Sun Sep 17 2006
It is likely that different officials from the IFIs would be left unemployed and the size of said institutions would be reduced; that is not a threat to security, but simply the result of IFIs failure and of their lack of credibility. At least they cannot go on talking about democracy and economic reforms. They do not believe in democracy, and this meeting and its bans are proving the case.
From Singapore
The IMF/World Bank Annual Meetings are taking place in Singapore this weekend September 16-17. As it happens every year, the meeting is attended by bankers, finance ministers and high-level advisors. The same as in the last six years, a parallel meeting is organized by NGOs and social groups which are critical or against the policies of these international entities.
This is the second meeting to be chaired by the new head of the World Bank, the Republican hawk Paul Wolfowitz, former US deputy defense secretary, who engineered the US entry into Iraq in 2001, before the attack on the twin towers. This is his first meeting outside the United States.
The Republican government headed by Bush has a unilateral and anti-multilateral policy, analogous to that maintained by Nixon during his administration (1970) and by Harding during his (1920), being all of them Republicans. The last time that Wolfowitz visited this part of the world, was in his capacity as Reagan’s ambassador to the corrupt government of Suharto in the 1980s.
Added to the paradox of the president of a multilateral institution that does not believe in multilateralism is the presence of a US ambassador to the United Nations that does not believe in the organization. The result is clearly visible, there is an erosion of multilateralism.
Within this framework, they arrive in Singapore to join either one side or the other. This year, the campaign "Shrink or Sink" the IMF is to be launched in view of the failures and above all, the harmful role played by its policies in terms of developing government capacities. Policies result in the existence of increasingly less representative governments that should fulfil the conditions attached to loans provided by these IFIs.
The discrediting of IFIs following the Asian and Argentine crisis has undoubtedly eroded the basis of their existence. Even worse, the incapacity to bell the cat when the US Treasury operates with a fiscal and external deficit amounting to 6 and 7 per cent of GDP respectively, while poor countries are financing such deficit, shows the bare reality of power.
The IMF has always been said to be an arm of the US Treasury. For those who did not believe it, the evidence is now before their eyes. The IMF cannot tell the Treasury what to do and least of all place conditions on it. Nor is it certain that it may be able to stop a global financial crisis unleashed from within the United States.
The IMF was created in 1944 when the United States was the soundest economy, and had the largest international reserves and the global reserve currency. Nowadays, the former world leader is the world’s most indebted economy, subsidized by Latin America, Africa and Asia and mostly funded by Asia.
The argument, as some people say, is focused on the representation of India, China and Brazil at the IMF Board. For this purpose, more space has been opened for these countries by means of a ridiculous voting share. The central point is that the large and weak economy keeps on maintaining the same weight in the board.
The United States sets the global rules without weighing the effects on the rest of the world, such as in 1971 when it took the dollar off the gold standard without consulting the IMF and in 1981 when it fuelled a massive fiscal deficit while having a restrictive monetary policy. The devaluation of the US dollar had a direct impact on raw material prices after 1971. The rise in real interest rates led to the global debt crisis after 1981.
To avoid these and other unpleasant discussions, the organizations that were going to meet in a parallel forum in the city of Singapore were banned and people were denied access to the city state. Wolfowitz was on TV at the crack of dawn on the 15th, talking with very little conviction about the importance of the right to dissent. So little conviction was expressed that the government of Singapore released in the following news programme the information that in the memoradum of understanding signed three years ago, they committed themselves to guarantee the security of the event. Nobody in the World Bank/IMF has publicly told that a discussion poses no threat to anybody, in the conventional sense of the term.
It is likely that different officials from the IFIs would be left unemployed and the size of said institutions would be reduced; that is not a threat to security either, but simply the result of IFIs failure and of their lack of credibility.
At least – and this is something we already knew in Latin America – they cannot go on talking about democracy and economic reforms. They do not believe in democracy, and this meeting and its bans are proving the case.
Related Information:
* Letter from Social Watch Coordinator to IMF-WB authorities
* IFIwatchnet WEBLOG
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