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28 September 2000 Edition

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Who controls the Future?

From Nick Buckley in Prague

IMF and World Bank bosses, Horst Kohler and James Wolfensohn, like to characterise the thousands of protesters who take to the streets to demonstrate against their institutions as ill-informed and misguided, but essentially well-meaning. They both talk of past failures and of the need for reforms, but maintain that poor countries would be in a far worse state without their help. Wolfensohn in particular likes to talk of poverty in the world and the widening gap between rich and poor.

     
The phenomenon of debt should not be seen as a transitory problem, but rather as an indispensable feature of international relations
It's an appealing image: the avuncular directors gently rebuking the young people who choose to fling their bodies in their path, and reassuring the world's press that, while all is not well with the world, the solutions are close at hand. As Russian political scientist Boris Kagarlitsky puts it, the lending institutions thrive on superficiality. Nothing in the discourse of these bodies touches on the fundamental question: how the huge debt crises that have crippled most of the world's population since the 1970's can be resolved by the very structures that created them. Structures that for decades have imposed the interests of credit institutions and creditor nations - in short, the West - on countries and peoples too weak to oppose them.

Kagaritsky - speaking at a weekend counter summit organised by INPEG, the coalition of activists behind the Prague protests - compared Wolfensohn to Mikhail Gorbachev. Like the former Soviet General Secretary (a figure reviled in his native Russia), the World Bank supremo is attempting to reform the unreformable. ``I am reminded of a joke we in Russia used to tell. The train carrying us on the railroad to Socialism first ground to a halt when Stalin had the engineer shot as a subversive. Khrushchev had him rehabilitated but it made no difference - the guy was still dead. So Brezhnev came up with the ultimate solution: to pull down all the blinds and pretend the train was still moving. That's exactly what Wolfensohn is doing at the World Bank.''

     
The Centre is only rich because the Periphery (Africa, Asia, Eastern Europe and Latin America) is poor. It cannot be otherwise
One of the issues at the centre of the fight for global economic justice is the collapse of Eastern Europe and the rapid fall of the population into poverty. Absolute poverty in the region is defined as having less than 2 dollars a day to live on, and it has risen from 2% in 1988 to 21% in 1998. Obviously this is not the future that the hundreds of thousands on the streets in 1989 envisaged. The extension of laissez-faire capitalism to include the other half of the globe has brought misery to millions.

The World Bank charts many of these tragedies - albeit in an overly optimistic way, comparing the former USSR to Latin America when in fact its future looks far bleaker. There is, after all, nothing to be gained in denying the obvious facts. The Bank even correctly blames many of the problems on ``the capture of governments by powerful business elites''. However it fails to go beyond this and examine the way in which Structural Adjustment Programmes enhance the profits and the relative power of these elites while disempowering workers and local populations.

Another speaker at the counter summit, journalist Peter Custers, concentrated on the nature of trade between the developed countries and the poorer regions. The exchange is unequal, because the products of the Third World are grossly undervalued in relation to those of the rich countries. The United States, Western Europe and Japan import raw materials at rock-bottom prices in order to then sell their produce at exorbitant rates.

There is also the question of the ecological debt to the Third World because the so-called ``creditor countries'' inflict huge ecological damage on these regions. Debt crises which force countries to export vast quantities of raw materials in order to service their loans have the result of increasing the supply of these materials, hence lowering prices and the costs incurred by more developed economies. The indebtedness of poor countries therefore benefits the rich ones immeasurably. The phenomenon of debt should not be seen as a transitory problem, but rather as an indispensable feature of international relations. The Centre is only rich because the Periphery (Africa, Asia, Eastern Europe and Latin America) is poor. It cannot be otherwise.

Custers went beyond this to analyse the nature of the exchange between rich and poor countries. In effect, this means the exchange of waste for wealth. Western economies - the US in particular - benefit from the export of arms to countries ravaged by war. Transnational corporations acquire raw materials (eg diamonds or oil) at low prices from the different factions, hungry for cash to buy armaments with. Custers makes the point that we should blame the corporations and the arms producers for this situation, rather than rejecting all armed movements out of hand.

Jubilee 2000, the international campaign against debt enslavement, also held a series of talks and discussions in the centre of Prague, bringing together a wide range of speakers from both rich countries and poor ones such as Ecuador and Indonesia. One of the triumphs of the movement for global justice - a complex weave of different strands of opinion - is that the possibility of debt relief is now universally accepted. The only question is how much money and for how many countries. The IMF is thinking in terms of relief for 10 extremely poor African and Asian countries, but even the most moderate critics are not content with this. As Ann Pettifor of UK Jubilee 2000 stated, the World Bank and the IMF ``can cancel 100% of the poorest countries' debt, and their G-7 puppet-masters should make them do it''.

Prague is at the centre of a fascinating world debate this week and the level and depth of analysis among the different groups protesting here is intensifying at a dizzying velocity. Whatever the lending institutions may be telling the TV cameras, on an intellectual level it's clearly the people on the streets who have the upper hand.

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