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spring meetings II
Mark asked why they’re protesting. Because the first time I asked that question, the person I was asking rolled her eyes and said “Don’t ask,” I’ve decided to actually answer it.
This Wikipedia article is about the movement(s) that protest. The protests are MUCH smaller than they used to be. In Seattle, in 2000, there was a very large to-do. Like all peaceful protests can, it got violent after the involvement of the authorities.
http://en.wikipedia.org/wiki/Anti-globalization_movement
The following is my own understanding from my work. I haven’t actually read the Wikipedia article above; this is just what I’ve learned over the last few years working on publications in this area. It’s entirely possible that I’m wrong on much of it.
The World Bank lends money to developing countries and consults with rich country governments on grants and trade. The IMF keeps track of exchange rates and of which countries owe money to who (the “balance of payments”). Aid comes in three forms: trade, loans, and grants. Grants are loans that don’t have to be repaid. Many loans to developing countries are converted to grants, or forgiven, sometimes due to default and sometimes as a reward for developmental milestones.
Basically, these nongovernmental international organizations, and to a lesser extent the United Nations, are very big on promoting free trade between industrialized (“rich” or “developed”) countries (like the US, Japan, Canada, Australia, and western Europe) and developing (poorer) countries (like those in southeast Asia and sub-Saharan Africa). Free trade agreements are seen by some as a way to make it easier for cheap import goods to displace home-grown goods in the local market.
The problem is that these developing countries NEED developed countries as trading partners; without the ability to export goods to countries with the means to pay for them, they’re caught in a cycle where they can’t get any richer. Developing countries need money to establish better infrastructure (roads, schools, hospitals) in order to improve conditions. Improved conditions, especially for women and children, lead to better-educated mothers, which leads to a healthier, longer-lived, better-educated population, which leads to an end to despotic governments and civil wars.
But it all comes down to trade, because none of that great stuff, like well-fed children, accessible schools, smaller families, and healthy (read: HIV-negative) teachers, can happen unless developing countries have money coming in year after year after year: money they earn through selling exports. Some of the anti-globalization groups make the very good point that rich countries’ efforts are better spent building ways for developing countries to trade with *each other*, because most of the existing trade groups meant for that purpose are outdated, ineffectual, and corrupt.
To make it even more complicated, there’s another organization, called the WTO, the World Trade Organization. The WTO is actually supposed to have oversight over international import tariffs (there are also export tariffs, by the way, meaning a country charges a fee to allow producers to ship goods overseas instead of selling them at home). They’re supposed to approve tariffs before they go into effect, and give poorer countries a forum to contest tariffs they see as unfair. Unfortunately, richer countries are better-represented to and within the WTO, and the organization has a tendency to produce policies and rulings that favor rich countries over poor ones.
Many rich countries charge poorer countries huge tariffs for the right to import goods into their markets. For instance, Egypt produces cotton. Egypt can produce more cotton more cheaply than, say, the USA can. But the USA *does* have its own cotton farmers. Through lobbying efforts and “protective” legislation, the USA has laws that mean Egyptian cotton exporters have to pay fees just to compete against American cotton in the marketplace. For many smaller countries with smaller exports, tariffs are so high and take so much profit away that they simply cannot compete; they can’t afford to place their goods into markets where they’re wanted.
Catfish from southeast Asia, shea butter from Africa, and exotic woods from South America are the same way. American catfish farmers were extremely successful in their efforts a few years ago; I don’t know if it’s true in Canada, but here, if you look at catfish at the grocery store, catfish from outside the USA isn’t even *called* catfish. It has a much less familiar name. The reason? Catfish from outside the USA is cheaper, and the catfish farmers’ lobbyists got Congress to pass a labeling law to encourage American consumers to buy the more expensive, more profitable American fish by convincing them the fish from Asia isn’t the same thing. Which it basically is.
The Bank and the IMF are seen by some as working in the interests of large corporations. Outsourcing of tech jobs to India and manufacturing jobs to China is a huge cost-saver for corporations based in rich countries. On the one hand, it leads to better infrastructure and more productive employment for the people living in those countries; on the other, it’s perceived as taking jobs away from people in more affluent countries, where the standard and cost of living are much higher, who are justified in refusing to do them as cheaply. On the one hand, international corporations do developing countries a favor by employing their people. On the other, they do tend to keep to themselves, sometimes maintaining beautiful, modern office campuses right next to the slums where their employees may live, with no effort to improve conditions *around* their own installations. It’s obvious why this can bother people.
The Bank and the IMF are concerned with fixing what’s broken. They were established by a meeting called the Bretton Woods Initiative, which occurred in 1945, when everything WAS broken. These days, the stated mission is an end to poverty. So a good point can be made: both organizations have a mission to ensure their own obsolescence; that is, a world where the Bank and the IMF are successful is a world in which they’re not necessary, and why would they work towards that at all?
