Seattle : The Sequel

Activists Prep for a D.C. Showdown With the IMF and the World Bank

FLORHAM PARK, New Jersey—Banging on kettledrums, playing pan flutes, and juggling, a hundred or so activists celebrated April Fool's Day with a raucous parade down the broad streets of this quiet suburban community. Hoisting a 12-foot-tall puppet in the air, they chanted their opposition to the International Monetary Fund (IMF) and the World Bank—whose representatives, oddly, were in town, holding meetings at the Hamilton Park Conference Center. As the protesters approached the meeting site, they were met by a hundred police officers in riot gear, plus several bomb-sniffing German shepherds. A man wearing a suit aimed a telephoto lens at the activists as they arrived: the costumed court jester, the hard hat, the student. Six arrests were made that day for minor infractions; two had been made two days earlier after activists hung a banner from the rooftop of the meeting site that read: World Bank + IMF = Corporate Colonialism.

Policymakers with the IMF and the World Bank had ventured to the suburbs to discuss "managing financial and corporate distress." But activists had come to criticize their policies, which they contend fatten multinational corporations and create human and environmental distress worldwide. They were also warming up for their next stop: Washington, D.C., April 8 through 17, for a "Festival of Resistance," part street party, part civil disobedience, which will culminate, they hope, in a shutdown of the IMF and World Bank's semiannual meeting on the 16th and 17th. Last year 25 protesters showed up. This year, organizers say they expect "tens of thousands."

Activists hope the D.C. event will be a worthy sequel to last November's success in Seattle, where more than 30,000 came to protest at World Trade Organization meetings. Like the Seattle actions, those in D.C. are being organized with skill and aplomb by numerous groups, including the Mobilization for Global Justice, 50 Years Is Enough Network, Jubilee 2000, Continental Direct Action Network, as well as various labor unions, and environmental organizations. Though D.C.'s police have a long track record in handling civil unrest, they nevertheless added $1 million worth of new riot gear to their wardrobes. Protesters plan to carry bandannas soaked in vinegar to protect them from tear gas and wear goggles in case of rubber bullets.

Spank the bank: a protester shakes up the suburbs.
photo: Michael Sofronski
Spank the bank: a protester shakes up the suburbs.

Why all the fuss over such arcane institutions as the IMF and World Bank? The IMF and the World Bank were established in 1945 to revive European economies ravaged by World War II. Today, they are responsible for granting aid in the form of loans to developing countries. The IMF has about $81 billion in outstanding loans; the World Bank lends about $30 billion each year.

Needless to say, these institutions, made up of bureaucrats named by member nations, wield tremendous power. Control is largely in the hands of the seven nations that kick in the most money, with the U.S. in the lead. This extortionary clout—doling out loans to developing nations and deciding who gets how much after meeting what conditions—"means you have a colonial institution, which is fundamentally immoral," says Bob Naimen, senior policy analyst at the Center for Economic and Policy Research.

Activists charge that both the IMF and World Bank attach overly severe restrictions to the money they lend. The IMF imposes "conditionalities": To receive a loan, a government must control inflation by cutting expenditures, devalue its currency, and raise taxes. These strictures, say critics, usually translate into slashed social programs, depressed wages, increased layoffs, and higher taxes for the poor and middle class. For its part, the World Bank imposes "structural adjustments": A government must eliminate deficits and sell state-owned enterprises to private investors to "attract" more foreign investment, as if the country were a series of products on a supermarket shelf, rather than an agglomeration of people with a long history and a right to self-determination.

Critics contend that these conditionalities and structural adjustments cripple the economic system in developing nations and benefit few, other than first- and third-world elites. "Systematic studies have been done by nongovernmental organizations," notes Beverly Bell, executive director of the Center for Economic Justice, "and every country that experienced structural adjustment has also experienced dramatic increases in poverty and unequal distribution of wealth."

In Mozambique, an example a number of people raised in interviews, the cashew industry was long the fourth-largest employer. Local workers harvested the nuts, shelled them, processed them for oil, and packaged the nuts and oil for export. The World Bank in conjunction with the IMF insisted that Mozambique remove all export taxes on cashew nuts and liberalize the cashew industry or else forgo the loan. The government balked but eventually complied; 10,000 people lost their jobs when production was outsourced to India, which bought up cheap cashews and processed them using child labor at bargain-basement rates. Mozambique may now be paying off loans, but at the price of skyrocketing unemployment for ordinary people.

Njoki Njoroge Njehu, a Kenyan and the director of 50 Years Is Enough Network, notes that when she returns to Nairobi, "there's a Hard Rock Cafe, but more and more beggars in the streets, especially women."


Mozambique and Kenya seemed very far away from Florham Park. At the April Fool's Day action, I was escorted into the Hamilton Park Conference Center to speak with a World Bank representative, through a parking lot where delegates' suitcases stood in line at perfect attention, "so the dogs could get some practice," said my escort, "practice bomb-sniffing, that is." Inside, IMF and World Bank bureaucrats, white badges flapping, scurried to a catered luncheon. Andrew Kircher, a spokesman for the World Bank, insisted that "some of the images in the street are of the old World Bank of the '80s, of a monolithic institution imposing its will. But since the mid '80s the World Bank has emphasized the human side of development along with the economics. People are frustrated at the pace of global change and they're using us as proxies for their frustration." As for the protests in D.C., he says, "we don't understand why they would want to shut down the meetings when we're looking at serious development issues like AIDS, trade, and poverty with development leaders."

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