Mark Jones debates the World Bank. Thanks for expanding your views, Mark. Mine Mark Jones wrote: > [Follows an email exchange between Henry Liu and Mine Doyran, followed > by Doug Henwood's recent article in "The Nation". The subject-matter > is the fate of the World Bank's "World Development Report". Kanbur got > pushed out because his draft report was too controversial for World > Bank panjandrums. As Henwood says, " Ravi Kanbur, an outside economist > whom Stiglitz brought aboard to supervise the writing of the bank's > annual World Development Report, resigned "in anger" (as the New York > Times put it) in June when he was ordered to revise the document to > conform to the party line that growth is the highest good of economic > policy." > > There are two issues here (at least): when is the continuing evidence > of chaos and ideological decay in Washington, symbolised by the > collapse of the "Washington Consensus". This is the reality behind > the triumphalist neo-liberal cry of TINA "There Is No Alternative". > There all too obviously ARE alternatives to the IMF/Washington gospel > of enforced "structural adjustment" programmes, global integration, > closure of public services etc. > > It is important to remember that the world deflationary crisis now > lapping at the feet of the Great and the Good in London,l Paris and > Washington has been a lived reality for most of the world's poor for > decades: at least since the FIRST (1973) oil-crisis which put paid to > any hopes of 3rd World development. Now the Fourth and Final Oil-Shock > has begun. For people in the rich west the flood water can rise a long > way before they hurt too much; for the peasants in Asia (quite > literally in today's flood-stricken Mekong Delta or flood-stricken > Bangladesh), who are already up to their necks in water, a single > ripple is enough to drown them. But the Oil-Shock is not a ripple, it > is an economic Tsunami of devastating force. > > So something has gotta give. The Washington Consensus is already a > thing of the past, but this huge, tempestuous new crisis which is > about to crash down on the capitalist world-system, will also be the > final nail in the coffin of the Neoliberal social experiment. > > The second point about this exchange is the insight it once again > provides into the intellectual and political corruption of the US > liberal-left. > > Mark] > > [Fwd: FWD: Henwood on Kanbur and Stiglitz] > From: Henry C.K.Liu <[EMAIL PROTECTED]> > Date: Wed, 20 Sep 2000 21:42:49 -0400 > > Comments on Ravi Kanbur's resignation > "The tussle about what the WDR [World Development Report] should > and should not emphasize demonstrates that there are forces inside and > outside the World Bank hostile to even a modest modification of the > dominant paradigm on development. The Bank may want to signal that it > is turning into a caring organization but, like a leopard and its > spots, it cannot change even if it wants to." The Hindu, 26 June, 2000 > "Everyone is shocked and deeply saddened that Ravi left. Many of > us see this as a real blow to the empowerment agenda; and if I've > learned anything from my work it's about the powerlessness of being > poor." World Bank source > "Ravi Kanbur has recently decided to leave his position as Staff > Director of the World Development Report "Attacking Poverty." Ravi's > decision is a source of regret for the Report's team, for colleagues > in the Bank and for many people outside the Bank who have been working > on the WDR. In leaving Ravi said he had some reservations on the > emphasis of the main messages that were likely to emerge in the final > version of the Report. We believe these reservations to be unfounded." > Jo Ritzen, Vice President, Development Economics, World Bank > "The Washington Consensus has emerged from the Asia Crisis with > its faith in free markets only slightly shaken. Poverty eradication is > now the menu, but the main dish is still growth and market > liberalisation, with social safety nets added as a side dish, and > social capital scattered over it as a relish. The overall implication > of the resignation is fairly clear. The US does not want the World > Bank to stray too far from its agenda of economic growth and market > liberalisation. Ravi Kanbur's draft has raised a few too many doubts > about this agenda, and strayed too much towards politics." The Nation, > Bangkok, 5 July, 2000 > "To keep the Bank afloat Wolfensohn has to steer between two major > constituencies. The first are the critics, the second is the US > Treasury. You don't need to be a World Bank economist to do the cost > benefit analysis. To save the Bank, and his own reputation, it is > essential that the Bank's policies and public pronouncements do not > err too far from its main shareholder and political protector, the US > Treasury." Focus on Trade, Number 51, June 2000 > "A rare individual has the courage to resign, but what about the > thousands who don't? We need to question all reports and documents and > data coming from the World Bank which the media and others use as > their source of truth about the South. This is the tip of the iceberg > of the reports that are produced under such intense politicization" > Michael Goldman, editor Privatising Nature, Political Struggles for > the Global Commons > "At the World Bank, the high church of development economics, a > widening schism over how to fight poverty is sending ripples around > the world. Ravi Kanbur, a top Cornell economist and the man hired by > the bank to oversee the writing of its World Development Report, > resigned in anger recently when he was ordered to rewrite his staff's > draft. The report is extremely influential among economists, and Mr. > Kanbur's version questioned how well developing countries adapt to > capitalism. In fact, it questioned whether the West's standard > prescription for reform does enough to help the poor." Joseph Kahn, > New York Times, 25 June, 2000 > http://www.brettonwoodsproject.org/update/18/18a.html#2 > > Mine Aysen Doyran wrote: > * This piece has emerged on the _International Political Economy_ > listserv today, and originally appeared in the _Nation_ magazine, > where the author of the article presents an overly positive view of > the former chief economists of the World Bank, Stiglitz and Kanbur, > and praise them for being "humane reformers who sincerely care about > the world's poor". I am posting the article as an evidence of the left > liberal position on international affairs and "humanist imperialism" > of the World Bank. This is evidently a pro-system journalism, so I am > telling _in advance_ to avoid another _Business Week_ friction. Since > this is the trendy position among the left in the US today, It is > always important to be updated about their views. > * Mine Aysen Doyran > * PhD Student > * Department of Political Science > * SUNY at Albany > * Nelson A. Rockefeller College > * 135 Western Ave.; Milne 102 > * Albany, NY 12222 > * ------------------------------------------------------------------- > ----- > > Subject: FWD: Henwood on Kanbur and Stiglitz Date: Wed, 20 Sep 2000 > * > * This article presents one view of the policies at the WB and IMF. > * > * The Nation - October 2, 2000 > * > Stiglitz and the Limits of 'Reform' Doug Henwood > It's global protest time again. When Bill Gates and other members of > the global elite gathered in mid-September for the World Economic > Forum in Melbourne, Australia, thousands of union members and > activists filled the streets to protest the effects of unfettered free > trade. The next opportunity to trouble a convocation of the world's > bigwigs is in Prague at the end of September, when the World Bank and > International Monetary Fund hold their annual meetings. In April, > their midyear meetings brought thousands to Washington and shut down > the city > There's a long-standing split among those who protest and criticize > these institutions - and their close relative, the World Trade > Organization - between those who'd reform them and those who'd prefer > to shut them down. Two forced departures from the World Bank have made > the limits of reform irrefutably clear. > The first was the exit of former chief economist Joseph Stiglitz at > the end of 1999. Stiglitz had made one too many public criticisms of > the economic policies preferred by the bank and its ultimate master, > the US government. And more recently, Ravi Kanbur, an outside > economist whom Stiglitz brought aboard to supervise the writing of the > bank's annual World Development Report, resigned "in anger" (as the > New York Times put it) in June when he was ordered to revise the > document to conform to the party line that growth is the highest good > of economic policy. > Stiglitz was appointed to his World Bank post in December 1996. Long > regarded as one of the leading theorists in his field - and frequently > tipped as a future Nobelist - he served on Bill Clinton's Council of > Economic Advisers from 1993 until his move over to the bank. Despite > this respectable pedigree, Stiglitz started causing trouble almost > from the first. > He attracted worldwide notice with a January 1998 lecture in Helsinki > in which he criticized the "Washington consensus" - the austerity, > privatization and deregulation agenda that had become the standard > policy prescription for much of the world - as misguided and often > disastrous. He pointed out that the historically unprecedented rapid > economic growth in East Asia - and with it the increases in life > expectancy, literacy and other social indicators - was the result of > the sort of state intervention that the bank frowns on. He also > pointed out that the 1997 financial crisis that interrupted that > growth was in large part the result of the reckless decisions of > private investors. But instead of drawing the proper conclusions, > Stiglitz noted, market ideologues were using the crisis to discredit > state intervention and promote more market liberalization. He further > argued that moderate inflation is pretty harmless, budget deficits > aren't necessarily evil, privatization isn't a panacea and > deregulation of domestic and international financial markets can do > serious harm. For a senior World Bank official to say these things is > a bit like a Pope denying the Virgin birth. > As his tenure progressed, Stiglitz elaborated on these themes. He > publicly rued the fact that workers and small businesses were "getting > screwed" because they were inadequately represented in > decision-making. He criticized the IMF - without mentioning it by > name - for making the Asia crisis worse by imposing austerity programs > instead of stimulating imploding economies and shoring up social > safety nets. He proposed that restricting the freedom of global > capital movements could make the world less crisis-prone. He mused > that the disastrous results of economic reform in Russia were "not > just due to sound policies being poorly implemented" but to "a > misunderstanding of the foundations of a market economy"earning him a > public rebuke from World Bank president James Wolfensohn. > The accumulation of sacrileges became too much, and Stiglitz's > "resignation" was announced last November, an occasion that led > Treasury Secretary Lawrence Summers to praise Stiglitz as a "major > creative and intellectual force." The Clinton Administration said it > had played no role in the exit. In fact, according to World Bank > insiders Summers informed Wolfensohn that if he wanted another term as > World Bank president, Stiglitz had to go - so Stiglitz went. > Stiglitz was kept on as a consultant, but his contract was terminated > in May. It's said the last straw was an article he wrote for The New > Republic that, aside from reiterating his policy criticisms, contained > this, passage: "The older men who staff the fund ... act as if they > are shouldering Rudyard Kipling's white man's burden. IMF experts > believe they are brighter, more educated, and less politically > motivated than the economists in the countries they visit. In fact, > the economic leaders from those countries are ... brighter or > better-educated than the IMF staff, which frequently consists of > third-rank students from first-rate universities." Policy disputes are > one thing, but this was just too harsh a truth to utter in public. > Ravi Kanbur was an inconvenient leftover from the Stiglitz days. > Together they had opened up the drafting of the World Bank's annual > World Development Report, its flagship document. A draft was posted on > the web, and public comments were actively sought, Its drift was that > contrary to standard development doctrine, growth wasn't enough to > lift the poor out of poverty - policy had to be actively tilted in > their favor. (It should be remembered that we're not talking about > people who skip a meal now and then: The bank's definition of poverty > is an income of less than $1 a day, a ration on which 1.2 billion of > the world's people subsist.) This openness was a departure from past > practice, in which the reports were written by staff economists under > the supervision of elite journalists on loan from The Economist or the > Financial Times. > The US government, in the person of Summers, was outraged by Kanbur & > Co.'s draft. As one participant in the process put it, the Clinton > Administration had essentially embraced the trickle-down economics > that Democrats had run against for decades. Kanbur was ordered to > rewrite the report to be more "pro-growth." He resigned instead. In > the final version, among other changes, discussion of the importance > of income distribution to poverty reduction largely disappeared. > A lot of bank staffers were upset by the departures of Stiglitz and > Kanbur (though even Stiglitz's supporters concede he was a poor > manager), but the public executions were a clear warning to any future > dissenters. None of the sources for this article, for example, wanted > to be quoted by name, even though the bank's mission statement swears > that it is an institution based on an ethic of "personal honesty, > integrity, commitment; working together in teams - with openness and > trust; empowering others and respecting differences." > Though ostensibly multilateral institutions, and formally part of the > United Nations, the World Bank and IMF are essentially run by the US > government. As MIT economist Rudiger Dombusch put it a few years ago, > "The IMF is a tool of the United States to pursue its economic policy > offshore." The bank has a reputation for being a bit softer than its > neighbor across Washington's 19th Street; it is, by its mission and by > the preferences of many of its staffers, devoted to poverty reduction > and economic development, while the IMF is the guardian of financial > stability and political orthodoxy. There are some good people with > good intentions working for the bank; the fund is staffed mainly by > disciplinarians. But the fates of Stiglitz and Kanbur make it clear > that there are severe limits on how much good can be talked about, > much less done, by the World Bank. > Treasury Secretary Summers, who purged Stiglitz and Kanbur, was > himself chief economist at the World Bank from 1991 to 1993. In that > role, Summers made headlines when a memo attributed to him - > suggesting that Africa was "vastly under-polluted" and that "the > economic logic behind dumping a load of toxic waste in the lowest wage > country is impeccable" - was leaked to the press. This past April, > when I asked Summers whether Africa was still vastly underpolluted, he > said, after conceding that this was a "fair if not friendly question," > that it's long established that he was merely being ironic and > provocative. He also praised the 'moral energy" of the protesters > who'd come to Washington to complain about the World Bank and the IMF, > unaware that I'd overheard him just an hour earlier celebrating the > "proactive" arrest of hundreds of them who hadn't committed any crime. > Neither Stiglitz nor Kanbur is a radical by any standard; both are > humane reformers who sincerely care about the world's poor. But even > that was too much for the World Bank and the IMF. The impeccable logic > by which they operate will hear no appeals; their decisions are final. > ---- > Doug Henwood, a Nation contributing editor edits the Left Business > Observer. His latest book, A New Economy?, is due out late this year > from Verso. > _______________________________________________ > stop-imf mailing list [EMAIL PROTECTED] > http://lists.essential.org/mailman/listinfo/stop-imf > > * -- Mine Aysen Doyran PhD Student Department of Political Science SUNY at Albany Nelson A. Rockefeller College 135 Western Ave.; Milne 102 Albany, NY 12222 _____NetZero Free Internet Access and Email______ http://www.netzero.net/download/index.html _______________________________________________ Leninist-International mailing list [EMAIL PROTECTED] To change your options or unsubscribe go to: http://lists.wwpublish.com/mailman/listinfo/leninist-international
