>
>from: [EMAIL PROTECTED]
>subject: Znet:IMF on the Ropes. WTO 2 -W.Bello
>
> IMF on the Ropes
> By Russell Mokhiber and Robert Weissman
>
>There may be no single institution with greater pernicious
>influence in the world than the International Monetary Fund
>(IMF). Now, for the first time, the Fund faces a real challenge to
>its existence, at least in its current form.
>
> For two decades, the IMF has exerted a stranglehold over
>developing country economies, denying them the funding they need
>to make foreign debt payments and avoid default, unless they enact
>"structural adjustment" policies.
>
> Structural adjustment can fairly be described as a virulent strain
>of Reaganomics or Newt Gingrich's Contract with America. The basic
>idea of these policies is to open countries' labor markets and
>natural resource riches to multinationals, shrink the size and
>role of government, rely on market forces to distribute resources
>and services and integrate poor countries into the global economy.
>
> Key structural adjustment policies include: privatizing
>government-owned enterprises and government-provided services,
>slashing government spending, orienting economies to promote
>exports, lifting trade restrictions, implementing higher interest
>rates, eliminating subsidies on consumer items such as foods, fuel
>and medicines and imposing tax increases.
>
> Structural adjustment has been successful at its intended effort
>to diminish the scope of government and integrate developing
>countries into the global economy.But it has increased suffering in
>developing countries immeasurably. In most of the world's poorest
>nations undergoing structural adjustment, poverty has increased,
>health care systems have collapsed and income inequality has
>skyrocketed.
>
> Developing countries that have done well in recent decades,
>primarily those in Asia, including China, have succeeded by
>violating central tenets of structural adjustment: they have
>maintained a strong government role in the economy, and they have
>protected certain parts of their economy.
>
> Not surprisingly, people in developing countries have protested
>strongly against IMF policies. Countries throughout the world have
>witnessed "IMF riots" following IMF-ordered lifting of price
>subsidies for goods such as bread and gasoline. But because the IMF
>derives it authority from rich countries, not the poor nations, it
>has been able to weather these outbursts.
>
>In the last two years, however, momentum against the IMF has grown
>in the rich countries, as well as in the developing world.
> The IMF's admitted mishandling of the 1997-1998 Asian financial
>crisis made the economic contraction in Asian nations much worse.
>The structural adjustment agenda further slowed the Asian
>economies that had already plunged into recession.
>
>This incompetent performance finally sparked widespread criticism
>of the Fund in the industrialized countries. Meanwhile, the worldwide
>Jubilee movement is increasingly winning support for the idea of debt
>cancellation for the poorest countries. The IMF has deftly tried to
>turn these weaknesses to strengths. It adroitly used the Asian
>financial crisis to win $90 billion in new funding from the rich
>countries. The Fund needed more money, proponents claimed, to keep
>the crisis economies afloat.
>
> And the IMF has sought new monies so it can offer very modest debt
>relief through its Enhanced Structural Adjustment Facility (now
>known as the Poverty Reduction and Growth Facility, an Orwellian
>twist) -- in exchange for countries agreeing to years of closely
>supervised structural adjustment! But these jujitsu tactics may be
>running out of steam. Political momentum against the IMF ratcheted up
>in recent weeks, when the Meltzer Commission, a bipartisan advisory
>commission to the U.S. Congress, released its report.
>
> While the members of the commission disagreed on many matters,
>they agreed on two: First, the IMF (along with the World Bank)
>should use its existing resources to cancel all debts. Second, the
>IMF should get out of the business of long-term lending -- the
>kind of development loans to which structural adjustment
>conditions are normally attached. The report has shifted the terms of
>debate over the IMF in the United States and the U.S. Congress.
>Unfortunately, the IMF is only seeking a relatively small amount of
>new money from the Congress -- and if that money goes through,
>Congress will lose most of its influence over the monetary agency for
>several years (until the next funding request).
>
> But the shift in policy circles is now being accompanied by a new
>progressive public protest against the IMF in the United States. On
>April 16, during the IMF's annual spring meeting, thousands of
>demonstrators will take to the streets of Washington, D.C. to
>protest the deadly toll of IMF policies.
>
> Infused with the spirit of Seattle that shut down the World Trade
>Organization meetings, the demonstrators are planning a direct
>action to shut down the IMF, as well as a massive, permitted rally
>and march. (For more information on the April 16 actions, see
>http://www.a16.org) Street demonstrations against the IMF in
>Washington have the potential to awaken people in the United States
>to the needless suffering imposed by the Fund on people throughout
>the world, and to mobilize a critical mass of opponents in the
>country that exercises a dominant influence at the Fund.
>
>The IMF's reign of terror may finally be winding down.
>
> Russell Mokhiber is editor of the Washington, D.C.-based
> Corporate Crime Reporter. Robert Weissman is editor of
> the Washington, D.C.-based Multinational Monitor. They
> are co-authors of Corporate Predators: The Hunt for
> MegaProfits and the Attack on Democracy (Monroe, Maine:
> Common Courage Press, 1999,
> http://www.corporatepredators.org)
>
> (c) Russell Mokhiber and Robert Weissman
>
> ***************
> UNCTAD: Time to Lead,
> Time to Challenge the WTO
> By Walden Bello
>
>UNCTAD X is being held at a very auspicious moment for the South.
>Two central institutions of the Northern-dominated system of
>economic global governance, the International Monetary Fund (IMF)
>and the World Bank, are undergoing a severe crisis of legitimacy
>and have, at least temporarily, lost their sense of direction. The
>South has the opportunity to seize the initiative, frame the terms
>of debate on the future of global governance, and push for the
>creation or institutions that will truly serve its interests.
>
> UNCTAD can serve as the catalyst for this process.
> A Backward Glance
>
>
>To envision a strategy for the future, it is essential to glance
>back at the past, to reclaim the best in UNCTAD's history and to
>avoid its mistakes. The place to begin this analysis is the period of
>decolonization in the 1950�s and 1960�s. The emergence of scores of
>newly independent states took place in the politically charged
>atmosphere of the Cold War, but although they were often split
>between East and West in their political alliances, Third World
>countries gravitated toward an economic agenda that had two
>underlying thrusts: rapid development and a global redistribution
>of wealth.
>
>While the more radical expression of this agenda in the shape of
>the Leninist theory of imperialism drew much attention and,
>needless to say, condemnation in some quarters, it was the more
>moderate version that was most influential in drawing otherwise
>politically diverse Third World governments into a common front.
>This was the vision, analysis, and program of action forged by
>Raul Prebisch, an Argentine economist who, from his base at the
>United Economic Commission for Latin America (CEPAL), won a global
>following with his numerous writings.
>
> Developed in the late 1950's and early 1960's, Prebisch's theory
>centered on the worsening terms of trade between industrialized
>and non-industrialized countries, an equation which posited that
>more and more of the South's raw materials and agricultural
>products were needed to purchase fewer and fewer of the North�s
>manufactured products. Moreover, the trading relationship was
>likely to get worse since Northern producers were developing
>substitutes for raw materials from the South, and Northern
>consumers, according to Engels' Law, would spend a decreasing
>proportion of their income on agricultural products from the
>South.
>
> Known in development circles as "structuralism," Prebisch's theory
>of 'bloodless but inexorable exploitation,' as one writer
>described it, served as the inspiration for Third World
>organizations, formations, and programs which sprang up in the
>1960's and 1970's, including the Non-Aligned Movement, Group of
>77, Organization of Petroleum Exporting Countries (OPEC), and the
>New International Economic Order (NIEO). It was also central to
>the establishment of the UN Conference on Trade and Development
>(UNCTAD) in 1964, which became over the next decade the principal
>vehicle used by the Third World countries in their effort to
>restructure the world economy.
>
> With Prebisch as its first Secretary General, UNCTAD advanced a
>global reform strategy with three main prongs. The first was
>commodity price stabilization through the negotiation of price
>floors below which commodity prices would not be allowed to fall.
>The second was a scheme of preferential tariffs, or allowing Third
>World exports of manufactures, in the name of development, to
>enter First World markets at lower tariff rates than those applied
>to exports from other industrialized countries. The third was an
>expansion and acceleration of foreign assistance, which, in
>UNCTAD's view, was not charity but 'compensation, a rebate to the
>Third World for the years of declining commodity purchasing
>power.' UNCTAD also sought to gain legitimacy for the Southern
>countries' use of protectionist trade policy as as a mechanism for
>industrialization and demanded accelerated transfer of technology
>to the South.
>
> UNCTAD at its Apogee
>
>To a greater or lesser degree, the structuralist critique came to
>be reflected in the approaches of other key economic agencies of
>the United Nations secretariat, such as the Economic and Social
>Council (ECOSOC) and the United Nations Development Program
>(UNDP), and it became the dominant viewpoint among the majority at
>the General Assembly.
>
> Instead of promoting aid, UNCTAD focused on changing the rules of
>international trade, and in this enterprise it registered some
>successes. During the fourth conference of UNCTAD (UNCTAD IV) in
>Nairobi in 1976, agreement was reached, without dissent from the
>developed countries, on the Integrated Program for Commodities
>(IPC). The IPC stipulated that agreements for 18 specified
>commodities would be negotiated or renegotiated with the principal
>aim of avoiding excessive price fluctuations and stabilizing
>commodity prices at levels remunerative to the producers and
>equitable to consumers. It was also agreed that a Common Fund
>would be set up that would regulate prices when they either fell
>below or climbed too far above the negotiated price targets.
>
> UNCTAD and Group of 77 pressure was also central to the IMF�s
>establishing a new window, the Compensatory Financing Facility
>(CFF), which was meant to assist Third World countries in managing
>foreign exchange crises created by sharp falls in the prices of
>the primary commodities they exported. Another UNCTAD achievement
>was getting the industrialized countries to accept the principle
>of preferential tariffs for developing countries. Some 26
>developed countries were involved in 16 separate 'General System
>of Preferences' schemes by the early 1980's.
>
> These concessions were, of course, limited. In the case of
>commodity price stabilization, it soon became apparent that the
>rich countries had replaced a strategy of confrontation with a
>Fabian, or evasive, strategy of frustrating concrete agreements. A
>decade after UNCTAD IV, only one new commodity stabilization
>agreement, for natural rubber, had been negotiated; an existing
>agreement on cocoa was not operative; and agreements on tin and
>sugar had collapsed.
>
> Right-wing Reaction and the Demonization of the UN
>
> By the late seventies, however, even such small concessions were
>viewed with alarm by increasingly influential sectors of the U.S.
>establishment. Such concessions within the UN system were seen in
>the context of other developments in North-South relations, which
>appeared to show that the strategy of liberal containment promoted
>by Washington's liberal internationalists, who held sway for most
>of the post-war period up to the late seventies, had not produced
>what it promised to deliver: security for Western interests in the
>South through the cooptation of Third World elites. The United
>Nations system was a central feature of the demonology of the
>South that right-wing circles articulated in the late seventies
>and early eighties. In their view, the UN had become the main
>vehicle for the South's strategy to bring about the New
>International Economic Order. As the right-wing think tank
>Heritage Foundation saw it, the governments of the South devoted
>"enormous time and resources to spreading the NIEO ideology
>throughout the UN system and beyond. Virtually no UN agencies and
>bureaus have been spared." The South's effort to redistribute
>global economic power via UN mechanisms was viewed as a concerted
>one:
>
>Private business data flows are under attack internationally and
>by individual Third World countries; proposals for strict controls
>of the international pharmaceutical trade are pending before more
>than one UN body; other international agencies are drafting
>restrictive codes of conduct for multinational corporations; and
>UNESCO has proposed international restraints on the press.
>
> Especially threatening to the Foundation was the effort by the
>Third World to "redistribute natural resources" by bringing the
>seabed, space, and Antarctica under their control through Law of
>the Sea Treaty, the Agreement Governing Activities of States on
>the Moon and Other Celestial Bodies (called the "Moon Treaty"),
>and an ongoing UN study and debate over Antarctica. Malaysian
>Prime Minister Mahathir Bin Mohamad, the principal architect of
>the effort to get the UN to claim Antartica, told the General
>Assembly "all the unclaimed wealth of this earth" is the "common
>heritage of mankind," and therefore subject to the political
>control of the Third World.
>
> Crisis of the UN Development System
>
> As the 1980�s unfolded, the North's drive to discipline the South
>escalated. Taking advantage of the Third World debt crisis, the
>IMF and the World Bank subjected over 70 countries to structural
>adjustment programs, the main elements of which were radical
>deregulation, liberalization, and privatization. This was
>accompanied by a major effort to emasculate the United Nations as
>a vehicle for the Southern agenda. Wielding the power of the
>purse, the United States, whose contribution funds some 20-25 per
>cent of the UN budget, moved to silence NIEO rhetoric in all the
>key UN institutions dealing with the North-South divide: the
>Economic and Social Council (ECOSOC), the United Nations
>Development Program, and the General Assembly. US pressure
>resulted as well in the effective dismantling of the UN Center on
>Transnational Corporations, whose high quality work in tracking
>the activities of the TNCs in the South, had earned the ire of the
>TNCs. Also abolished was the post of Director-General for
>International Economic Cooperation and Development, which "had
>been one of the few concrete outcomes, and certainly the most
>noteworthy, of the efforts of the developing countries during the
>NIEO negotiations to secure a stronger UN presence in support of
>international economic cooperation and development."
>
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