Hard on the heels of a tough week defending the World Bank against charges that its policies create poverty and promote the interests of corporate capitalism, James Wolfensohn probably had mixed feelings when he turned to page 9 of the International Herald Tribune and saw oil-giant Exxon Mobil declare its support for the Bank (5 October).
In a quarter page ad, distinguished only by its lack of design pizzazz, the largest petroleum refining company in the world (and, incidentally, not a member of OPEC whose members have been villainised for keeping oil prices high despite the fact that 58 per cent of global oil production comes from non-OPEC members) quotes the World Bank report Growth is Good for the Poor (1) to justify its activities in the Third World.
Exxon Mobil we are told, in simple sans serif language, is “on the side of the tide” by which they mean that the rising tide of growth “lifts all boats”. However, they do not accept the simplistic view that growth per se is the silver bullet. No, we are told, what makes the difference is health, education and strong institutions. And if that is not enough to make you glow with gratitude that the third highest earning company in the world cares about the poor, they bring out the violins and push their implied corporate good housekeeping appeal to the limit. “One direct beneficiary of growth,” they assert, “is children.” To prove the point, there is a fabulously simplistic graph showing the dramatic drop in working children as national income rises. Of course, advertising specialises in simplification, but the message clear: Exxon Mobil though its association with the World Bank is a concerned and caring company.
What the advertisement doesn't say is that Exxon Mobil is also the major shareholder and principal operator of the controversial Chad Cameroon pipeline. No doubt the children of Chad and Cameroon -- where, respectively, 10 and 27 per cent are in secondary school (World Development Indicators, 2000) -- will benefit enormously from the corporate taxes of Exxon Mobil, whose 1999 end-of-year profit was US $7.91 billion and whose head office is located in Irving, Texas. Meanwhile, the governments of Chad and Cameroon have signed on to $100 million in non-concessional loans with the World Bank and the European Investment Bank simply for the privilege of being a “partner” in the $3.5 billion venture. Let’s hope oil prices stay up.
But aside from rich and powerful corporate buddies like Exxon Mobil, Mr Wolfensohn was hard-pressed to find friends during the World Bank IMF annual meetings in Prague.
Prague Castle or the Land of Oz?
In what should have been a public relations coup for the Bank and the Fund, the Czech Republic’s playwright dissident turned president Vaclav Havel invited the critics and the defenders to share a platform at the Prague Castle (see stories below by Walden Bello and Steven Pearlstein).
The critics were in top form, but didn’t say anything that either Wolfensohn and the IMF’s new managing director Horst Koehler have not already heard a thousand times. Yet they had no comeback. The best Wolfensohn could do was clamber up to the moral high ground and reassure us that he “has a heart.”
“When we go to work in the morning,” he said, “we think that we are fighting poverty. We do not think that we are responsible for 3 billion people living under $2 a day.”
Wolfensohn also tried to deflect blame by claiming to be “just a civil servant.” He was, admittedly, handed this excuse on a platter by Ann Pettifor of Jubilee 2000 UK when she commented that the real villains, the G7, were not on the podium. But Wolfensohn, who three years ago was claiming personal victory for the transformation of the Bank and is paid in excess of US $360,000 tax free for the pleasure, cannot sidestep his responsibilities or deny his real power so easily. Mr Koehler was no better, but managed – probably unwittingly – to make a dig at Wolfensohn by saying “I, too, have a heart," he said, "but I also have to use my brain to find solutions.” (Images of Dorothy swinging down the Yellow Brick Road with this pair as the Tin Man and Straw Man singing “If I only had a heart, if I only had a brain” were irresistible.)
After a lot of filler about having spent the first four months on the job “listening” Koehler’s thoughtful contribution to the debate was “Democracy and market oriented policies are the best way to go.”
Although the critics felt victorious, their assessment was vindicated the next day by the Washington Post’s report of the debate “Tough Crowd for IMF, World Bank Leaders in Prague” (see below). And in one of life’s sweet ironies, an IMF staffer was seen at the gates of the Castle pleading with officials for the Post’s journalist Steven Pearlstein to be allowed in, even though his name was not on the list. “It is terribly important that the Washington Post cover this event,” said the man from the IMF. Quite so.
Inside the meetings, the Bank also had a heavy time of it. Of course, the demonstration – before, during and after – dominated press conferences, but some disquiet about the Bank’s expansionist approach also floated to the surface.
The Development Committee (the joint ministerial committee of the board of governors of the Bank and the Fund) tugged on the Bank’s leash, warning that it should “clarify its agenda” and set out key criteria for the Bank’s involvement in “global public goods.” The G24 was far more critical – both of the Bank and of the Bank’s openness to civil society. Amongst a litany of pointed criticisms, the ministers expressed their concern about the “ever-mounting political pressures and non-economic considerations that are interfering with the process of approval and implementation of the BWI’s program and projects.” But they were also critical of the imbalances that exist in the system, noting the “application of codes and standards to be highly asymmetric” and calling for “equitable procedures for debt settlement.”
And of course the Bank and the Fund would have found few friends amongst the 12,000 activists who joined the overwhelmingly peaceful and festive protest. The convention centre was effectively under siege for six hours and caused such disquiet that the meeting closed one day early. The Bank’s vice president for external relations Mats Carlsson admitted as much when he explained the early closing to Reuters television, “We are having a consensus on many of the development issues, but it probably is also prompted by the demonstrations yesterday.”
A curse on all your houses
The Bank is also losing support from the establishment press, which formerly championed their neo-liberal rigour and is now clearly contemptuous of what they regard as Wolfensohn’s woolly “concessions” to the protestors.
The post-Prague Financial Times editorial put a “curse on all your houses” when it attacked in one blistering breath (which had all the markings of the splenetic NGO-bashing Martin Wolf) the demonstrators, the Bank and the Third World elites.
On the demonstrators, the editorial hysterically asked, “how is anyone to deal constructively with people who believe that throwing stones is the answer to world poverty.” It then lay all the blame for poverty at the feet of “predatory, indifferent or incompetent elites of the countries where most of the world’s poor live.” (This does beg the question: would the FT support stone throwing at Third World Leaders?)
But they keep the true venom for the Bank. After quoting Wolfensohn on poverty, “[it] is also about lack of voice, lack of representation, it is about vulnerability to abuse, its is about violence against women and fear of crime. It is about lack of self-esteem” the FT imperiously concludes: “A development institution that believes that poverty is about all this will collapse under its imperial overstretch.”
The Economist was only slightly kinder, noting in a review of the World Bank’s latest pro-growth publication The Quality of Growth that the Bank’s central (and in their view correct) development message is getting “blurred” because it is “bowing to the forces of rich- country NGOs and… and rich-country governments who care more about seeming enlightened than about doing what is right.”
Notwithstanding that both the Financial Times and The Economist are clearly incapable of engaging in a sensible discussion about what the critics of the Bank and the Fund are saying and apparently have not even noticed that hundreds of thousands of Zambians, Bolivians and Nigerians agree with the “uncivilised” elements of civil society (2), it is heart warming to see them turn on their own children.
I was only following orders Wolfensohn's transformation from the Man who Changed the Bank, to a mere functionnaire is not convincing. While he fell short of saying "I was only following orders," he did attempt to paint himself as the well-intentioned man of conscience, trapped between mendacious and corrupt governments, the all-powerful G7, carping NGOs and the world’s ever growing masses of poor, unemployed and endangered humans.
The truth is that the Bank raises 80 per cent of its funds on the private capital markets and while politics demands that NGOs be mollified, that Third World governments are accommodated and that the poor are, at least, acknowledged, at the end of the day it must be comforting to know that Exxon Mobil is still on your side.
(1) The Centre for Economic Policy Research has produced a critique of this report. The full report, "Globalization May Be Good For the Poor-- But are World Bank and IMF Policies Good for Growth?" is available at www.cepr.net along with the executive summary.
(2) The World Development Movement has compiled an invaluable report “States of Unrest: Resistance to IMF Policies in Poor Countries”. For full report: http://www.wdm.org.uk/cambriefs/DEBT/unrest.htm
(3) The World Bank Bonds Boycott is taking the US by storm. For more information contact Neil Watkins neil@econjustice.net World Bank bonds boycott campaign Center for Economic Justice, 1830 Connecticut Ave., NW, Washington, DC 20009. Tel: (202) 299-0020 Fax: (202) 299-0021 Web:www.worldbankboycott.org. To stay updated on the World Bank bonds boycott, join the listserve: Send blank e-mail to <bank-boycott- subscribe@egroups.com>Website