The Hindu : `World Bank policies promote globalisation'

Online edition of India's National Newspaper
Thursday, Jan 22, 2004

National

National

`World Bank policies promote globalisation'

By Gargi Parsai

MUMBAI, JAN. 21. A group of international activists at the World Social Forum (WSF) here shared their experiences on how they got together to conduct an international audit of World Bank debts to examine how governments utilised those funds.

According to Rick Rowden, Policy Officer for ActionAid USA, the World Bank (WB) did not audit the money spent by governments, which led to corruption. Their "Jubilee 2000" initiative would reveal whether the debt burden on citizens had increased because of funds that were not used wisely, wasted or stolen through corrupt means by governments and bureaucracy.

At an interactive session, activists brought out the connection between the International Monetary Fund (IMF), the WB and the World Trade Organisation (WTO). It was pointed out that between 1995-97, the WB and the IMF started to make formal agreements for free trade, neo-liberalisation, economic reforms, privatisation and structural adjustments to enable mega business corporations to go "unlimited and unrestricted" into other countries.

World Bank funding gave the bank the clout to dictate policies to governments, leading to strategies that promoted globalisation and interests of multinational corporations involved in services, telecom, finance, insurance, health care education, water and agriculture. Having saturated the markets in the developed countries, big corporations needed to find new markets for their services.

Mr. Rowden said the WB and the IMF had influenced the WTO by being observers to negotiations that were governed by different sets of rules for the developed and developed countries. The IMF itself did annual surveillance reports to assess whether a developing country had completed structural adjustment before the WB provided funds.

The WB offered funding to developing countries for "Capacity Building" of trade negotiators, customs officers under the Integrated Framework for Trade Ruled Technical Assistance. This brought together WB/IMF, UNTAC, UNDP, DANIDA, SIDA and such agencies with support and money to implement and monitor these agreements. "The risk is that even if hard conditions are not made around loans, such Capacity Building Measure studies come up with recommendations that favour free trade and privatisation," said Jeff Powell, Communications and Research Officer of the Breton Wood Project, U.K.

Some 40 WB-aided poor countries were asked in 1999 to prepare a Poverty Reduction Strategy Paper (PRSP) to earn themselves debt relief. In order to get the paper endorsed by the WB board, they were forced to follow the bank's norms. Otherwise, they would be deprived of further loans and their approvals meant getting into debt.

Historically, industrial nations such as the United States, the European Union and Japan have had hard regulations to restrict foreign investors with instruments such as high taxes, use of local labour and adhering to local laws etc. But, in the WTO, these very countries were pushing for "National Treatment" (level playing field) to foreign investors. "Even while these negotiations are on, the IMF and WB are taking one developing country at a time and making them treat foreign investors like national companies through their conditions for loans. The same is their claim for government contracts and dumping. Thus, WB/IMF/ WTO are working together through loan conditions to reinforce the WTO process before they have been finalised," Mr. Rowden said.

In the last 10 years, short-term private interests had become predominant and long-term public interests had become subordinate to them. The WSF was a challenge to such process. It was no longer about left or right. It was a global response to globalisation for private interest. It was about ecology, social justice, citizens' engagement, transparency and democracy. Citizens must hold their governments accountable, he said.

The activists were upset at the lack of support from the media. "Media is the biggest problem activists have in the U.S. We are unable to access fellow citizens because media corporates are corporations themselves. They put up propaganda in their own interest," Mr. Rowden added.

Printer friendly page
Send this article to Friends by E-Mail

National