Global Policy Forum

By Absalom Mutere

The World Bank and the International Monetary Fund have this irritating habit of insisting that things must be done a certain way - their way.

They tend to use language that is almost condescending when demanding outputs from sovereign African countries. In an election year, that dialogue does not go down well with leaders who are to be held accountable for their performance by the electorate.

President Moi swiped at them recently arguing that Africa is ravaged by poverty because they have withheld financial assistance. The World Bank has always shifted goal posts from one point to the other, while Kenyans continued to suffer. Kenyans have heard Moi make such statements before. Coming in an election year where all are to be held accountable for their performance, his words take on new meaning. The President and his government have to account for what has and has not worked over the past five years.

Who will the World Bank and IMF be accountable to in the Kenyan context come election time? Both institutions had a two-day meeting in Mombasa that engaged Kenyan MPs in discussions about the way forward. They agreed to involve MPs and other stakeholders in future aid programme negotiations. The meeting also noted that it was wrong for financiers to generalise.

Legislators called for flexibility in setting realistic and achievable benchmarks without hurting those who were meant to be helped. A question they did not seem to address was how both should be held accountable? Bank funding policies fundamentally affect the lives of ordinary Kenyans. Lately, judging by the spirit of Labour Day events held last week, those policies are not popular.

Job insecurity has become the Kenyan workers' nightmare ever since the onslaught of privatisation, down-sizing, right-sizing, and retrenchment. Chances of the government clinching a successful deal with the IMF before the General Election look bleak. Before resuming aid, the IMF first wants the Government to ensure the passage in Parliament of an economic crime Bill and three others spelling out codes of conduct for MPs, the Judiciary and civil servants.

Secondly, according to the same institutions, the government must ensure the passage in Parliament of the recently introduced Central Bank Amendment Bill 2002, which proposes to kill the Donde Act. The fact that Kenya has to implement an anti-corruption programme in the middle of a major political transition and in the context of competitive politics, does not help.

Talking about corruption, one wonders whether it dawns on bankers that some of their policies effectively promote the same. They seem to be comfortable identifying villains in government who are fixated on depleting public coffers. Elections, in their thinking seem to have to do with bringing in a more reasonable leadership. It used to be that they were comfortable working with dictators, the same ones who are now labelled corrupt.

During the martial law period in the Philippines, the World Bank was comfortable working with President Ferdinand Marcos despite all that he stood for. Walden Bello, writing on Development Debacle: The World Bank in the Philippines, talks about how these institutions considered repression an unfortunate necessity for creating the social arena that would enable them to effect technocratic solutions for the country's development problems.

During that period, certain social sectors were designated as being losers in a World Bank strategy of export led growth. Their proposed dismantling of protectionism meant that the Filipino industrial elite would have to be sacrificed. Another victim of the Bank's strategy was the urban working class whose cheap labour was seen as the main incentive for foreign multinationals to locate in the country, says Bello.

To control these two classes, their strongholds within the political system had to be destroyed. In the case of the national capitalist class, this meant Congress; in the case of the working class, it was the trade union movement. The dismantling of Congress, says Bello, was thus sanctioned by the Bank which noted approvingly that the proclamation of martial law in 1972 and the abolition of Congress provided the government with almost absolute power in economic development.

The Bank also acted as an apologist for acts of repression against the labour movement by promoting acts which outlawed strikes. Assuming that our friendly bankers now want to involve the people, maybe, as per President Moi's thinking, the goal posts have moved.

The people were not involved in determining the current phase of World Bank/IMF programming. That phase began when the Ronald Reagan administration came to power in the USA with an agenda aimed at disciplining the so called Third World. To Reaganites, the liberal democratic tradition of big government, social welfare and support for labour went against the American grain of individual freedom and free markets and represented creeping socialism.

Privatisation, liberalisation and globalisation, agendas which the Bretton Woods institutions are now promoting rode on these same concerns. They have a right to promote such things even as the government has a right to refuse says Kenyan opposition party leader Mwai Kibaki.

Kibaki, speaking out recently on World Bank funds, noted that the institutions have every right to withhold financial assistance to Kenya because the government has not been sincere about fulfilling conditions given.

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