Patrick Bond

"We

can’t REALLY aim to shut down the International Monetary Fund and World Bank,

you know, Patrick. What would we do without them? What would take their

place?"

I

hear this too much in the run-up to the mid- April Mobilization for Global

Justice in Washington, DC. Are activists getting the detailed information needed

to take on the IMF and Bank with the militancy that Seattle-East deserves?

Even

some well-intentioned, smart progressives involved in defining international

movement strategy don’t have the imagination to think of a world free of an

enemy they have grown perhaps a bit too comfortable with, or alternatively too

fearful of to consider life without. Worse, some in the Jubilee 2000 US movement

view the current debate as an opportunity to lobby for a greater, not lesser

role, for the IMF, Bank, their discredited "Highly Indebted Poor

Countries" debt relief initiative, or the new IMF "poverty

reduction" scam.

The

comradely criticism below is meant to bolster the folk who’ll be on the streets

of Washington and who may want, in contrast, a few good reasons to shut down the

IMF and World Bank–not just for a couple of days, but for good.

For

the specter haunting the Bank was remarked upon by its president, James

Wolfensohn, in a speech to Western Hemisphere finance officials in Mexico last

month: "Let us not let radicals in Seattle scare us from the task of

adjusting to globalization and giving greater opportunities to our people."

Fix

it or nix it?

Should

we adjust the IMF/Bank, or instead seek to abolish these big, undemocratic,

inefficient, corporate-oriented dinosaurs? While retaining unity in the upcoming

mass protest, it’s still useful to clarify strategic differences, so that lines

of demarcation don’t occur over trivia such as whether or where to break

windows, but instead over the arguments we deploy, and the demands we make.

The

right is also mulling this over. A gaggle of conservative economists in the

congressional Meltzer Commission pronounced, earlier this month, that the IMF,

Bank and three regional development banks in Asia, Africa and Latin America are

so badly warped that they must shrivel, quite dramatically, before being

straightened out.

On

the left, the choices have been reduced– crudely but helpfully, I’d say–to the

slogans "fix- it" versus "nix it."

Fixers

correctly argue that the IMF and Bank have been pressured to adopt reforms over

the past 15 or so years. Nixers rebut that these must be measured against the

worsening scale of eco-socio-economic damage done by the terrible twins over the

same period.

In

five areas–environmental protection, gender awareness, transparency, community

participation and post-Washington Consensus economics–the reformers can claim

victories, yes. But those very wins have allowed the Bank, especially, to

whitewash itself, disguising a thorough-going commitment to hardcore

neoliberalism with happy talk about sustainability, in the process dividing

opponents and hiring famous ex-critics.

Empowered

by the Bank’s plagiarism of NGO rhetoric, some inside-Beltway policy wonks are

even suggesting that Wolfensohn switch the focus of lending to sectors like

basic education. The slogan invoked from time to time–"Public funds for

public good"–is fundamentally misguided, I will conclude below.

How

far can reform go? Reflecting the realpolitik of institutional constipation, it

is now widely acknowledged that late last year, maverick Bank chief economist

Joe Stiglitz–who during his 1997-99 term was roundly despised by IMF and US

Treasury bigwigs– got pushed overboard. (Stiglitz diplomatically claimed to

have jumped ship, in order to have more freedom to launch his critiques.)

According

to a reliable Bank insider quoted in the February issue of Doug Henwood’s Left

Business Observer, "Summers made it clear that if Wolfensohn wanted a

second term as World Bank president–to start on June 1, 2000–Stiglitz had to

go."

Serious

campaigners acknowledge the point: reforms won to date are deeply unsatisfying.

But matters get more complicated yet.

Inside-Beltway

strategy

Straddling

the reform/abolition fence is a "fix-it or nix-it" faction, who make

demands on the international institutions that are going to be awfully

difficult, if not impossible, to meet–and if after a year they’re not, pressure

will be ratcheted up towards abolition. In a letter last week from the

indefatigable Public Citizen and its allies to the WTO, the latest version calls

for the enemy to "shrink or sink."

Although

this might be a wise baby-step, tactically, so as to solidify alliances

(especially with AFL-CIO heavies) before attempting more rapid progress, the

danger is that both as a slogan and a strategy, it confuses the grassroots base.

The

base militants, after all, lack the time and patience to follow the latest

public relations gambits and fake reforms, and have every good reason to

mistrust some of the Washington-based strategists, especially in the debt relief

movement (for the Jubilee South network’s powerful critique of the weakness of

Northern debt campaigning to date, see the link at http://www.aidc.org.za).

I

admit to having a hard time keeping up, myself, with the continual permutations

on reform that flit through my e-mail inbox. What I do know, however, is that

highly questionable deals regularly get done between international NGOs and the

Bank’s sophisticated NGO flack-catching unit (led by former Oxfam anti-Bank guru

John Clark).

Fixers

should acknowledge that power relations don’t yet afford the possibility of real

reform through a negotiated surrender (as was achieved here in Johannesburg

against apartheid officials in talks that lasted from 1990-94). Under current

conditions, it is delusional for environmental, developmental and human rights

NGOs, and organised labor, to formally meet their 18th and H Street foes during

the mid- April IMF/Bank sessions, in the expectation of realising meaningful

concessions.

Recognising

this, the excellent "50 Years is Enough Network" is asking colleagues

for a moratorium on backroom consultations because of the likelihood of

"`divide and conquer’ or `good’ NGO/`bad’ NGO tactics on the part of Bank

and Fund officials."

Perhaps

Mobilization organizers like Njoki Njehu and Soren Ambrose (both based at 50

Years, and extremely well regarded throughout the world movement) can continue

keeping reformers and abolitionists marching in step. But once the Washington

dust settles, this debate is worth settling conclusively.

Do

we need the Bank and IMF?

It

revolves around competing visions of a democratic global state, on the one hand,

and on the other, the reality that the economic institutions operating at world

scale (IMF, Bank, WTO) will in the foreseeable future be rigidly controlled by

malevolent economists. The man running the show, after all, Summers, signed a

memo with the most famous sentence in development-industry history, when he was

Bank chief economist in December 1991: "I think the economic logic of

dumping a load of toxic waste on the lowest-wage country is impeccable and we

should face up to that."

I’ll

return to the world state theme in a later Z-Net column, drawing on academic

debates which are gravitating towards the same conflict. Meantime, the

abolitionist position emerging especially from South sources should be given

maximum credence. Third World movements are struggling under very difficult

conditions, even for the freedom to simply demand, without fear of persecution,

that the IMF/Bank leave their countries.

Personally,

I speak for no one in particular, except to say that the key institutions in my

own activist circuits–the Campaign Against Neoliberalism in South Africa,

Jubilee 2000 SA and the Alternative Information and Development Centre (CapeTown

and Jo’burg)–are adamant, first, that Bank staff must leave Pretoria

immediately, given the awesome damage they’ve done over the past decade; and

second, that progressive northern allies should be working to lift the boot of

the IMF/Bank off southern necks. That means, in short, that the Bretton Woods

Twins must be delegitimized, defunded and decommissioned.

Experience

in post-apartheid South Africa has provided three universal reasons for nixing

the IMF/Bank (there are also reasons drawn from specific project experiences too

numerous to explore here):

 virtually

all possible core value reforms in  key areas of eco-socio-economic

advocacy have  been explored, and the profound limitations  unveiled;

 

there

is a greater urgency to restore economic  sovereignty to nation-states,

mainly through  releasing IMF/Bank pressures, than there is time  to

convince several tens of thousands of hardened  economists to change the

Washington Consensus  policy advice that has defined their worldview  since

grad school; and  

the

hard-currency component of Bank and IMF  lending is generally not required,

and indeed is  damaging to balanced development.

In

what currency can you measure development?

It

may be useful to justify the latter argument, and in the process answer the

opening question. Consider the viewpoint of the African National Congress in its

1994 Reconstruction and Development Programme (RDP), in a sentence won only

after much left-wing lobbying: "The RDP must use foreign debt financing

only for those elements of the programme that can potentially increase our

capacity for earning foreign exchange." (The ANC broke more than one such

promise, but it is the principle here that is worth careful consideration.)

The

motivation for rejecting hard-currency loans for "development" was the

ANC left’s fear of the rising cost of repayment on foreign debt, once the

currency declines, and the use of hard currency not to pay for a basic education

project but instead to a) repay illegitimate apartheid debt, b) import luxury

goods for the rich, and c) replace local workers with inappropriate job-killing

technology from abroad. In sum, why take a US dollar loan for building and

staffing a small rural school with virtually no foreign input costs?

This

point was conceded even by former Bank chief economist Anne Krueger (an arch-neoliberal)

in her Meltzer Commission input: "Questions also arise as to the `foreign

exchange component’ of some of the social sector (and other) projects."

Citing the 1998 Bank Annual Report, Krueger queried "the foreign exchange

expenditures associated, for example, with a Bank loan of $5 million, described

as a `learning and innovation loan… [to] test and promote community-based

child care and reintegrating Bucharest’s street children more fully into

society’."

If

real development comes from local resources (only a tiny fraction of basic-need

inputs in most developing countries require foreign loans), and if the hard

currency needed to import petroleum or other vital inputs can usually be

supplied by export credit agencies, the basic rationale for the World Bank

begins to fall away. We don’t need a World Bank and IMF, and without them,

financial markets should and can finally be tamed (and development finance

provided) within national borders, using tried-and- tested exchange controls.

Bankrupt

the Bank

That

is why, in addition to defunding the IMF/Bank through pressure on Congress (and

indeed all parliaments) to deny them further resources (the AFL- CIO

inexplicably backed the last IMF recapitalisation), the Bank’s extreme

dependency upon international bond markets–where it raises most of its funds

for onlending–is now the most compelling pressure point we have for the

medium-term struggle.

Hence,

a "World Bank Bond Boycott" initiated by Haitian, South African,

Brazilian and many other activists and debt campaigners across the world, will

be launched during the mid-April protests. All investors of conscience–pension

funds, churches, university endowments, individuals–are being asked not to

profit from poverty and ecological destruction through their portfolio’s World

Bank bond holdings. There’s a clear echo, here, of targeting companies active in

South Africa for disinvestment during the 1960s-90s anti-apartheid campaign.

If

A-16 gives activists an initial opportunity to run on the Bank and IMF, the

nix-it challenge afterwards will be to keep the institutions running, until they

drop of exhaustion.

Patrick

Bond’s "Elite Transition: From Apartheid to Neoliberalism in South

Africa," was published this month by Pluto Press (http://www.plutobooks.com),

and contains two chapters on the important Bank/IMF role in denying the

country a fully-fledged liberation.