IMF/WB/WTO: unholy trinity?

15 December 1999

At the Seattle meeting of the World Trade Organisation (WTO) in late November, the World Bank confirmed that it will expand its work on trade.

A joint statement from the World Bank, WTO and IMF promised:

“to build on the strong collaboration between our three organisations to enhance the capacity of developing countries … and help them increase the coherence of economic policy-making.”

Walden Bello of the Thailand-based NGO Focus on the Global South expressed concern that: “The IMF, the World Bank and the World Trade Organisation are in the process of creating an international iron cage”, ganging up to force countries to comply with liberalisation policies. IMF spokesman William Murray retorted

“you don’t want competition among the institutions; otherwise, if a country doesn’t like what the World Bank or the IMF says, it would simply go to the other institution – like a child shopping for favours between his parents”.

The Bank’s roles in this area are explained in a new paper by Lisa Jordan of Washington DC-based NGO Bank Information Center. The Bank has, for many years, pressed borrower countries to liberalise their trade. A recent Bank document boasts that:

“between 1981 and 1994 the Bank made 238 loans that supported liberalization of trade or foreign exchange policy to 75 different countries. Since 1995, fifty-four additional IBRD and IDA adjustment operations (65 percent of all adjustment operations) have supported exchange rate and trade policy reform”.

Jordan warns that:

“the WTO can reinforce liberalization in a way that the World Bank has never been able and which presents a real threat to democratic processes, placing a burden of adjustment on countries not able to represent their own interests when the agreements were formulated”.

She describes the Bank’s training initiatives for Southern officials as popular, yet “one-sided”: the joint Bank/WTO web site is a “virtual advertisement for trade liberalization”. The paper also describes the “Integrated Framework for the Least Developed Countries”, involving the Bank, WTO, IMF, UNCTAD, and UNDP. Under this the Bank is helping countries produce strategies which anticipate future multilateral trade rules. Uganda and Tanzania have piloted this, and Bangladesh, Ethiopia, Malawi, Mali, The Gambia, Haiti and Guinea all plan to present trade-related assistance strategies to their next Consultative Group meetings.

Jordan’s paper concludes by setting out two options for the Bank: to continue

“mitigating impacts, cleaning up messes and lending for social safety nets [or]

to team up with developing countries to adjust trade agreements and negotiations so that the process and the outcomes of trade agreements work for developing countries”.

Bank President Wolfensohn’s speech to the Seattle meeting urged richer countries to open their markets to imports from the South and help provide technical assistance to boost their capacity to represent their interests in Geneva where the WTO is based. Some of this is already being done under the British and Dutch-supported WTO 2000 initiative. However, Wolfensohn also admitted:

“The state of our knowledge about the practical impact of different patterns of trade liberalization on poverty is still far too limited. We need to know more; we need to sharpen our focus on the links between poverty and trade.”

The Bretton Woods Project does not work directly on WTO issues. Contact the UK Trade Network, c/o Hilary Coulby, Action Aid, Hamlyn Hse. Macdonald Road, London N19 5PG, UK,,

The most comprehensive website with critical material is Third World Network’s:

For more on the Bank’s work with the WTO and on trade in general, see: or the joint Bank/WTO

Lisa Jordan’s paper, The Death of Development? is available from Bank Information Center:, or see:

See also News and Notices for World Bank Watchers, January 2000, Web:

And Focus on Trade Number 42, December 1999, E-Mail:, Web:

Relevant official documents:

World Bank Support for Developing Countries on International Trade Issues, World Bank, 1999.

Making Small States Less Vulnerable: Supporting Development during Globalization, World Bank/Commonwealth Secretariat Task Force on Small States, Discussion Draft, 1999.

Report of the Managing Director of the IMF, President of the World Bank, and Director-General of the WTO on Coherence, 1998.

Trade, Global Policy, and the Environment, World Bank Discussion Paper, 1999.

World Development Report 1999/00:

Some of these are available on the Bank’s website ( or from Bank offices. If you have problems obtaining them, contact the Bretton Woods Project.