The World Bank and other IFIs

Asbjørn Wahl

The International Financial Institutions, like the World Bank, the IMF and the World Trade Organisation have become instrumental in the current neo-liberal restructuring of the world economy. The people and workers of developing countries are suffering the most from the devastating policies which are being pursued by these institutions, but they are increasingly also attacking social welfare provisions as well as trade union rights and democratic structures in rich countries. They are, in short, currently the most important instruments for the institutionalisation of neo-liberalism at the global level – by the marketisation, the commodification and the commercialisation of all aspects of human life.

There is a lot of disagreement on how to deal with these institutions. Should they be abolished, and their tasks transferred to other institutions as for example the UN, should they be deeply reformed and democratised, or should we rather base our policy on influencing their policies through formal or informal dialogues?

During the opening session of the ITF Durban Congress, General Secretary Zwelinzima Vavi of COSATU, and General Secretary Randall Howard of SATAWU, launched fierce and well-founded attacks on the WTO. Actually, COSATU has played an increasingly important role in developing global trade union policies towards the WTO over the last couple of years, particularly regarding the so-called NAMA agreement, which is the free trade agreement on manufactured goods and natural resources. Through solid documentation COSATU has proved that the policies pursued by the USA, the EU and other rich countries – including my own, Norway – in the WTO, has led to, and will continue to lead to, deindustrialisation of many developing countries. COSATU has even succeeded in pushing the ICFTU position on these questions to the left, and that is impressive, since this does not seem to be an easy thing to do. Under current circumstances, there is no doubt that the recent breakdown of the WTO negotiations was the best that could happen – since no agreement obviously must be better than a bad agreement.

But what are the ITF’s positions on these questions? Well, there is a lot of sound scepticism, criticism and opposition expressed in statements from the Congress. Regarding the World Bank, however, one of the motions states that “progress has been made by Global Unions in engaging in dialogue with the World Bank”, and that “some officials within the Bank appear to have recognised the failure of Bank restructuring projects, even by their own standards, and have expressed interest in establishing closer relations with transport unions”.

I think it is necessary to complement this promising story with some further information. For example the fact that the World Bank for many years repeatedly has informed us that they have recognised the failure of Bank restructuring projects. It has simply become a routine exercise. These exercises are often followed by a rebranding of their projects and strategies – from SAPs (Structural Adjustment Programmes) in the 1980s, via some other acronyms, to the current PRSPs (Poverty Reduction Strategy Programmes). When one programme brand is sufficiently scandalised through the destructive effects it has had on those who are the victims of the programmes, the World Bank comes up with some self-criticism and it launches new, and even more promising, brands. The contents, however, continue to be the same: liberalisation, deregulation and privatisation – and devastating effects on people, workers and the environment.

There is an army of people in the World Bank who are specialised in paying lip-service to trade unions, other NGOs and social movements – while at the same time forced liberalisation and privatisation uninterruptedly are taking place on the field. We should not let us fool by these tactics. First of all, we should develop our own analyses of the World Bank and the other IFIs. The role of the World Bank is not formed by more or less well-intentioned rhetoric from Bank employees. If we are to understand the role of the World Bank, we should analyse its position in the international economic power-structures.

The policies of the World Bank do nothing but reflect the balance of power in today’s world. As long as neo-liberalism represents the ideological order of the day, as long as capitalist forces are on the offensive, as long as most of the governments in most of the rich countries, which control the WB, the IMF and the WTO are predominantly neo-liberal, these policies will continue to undermine economic and social development in the South and social welfare provisions in the North.

(Contribution at the ITF World Congress, Durban, August 2006.)