-Caveat Lector-
Wolfensohn in sheep's clothing
by Paul Swann / London Human Rights Forum
The recent speech on "The Other Crisis" by James Wolfensohn,
President of the World Bank, is reminiscent of a wolf dressed up
in sheep's clothing trying to talk his dinner into climbing into
the pot.
The global elite are evidently learning to speak the right
language, and Wolfensohn's fine words could hardly have been more
skillfully designed to lull the unsuspecting flock into trusting
their dubious intentions.
Consider them carefully.
A debt-based monetary system enslaves
Wolfensohn's call for a "new approach to development
partnership led by governments and parliaments of the countries,
influenced by the civil society of those countries" amounts to no
more than cosmetic adjustment of a system that is fundamentally
flawed. As long as the people and nations of the world are
subjected to a debt-based monetary system, we will remain
enslaved to the power elite who control the system.
We, civil society, must cry "Wolf" and demand AUTHENTIC
monetary reform and a GENUINELY new global financial architecture
that eradicates the parasitic elite and their corrupt
institutions. The bankers, corporations and toady politicians
must be set to work IN SERVICE TO the people and the planet,
before it's too late.
In one respect Wolfensohn is certainly right: "in a global
economy, it is the totality of change in a country that matters".
The global casino
It is time to re-think the basic assumptions on which our
societies are based. Corporate globalization and neoliberal
"free" market capitalism are not working for the benefit of all
people, but only for a few. The deregulated financial market ~
the global casino ~ is not working for the benefit of all people,
but only for a few. The debt-based monetary system is not working
for the benefit of all people, but only for a few. The mantra
of economic-growth-at-all-costs is not working for the benefit of
all people, but only for a few. Neither are our so-called
"democratic" political systems working for the benefit of all
people, but only for a few.
Yes, a systemic "totality of change" is called for in our
nations, but not of the kind that Wolfensohn envisages. Beyond
the rhetoric and hubris, his solutions are no more than a set of
re-vamped rules for more of the same old game -- lining the
pockets of the elite at everyone else's expense.
Wolfensohn is again right in saying:
"What we can do here and now is this: We can identify what
needs to be done. We can recognize the problems. We can clarify
our objectives. We can work to reach consensus. The problems are
too big, their consequences too important, to be guided by the
pat answers of the past, or the fads or ideologies of the day. We
must make a collective commitment to join together to build
something better."
The benefit of the few
Indeed we must. But are Wolfensohn and his ilk genuinely
prepared to put "the benefit of all people" at the head of the
agenda instead of the benefit of the few? Are they prepared to
make respect for the Earth a priority of our national and global
economic policies? Not on the evidence of the program set out in
this speech.
The self-styled "experts" are blind
Clearly there are no easy answers to the complex mess that
we've got ourselves into. With a few notable exceptions,
economists and other self-styled "experts" are blind to the root
causes of the looming global financial crisis. As Wolfensohn
says, "we have focused too much on the economics, without a
sufficient understanding of the social, the political, the
environmental, and the cultural aspects of society."
To that list of missing considerations may be added the
psychological, the spiritual, and the moral aspects of living in
a truly civilized society.
The tired old men in gray suits
Yes -- a "holistic framework" for a new financial
architecture is needed. And those best qualified to supply such
a framework are those who have educated THEMSELVES to think
holistically ~ ordinary people for the most part, men and women
who have learnt to combine their intuitive sense with a
penetrating analysis of what's wrong with the world. These are
the people who should be designing the new economic and political
systems, not the tired old men in gray suits who have failed us
so badly for so long.
Genuine repentance among the ranks of the de facto
leadership of our global economy is to be welcomed. But fine
words are cheap and the sincerity and intent of Wolfensohn's
declaration must be demonstrated in practical action.
The first step is to acknowledge that USURY, the creation of
money out of debt, and the mindset of continual growth are the
root causes of the global economic crisis.
Nothing less will suffice.
____________________________
The World Bank -- PLUNDER WITH A HUMAN FACE
by Asad Ismi
Z magazine, February 1998
Lately the World Bank has been striving to project a caring
image. First, there was its World Development Report (released in
June) which emphasized the important role of government in
improving health and education and reducing social inequality.
"Without [an effective state]," the Report stressed, "sustainable
development, both economic and social, is impossible." In July,
the Bank announced that it would look at the growing poverty and
income inequality that has resulted from the implementation of
its Structural Adjustment Programs (SAPs) in the Third World, in
collaboration with 30 non-governmental organizations (NGOs) which
have criticized Bank policies for these effects.
SAPs offer loans on condition that governments drastically
reduce public spending in favor of repayment of debt owed to
Western banks.
James Wolfensohn, the Bank's president, has earlier warned
that maldistribution of income threatened global stability.
At the World Bank's annual meeting in Hong Kong in
September, Wolfensohn called for a bank "rooted in villages and
poor countries," not in Washington. He has already announced
plans to send his staff to villages to learn about poverty.
In Hong Kong, the Bank and the International Monetary Fund
(IMF) also pledged to fight corruption (especially in developing
countries) which the Bank says flourishes when "economic policies
are poorly designed, education levels are low, civil society is
underdeveloped, and the accountability of public institutions is
weak."
As Wolfensohn put it, "the Bank has taken the moral high
ground. I will not accept that anyone else has a higher moral
ground."
Destructive Record
World Bank policies have devastated the Third World.
Between 1984 and l990, developing countries under SAPs
transferred $178 billion to Western commercial banks. So enormous
was the capital drain from the South that one former Bank
director remarked: "Not since the conquistadors plundered Latin
America has the world experienced such a flow in the direction we
see today." By severely restricting government spending in favor
of debt repayment, the loan terms of the Bank and the IMF have
eviscerated the state they wish to be "effective," leaving in its
wake spiraling poverty and hunger fueled by slashed food
subsidies and decimated health and education sectors.
After 12 years of following World Bank and IMF-imposed
policies, Latin America is going through "its worst period of
social and economic deprivation in half a century."
Of the region's 460 million people, nearly half are poor --
an increase of 60 million in ten years. But the number of Latin
American billionaires rose to 42 in 1994 from six in 1987.
Populations, overall, are worse off than they were in 1980.
According to the United Nations Economic Commission for Latin
America and the Caribbean (ECLAC), "the levels of [poverty] are
still considerably higher than those observed in 1980 while
income distribution seems to have worsened in virtually all
cases."
SAPs imposed on Peru by the World Bank and the IMF pushed 4
million people into extreme poverty, almost halved real wages,
and cut those with "adequate employment" to 15 percent of the
workforce.
Consequently, there has been a forced migration of
impoverished peasants and urban unemployed into coca growing as
an alternative to starvation. In 1991, in exchange for $100
million from the United States, Peru put in place the IMF
"structural adjustment" clause opening its markets to U. S. corn.
As a result, by 1995, corn cultivation had fallen tenfold and
coca production had grown by 50 percent.
Under these conditions, corruption has flourished; indeed
almost an entire economy has been criminalized.
Increased coca production means more cocaine trafficking
which has led to deepening official corruption in Peru as the
amount of money in the hands of drug lords increases. Drug
corruption has ensnared an increasing number of top military
officers and Vladimiro Montesinos, the head of Peru's
intelligence agency and a close advisor to President Fujimori.
This is hardly new for the World Bank, which has long financed
corrupt dictators.
Wolfensohn, who has pledged to fight corruption "wherever we
find it" defined the phenomenon as "exclusive: [corruption]
promotes the interests of the few over the many."
Exactly what World Bank policies do.
About Africa, the "concerned" World Bank chief economist has
admitted: "We did not think that the human cost of these
[structural adjustment] programs could be so great and the
economic gains so slow in coming." The World Bank predicts that
by the year 200O, 300 million Africans will be living below the
poverty line, a 50 percent increase over the 200 million figure
for 1994. Between 1984 and l990, the net outflow of financial
resources from Africa to the World Bank and the IMF totaled about
$5 billion. Africa's GNP fell by 2.2 percent in the 1980s and by
l990, its estimated per capita income was at the same level it
had been in 1960.
From 1990 to 1993, Zambia spent $37 million for primary
school education while giving 1.3 billion to international
bankers. Annually, Ghana spends about $75 million on all social
programs, less than 20 percent of its payments to foreign
creditors. Uganda spends less than $1 per capita on primary
health as opposed to $9 per person for debt repayment.
These three countries (considered models by the World Bank
for their diligence in carrying out austerity programs) sent $2.7
billion to international bankers in 1994.
Austerity for Others
While worsening poverty in the Third World with its extreme
austerity measures, the World Bank has been loath to take its own
medicine and has spent the money taken from necessary services in
the South on luxuries for ITSELF. The compensation for its
president is $105,000 a year while the senior 74 officers receive
more than $120,000. Employees have access to a free health club
and complimentary vacation travel. Michael Irwin, a former
personnel manager, described Bank employees as "living and
working comfortably in the Washington area, and venturing forth
in luxury ... out of touch with both the realities and causes of
poverty in the Third World. "
The World Bank is currently renovating its headquarters for
$314 million-more than $100 million above the original estimate.
About $300 million of this comes from the $2.7 billion loan
repayment of Uganda, Ghana, and Zambia in 1994. The remodeling
includes the insertion of gold leaf on ceilings at an estimated
cost of $1 million. Also being used is anegre, a very expensive
wood from Africa. The wood took four years to collect and the
company carrying out the work was paid more than $1 million.
Nor has the Bank's newfound "concern" for the poor extended
to the Pehuenche tribe in Chile, which is likely to be displaced
from its ancestral forests by dam construction financed by the
International Finance Corporation (IFC, the Bank's private sector
arm). The IFC signed a secret agreement with Endesa (the Chilean
utility in charge of constructing six dams) which included
resettlement provisions for about lOO,OOO members of the 5,000
strong Pehuenche tribe. The Indians were not informed of this.
Subsequent independent reports have been suppressed by
Wolfensohn. Theodore Downing, an anthropologist who wrote one of
these reports, has filed a complaint against the Bank and the
IFC, charging them with racism in the Pehuenche's treatment.
According to one observer, "[Wolfensohn] and his subordinates
have partaken in a conspiracy that will see the Indians either
'resettled' at higher elevations which could see them die of cold
or scattered in shiftless alcoholism on the outskirts of tourist
or corporate enclaves. This is what is meant by 'ethnocide'."
The U.S. Connection
It is hard to believe that the World Bank did not know about
the disastrous effects its policies would have on the Third World
whatever its officials might say. The Bank is dominated by the
United States and has long functioned as an arm of U.S. foreign
policy. The most notorious case of U.S. manipulation of Bank
policy was the ending of loans to the elected government of
Salvador Allende in Chile -- the first step in a U.S.-planned
destabilization.
Richard Nixon and Henry Kissinger used the Bank to (as the
president stated) "make the Chilean economy scream." The
subsequent economic crisis "paved the way for the bloody coup of
1973." The U.S. then poured aid on the military dictatorship of
Pinochet who killed Allende and 5,000 to 3O,OOO Chileans. From
1973 to 1976, the World Bank gave Chile $350.5 million, almost 13
times the $27.7 million it gave during the 3-year Allende
presidency.
During the 1980s, the Bank's SAPs were "the second prong of
the massive assault that Washington mounted against the South."
The other prong was "low-intensity conflicts" (LIC) the U.S.
launched against governments in Afghanistan, Angola, Nicaragua,
Panama, and Grenada, and against liberation movements in El
Salvador, Guatemala, and the Philippines.
Susan George has called the World Bank-IMF debt management
strategy, "financial low-intensity conflict" (FLIC).
U.S. officials are clear about the link between economic and
military strategies in controlling the Third World. The
Presidential Commission on Integrated Long-Term Strategy stated
in 1988: "We need to think of low-intensity conflict as a form of
warfare that is not a problem just for the Department of Defense.
In many situations, the United States will need not just DoD
personnel and material but diplomats and information specialists,
agricultural chemists, bankers and economists ..."
Robert McNamara, who become the Bank's president in 1967,
best epitomized the close U.S. connection. McNamara had been
Secretary of Defense before being transferred to the World Bank
by President Johnson. The Secretary had grown disillusioned with
his idea of bombing North Vietnam since this had failed to stop
Northern support for insurgency in South Vietnam.
One could conclude that McNamara went from bombing the Third
World to starving it.
New Strategies
FLIC succeeded in bringing economies in Asia, Africa, and
Latin America to their knees. Even nationalistic elites have
rejected industrialization strategies in favor of supplying
greater amounts of raw materials to the North as advocated by the
Bank. However, the combination of LIC and FLIC may have
succeeded too well, creating a situation that the Bank may not be
able to control. The weakening of Third World governments has
opened up a Pandora's Box of social problems ranging from
outright state collapse (as in Somalia and Afghanistan) to the
increasing hold of drug traffickers on states (as in Colombia,
Peru, and Mexico.) Having weakened the state to a dangerous
extent, the U. S. and the World Bank are unable to deal with the
consequences and this may be one reason for the latter's current
stress on government.
It is also difficult for the Bank to work its will on Third
World societies if there is no state to work through. NGOs can
also be instruments for carrying out Bank policies especially
where states are weak. This could be one reason for the Bank's
recent consideration for their criticisms of its policies.
Involving NGOs in looking at poverty created by SAPs seems a
pointless exercise since there is no dearth of such information
but this could be an effective method of co-opting such
institutions.
The success of LIC and FLIC in defeating nationalistic Third
World regimes has also made it necessary for the World Bank and
the IMF (like the Pentagon and the CIA) to find new roles for
themselves; hence the sudden concern for poverty and corruption
exhibited in Hong Kong. In an immediate sense, the insincerity
of this concern is most vividly displayed by the fact that, in
the same breath, the two institutions urged Third World countries
to liberalize their capital markets. Such a step could put
developing economies at the mercy of Wall Street speculators and
further reduce the ability of governments to deal with the
problems of health, education, and poverty. Many Southern
governments made clear their opposition to such liberalization in
Hong Kong but the IMF, backed by the Group of Seven leading
industrialized nations, is going to push ahead anyway.
The insistence on capital liberalization is revealing of the
true agenda of the World Bank and the IMF since 1945: fully
integrating the Third World into the global capitalist system --
in the subordinate position of raw material supplier and open
market.
The fulfillment of this agenda has involved the use of U.S.
military power in combination with World Bank-IMF economic
programs to crush Third World governments aspiring to independent
development. No talk of "eliminating poverty" can hide such a
brutal enterprise.
_________________________________________________
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