The Road to Prague

A call to action published on and various other places in the run up to the September 2000 mass action against the World Bank and IMF in Prague.

It would take an Ecuadorian working family 25 generations to earn what World Bank president James Wolfensohn, will get paid this year.

That’s if enough of them could leap the child mortality hurdles and then find a job that pays. A fair old task in a country where 70 per cent of the population live on less than $2 a day, with no access to basic health or education. Spending on which has been frozen by Wolfensohn’s Bank at 3 and 8 per cent respectively.

Ecuador’s resources are needed elsewhere – namely to service the International Monetary Fund imposed debt, projected to swallow 53.9 per cent of the country’s 2000 expenditure. (It would take the same Ecuadorian workers 616 years to make the $308,460 IMF boss Horst Koehler will bank tax-free this year.)

In the Spring, when top Cornell economist Ravi Kanbur, produced his draft of the 2000 World Bank’s World Development Report he was ordered to rewrite it. This is the star document in the Bank’s calender and is extremely influential among economists.. In it Kanbur dared to question how well developing countries adapt to capitalism or whether the West’s standard prescription for reform actually helps the poor at all.

Kanbur wouldn’t capitulate and resigned. Followed closely by World Bank chief economist Joseph Stiglitz. Stiglitz had made some powerful enemies (not least Wolfensohn and US Treasury secretary Larry Summers) with his criticisms of ‘The Washington Consensus’, aka: ‘The view of the world driven by the free-market dogmas of the IMF, Wall Street and the US Treasury.’ (Larry Elliot , the Guardian)

‘Kanbur’s departure shows how the persistence of extreme poverty in Latin America, the former Soviet states, Africa and South Asia, right through the roaring 1990’s, has led to scepticism [right at the heart of the capitalist beast] about economic orthodoxy,’ wrote Joseph Kahn in the New York Times.

Typically, capitalism’s shock troops were in ‘open to suggestion’ mode. “No one in his right mind opposes markets or growth,” said Dani Rodrick, economist at Harvard’s Kennedy School of Government.

The man charged with respinning Kanbur’s report is Stiglitz’ successor, Englishman Nick Stern. (Funnily enough Stern’s older brother Richard is the World Bank’s vice-president for human resources, and Wolfensohn had to use his prerogative as president to override bank restrictions on nepotism to get his man in.)

Stern said the report “was read by some people as hostile to growth and reform”. Unlike Nick Stern. Established in the dying embers of World War II, the IMF and World Bank never really came into their own until the oil price hike of the 1970s left many of the world’s poorer oil-importing nations effectively buggered.

Enter the Bank and Fund, awash with petrodollars, who set about initiating a series of loans – more often than not in secret with dubious military dictatorships (Somosa, Pinochet, Suharto, anyone knee deep in the blood of their own citizens qualified). Once ensnared in debt, no country has managed to shake it off.

When they can’t pay it back, the IMF appears with a ‘solution’ of Structural Adjustment Packages. These include replacing the domestic economy with a trade based system, enforced relaxation of import/export tariffs and the removal of subsidies for basic foods and local producers (the decimation of small scale, non transport dependent, domestic industry), the creation of independent (Washington controlled) central banks, the privatisation (sale to Western multinationals) of state assets, water and power, a garage sale of any natural resources (theft by Western multinationals) and the removal of people from the land that used to feed them, which is instead turned over to crop production to feed Western coffee or cocaine habits.

When this lot fails to meet even the interest repayments on the debt, wages are cut and social spending (healthcare, education, welfare) is done away with, to foot the bills.

To the free-trade obsessives, economic growth is the only solution. “It doesn’t take a genius to pump up the GNP [of a developing country] by burning down rainforests, using slave labor and social repression to keep things in place,” wrote economist Hazel Henderson.

After a career peddling the party line, Stiglitz took his nose out of the book and made the unthinkable connection between cause and consequence. He contributes the Asian economic collapse to the IMF’s refusal to see how its policies were driving the tiger economies into the mud.

Russia too: ‘The IMF and [US] Treasury laid the groundwork for the plundering. While the government lacked the money to pay pensioners, the oligarchs were sending money obtained by stripping assets and selling the country’s precious natural resources into Cypriot and Swiss bank accounts.”

Much as the hand in your pocket is connected to the knife at your throat: while the IMF are ‘adjusting’ economies, the World Bank are busy enforcing ‘development projects’ that recipient countries neither need or can afford. As the West spouted off about CO2-emissions reduction, the Bank, between 1992 – 97, spent over $13bn on fossil fuel pipelines and power stations in the Southern hemisphere.

They have funded over 500 large dams in 92 countries, that have left over 10 million people homeless and without the means to feed their families. They have supported private mining projects from Guyana to Peru to Papua New Guinea, that have destroyed communities and flooded rivers and seas with millions of tons of toxic sludge.

For decades they have funded agricultural and health projects that involved the pesticides DDT, lindane and parquat. With the West finding it ever more expensive to dispose of its own mess, the Bank has given money to multinational companies to build medical waste incinerators throughout the so-called developing world, that pump mercury and dioxin into, less heavily legislation-protected, lungs.

By their own calculations more than two thirds of World Bank funded projects are failures. ‘IMF economists,’ says Stiglitz, ‘frequently lack extensive experience in the country [they have come to assist]; they are more likely to have first hand knowledge of its five-star hotels than the villages that dot its countryside.’ He describes the Fund’s calculation methods as ‘flawed or out of date’.

In one case the IMF team ‘copied large parts of the text for one country’s report and transferred them wholesale to another. They might have gotten away with it, except the ‘search and replace’ function on the word processor didn’t work properly, leaving the original country’s name in a few places’.

But the world is done with lying down in the face of pin striped rapists, however many cops or bulldozers they can muster. ‘Its time to deal with this financial dictatorship,’ rallied labour leader Hugo Moyano, to 80,000 Argentinians on the streets of Buenos Aires in May.

He urged them to stop paying their taxes and strike, in opposition to austerity measures brought in on IMF instructions. With the threat of withholding a $7.3 billion loan, the Fund has demanded Argentina keeps its budget deficit below $4.7 billion with wage cuts and tax hikes. (A scenario unlikely to be repeated in the country with the world’s largest budget deficit, 3000 miles to the North).

Within days Pakistani small traders were on strike when their government, hanging out for a $2 billion IMF loan, made similar proposals. Surreally, they needed it to start repaying the country’s $38 billion, Fund-inflicted, debt.

In June Paraguayan strikers were clashing with police over World Bank/IMF demands that the state telephone, water and rail companies be privatised. Simultaneously the Nigerian Labour Congress brought Africa’s most oil-rich nation to a standstill after the IMF enforced a doubling in price for domestic petroleum products.

‘The IMF measures are at odds with what this country and its people desperately need,’ says Kwesi Owusu, head of Africa’s Jubilee 2000 Initiative. ‘Is it not ironic that whilst western creditors allowed Abacha and his corrupt gangster regime to default on debt repayments, they are now hell bent on squeezing the last drop of blood out of a new democratic government?’

Apparently oblivious to the unrest and misery caused by his fund’s policies Horst Koehler talks of the need to ‘adapt’ the IMF’s ‘global growth strategy’ to a ‘world where financial markets have seen such phenomenal growth in size and sophistication’. On whatever scale, capitalism’s first thoughts are always with the shareholders.

In a fit of ‘generosity’ flood ravaged Mozambique, whose entire economy was wiped out in the spring, was told it need only pay $73 million of the $100 million debt servicing it was due to cough up this year. With the subtlety of an ambulance-chasing coffin salesman, the IMF, moving in as Hurricane Mitch moved out, offered to wipe out less than half of Honduras’ £2.4 billion debt in return for sweeping social security reform and the privatisation of the state power distribution industry.

PRAGUE IN SEPTEMBER The Bank and Fund claim they are meeting in Prague ‘to combat global poverty and create conditions of sustainable growth’. They have a programme of events that will run from 18 to 30 September, including committee meetings, the release of the comically rejigged ‘World Development Report’, and various seminars (ranging from ‘Financial Crisis Resolution: What Role for the Private Sector’, to ‘Dollarization: Is it the way Forward?’, and ‘After the Guns Go Silent: Post Conflict Resolution[read Take Over]).

The boards of governors of the two institutions will meet between Tuesday 26 and Thursday 28 September. Activists intend to close the opening ceremonies (on the 26th) and prevent any meetings going ahead over those three days. CZK2.8 billion (£51 million) has been blown rebuilding Prague’s Palace of Culture Congress Centre for the meetings.

Though of course this ‘will contribute greatly to the development of congress tourism in Prague,’ according to the IMF/WB Group. Unfortunately the centre only incorporates 261 hotel rooms, so the majority of the 20,000 expected government and business delegates will have to stay elsewhere in the town.

They may have a job finding a spot to lay their laptop’s and complimentary smoked salmon boxes, as twice that number of anti-capitalist activists are planning to make the trip to Prague that week too. The Prague based Initiative Against Economic Globalisation (INPEG), a loose coalition of anarchists, environmentalists, socialists and anyone else concerned about the global decimation and the genocide of free market capitalism, has put out an international call for people to join the week’s campaign and support the global day of action on September 26.

‘Capitalist globalisation is a continuation of colonialism, stealing enormous wealth from the poorest parts of the world,’ they say. ‘At the same time anti-social neoliberal policies force workers in industrial countries to compete with workers in so-called developing countries.’

INPEG’s motivation makes compelling reading: More than four billion people live on less than $2 a day; 17 million children a year die from easily curable diseases; a third of the inhabitants of the Southern hemisphere will not reach the age of forty and 250 million children, in so-called developing countries, work as slave labour (more often than not for multinational corporations) to support their families.

‘We can’t oppose institutions like the IMF and World Bank by lobbying ,’ say INPEG, who instead are calling for trade unions, the unemployed, the landless, environmentalists, migrants and radical political activists to unite on the streets of Prague in September.

‘Globalisation can’t be opposed by the protectionist policy of nation states. The real alternative is a society, not based on profit for a few, but on the genuine needs and desires of everybody.’

The day of action has been tagged S26 . This is the latest pallette on capitalism’s funeral pyre – following J18, N30, A16 and M1 (co-ordinated global actions against the G8 meetings in Cologne, the WTO in Seattle, the IMF/WB in Washington DC and the Mayday international day of anti-capitalism respectively). Described as ‘meeting-stalkers, following the trade bureaucrats as if they were the Grateful Dead,’ by Naomi Klein in the New Statesman, social justice activists have not only put the spotlight on some highly secretive, not to mention murderous, organisations, they have put the global-carve-up posse firmly on the back foot. Horst Koehler has been lapping the planet on a ‘listening tour’ of the nations his organistation has beaten to a blooody pulp.

Bruce Silverglade, of the Center for Science in the Public Interest – who managed to get himself invited to a high-level seminar on “After Seattle: Restoring Momentum to the WTO” – exposed WTO strategists plotting to ‘de-legitimize’ anyone who dared to oppose them.

Silverglade explains how the meeting’s chair, Lord Patterson, UK Secretary of State for Trade and Industry under Thatcher, said: ‘Non-profit groups have no right to criticise the WTO as undemocratic, because the groups themselves do not represent the general public,’ (unlike the WTO). Patterson described Clinton’s speech during the WTO meeting Ð acknowledging the protesters’ concerns as “disgraceful”, as disgraceful as the delegates having to survive on sandwiches without ‘a decent meal’ for three days.

‘The Lord finished his speech by recalling better times having tea with Maggie, and stating that the staff of the WTO Secretariat should not be balanced with people from developing countries just because of the colour of their skin.’ ‘[One] former White House budget official [asked] can’t we give the NGOs other sandboxes to play in and have them take their concerns to groups like the International Labour Organisation.’

(The UN sponsored ILO have recently produced a report blasting globalisation for costing jobs and increasing insecurity. ’75 per cent of the worlds 150 million unemployed have no benefits or social protection’.)

Discussions about what form the actions should take have been underway in activist communities all over Europe and beyond for some months. An open meeting in Prague was initiated, attended not only by Czech activists but by Catalan squatters, Austrian feminists, Norwegian Christians, French workers, Dutch environmentalists, Earth Firsters from the North of England and RTS’s from the South. Not to mention Ya Basta! Italy’s infamous ‘white overalls’ fresh from their recent successes – kitted out in full activist riot gear – at the OECD summit in Genoa in May.

While ‘not supporting the initiation of any violence against people, animals or property,’ INPEG are intent on upholding ‘citizens’ democratic right to demonstrate. We oppose any measures taken by any authorities to prevent people from exercising this right.’

In an echo of the strategy used in The City of London Carnival Against Capital on June 18 1999, the morning call is for autonomous non-violent actions around Prague aimed at awareness raising and the disruption of the conference. In the afternoon, protesters will converge for ‘a mass action of civil disobedience with the aim of stopping the IMF/WB’. There is no secrecy. ‘We have nothing to hide,’ say INPEG. ‘We don’t see any legitimacy in the IMF or World Bank.’

Taking a lead from the sideshows that surrounded the high profile US based anti capitalist actions, the Prague resistance will also incorporate a range of other stuff. A counter-summit, to explore the issues being raised, is planned across the city that week. Anti capitalist academics from Chomsky to Chesney are being touted as speakers.

If grassroots activists are encouraged to take part (The American N30 and A16, International Forum on Globalisation, sponsored events were a touch on the ‘exclusive’ side) this could prove a good forum for debating divisions within the movement as well as post revolutionary strategies.

An Art of Resistance festival of art, music, theatre and exhibitions – originally viewed as a front for the demonstrations, which have since been made legal – realising their initial line of non-co-operation, was making them look a little more Stalinistic than they liked, the Czech authorities have allowed protest in the city from 8am to 8pm for a ten day period – is also planned, along with a host of smaller protests, single-issue actions, squatted buildings and pirate radio broadcasts.

INPEG are concerned that the threat of capitalism does not appear to be a major issue for many Czechs (following the ’89 ousting of the state-communist regime, it was seen as a solution to the shit they were having to put up with).

However since 1990, and the acceptance of a $3.9 billion dollar structural adjustment dependent IMF loan, wages have plummetted and social security is worth less than half of what it was. In an attempt to ‘include’ the people in the enforced privatisation of industry, vouchers were distributed to buy shares, private bond companies bought them up and ownership, as is the way, is now concentrated in just a few grubby mits.

In return Czech got swamped with western corporations, eager to strip the young country of its natural and labour resources (Prague boasts 24 McDonalds, Tescos and a Monsanto office – addresses in the phone book), who set about putting the domestic producers out of business.

President Vaclav Havel – who rose to power as a protest leader himself during the November ’89 ‘Listopad’ or ‘Velvet Revolution’ (even spending several months in jail after leading mass demonstrations against the old regime) has been trying to set up a meeting between protesters and the IMF.

Koehler is up for this, and plans to be in Prague in July, though activists claim it is laughable to suggest that the IMF would change their strategies on the back of any negotiation (they have not bowed to any pressure – other than that of the global corporations – since their 1944 inception).

It is clear that any private talks between a handful of delegates, from either side, is little more than a greenwash style PR stunt from the IMF. Havel is keen to keep the peace, not only to keep his own people sweet – only a decade has passed since they rid themselves of one despotic government that was having them beaten in the streets – but he is also keen to court favour from the capitalist puppeteers, as the Czech Republic (probably have to drop the R word) slides into the EU and NATO.

Having said that, some of the more media magnetic, reformist NGOs are queuing up to enter into talks (led by the comically named Bankwatch, a World Bank ‘watchdog’ funded by The World Bank.)

David Korten of the People Centred Development Forum, a man with three decades experience of so-called ‘development’ projects, is adamant that there is no reforming these institutions. ‘If there is such a thing as institutional evil, it is embodied in the World Bank and IMF,’ he told Urban75 during April’s DC protests. ‘Between them they have done more harm to more people than any other non military organisations in human history.’

Havel has offered protesters a disused stadium in which to camp. though the potential for police deciding to contain everyone there, during a change of heart, means most will probably avoid this. As one British activist recently returned from Prague said: ‘The Chileans made that mistake. In my experience, the Czech police seem to work entirely independent of the Czech state anyway.’ Activists are being advised to work as independently as possible, though information and some decentralised co-ordination will be available, those coming should sort out their own travel and accommodation.

The present atmosphere of dissent, initiated perhaps by Mexico’s Zapatistas or Nicaraguas Sandanistas, that came to attention of the West on the streets of Seattle in November 1998 has been compared to the anti-war movement of the 1960s. However, this generation of upstarts do not appear keen to ‘grow up’ and replace the leaders and lenders they see as their nemeses.

The job in Prague is not to attract publicity or to open up debate for reform. To those who asked: ‘But what would you put in place of the IMF and World Bank?’ veteran campaigner Susan George would reply: ‘And what would you put in the place of cancer?

‘The death throws of the IMF and World Bank may take some time, but these institutions are going to die, that much is definite’ says Walden Bello of the food and development policy institute, Food First. The intended domino effect of the S26 actions – if the movement follows through – is to speed up that process. From there, the greater beast of global capitalism becomes a little closer to the cross hairs.