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World Bank and IMF: Good, evil or irrelevant?
On the eve of the A16 protests, experts discuss the roles of the international financial organizations and the Seattle protests in this weekend's battle over globalization.
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[04/15/00]

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[04/13/00]

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A few people picked up on this crisis early, especially those on the receiving end. I remember more than 20 years ago being part of a group at the University of Chicago protesting a peace prize to Robert McNamara, then head of the World Bank. Most of us were angry about McNamara's record as secretary of defense during the Vietnam War.

But a graduate student from Mexico, a former seminarian named Primitivo Rodriguez (today one of his country's most inventive and visionary reformers), insisted that the harsh new economic order being imposed by the World Bank was as noteworthy a crime. Unfortunately, Rodriguez was the exception. Most analysts didn't wake up to the IMF-World Bank's blunders until the late-'90s Asian economic crisis, when even Business Week and Morgan Stanley could smell the coffee and proclaimed the international financial regime a debacle.

But Seattle brought the issue of globalization to the front pages and quickly got the attention of a number of people on Capitol Hill. On Thursday, five members of Congress released a sweeping "Global Sustainable Development Resolution" originally drafted by Rep. Bernie Sanders, I-Vt., incorporating a wide range of steps to stem the worldwide "race to the bottom," a race even corporate-globalization champion President Clinton now warns against.

The bill calls for the United States to renegotiate trade agreements to include worker rights and environmental protections. It calls for reining in the IMF and World Bank to their original roles as guarantors of international financial stability and proposes United Nations oversight of international lending.

Washington, in other words, is no Seattle rerun. The issues, the players and the American public itself were all changed by Seattle, in ways few would have predicted a year ago.

There is, for instance, the hot issue of the moment, most-favored trading status for China, which Clinton is trying to push through as his final foreign-policy achievement. Until recently, opponents of China's entry into the World Trade Organization -- including both the AFL-CIO and Pat Buchanan, who addressed the federation's China-trade rally this week -- framed their argument in the language of economic nationalism, pitting American jobs against the Chinese economy. The question still divides the broad Seattle coalition, with the AFL-CIO's critics claiming that defeating the China trade bill will only hurt Chinese workers.

But since Seattle, a growing body of evidence has emerged suggesting that Chinese workers as well as American jobs are at risk from unrestricted trade, accelerating the so-called "race to the bottom" in wages, and environmental and human-rights standards. The South China Business Post estimates that if China joins the WTO, the already-low wages of rural workers will drop by an average of 2 percent over the next five years. Economist Nicholas Lardy of the Brookings Institution, hardly a rabble-rouser, predicts that the WTO agreement will lead to a 33 percent decline in output of Chinese agriculture. The National Labor Committee reports that some regions of China are already lowering their wages to attract or keep American investors like Wal-Mart.

This data has emboldened the AFL-CIO's rhetorical shift from jobs for Americans to international workers' rights, and driven it into a closer relationship with environmental and human rights groups. Indeed, no institution better symbolizes the shift in the parameters of debate than the labor federation, which is either the dinosaur or 800-pound gorilla of American social-change politics. For months, the AFL refused to join in this weekend's demonstrations against the IMF, sticking to its narrow China demonstration Wednesday. Just a year ago, the labor federation supported the Clinton administration's call for an $18 billion increase in IMF funding. But at the last minute, AFL-CIO president John Sweeney shifted course, not only throwing his weight behind the weekend's protest but signing an angry statement against IMF lending policies in the Third World.

Sweeney is not the only person whose views have shifted since Seattle. In this presidential year, the American public's views have changed dramatically from the free-market orthodoxy of a few years ago. A recent study of U.S. attitudes toward globalization conducted by the University of Maryland found that overwhelmingly, Americans support global economic integration, but that they want it managed to protect the environment, labor and the poor.

The protests, meanwhile, are having measurable effect. Major universities -- including such high-profile, high-endowment institutions as Brown and Cornell -- have pledged to void their apparel contracts with companies that fail sweatshop evaluations, for instance. (Yale isn't yet one of them, which is why those students are camped out on the plaza.) Global protest recently drove the chemical giant Monsanto out of the genetically engineered food business. Starbucks has promised to buy so-called Fair Trade coffee from growers who respect workers' rights.

As dramatic as last year's Seattle protests were, this week's events in Washington cut closer to the bone in some ways. The WTO is a murky and ambiguous rule-making body, but all but the most ardent localists approve the general concept of regulating trade; the only argument is over whether labor, environmental and human-rights standards are part of the picture. On the other hand, to reform international financial institutions is to reform the bodies that have imposed a specific economic model worldwide, creating the greatest gulf between rich and poor in human history.

What matters about this weekend's demonstrations is not the number of protestors. These days, anyone with a bus, a driver's license and an e-mail list can get bodies to Washington. Instead, this weekend's events are important because they represent -- like the 1963 civil rights march on Washington -- one wave in an accumulating, rippling cascade of specific, local, hard-nosed campaigns. "Only connect," the novelist E.M. Forster once demanded. Water in Cochabamba, sweatshirts in New Haven, loans in Washington -- if last fall the world came to Seattle, this weekend in Washington marks the moment that Seattle goes global, connecting and unleashing worldwide anti-corporate passions whose outcome cannot be foreseen.
salon.com | April 15, 2000

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