The IMF's complicity in the Asian and Russian financial crises, the sudden resignation of its long-serving Managing-Director, Michel Camdessus, and the widespread condemnation of its central policy prescription of structural adjustment have all seriously undermined the institution. The WTO has been dealt a body blow by the mass protests and developing country opposition that prevented the launch of a new world trade round in Seattle. The World Bank's credibility has also hit a new low as it has been exposed for continuing to support projects that violate its own codes and stated goals, and has so visibly failed to be reformed, despite the best efforts of its energetic President.
At this key juncture, instead of genuinely addressing the problems they face, the people who run these institutions and their political allies -- the vast majority of whom are from wealthy industrialised countries -- have resorted to promising cosmetic changes and employing a form of emotional blackmail designed to preserve the status quo.
'We are the linchpins of poverty alleviation in the world,' they are effectively saying, 'and if you continue to criticise us, it is the world's poor that will suffer most.' Hence, WTO Director-General Mike Moore and The Economist reacted almost identically to the failure to launch a new round of trade liberalisation in December 1999: "Make no mistake," they said, "the world's poor are the real losers from Seattle..."
This is a shameful deceit, and it is to expose it that we have produced this special issue of The Ecologist. With the help of leading thinkers and writers on developing country issues from around the world, we reveal the unambiguous reality of World Bank, IMF and WTO policies today, and make the case for fundamental change.
Poverty today
If the goals of the World Bank, IMF and WTO were to alleviate poverty -- even according to their own narrow, monetary-based definition of the term -- their policies have failed to do so. The world has more poor people than ever: 1.3 billion people -- over a fifth of the world's population -- now live on less than $1 a day and a further 1.6 billion -- another quarter of the world's population -- survive on between one and two dollars.
Moreover, the plight of the citizens of many poor countries has become worse under the policies of economic globalisation prescribed by the World Bank, IMF and WTO. More than 80 countries now have per capita incomes lower than they were a decade or more ago, and as the United Nations Development Programme (UNDP) points our, it is often the countries that are becoming even more marginal which are highly 'integrated' into the global economy. While exports from Sub-Saharan Africa, for example, have reached nearly 30 per cent of GDP (compared to just 19 per cent for the leading industrialised countries of the OECD), the number of people living in poverty there has continued to grow.
Other indicators of poverty have also worsened under economic globalisation. According to the UNDP, financial volatility, job and income insecurity, crime, threats to health, food insecurity, loss of cultural diversity, community disintegration and environmental degradation have all increased. The greatest losers from all these trends are the poor.
The Bretton Woods agenda
That this is so should come as little surprise. The World Bank, IMF and WTO were not created with poverty alleviation primarily in mind. They were designed at the United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire, in July 1944, to fulfil quite another agenda. To cite Henry Morgenthau, then US Treasury Secretary and president of the conference, the purpose was, "the creation of a dynamic world economy," to sustain the domestic American economy's continuous expansion by ensuring it sufficient access to foreign markets and raw materials.
The IMF would be responsible for insuring that in periods of economic down-turn, nations would not introduce exchange and trade restrictions, or competitive devaluations of their currencies to protect their domestic industries. To facilitate trade, the IMF would above all ensure that currencies remained liquid and stable. The World Bank, it was originally envisaged, would make loans to war-damaged European nations to pay for investments in large energy and transport infrastructure projects, essential for their re-integration into the global economy. An International Trade Organisation, meanwhile, would serve as the primary means of creating and enforcing global free trade agreements.
Author: Array
Previous article: 22 November 2007
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