The implications for the World Bank and IMF of the 11 September atrocities and their aftermath are as yet uncertain. Will this new political and diplomatic context improve the prospects for international cooperation and multilateralism? Or will it mean that the US seeks to exert tighter control on institutions with financial and policy-making clout?
Wars raise important questions of institutional structure within and between nations. Many comparisons have been made with Pearl Harbour, which triggered US participation in World War II, overcoming isolationist tendencies. One week after Pearl Harbour, the US Treasury Secretary ordered his chief economic advisor to prepare a paper setting out the case for a “stabilization fund” and a “bank for reconstruction and development” – the proposals which were to yield the Bretton Woods agreement establishing the World Bank and IMF.
Since 11 September we have seen a similarly dramatic shift in US approach. TIME magazine (15/10/01) commented: “an Administration that just a month or two ago emphatically believed in going in alone – walking away from treaties, pushing its missile defence scheme no matter who said what – has thrown open its arms to embrace the pleasures of multilateralism.” US subscriptions to the UN have been paid, more aid finance has been promised and positive noises made about international cooperation in general. This is long overdue and warmly welcomed.
However it may come with more strings attached. Just as the original plans for the World Bank and IMF were watered down to meet US interests and concerns, the new multilateralism sparked by 11 September may well be expedient and unbalanced. UK consultancy company Oxford Analytica warned that the “shift in American foreign policy priorities brought on by the recent attacks could presage a return to development assistance motivated by ideological and geopolitical considerations”.
NGOs have long argued that the World Bank and IMF are politically captured by the powerful governments which have the strongest representation on their Boards and that they are ideological, not pragmatic, in their approach to policy-making. This situation may soon get worse, however. The US government has removed aid sanctions on Pakistan and helped facilitate favourable debt treatment and speedy new IMF financing. The Bank has reportedly started examining possible projects in Uzbekistan, should the US suggest that these supporters need to be rewarded.
There have clearly long been constraints on the supposedly objective, technical criteria the Bank uses for aid allocation, but may now become more blatant. The 50 Years is Enough! campaign commented: “This use of the international financial institutions as instruments of the US political agenda has been going on for decades. But since the end of the Cold War there has been a reluctance to acknowledge the fact publicly, which has itself acted as a valuable restraint on the US government’s inclination to use the institutions to serve its own narrow purposes.”
Andrew Rogerson, a Bank representative in Brussels, denied this. He said “the Bank is not facing pressure from member governments to take decisions based on geopolitics”. He emphasised that the Bank is looking to take action to support countries negatively affected by the current economic downturn and refugee crisis in Afghanistan’s neighbours. It is also planning post-war reconstruction efforts in Afghanistan.
These issues will be discussed at the rescheduled World Bank/IMF annual meeting on 17-18 November in Ottowa, Canada. Also on the agenda will be terrorist financing and measures to boost the global economy.
As well as continuing to monitor the World Bank and IMF, campaigners will closely watch the new trade talks, the UN Financing for Development summit, the Earth Summit II, and other processes see whether there are signs of a new, more positive multilateralism. In October Pakistani civil society organisations demanded “a more egalitarian political order based on principles of democracy and justice”. This, they said, is “a pre-requisite for curbing or eliminating terrorism with international dimensions and origins”.
The Bretton Woods Project has produced a longer analysis on these issues, plus further recommended links:
Crisis or Opportunity? The International Financial Institutions and civil society in a new political context
Keep up the pressure. Protestors need to adapt to the world after September 11th, but popular pressure at Doha and beyond is more important than ever. Alex Wilks, article for Observer.co.uk
Street Protests Cancelled, But Movement for Global Justice Goes Forward. Article by Njoki Njoroge Njehu and Soren Ambrose in: Economic Justice News.