IMF and World Bank 50th Birthday Bash: Critics Crash Party

By , Staff writer of The Christian Science Monitor

A HOST of critics are throwing a damper on the World Bank and the International Monetary Fund's (IMF) 50th anniversary celebration in Madrid.

The two multilateral institutions decided to mark the occasion with a conference on their future last Thursday and Friday, a prelude to their joint annual meeting this week. The conference featured about three dozen notable participants, ranging from Paul Volcker, former president of the Federal Reserve, to Liu Zhongli, China's minister of finance.

While they were speaking in an amphitheater in Madrid's marbled convention center, the Palacio Municipal de Congress, just a few steps down the hall were representatives from the U.S. 50 Years Is Enough Campaign briefing passing journalists on the ``substantial reforms'' these critics see as necessary for the bank and the fund.

Recommended: Five ways big banks' Libor scandal affects you

In the nearby press room, a woman employed by a Gibraltar publication was furtively handing out a flyer publicizing a ``protest demonstration/procession in central Madrid'' against IMF/Bank policies. ``Floats, banners, slogans, music, thousands of development activists from Spain and all over Europe,'' the sheet read. The woman said she was doing it ``clandestinely'' because two of her colleagues were kicked out of the room for doing the same thing the day before. Some journalists among the 1,800 covering the gathering have also been helping out the critics.

At a press conference Saturday given by bank president Lewis Preston, one man and two women accredited as journalists stood up to protest, shouting ``50 years is enough!'' They were hustled outside by Spanish guards and carted off in a police wagon. Police searching the bags of journalists arriving for the press conference, discovered a pie intended for Mr. Preston's face and a can of shaving cream. A bank critic, disliking the more radical protesters' techniques, tipped off the World Bank of the planned escapade.

These protesters, supposedly representing publications of nongovernmental organizations (NGOs), lost their accreditation.

Until eight years ago, critics of the bank and fund could only demonstrate outside the site of the annual meeting. Later, they were given space on a table inside for their publicity; after that, an office; and finally, an office with a phone, recalls Mark Dubois, international grassroots coordinator for Friends of the Earth International, one of the 125 NGOs from the United States critics campaign. There are another 125 groups from 50 more nations joining the effort here to change the bank and fund.

The nonradical critics are taken seriously by the bank now, especially since they have had some success in persuading key members of the appropriations committees of the US Congress that funds sought by the Clinton administration for the bank and its affiliates should be cut or held up until reforms in the two bodies are in place. Critics charge that the bank and the fund are too secretive and lack accountability for their actions. Rep. Barney Frank (D) of Massachusetts, chairman of the House Banking subcommittee on international development, has warned that unless the bank does a better job of disclosing information about its lending practices, Congress will have to start cutting off funding.

Critics also charge that bank projects have displaced more than 2 million people from their homes; that it finances some dams, roads, and power plants that are among the largest and most environmentally destructive projects on the planet; and that the bank sometimes does not consult with those affected by its projects. Both the IMF and the bank, the campaign claims, impose on nations ``structural adjustment programs'' that increase poverty and lower wages, widen the gap between rich and poor, gut local productive capacity, and accelerate environmental degradation.

While admitting some mistakes, the bank and the fund deny the generalizations and point to specific reforms. In January, for instance, the bank came out with a more-liberal policy on disclosure of information. The bank has greatly expanded its environmental staff. The bank says it insists governments consult with those affected by projects it finances.

Stanley Fischer, first deputy managing director of the fund, says the adjustment program issue is susceptible to demagoguery, that nations must live within their means, and that the fund's conditions for a loan, often involving austerity in order to restrain inflation and get a budget in better balance, does less harm to an economy than if a nation continues on its merry, unsustainable economic way. Without an IMF program, Peru saw a 20 percent output drop after running out of foreign currency reserves, he notes.

Share this story:

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...