Blueprints for redesigning the World Bank
Thousands swarmed capital yesterday, protesting meetings of World Bank and IMF.
Kenan Anderson and Barber Conable don't have much in common.
Mr. Anderson, a self-described anarcho-syndicalist, sports a Mohawk of curly, burgundy-colored hair and a shirt adorned with the logos of "political punk" bands.
Mr. Conable, a former congressman, a regent at the Smithsonian, and a former president of the World Bank, blends easily into the three-piece suit crowd.
But there may be one thing the two men agree on: The International Monetary Fund (IMF), which bails out economies in crisis, and the World Bank, which tries to alleviate poverty, are ripe for an overhaul.
Conable and Anderson are far from alone. From hard-nosed Harvard economists to a hippie-era holdover named Starhawk, these once-quiet institutions are under a barrage of attack. Among the critics, there are widely varying - and sometimes contradictory - ideas on how the world economy ought to work. But one thing they can agree on is that the World Bank and IMF need to be more open, more democratic, and under more scrutiny.
"They have lost contact with public opinion - they have to make a greater effort to be convincing about their mission," says Bob Hormats, vice-chairman of Goldman Sachs International.
Yesterday, the debate over the future of the organizations turned to the streets, as protesters unsuccessfully tried to prevent 750 delegates from 182 countries from attending the spring meetings of the fund and the bank.
Police allowed the protesters to roam the streets, which were filled with the sound of impromptu drums, dancing papiermch puppets, and chants. The street theater was similar to last November, when demonstrators delayed the start of the World Trade Organization meeting in Seattle. This time, however, the finance ministers started on time.
"It would have been nice to keep them from meeting, but I think we have been educating people, so it's a success," said a butterfly-winged Feather Ash, a student from Fitchburg State College in Massachusetts.
On Saturday, the police arrested 600 protesters, and arrests continued yesterday, amid scattered clashes between police and protesters.
Differing ideas for reform
Although the IMF and the bank are not likely to give in to the protesters, the hubbub is casting a bright light on organizations that usually make their decisions in secret.
Specific ideas for reform can be as disparate as the colors of hair on protesters' heads. But among them are:
*Shift the focus of the World Bank away from loaning money for public-works projects and toward broader research on development. "The world has plenty of banks," says Jeffrey Sachs of the Harvard Institute of International Development in Cambridge, Mass. "What the world needs is an organization that will do things banks don't do."
*Stop the IMF approach of requiring conservative economic policies as a condition of aid. Critics say the fund effectively bribes governments into cutting social benefits. They want aid to be awarded with fewer strings attached.
*Other critics would attach new strings, saying the IMF and World Bank should make human rights and environmental concerns central to aid-giving.
The one thing on which most critics agree is the organizations need to be more open (even the US Treasury concurs). The fund is taking baby steps toward more disclosure, but most of its actions remain shrouded in secrecy. Slowing the process are nations that are reluctant to open up details of their economy to the public, according to a fund official.
Many supporters of the institutions also are in favor of change. Conable, who headed the bank from 1986 to 1991, thinks the two organizations should merge. "There is a lot of turf creep," he says. "Someone should be coordinating these two agencies, and one way to do it is to merge them."
He would like the bank to ease its criteria for making loans. "Perhaps we should reduce our expectations of what is achievable," he says. "For example, in Mauritania, all the oases are dried up, they have very little future. But should we ignore the country?"
Even Treasury Secretary Lawrence Summers, a frequent Fund defender, has proposed IMF reforms. For example, he wants the body to loan only to nations in financial crisis, rather than underwrite broad, long-term economic programs. And he would like the World Bank to lend only to the poorest nations.
Signs of greater openness
In response to the concerns, the IMF plans to publish its financial transactions on a quarterly basis, eliminate some of its departments, and try to catch wayward economies sooner.
At the same time, the IMF is trying to make itself more relevant: Among the topics the finance ministers hoped to discuss are AIDS and debt relief for poor nations. "We have to listen to the demonstrators. We have to have discussion with them," says Stanley Fischer, the acting managing director of the IMF.
Despite the protests, Conable does not expect major reform. Typically, the finance ministers leave the World Bank meetings to the bureaucrats. "Their instructions are not to compromise on anything, which is why nothing gets done," he says.
(c) Copyright 2000. The Christian Science Publishing Society