May 2002 - VOLUME 23 - NUMBER 5
E D I T O R I A L
Janya Petrovic is blunt: The World Bank, she says, is
clear on what needs to be done [in Central and Eastern Europe]: deregulate
workers rights, annul or considerably reduce severance pay, facilitate
dismissals, introduce fixed-term contracts as a rule, extend the probationary
period for new employees, shorten annual vacations, strengthen employers,
weaken trade unions, legalize equality of small and large
trade unions, bust collective bargaining at the national level. The model of development that the World Bank and the International Monetary
Fund are promoting, says Petrovic, who is editor-in-chief of the International
Confederation of Free Trade Unions Central and Eastern European
Network Bulletin, is anti-worker and anti-unionist. In the interview in this issue, Petrovic offers a detailed account of
the labor law and policy changes pushed by the World Bank and IMF in country
after country. Instead of treating the high level of worker organization in Central
and Eastern European nations as one of the few strengths of these economies
as they transition to market systems, the Bank and Fund have facilitated
the dismemberment of unions. These are institutions out of control. For further evidence, consider the institutions feeble and fatally
flawed debt relief program. Under their Highly Indebted Poor Country (HIPC)
initiative, the worlds poorest countries can receive reduction of
approximately one third of their current payments to overseas creditors
if they endure six years of closely monitored, extremely intrusive
structural adjustment. Structural adjustment is the policy
package that includes such measures as indiscriminate privatization, labor
market deregulation, government spending cuts, trade and financial liberalization,
economic deregulation, an emphasis on exports and charges (user
fees) for people to attend clinics for basic healthcare. HIPC is the institutions most important fig-leaf, a program designed
to obscure the view of the harm they are doing to poor countries. The
World Bank and IMF regularly tout HIPC as a sign of their responsiveness
to the poor. But now the HIPC initiative is beginning to collapse, even on its own
terms. In April, the IMF and Bank announced that several of the countries
that have qualified for debt relief by suffering through the first period
of mandated structural adjustment have had relief suspended. The charge:
they have failed to continue to implement structural adjustment conditions
with sufficient vigor. Apparently, the Bank and Fund cannot control themselves. They want to
exact more blood from the worlds poorest countries, even when they
must know it will sabotage their public relations campaign. There is, however, now an opportunity to rein in the Bank and Fund. This year, the Bank is seeking new monies for its International Development
Association (IDA), the arm of the Bank that lends to the poorest countries. Getting the U.S. contribution to IDA will require a vote by the U.S.
Congress. A broad coalition of U.S. environmental, development, religious, labor
and global justice organizations has formed to demand that if the United
States decides to contribute to IDA a near certainty that
it also work for policies that will reduce the IMF and Banks power.
(Essential Action, a project of Essential Information, the publisher of
Multinational Monitor, is part of this coalition.) The coalition is drawing on a successful initiative two years ago, when
the Congress enacted a law requiring the U.S. representatives to the World
Bank and IMF to vote against projects, loans or strategies that included
user fees for primary education or healthcare. The Treasury Department, which manages U.S. policy at the Bank and Fund,
invented a duplicitous reading of the legislative language to avoid carrying
out Congressional intent, especially on healthcare user fees. But the passage of the law helped force a reconsideration of education
user fees. Now the World Bank, which for 15 years has encouraged school
fees, is actively working to help countries remove such charges. In Tanzania,
the recent elimination of school fees enabled 1.5 million children who
otherwise would have been locked out to go to school. The coalition is now urging the United States to oppose loans or projects
that include a range of harmful provisions, including restrictions on
labor rights; increased water charges for the poor; environmentally hazardous
practices such as aggressive pesticide use; privatization without safeguards
for workers and protections against corruption; and privatization of tobacco
enterprises. The coalition is also proposing the IDA appropriation be accompanied
by new U.S. support for debt cancellation for the poorest countries, social
and environmental assessments of structural adjustment, and requirements
that the World Bank measure the effectiveness of its project loans. Some set of these proposals will appear in an IDA authorization bill,
which Congress will consider over the summer, as well as in the foreign
operations appropriations bill, which is sure to pass by the end of the
Congressional term. It is sad and pathetic that these reforms, limiting the ability of the
World Bank and IMF to do harm, must come from the U.S. Congress. Sad,
because institutions that claim to be devoted to eradicating poverty should
not need such external discipline. Pathetic, because it is not people
in affected countries who have the ability to influence the institutions
policies, but uniquely the citizens of the United States. With that power and influence comes obligation. The Treasury Department will oppose the coalitions proposals, if for no other reason than it does not like Congress trying to direct policy toward the Bank and IMF. It will take an expression of citizen concern to overcome the Treasury Departments obstruction. |