World Bank

Decoding the Lingo

Trade technocrats try to hide behind a veil of boring, but you can get beyond the jargon.

• Neoliberal economics, aka "market fundamentalism." The idea that we are better off eliminating all barriers to trade (and commerce in general), all the time.

• Policy space. Letting governments choose the economic policies that actually fit their circumstances, instead of restricting them with one-size-fits-all trade agreements or harmful conditions attached to aid or loans.

• World Bank. An international body, controlled by wealthy countries, that lends and grants money to poor countries in order to fight poverty. It is slowly getting over the destructive habit of imposing harmful conditions.

• International Monetary Fund. An international body controlled by wealthy nations. When its original goals (having to do with currency exchange rates and short-term balance-of-payments problems) became obsolete in the 1970s and after, the IMF started strong-arming poor countries into accepting damaging conditions.

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Sojourners Magazine May 2007
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Big is Beautiful?

The Annual Review of Development Effectiveness, a major report by the World Bank's Independent Evaluation Group released in early December, criticized World Bank policies and project design as leaving tens of millions of people, especially the rural poor, "suffering stagnating or declining living conditions." The group's conclusions were no surprise to the poor or to those who accompany them in their daily struggle for survival.

For 25 years critics of the macroeconomic model unwaveringly promoted by the World Bank and its sister organization, the International Monetary Fund (IMF), have called for a fundamental shift away from top-down policies and mega-projects to allow space for more appropriate approaches to economic life that respect the local social and ecological context and the socio-economic and cultural human rights of the poor. The work of 2006 Nobel laureate Muhammad Yunus and the Grameen Bank has been one example of an alternative approach.

Beginning in the early 1980s, the World Bank's "structural adjustment policies" had initiated the shift to "neoliberal" economies in poor country after poor country. Although structural adjustment aimed at laudable goals such as controlling inflation and stabilizing out-of-control economies, its policies left the poor even more vulnerable as social safety nets disappeared and health care, education, transportation, and utility costs rose dramatically.

The 1990s saw an increased pace of neoliberal reform and the globalization it was helping to shape. Production shifted from food staples and basic goods for domestic use to commodities for export.Whole sectors of economies in which the poor were able to participate—especially subsistence farming and small businesses—were destroyed as cheap imports flooded local markets.

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Sojourners Magazine March 2007
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Turning Tables

Once each year, the quiet and spectacularly beautiful Swiss mountain village of Davos is taken over by top business and political leaders from around the globe for the World Economic Forum. The motto of the event is “Committed to Improving the State of the World.” This year’s meeting saw 1,200 of the world’s leaders of governments, corporations, and civil society gathered, carefully protected by 8,000 security personnel. The topics were wide-ranging, the panelists among the most famous people in the world, the discussions often quite provocative.

The kind of globalization that drives for unbridled economic growth and unlimited corporate profits, while imposing financial conditionality on poor countries—often to their detriment—has been a persistent problem for real development in the global South, and an offense to the requirements of justice. The many sessions I attended included a serious critique of those practices and structural problems, especially in regard to the crises of global health care and extreme poverty. That was a sign of hope.

Since Sept. 11, a few religious leaders have been invited to join the conversation, creating interfaith dialogue to breach dangerous divides and add broader moral and ethical perspectives. During a “West-Islamic World Dialogue” meeting, participants said they hoped to “understand the differences and affirm the commonalities.” This year, 24 religious leaders came from around the world, including six of us from the United States, to talk with each other and with the business and political leaders. The group was convened each day by Dr. George Carey, former Archbishop of Canterbury, and then dispersed to listen and present to the many interactive sessions.

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Sojourners Magazine April 2006
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News Bites

Altar Call.

  • Altar Call. Thousands celebrated the reopening of Rwanda’s Episcopal cathedral in July. The original cathedral was heavily damaged during the 1994 war in which more than 800,000 people were killed.
  • Viva PBS. In the second season of the PBS drama "American Family," Conrado (played by Yancy Arias, above) is sent to Iraq where he struggles with the media’s glorification of war and must disobey a commanding officer in order to follow his conscience in obedience to a higher power.
  • Great Wall. Chinese Web-users are denied access to a wide range of foreign religious sites, according to Forum 18 news service. The Chinese government’s firewall, used to censor the Internet, blocks access to religious Web sites - including a number of Catholic sites and those related to religious persecution and the Dalai Lama.
  • Vote Watch. Global Exchange’s Fair Elections initiative is hosting international election monitors to observe U.S. pre-electoral conditions and the Nov. 2 elections. The monitors will apply internationally developed standards of electoral fairness to investigate and report on issues of concern to the U.S. electorate, according to the press release.
  • Don’t Cry. Nobel peace laureate Adolfo Perez Esquivel presented new evidence against the World Bank and IMF, charging them with placing Argentina’s government in "a state of need due to the application of economic policies that were imposed - indirectly or directly - by the IMF." Perez Esquivel said, "The resulting situation risks dissolving the national state."

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Sojourners Magazine November 2004
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Debt Relief at Last?

During the last few months,

During the last few months, desperately needed progress has been made on debt relief for the world’s poorest countries. In the lead-up to October’s World Bank and IMF meetings, the U.S. Treasury floated a plan to cancel 100 percent of the debt owed to those institutions by about 30 extremely poor countries.

The need has never been more urgent. Foreign debt is the gift that keeps on taking—many countries, even faced with runaway rates of AIDS and poverty, are forced to spend more each year on interest payments than on education or health care. African countries pay almost $15 billion a year in interest—one and a half times what the AIDS-ravaged continent receives in foreign aid. And debt relief works; the limited debt relief awarded so far has helped countries put millions of children back in school, vaccinate kids against deadly diseases, and fight HIV infection rates.

The Treasury plan isn’t perfect. At least 20 more countries are in great need of debt relief, and the plan is likely to include harmful demands. At press time, it wasn’t clear whether the G7 finance ministers would accept the U.S. plan, or whether activists will have to focus still more pressure on wealthy governments leading up to the G8 meeting in Scotland in July 2005. But when debt relief happens—and, for the survival of millions of the world’s poor, it must happen—there are several lessons we can learn from the past mistakes.

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Sojourners Magazine November 2004
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News Bites

It's On Me. Canada has cancelled the $750 million debt owed it by Iraq to help put the war-torn country on a "better foundation" for economic development, announced Prime Minister Paul Martin at the recent World Economic Forum.

Lawyer Up. Guantanamo Bay detainees have the right to challenge the legality of their detention, stated the National Council of Churches and other religious organizations in a brief filed with the U.S. Supreme Court. The United States has been holding foreign nationals from more than 40 countries at Guantanamo since 2002.

Bar None. Kathy Kelly, above, co-founder of Voices in the Wilderness and three-time Nobel Peace Prize nominee, was sentenced to three months in federal prison for protesting the School of the Americas at Fort Benning, Georgia.

Shop Right. Discount warehouse chain Costco's religious shareholders won a 5 percent proxy vote and declared a "first-step victory" in their campaign to demand that the company develop a transparent policy that incorporates social and environmental factors in the store site selection process.

Dry Heaves. The World Bank predicts that the Yemeni capital of Sana'a will exhaust its water supply by 2010, at which point it will either need to import water or the city must be abandoned. The Earth Policy Institute is now keeping statistics on "environmental refugees."

Chuck E.'s Mad. Pop singer Rickie Lee Jones, not known for her political music, takes on George W. Bush with her latest album, The Evening of My Best Day, featuring several protest songs that directly criticize current U.S. policies, especially the Patriot Act.

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Sojourners Magazine April 2004
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Boycotting World Bank Bonds

Following a two-year organizing drive by students and faculty at the University of New Mexico, the university became the first in the United States to adopt a policy against investment in World Bank bonds. UNM joins more than 80 institutions and municipalities—including seven U.S. cities, 10 investment firms with $16 billion in assets, and dozens of major unions and religious communities—in adopting the World Bank Bonds Boycott, which organizes institutional investors to avoid buying World Bank bonds as a means of pressuring the World Bank for fundamental change on behalf of the world's poor.

In spring 2001, several local student groups formed the World Bank Bonds Boycott Committee and organized a protest in conjunction with international World Bank protests.

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Sojourners Magazine July-August 2003
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World Bank Says 'Oops' on Past Projects, Okays New Pipeline

It’s not just civil wars, AIDS, or other diseases that have brought suffering to sub-Saharan Africa in recent decades. A World Bank report released in June admits that the institution wasted billions of dollars on ill-conceived projects that left nations "project rich and cash poor."

Just five days after releasing the report, the bank approved $193 million in loans for a controversial oil project that will drill 300 oil wells in Chad and build a pipeline through Cameroon to the Atlantic Ocean. Exxon Mobil, Chevron, and other corporations likely will reap a $28 billion profit on the project over the next 20 years. The government of Chad is projected to earn $1 billion to $2 billion, Cameroon $500 million.

The World Bank claims that the project will help "the poor, the vulnerable, and the environment," but Delphine Djiraibe, a spokesperson for a Chad human rights group, believes otherwise. "Under the constant threat of brutal government repression," Djiraibe said, "it is highly unlikely that the citizens of Chad will reap any benefits from the World Bank’s proposed oil pipeline if it goes forward now, and, clearly, they stand to be harmed if they try to voice their concerns." In addition to the risk of toxic spills, environmentalists worry that construction roads would open the nation’s rainforests to poaching and illegal logging.

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Sojourners Magazine September-October 2000
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It's a Start

Recalling my days of fire-breathing student activism with a slight cringe, I assumed an air of aloof bemusement at the strident rhetoric of the IMF and World Bank protesters this April in Washington, D.C. Oh, for the lost days of Idealism vs. evil Establishments (for me, that was two whole years ago) - before the complexities of life in the "real world" hopelessly jaded me. Sigh.

But, for the most part, the protesters are right. The IMF and World Bank (and the WTO) do promote policies that hurt the poor. Whether these institutions should be razed or reformed is subject to debate - a debate that wasn't taking place in the mainstream until students, steelworkers, and people in turtle suits marched on Seattle and Washington, D.C.

Of course, at both events violence by police and protesters grabbed disproportionate attention. Though our local news coverage did a reasonably good job of covering the actual event, the crowd of journalists followed - and nearly outnumbered - the relatively small band of anarchists they hoped were going to "do something." Power plays in which police and activists tried to show each other who was in charge made exciting footage but focused attention on the event rather than its goal. Chants of "Whose streets? - OUR STREETS!" confused rather than clarified the real issues at stake.

More aggravating than these tangents, however, were those of the pundits. While news coverage was generally accurate, the general line on the op-ed pages of the major papers was this: These protesters are a bunch of well-intentioned but ill-informed privileged white kids desperate for something to rebel against. One letter to the editor thought it important to mention that marchers were seen wearing $150 hiking boots - obvious proof to the writer that these were just the ungrateful children of global prosperity.

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Sojourners Magazine July-August 2000
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And on This Side of the Pond

In spring 1995, before the debt crisis was a front-page story, a small group of people representing mainline Protestant churches, peace churches, and Catholic orders and organizations met in Washington, D.C., to brainstorm about creative and effective ways that the U.S. church community could challenge the policies of the international financial institutions. The upstart, ad-hoc group named itself the Religious Working Group on the World Bank & IMF (RWG).

The mandate of the RWG—most of whose members had close contact with people living and working in the "Two Thirds" World—extended across a spectrum of economic justice issues, particularly structural adjustment programs and the debt. However, members soon realized that the crushing debt of the world’s most impoverished countries was a priority and deserved extra attention. They also realized that to continue their work on debt, a strategy needed to be created that would include a broader base than Christian churches. Many members of the RWG were in contact with the coordinators of the Jubilee 2000/UK campaign, and when the British appealed to the folks in the United States to pick up the Jubilee banner, the RWG complied.

At the June 1997 G7 meeting in Denver, when the world’s seven richest countries gathered to discuss the world economic system, RWG members and others concerned about debt cancellation announced the formation of the Jubilee 2000/USA campaign. By December 1997, a campaign platform had been written, additional organizations recruited to join, and the first staff person hired.

THE U.S. AND BRITISH Jubilee 2000 campaigns "have a common vision," said Jo Marie Griesgraber, director of the Rethinking Bretton Woods Project at the Center of Concern and the chair of the Jubilee 2000/USA executive committee. "We want to make debt relief a reality. We want concrete results. We want to get rid of all unpayable debts without the burden of structural adjustment programs."

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Sojourners Magazine May-June 2000
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