IMF/WB/WTO - Fix it or nix it?
Green Left Weekly #402, April 19, 2000
http://www.greenleft.org.au/
Demonstrators in Washington, D.C., for the World Bank-International Monetary Fund (IMF) joint meeting on April 18-19, will take up where those who protested in Seattle in December against the World Trade Organisation (WTO) left off: they will seek to "shut it down".
The demonstrators will argue that the IMF and World Bank are institutions at the cutting edge of efforts by transnational corporations and imperialist governments to deepen their dominance of the world economy. They can back their arguments with a mountain of data from all over the world.
They are a part of a growing global movement to challenge the claim that "globalisation" is an objective, can't-be-hindered process, rather than an ideological cover for corporate tyranny.
For the moment, this movement has forced the IMF and the World Bank, formed in 1944 at the Bretton-Woods summit, and the WTO, formed in 1995, onto the back foot.
Counter-offensive
These normally impenetrable institutions have at last been forced to defend themselves against claims that their policies and practices have brought poverty and misery to the Third World, accelerated the destruction of the environment, worsened global inequality and prompted a "race to the bottom" in labour and human rights standards.
These institutions are even criticised from elite circles. A bipartisan US congressional advisory report, the Meltzer report, has recommended an overhaul of the IMF's functions, arguing that it withdraw from issuing long-term loans and use its existing assets to relieve debts owed to it. Free trade Democrats and Republicans have rejected the report and are unlikely to adopt its more significant recommendations.
But the IMF, the World Bank and the WTO, as well as the transnational corporations and governments which back and control them, are planning a counter-offensive. They are attempting to co-opt critics with promises of reform and offers of a "seat at the table".
The World Bank has pioneered this since it was embarrassed by protests during its 50th anniversary year in 1994. It now claims to focus its attention on "poverty alleviation".
The World Bank has also re-focussed on extensive consultation with non-government organisations (NGOs). According to the December 11 Economist, more than 70 NGO specialists work in the bank's field offices and more than half of its 1998 projects involved NGOs.
The World Bank's claim to have changed was bolstered during the tenure of Joseph Stiglitz as the bank's chief economist, hired in 1997. While hardly a radical, he questioned the Bretton Woods institutions' relationship with the US treasury and criticised Washington's "hypocrisy and double standards". He even described the US and the IMF's disastrous "shock therapy" prescriptions for Russia as a "damning indictment of those who rely on simple text-book models or naive ideology".
Stiglitz was gone by the end of 1999. According to a World Bank insider, writing in the February 10 issue of Left Business Observer, "for Stiglitz to have been reappointed to a second term, [US] Treasury Secretary Lawrence Summers would've had to agree. Summers didn't. In fact, Summers made it clear that if [James] Wolfensohn wanted a second term as World Bank president — to start on June 1, 2000 — Stiglitz had to go."
The IMF has made similar, albeit more recent, attempts to convince critics that it has changed tack. It has changed the names of the Enhanced Structural Adjustment Facility, under which debtor countries are forced to open up their economies to greater Western trade and investment, to the Poverty Reduction and Growth Facility.
IMF managing director Michel Camdessus has said that, with the change, "The IMF is now well-equipped to give a new impulse to the fight against poverty", even though the same poverty inducing conditions will still be attached.
Even the WTO is making noises. US trade representative Charlene Barshevsky, whose dictatorial methods at the Seattle WTO ministerial meeting contributed to its breakdown, promised immediately afterwards "a greater degree of internal transparency and inclusion". US President Bill Clinton has lent his support to the formation of a labour rights working group within the WTO.
Choices
While many campaigners are unimpressed, the co-option mechanisms already in place prove that, as the saying goes, you can fool some of the people some of the time.
For many protesting in Seattle and in Washington, a catch-cry has been "fix it or nix it", meaning that the World Bank, IMF and WTO either change their ways or be abolished.
However, "fix it or nix it" can also describe the choices facing the movement: does it seek to reform and reorient the imperialist financial institutions or does it seek to ultimately abolish them?
In one corner is the US trade union federation, the AFL-CIO, and what the Economist calls "technical NGOs" ("staffed overwhelming with lawyers" who have become "expert in the minutiae" of trade and finance policy), such as Oxfam International. These organisations are primarily concerned with amending the "rules" of global capitalism rather than junking them.
According to the AFL-CIO's assistant director for international economics, Thea Lee, writing in the December 6 US Nation, "Our ultimate goal is to incorporate workers' rights and environmental protections into WTO rules. But we can't start with that. In the short term we hope to force the WTO to acknowledge that its actions have a bearing on labour standards and begin a conversation that will one day lead to a change in the rules."
In Seattle, the AFL-CIO's aim was to secure, in Teamsters' Union president James Hoffa's words, "a place at the table" in the form of a labour rights working group within the WTO. The federation was overjoyed when Clinton promised exactly that.
The AFL-CIO's other battle cries in Seattle were opposition to China joining the WTO and greater protection from imports for US-produced steel. The union tops condemned more militant protesters who "destroyed property".
In the opposite corner are more radical and activist forces that are wary of co-option and understand that reversing corporate economic dominance involves more that "better" clauses in agreements.
The Third World Network's Martin Khor argues that incorporating labour rights and environmental standards into WTO agreements — the "social clause" — would hand the major capitalist powers another protectionist stick with which to beat the Third World. Such standards could only be enforced through the WTO's normal disciplinary process, which includes heavy trade sanctions.
"If our aim is really to improve labour and environmental standards worldwide", Khor told the November Multinational Monitor, "then we have to choose a venue or a forum that is going to work towards that goal and to be able to succeed. The WTO is not that forum because the WTO is ... mainly an institution dominated and controlled by the big powers."
Patrick Bond, a South African anti-corporate activist, argues in the February 24 edition of ZNet that calls for such a "social clause" are a "wedge issue" with which "free trade ideologues and bureaucrats ... seek to seduce pliable movement bureaucrats from NGOs, unions and environmental groups with the offer of a 'seat at the table'".
Bond describes hopes for "social contracts between big global government, transnational corporations and the leading fractions of unions" as "utopian notions". Capitalist governments and imperialist financial institutions will act in their own interests, and to the detriment of workers and the environment, regardless of what promises appear above their signatures.
A meeting of social movement activists and trade unionists in Johannesburg last November rejected "social clauses" because they believed that "the potential value of clauses was outweighed ... by the damage done to power relations through amplifying the legitimacy and power of the WTO", Bond reported. The November summit of the Jubilee South coalition, which demands the abolition of Third World debt, called for the IMF and World Bank to be abolished.
In the editorial of its special Seattle issue, "Dismantle the WTO", Multinational Monitor warns that until it is able to "shut the agency down", the movement "must be careful in selecting [its] reform agenda. Reforms that add new areas of competence to the WTO or enhance its authority go in the wrong direction, even if the new areas appear desirable."
In contrast, "reforms that limit the WTO's authority ... are necessary and beneficial in their own right and they help create momentum to close down the WTO", the magazine argued. Measures such as "denying [the WTO] the power to invalidate laws passed pursuant to international environmental agreements, limiting application of WTO agricultural rules in the Third World, or eliminating certain subject matters (such as essential medicines or life forms) from coverage".
The radicals argue that the pro-corporate policies of the WTO, IMF and World Bank are due to more than the free market orthodoxy that prevails amongst those bodies' economists. It is because they are controlled by the major imperialist governments, the US in particular. Nobody can convince such bodies to cease to enforce and expand the power of international capitalism.
Australian debate
In Australia, the "fix it or nix it" debate is yet to take off. Most campaigners, while agreed on what they oppose, are still vague about their demands, which include calls for greater democracy, respect for the environment and global equality and for "fair trade, not free trade".
The S11 coalition is organising mass protests to shut down the September meeting of the World Economic Forum of transnational corporations in Melbourne, but it is yet to discuss whether it supports a demand to close the entire institutions, rather than just its meetings.
Pat Ranald, convener of the Australian Fair Trade and Investment Network, told Green Left Weekly that AFTINET calls for a "critical reassessment" of all the WTO's structures and agreements but says that it has yet to formulate a detailed policy on the existence of the IMF and World Bank.
Melanie Gillbank, spokesperson for Aid/WATCH, one of the sponsors of the Washington, D.C., protests, argues that the WTO, and by extension the IMF and World Bank, should be abolished — once attempts to reform have been exhausted. Such attempts to reform are "hard, if not impossible", she said, "because they would have to admit that their past policies have caused major harm".
Asked if reform of the international financial institutions is possible, Friends of the Earth Victoria's Cam Walker told Green Left Weekly that "in all honesty, no, but we can't afford to walk away [from engagement] in the hope [that they] will just go away. We have to slow globalisation."
Walker believe that the growth of public protest indicates that "by building alliances, all sectors are more powerful, certainly more powerful than if they're at the negotiating table. We need to play the game [inside these bodies] but it's no longer the main game."
The Democratic Socialist Party's Doug Lorimer argues that the longer Australian campaigners delay the discussion on what attitude to take toward the imperialist financial institutions, the more likely the movement is to be sidetracked, blunted or co-opted.
Lorimer pointed to Australian union officials, like Australian Manufacturing Workers Union secretary Doug Cameron, the only Australian union leader in Seattle during the protests, who seems eager to follow the protectionist, "insider" path of his AFL-CIO colleagues.
If those who seek to fight the WTO, IMF and World Bank, Lorimer told Green Left Weekly, "don't get it straight about what they are fighting against — that it's not just the rules or the structures that are the problem but that these bodies are part of imperialism's power structure — then they're going to end up supporting reactionary causes, like defending Australian nationalism, or the myths that you can have global justice while a corporate ruling class still rules and you can have capitalism with a human face".
While attempts at co-option may be accelerating, it was the more radical, abolitionist attitude that most attracted the militant, and mainly young demonstrators in Seattle, whose favourite chants included, "Capitalism, no thanks, we'll burn your fucking banks".
BY SEAN HEALY