World Bank, IMF exploit developing countries

By Kirsten Isaacson

Recently, I observed a woman wearing a T-shirt that read,
“Nation of sheep, led by pigs, ruled by wolves.” This
struck me as humorous at the time, but upon reading David
Wu’s Viewpoint submission (“IMF, World Bank protesters
buy into hype,” Viewpoint, April 24), I realized just how
depressing the truth to that statement was.

All too often, we accept the proposed system and its set of
values rather than questioning its motives and realizing that it is
well within our power and realm of responsibility to change it. Wu
found the World Bank and International Monetary Fund protesters who
converged on Washington, D.C. to be “disturbing” and he
wondered, “if the protesters really understand what
globalization is.”

As one of the thousands of protesters, I must contend that I
know exactly why I traveled across the country to hold my sign and
chant in the face of police officers outfitted in riot gear.

The World Bank and IMF are institutions poorly understood by the
American public and, until recently, have been blindly accepted.
Their misguided dogma of development and their undemocratic
institutional structures must be reformed; their version of
globalization is our common enemy and must be stopped. After 50
years and billions of dollars, the World Bank and IMF still fail to
eliminate poverty or facilitate free trade. This is why thousands
of people who have been able to see past the false development
doctrine, have converged on Seattle and Washington D.C., and will
converge again in Philadelphia (for the Republican National
Convention), Los Angeles (for the Democratic National Convention),
and more cities worldwide until change is enacted and justice for
all of humanity is achieved.

The particular process of globalization that is facilitated by
the World Bank and IMF does nothing to encourage free trade, but
rather does all in its power to encourage the expansion of western
domination and the protection of those institutions’
interests. Wu attempts to discredit the anti-globalization
activists by stating that, “the concentration of trade
resides mainly in Western Europe, Japan, North America and other
Asian countries.”

I find this statement interesting when we take into
consideration that coffee, the second most traded commodity in the
world (preceded only by oil), can only be grown in tropical
regions. In addition to nations within Southeast Asia, coffee
production is concentrated in Central and Latin America, as well as
sub-Saharan Africa. The appropriate issue at stake is not a lack of
trade or the expansion of trade; rather, it is the lack of equity
and justice promoted by IMF and World Bank programs.

The World Bank aims to eliminate poverty. But in reality, the
bank ensures that poverty remains, and arguably, the bank is
responsible for the massive debt accumulation of developing
nations. As president of the World Bank for 13 years (1968-1981),
Robert McNamara significantly molded it into the institution we
know today.

He created a virtual quota system governing the amount of
lending issued, resulting in loans not being granted to specific,
feasible projects, but rather as hasty investments made to any
government that would accept. There was a six-fold increase in real
terms, with the amount of loans increasing from millions to
billions. Unfortunately, the gain in quantity came at the expense
of quality. Thus, numerous developing nations were at risk of
default as projects failed to produce revenue.

Exacerbating the already heavy accumulating debt within
developing nations, Structural Adjustment Programs became
requisites for loan acquisition. SAPs are a series of neo-liberal
policy reforms mandated prior to receiving a World Bank loan. The
removal of all trade barriers, devaluation of currency, and cutting
of state expenditures are typical of an SAP. Unfortunately, debts
are held in U.S. dollars, and thus upon devaluation of the
developing nation’s currency, the debt increases.

As well, the cutting of state expenditures is mainly applied to
social services; in the name of “development,” schools
are closed, health services are discontinued and real lives are
sacrificed. The World Bank discourages the undertaking of any
social project. In this quest for a “developed” world,
how can progress be measured without investments in education or
the basic health of a population?

I believe that development must occur on all levels in order to
be matched with success. A nation’s progress in trade and
economic terms is only sustainable if accompanied by compulsory
education, environmental sustainability and physical health for all
peoples. Thus, investments are required on multiple levels for true
progress to be made. But the World Bank considers its loans,
“with due attention to considerations of economy and
efficiency and without regard to political or other non-economic
influences or considerations.”

Neither institution nor person is exempt from politics; how can
appropriate decisions be made if political and “other
non-economic influences” are not considered? I hate to buck
against orthodox theory, but as a species, we are much more than
rational, economic actors.

Not only is the World Bank and IMF’s foundational approach
lacking in multiple realms, but both are completely undemocratic
institutions. Actions are hidden under a veil of secrecy that
protesters are just now trying to lift up. Taxpayers’ money
goes to fund these institutions; the public has a right to demand
accountability. Instead, the institutions pay greater heed to their
partners on Wall Street and have absolutely no public
responsibility. Any form of government that has no loyalty to the
voice of the people is unnecessary.

Officials at the IMF and World Bank are not elected and the
system’s basic structure is undemocratic. A nation’s
voice within the IMF and World Bank forum is directly related to
the size of its wallet. So, the rich, developed nations are able to
dominate the developing nations and dictate how they should evolve
economically. The institutions ensure that there are no barriers or
restrictions to the infusion of northern foreign capital within
developing markets. But basic history indicates just how
hypocritical these policies are, as the United States, in
particular, industrialized its economy under heavy protectionist
tariffs, and even still today has critical policies limiting
foreign competition in certain markets.

The interdependence and connectivity of world markets associated
with globalization is not what I protest against. I raise arms
against the unfair exploitation and outright abuse of fellow human
beings in the name of capitalism. Unfortunately, greedy, power
hungry governments and corporations have become obsessed with the
accumulation of monetary wealth at the expense of the world’s
poor. Under the facade of promoting free trade, they ensure their
edge on the market. The World Bank and IMF must stop serving the
needs of these pigs and wolves.