture its contours, dynamics, problems and possible future.

It strengthens the dominance of a world capitalist economic system, supplanting the privacy of the nation states by multi-nationals and organisations, and eroding local cultures and traditions through a global culture, capitalism therefore becomes the logic of globalisation."

It would be recalled that the IMF's chief economist, Joseph Stiglitz resigned due to what he described as discrimination in the formulation and implementation of the Fund's policies. In addition, the last days of Michael Camdesus in the IMF were marked series of protests from groups who felt the organisation has done little or nothing to better the lot of developing countries around the world.

The 1986 World Development report of the World Bank in which Nigeria was used to describe how over-valued exchange rates have caused decrease in agricultural production states thus:

"The internal "structural" problems and the external factors impeding African economic growth have been exacerbated by domestic policy inadequacies, of which there are critical, first trade and exchange rate policies have over protected industry, held back agriculture, and absorbed much administrative capacity.

Second, too little attention has been paid to administrative constraints in mobilising and managing resources for development, given the widespread weakness of planning, decision-making, and management capacities, public sectors frequently become over extended. Third, there has been a consistent bias against agriculture in prices, tax and exchange rate policies."

Surprisingly, this particular report turned out to be nothing but one of the bank's numerous "imperial" agenda aimed at frustrating economic development in third world countries. The reason for this is not far fetched as the bank claimed Nigeria and Indonesia had over valued currencies between 1968 and 1978.

The report argued that while Indonesia quickly devalued her currency after 1978, Nigeria was said to have glued itself to an over-valued naira. The truth of the matter is that Nigeria's economy grew during the period under review contrary to the World Bank's claim. It is an established fact that it was the bank's strategies that partly created the conditions for the failure of agricultural policy in Nigeria.

Perhaps, Professor Claude Ake (1994), of blessed memory, had this in mind when he said: "The ethics of globalisation requires economic liberalisation and structural adjustment as measures for solving economic crisis, particularly in the third world countries. This economic aspect poses threat to the third world through IMF and the World Bank who give conditionalities over aids, loans or debt relief. This situation only intensifies economic hardships and the IMF/World Bank-inspired SAP exacerbates poverty. Poverty disempowers and subverts democracy, the politics of the stomach now dominate the scene, thereby leading to the vulnerability of the third world by the forces of globalisation."

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