Bretton Woods Institutions’ neoliberal over-reach leaves global governance in the gutter

18 October by Patrick Bond


This week, the annual meeting of the World Bank and International Monetary Fund will again be held in Washington, DC, with back-slapping now that the Bretton Woods twins have reached age 75 (they were founded at a New Hampshire hotel in 1944). And with more passion than in recent years, there will be protests, especially climate activists on Friday at noon with a strong set of messages, to “end all funding for fossil fuels!”

One voice will be especially loud: Trevor Ngwane’s. A leading activist from Soweto, he was last at a Washington protest in April 2000, amidst 30,000 demonstrators. That week, he co-starred – along with World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

board chairperson Trevor Manuel – in a documentary, Two Trevors Go to Washington. (Regrettably, young Trevor Noah was still in a Johannesburg high school and not in that particular film; but with his attitude, would have fit in just fine on that picket line.)

The latter Trevor was South Africa’s finance minister from 1996-2009 and in the process, turned the economy into a neoliberal wasteland, as manufacturing fell from 24 to 13 percent of national output and commodity export-dependency rose. On the ground, Manuel’s policies ensured the apartheid era’s world-leading inequality worsened, along with poverty. The main unemployment rate nearly doubled from 16 to 29 percent, and foreign debt soared from $25 billion to $70 billion during his reign – and is now $180 billion. Manuel was always treated with the greatest regard inside the Bank and IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
.

An example of the kinds of dubious deals Manuel and his successor Pravin Gordhan arranged with international financiers was the Medupi coal-fired power-plant, which at 4800MW is the largest under construction on earth today. There was widespread corruption on the project by Hitachi – which in 2015 was prosecuted and fined $19 million under the U.S. Foreign Corrupt Practices Act for bribing South Africa’s ruling party – and many other contractors. This was all well known by World Bank president Robert Zoellick, who nevertheless arranged his institution’s largest-ever project loan for Medupi: $3.75 billion.

But it’s a kind of “Odious Debt,” one so awful that Medupi is the reason in late 2017, 16 months before Donald Trump named him World Bank President, David Malpass admitted South Africa was the exemplary case of fraudulent relations with the lender. Correctly, he insulted Bank loan officers while testifying to the U.S. Congress: “They’re often corrupt in their lending practices, and they don’t get the benefit to the actual people in the countries. They get the benefit to the people who fly in on a first-class airplane ticket to give advice to the government officials in the country, that flow of money is large, but not so much the actual benefit to normal people within poor countries.”

This description perfectly fits Medupi and a sister power plant (Kusile), which are driving Eskom’s finances to the brink, due to eight-year production delays, incompetent design and massive cost over-runs, in turn threatening South Africa’s credit-worthiness, as well as security of power supply. (On October 16, power was turned off in a “Stage 2 load-shedding” disruption due to a broken conveyor belt at Medupi.) Even in their half-built state, the climate implications from CO2 emissions and the consumption of scarce water for cooling the reactors are horrendous.

But merely in financial terms, even leading bourgeois representatives from Anglo American Corporation’s main think tank now contemplate just shutting the two white-elephant plants and walking away. Progressive writers in South Africa’s main ezines - Kevin Bloom in Daily Maverick and Jonathan Cannard in the Mail&Guardian – argue the Bank should be compelled to face lender liability, and write off the debt.

Instead, refusing to learn, the Bank’s International Finance Corporation (IFC) subsidiary has just made a $2 million investment in another South African fossil-dependent project: a major new gas terminal on the coast; its partner, Transnet, is one of the most corrupt institutions in Africa. The arrogance is stunning given that the IFC lost its U.S. diplomatic immunity in a Supreme Court case just six months ago.

As local environmental justice, community-feminist and anti-poverty activists contemplate how to punish the World Bank for its proclivity to finance one absurd project after the other, all the while churning out neoliberal research, South Africa appears as a microcosm of what’s gone wrong with Bretton Woods pro-corporate neoliberal malgovernance, more generally, these last 75 years.

 The multilateral cul-de-sac

Multilateralism has surfed the up-swells and down the troughs of globalisation. In the latter case, the League of Nations faded away during the 1930s as a relevant force for peace, once the waves of Great Depression ripped Western economic interests apart. Today, multilateralism also seems to have entered the final, life-support stage of its 21st-century crisis, in part because of the overwhelming power of multinational corporations, and in part because of fast-rising reactionary nationalisms.

As the 2019 G7 summit confirmed, the world cannot contend with the bully-boy ascendance of Donald Trump and other right-wing critics of ‘globalism’ (an anti-Semitic smear), who spew ever more toxic nativist-populist hatred while ignoring their countries’ historic responsibilities to solve problems that their corporations mainly created. As a result, concluded the founder of world-systems theory, the late Immanuel Wallerstein, the 2018 G7 meeting was simply farcical: “Trump may have done us all the favour of destroying this last major remnant of the era of Western domination of the world-system.”

Even at the G20 G20 The Group of Twenty (G20 or G-20) is a group made up of nineteen countries and the European Union whose ministers, central-bank directors and heads of state meet regularly. It was created in 1999 after the series of financial crises in the 1990s. Its aim is to encourage international consultation on the principle of broadening dialogue in keeping with the growing economic importance of a certain number of countries. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, USA, UK and the European Union (represented by the presidents of the Council and of the European Central Bank). , which is the economic grouping responsible for three quarters of global greenhouse gas emissions and hence the site where addressing climate catastrophe is most urgent, the 2017-19 hosts in Hamburg, Buenos Aires and Osaka were cowed by Trump.

As a result, the world’s most important climate, trade and financial arrangements are increasingly ineffectual and discredited. Notwithstanding a decade-old network of five ‘middle powers’ (better termed ‘subimperialists’), the Brazil-Russia-India-China-South Africa (BRICS) bloc, the South is much less capable of giving the world’s oppressed a chance to make inputs and win long-overdue concessions.

Those expecting progressive change through the BRICS’ collective financial and trade statecraft are disappointed, especially as the world spins out of control economically. “BRICS should be much stronger by now,” one of its founders, former Brazilian president Lula da Silva told Asia Times recently. “I imagined a more aggressive BRICS, more proactive and more creative.”

Instead, global-scale neoliberalism remains dominant. The ill-conceived United Nations (UN) collaboration deal with the plutocratic Davos World Economic Forum in June 2019 followed persistent ‘bluewashing’ concerns about the UN’s discredited Global Compact with some of the world’s least ethical firms, growing corporate manipulation of the 2030 Sustainable Development Goals, and sabotage of multilateral environmental and human rights governance.

Another sign of ever-worsening degeneracy is personal. Thanks to unashamed cronyism, all the major multilateral economic organisations with the exception of the near-impotent World Trade Organisation WTO
World Trade Organisation
The WTO, founded on 1st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.

(WTO) are run by Westerners: the World Bank and International Monetary Fund (IMF), the Bank for International Settlements Bank for International Settlements
BIS
The BIS is an international organization founded in 1930 charged with fostering international monetary and financial cooperation. It also acts as a bank for central banks. At present, 60 national central banks and the ECB are members.

http://www.bis.org/about/
and the United Nations itself.

The only exception, Brazilian WTO leader Roberto Carvalho de Azevêdo, has notoriously pandered to the West, although to be fair, he is now openly expressing frustration as Trump ratchets up protectionism and as US trade representative Robert Lighthizer obstructs appointments to his crucial Appellate Body. “The dispute resolution mechanism is in crisis,” according to neoliberal Peterson Institute scholars, a paralysis which “runs the risk of returning the world trading Market activities
trading
Buying and selling of financial instruments such as shares, futures, derivatives, options, and warrants conducted in the hope of making a short-term profit.
system to a power-based free-for-all, allowing big players to act unilaterally and use retaliation to get their way.” That is exactly how Trump and Xi Jinping are handling their trade dispute.

Meanwhile, Bolsonaro is following Trump’s anti-multilateral lead, quickly renouncing ‘special and differential treatment’ provisions for poor and middle-income countries at the WTO – although it is sacred to other BRICS members, especially India. But Brasilia’s divorce began much earlier, complains Third World Network’s Ravi Kanth, because although the developing-country bloc inside the WTO now “exists on paper, it remains paralysed after Azevêdo became director-general in September 2013.”

Bolsonaro also cancelled Brazil’s hosting of the UN Framework Convention on Climate Change (UNFCCC) summit later this year, forcing its move to Chile. Deploying bogus anti-colonial rhetoric, he turned his nose up at the G20’s tokenistic $20 million grant to control the Amazon’s conflagration. Moreover, Bolsonaro could well wreck the BRICS when he hosts the other four leaders in November.

In any case, the BRICS have already failed miserably when attempting to reform global finance, for example by complaining about – but failing to contest – the IMF and Bank leaders, chosen by Europeans and the US in the 2011, 2012, 2015, 2016 and 2019 ‘elections.’ At the same time, four of the BRICS bought expensive voting-power increases in the IMF (e.g. China rising 37 per cent), but at the expense of countries like Nigeria and Venezuela (which in 2015 both lost 41 per cent of their votes, while even South Africa’s IMF ‘voice’ softened by 21 per cent).

The BRICS’ supposed alternative to the IMF, the Contingent Reserve Arrangement, was founded in 2014 with a notional $100 billion. It actually gives Washington even more power, by leveraging most of its loans on the condition that the borrower accept an IMF structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

IMF : http://www.worldbank.org/
program. The BRICS New Development Bank’s first five years of lending confirm that it is as rife with corruption, non-consultation, climate damage and inappropriate currency denominations as the World Bank, and even more unfriendly to gender equity Equity The capital put into an enterprise by the shareholders. Not to be confused with ’hard capital’ or ’unsecured debt’. .

Likewise, there is no BRICS alternative to Western domination in trade or climate multilateralism. At the WTO, the BRICS were fatally divided, leading to the 2015 destruction of food sovereignty options during the Nairobi summit. And as for climate, the Brazil-South Africa-India-China (BASIC) leaders’ close alignment with Barack Obama at the Copenhagen UNFCCC summit in 2009 held firm through the 2015 Paris Climate Agreement.

But that won’t solve our existential crisis, for the BASIC countries are absolute CO2 emitters at levels even higher than the West (and in South Africa’s case higher per capita than any country in Western Europe). So Paris’ fatal weaknesses suit them fine.

More recently, new causes of global governance illegitimacy appear similar to the centrifugal forces tearing Europe apart. The political commitments of climate-denialist, ‘paleo-conservative’ xenophobes like Trump are different to other Washington philosophies imposed on the world, including the 1980s-90s’ Reagan-Bush-Clinton era of neoliberalism (stretching with Thatcher and Blair into Britain and Kohl and Schroeder into Europe), George W. Bush’s 2000s neoconservatism and Obama’s 2010s fusion of these two US-centric ideologies.

With just a couple of exceptions (discussed below), an earlier generation of global-scale social-democratic hopes – fostered by serious multilateralists from 1970s traditions, e.g. Willy Brandt and Gro Harlem Brundtland – were dashed by the early 1980s, thanks to the role the Bretton Woods Institutions played in fracturing the world’s progressive potentials on behalf of international financiers. The poorest countries went through a ‘lost’ decade or more of austerity. The 1995-2002 middle-income countries’ rolling crises meant local elites allowed the same inappropriate neoliberal regime to be imposed by Washington even more deeply and dangerously in Mexico, East Asia, Russia, South Africa, Brazil, Argentina and Turkey.

Then it was the turn of the West’s ‘labour aristocracy,’ a core group of working-class people dethroned, for they lost their once-solid manufacturing jobs to machines and overseas outsourcing, and were reduced to taking underpaid and under-valued service-based jobs and relying upon fast-degenerating public services. In 2008-09 they too witnessed a replay of brutal 1980s-90s Bretton Woods power plays, once their elites agreed upon a multilateral ‘solution’ to the world financial meltdown: a coordinated central bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

ECB : http://www.bankofengland.co.uk/Pages/home.aspx
bailout for the largest Western financial institutions.

This generosity was confirmed by the 2010s’ official prioritisation – by the IMF, European Central Bank ECB
European Central Bank
The European Central Bank is a European institution based in Frankfurt, founded in 1998, to which the countries of the Eurozone have transferred their monetary powers. Its official role is to ensure price stability by combating inflation within that Zone. Its three decision-making organs (the Executive Board, the Governing Council and the General Council) are composed of governors of the central banks of the member states and/or recognized specialists. According to its statutes, it is politically ‘independent’ but it is directly influenced by the world of finance.

https://www.ecb.europa.eu/ecb/html/index.en.html
and European Union (EU) – of the Frankfurt, New York, London, Paris and Rome bankers’ interests, which were near-fatally exposed to Greece and other peripheral European borrowers. By 2016, neo-fascist political parties were thriving there, while the most resentful within the British and U.S. working classes chose xenophobic backlash in the form of Brexit and Trump.

 Self-destructive IMF and World Bank ideology and financing

The crucial break point for multilateral potential was the 1980s world debt crisis, during which neoliberal ideology stretched the Third World so far that the likes of Tanzania’s Julius Nyerere and Cuba’s Fidel Castro even proposed a ‘debtors’ cartel’ – but could not find a sufficient critical mass of other brave leaders even in a Latin America suffering sustained IMF rioting, to the relief of international elites.

At one point in 1983, World Bank president William Clausen quite bluntly explained the balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. of forces: “We must ask ourselves: How much pressure can these nations be expected to bear? How far can the poorest peoples be pushed into further reducing their meagre standards of living? How resilient are the political systems and institutions in these countries in the face of steadily worsening conditions?”

Clausen’s power came from the 1979-80 ‘Volcker Shock’: soaring interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation.
catalysed by US Federal Reserve FED
Federal Reserve
Officially, Federal Reserve System, is the United States’ central bank created in 1913 by the ’Federal Reserve Act’, also called the ’Owen-Glass Act’, after a series of banking crises, particularly the ’Bank Panic’ of 1907.

FED – decentralized central bank : http://www.federalreserve.gov/
chair Paul Volcker’s decision to restore the Dollar’s power, in turn causing the Third World Debt Crisis. Clausen and all his successors abused that power to impose the Washington Consensus’s ten policy commandments. The term came from John Williamson of that city’s Institute of International Finance, representing the world’s major banks:

  1. Budget deficits … should be small enough to be financed without recourse to the inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. tax.
  2. Public expenditure should be redirected from politically sensitive areas that receive more resources than their economic return can justify…
  3. Tax reform… so as to broaden the tax base and cut marginal tax rates.
  4. Financial liberalisation, involving an ultimate objective of market-determined interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. rates.
  5. A unified exchange rate at a level sufficiently competitive to induce a rapid growth in non-traditional exports.
  6. Quantitative trade restrictions to be rapidly replaced by tariffs, which would be progressively reduced until a uniform low rate of 10 to 20 per cent was achieved.
  7. Abolition of barriers impeding the entry of foreign direct investment.
  8. Privatisation of state enterprises.
  9. Abolition of regulations that impede the entry of new firms or restrict competition.
  10. The provision of secure property rights...

Needless to say, the victims were mainly women, youth, the elderly and people of colour. The IMF’s flows of annual loans that, thanks to conditionality, locked these policies into place, were initially less than $15 billion before the Volcker Shock, then soared to $40 billion by the late 1980s, jumped as high as $100 billion by the early 2000s, and exceeded $140 billion by the early 2010s (see Fig 1). The World Bank had similar bursts.


Fig 1. IMF loans, 1970-2015

Source: Reinhart and Trebesch, 2015, p.24.

Added to the neoliberal agenda were trillions worth of ‘illicit financial flows’ manoeuvred into offshore financial centres, leaving governments with rising budget deficits and their social sectors experiencing permanent cost-cutting pressures. IMF economists Jonathan Ostry, Prakash Loungani, and Davide Furceri admitted in 2016 that as a result, “The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting. There is now strong evidence that inequality can significantly lower both the level and the durability of growth.” But notwithstanding that admission, most subsequent Article IV consultations offered advice that amplified inequality, Oxfam researchers discovered.

The IMF also made a similar confession about its role in patriarchy, namely that “some policies recommended by staff… may… exacerbate gender inequality” – but again, when it came to a correction, the IMF “missed the forest for the policy trees,” explains Emma Bürgisser of the Bretton Woods Project. “Almost every macroeconomic policy the IMF regularly prescribes carries harmful gendered impacts, including labour flexibilisation, privatisation, regressive taxation, trade liberalisation and targeting social protection and pensions.”

 Activists try to undo destruction

In turn the predatory debt, precarious work and privatisation of so many aspects of life experienced by the world’s citizenries calls forth two kinds of responses: appeals to global governance to sort out problems national states have shied away from, and popular revolt. There are both good and bad versions of these top-down and bottom-up responses, as we have seen, with cases such as the Montreal Protocol and Global Fund for AIDS, TB and Malaria as top-down successes, but the latter owes more to bottom-up pressures.

Since the urgency of the situation required a global response, the 1987 Montreal Protocol was supported by even the reactionary Ronald Reagan administration. It committed national states to ensure their corporations (e.g. Dow Chemical and General Electric) stop producing and emitting CFCs within nine years. The ban worked and the problem is receding (aside from recent Chinese corporate cheating on hydro-CFCs).

At present, a Montreal Protocol-type ban on Greenhouse Gas (GHG) emissions is presumed unthinkable, notwithstanding the impending eco-social catastrophe. A solution as forceful as the Montreal Protocol is needed for GHGs, but the weakness of multilateralism and the pro-corporate balance of forces makes it unlikely within the UNFCCC – unless the world’s rising youth and other climate activists ramp up the civil disobedience and divestment advocacy that is now beginning to worry fossil fuel financiers.

In that spirit, there was one other more recent multilateral solution to a world crisis, AIDS, which shows how to shift the balance of forces not through elites’ top-down meetings of minds (although within the World Health Organisation and UN AIDS, there were a few bureaucratic allies) – but instead, bottom-up, through militant activism.

Because of groups like South Africa’s Treatment Action Campaign (led by visionaries Zackie Achmat and Vuyiseka Dubula), the US AIDS Coalition to Unleash Power (‘ActUp’) and the health NGO Médecins sans Frontiers, a persuasive case emerged in the 1990s – and gained confirmation in 2001 – to exempt copyrighted AIDS medicines within the WTO’s Trade Related Intellectual Property System. Generics were permitted, not made in the US and Germany, but instead in many Southern countries. This resulted in more than a decade’s rise in life expectancy, in South and North alike.

Anti-neoliberal protests help shift the balance of forces, including many millions in the Third World who objected to structural adjustment, or “IMF Riots.” In the main study of these protests, David Seddon and John Walton in 1994 remarked on how not just poor and working-class people, but larger coalitions of society rose up: “Once mass discontent is made evident by these coalitions, political parties may take up the anti-austerity cause in successful bids for national office (e.g. Peru, Dominican Republic). In several countries, austerity protests initiated political crises that sooner (e.g. Sudan, Turkey) or later (e.g. Philippines, Haiti, Poland) toppled the national government.”

Since then, there have been scores more countries – especially in Africa – whose unpatriotic leaders were tossed out of power or drew sustained dissent as they imposed the BWIs’ logic.

Solidarity activism in the North is vital, such as demonstrations at IMF and Bank official events. Major protests included the 1988 Berlin Annual Meetings (which attracted tens of thousands of protestors), the 2000 Spring Meetings in Washington (30,000) and 2000 Prague Annual Meetings (50,000), as well as even the Oslo 2002 Bank research conference on development economics (10,000). One of the main activist challenges to Bretton Woods power was the early 2000s “World Bank bonds boycott” which – at the peak of the global justice movement’s mobilisations – compelled cities as large and financially potent as San Francisco to divest from Bank securities. (Trevor Ngwane and another South African, the poet Dennis Brutus, joined then-U.S. Representative Bernie Sanders to launch the boycott in 2000.)

This led to a ‘fix it or nix it’ debate, in which reforms of the Bank and IMF were so slow that TransNational Institute scholar Susan George fumed in 2000, “These institutions have had their chance. Anytime anyone asks, ‘And what would you put in its place?’ I am tempted to respond, ‘And what would you put in the place of cancer?’” Added Kenyan activist Njoki Njehu, the leading Washington protest organiser at the Bank/Fund Spring Meetings that year, “The IMF and the World Bank increase poverty. The consensus is that the IMF and World Bank cannot be reformed. They have to be abolished.”

It’s a debate that needs kick-starting once again. The 75th anniversary is a good time to ask whether such out-dated ideologies and their enforcers deserve to be retired, not (as the right-wing populist protectionists argue) so as to close the door on global governance, but to open it much wider in a way that serves people and planet, not multinational corporate profits. At the same time, by posing the question of abolition, we should also recall instances where impressive reforms were won at the multilateral scale.



Patrick Bond teaches political economy at Wits University in Johannesburg: pbond at mail.ngo.za (A version of this article was originally published in Bretton Woods Project Observer, October 2019.)

Patrick Bond

is professor of political economy at the Wits University School of Governance in Johannesburg and co-editor of BRICS: An anti-capitalist critique (published by Haymarket, Pluto, Jacana and Aakar).

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