by Walden Bello*
WASHINGTON, DC--Sure, the demonstrators who converged on Washington on April 16 and 17 were not able to prevent the World Bank and the International Monetary Fund (IMF) from holding their regular spring meetings. But though they may not have achieved their tactical goal, the anti-IMF and World Bank protesters and critics were able to pull off a great strategic victory.
The dynamics of the last week were similar to that of the Vietnamese Tet Offensive in 1968, where the ultimate measure of victory was not the gaining and holding of territory but the fatal undermining of the aggressor's will to win the war.
Thirty thousands demonstrators. One thousand three hundreds individuals who courted arrest. Over a week of intense media coverage of the Bretton Woods institutions and their critics. These were the facts against which the organizers of the great spring offensive against the two multilateral agencies unanimously declared victory. As Kevin Danaher of Global Exchange put it, "We have pulled off something that we were never able to do before: imprint the World Bank and the IMF as major problems in the American political consciousness."
Njoki Njehu of Kenya, the coordinator of the 50 Years is Enough Campaign, put things in perspective: "It's a miracle. At last year's spring meeting, we were able to get only 25 people to come down to Washington to protest. Our best mobilizations in the past never drew more than 400 people, max."
"That this meeting of two secretive institutions which have such influence on the lives of billions of people could only take place under massive police protection against people who shut down an entire city- -there could be no better image of what these two organizations are about," said John Cavanagh, director of the Institute for Policy Studies, a progressive Washington think-tank.
IMF under Fire The Battle of Washington came on the heels of a series of demoralizing developments for the IMF and the World Bank. The IMF had been widely criticized for its role in the Asian financial crisis, with critics and in out of the establishment faulting it for encouraging the indiscriminate capital account liberalization that precipitated the crisis, assembling massive rescue packages to ensure the repayment of foreign banks and speculative in vestors, imposing stringent fiscal and monetary programs that only made the crisis worse, and pushing investment and trade liberalization measures that resulted in US and European corporations acquiring Asian assets at fi resale prices.
The Fund's dismal performance in the Asian financial crisis merely amplified what many analysts had been saying for years about the IMF's record in Latin America and Africa, where IMF-World Bank "structural adjustment" pr ograms that cut back government expenditures and promoted radical trade and investment liberalization, deregulation, and privatization had not brought about growth but institutionalized economic stagnation, created more p overty, and increased inequality both within and between countries.
The massive global resentment building up against the Fund was symbolized by the widespread delight that greeted the throwing of a cream pie on former Managing Director Michel Camdessus' face by Robert Naiman of the 50 Ye ars Is Enough Campaign just as the Frenchman was about to deliver his farewell speech of his career at the UNCTAD Conference in Bangkok last February.
PR Effort Set Back The World Bank's situation was slightly different. Under President James Wolfensohn, the World Bank over the last few years has sought to distance itself from the Fund in a major public relations effort to promote a new i mage as an anti-poverty organization. That effort was stopped dead in its tracks last month with the release of the report of the International Financial Institution Advisory Commission delegated by the US Congress to ass ess the performance of the World Bank and the IMF. Better known as the Meltzer Report after its Commission Chairman Arthur Meltzer, the document stated, among other things, that 80 per cent of the World Bank's resources h ave gone to a few countries that are among the richer economies in developing world and that Bank projects have had a failure rate ranging from 65 to 70 per cent.
More broadly, the Meltzer Commission argued that: - instead of promoting growth, the IMF institutionalizes economic stagnation; - the World Bank is irrelevant rather than central to the goal of eliminating global poverty; - both institutions are to a great extent driven by the interests of key political and economic institutions in the G-7 countries--particularly, the US government and US financial interests; and - the dynamics of both institutions derive not so much from the external demands of poverty alleviation or promoting growth but from the internal imperative of bureaucratic empire-building.
Towards Seattle II But probably the biggest factor that accounted for the large masses of people that came to Washington was the "Battle of Seattle" last December 1999. The massive protest that helped bring down the Third Ministerial of the World Trade Organization (WTO) was like a thunderbolt that activated widespread latent resentments against globalization that have been percolating among large numbers of people in the US and internationally. Promoting c orporate-led globalization has been widely identified as the mission of the mission not only of the WTO but also the World Bank and the IMF. Speaker after speaker at the six-hour rally at the Ellipse, the park at the back of the White House, welcomed the protestors to "Seattle II." And a great number of those who came in all probability came to convert Washington into another Seattle. Seattle has now been converted in the global conscious ness into that rarest of rare events: a people's victory.
Demoralized and Bewildered In contrast, the crisis of legitimacy and confidence is very palpable among World Bank and IMF technocrats to whom the mass civil disobedience this weekend is the culmination of months of feeling besieged. Many staff memb ers of both institutions now see their jobs on the line, with the prospect that their organizations might be drastically downsized, if not eliminated. To shore up the morale of his staff, World Bank President James Wolfen sohn issued a memo last week acknowledging that "the next week will be a trying time for all of us." He went on to claim, however, that "we can and should be proud of the work we do in fighting poverty. This is a noble ta sk, and a human one. Our staff is as devoted and effective as any in the world."
Fine words. But few can take comfort from the fact that Larry Summers, the US Secretary of the Treasury, the agency that has the strongest voice in these institutions, has lately been voicing his agreement with some criti cisms of the functioning of the two organizations and with proposals to "downsize" the two institutions. The approximately 11,000 personnel of the two organizations are said to be the most highly paid civil service employ ees in the world. "They would be smart to start sending out resumes," said World Bank critic Anuradha Mittal of Food First.
For many of us who have spent a good part of the last 25 years trying to expose the destructive impact and arrogance of the two institutions, this weekend's events have been simply too good to be true. In the late seventi es, when my colleagues and I broke into the World Bank to steal the 3,000 pages of documents that became the raw material for the book Development Debacle: The World Bank in the Philippines, the Bank and the Fund were, si mply put, indestructible. This weekend I could hardly believe that tens of thousands of people were cheering, wildly, when I stated at the rally at the Ellipse that "I have not come to Washington to dialogue with the Fund and the Bank. I did not come to reform the Fund and the Bank. I came to join you in shutting down these Jurassic institutions."
The world has indeed turned upside down.
*Executive Director of Focus on the Global South and Professor of sociology and public administration at the University of the Philippines
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