AVANT-GARDE POLITICS

Author: Ben Gore

Last year some intrepid activists hung a 10-story banner off of the front of the World Bank building on H Street in Washington, D.C. It denounced Bank funding of the Chad/Cameroon Pipeline, a project undertaken in two of the most corrupt countries in the world, which called for oil drilling on rich agricultural land, bulldozing thousands of acres of rainforest and displacing indigenous peoples. The government of Chad got wind of this banner hanging, and to make sure something like it never happened again, sent the army as well as some of ExxonMobil's private security force to gun down 50 villagers sympathetic to the opposition.

In the 1970s and '80s Nigerian dictator President Osabanjo took out massive loans, some of them from the World Bank, most of which disappeared without a trace. In order to repay this debt, working with the Bank, the new civilian governments of Nigeria ramped up oil production in the Niger Delta. The Ogoni people who lived there were not consulted. Over 80 percent of their farmland was destroyed, the groundwater was polluted and the air made unbreathable. When they organized against the pipeline, nine of their leaders, including noted playwright Ken Saro-Wiwa were hung.

The World Bank's slogan is "A World Free of Poverty," and if you talk to many of the people who work at the Bank they seem to feel as if this is what they really want. If you talk to people in affected countries (ordinary people, mind you, not finance ministers) you'll generally get a different story. In fact, whenever the Bank or its evil stepsister institution, the International Monetary Fund (IMF), implement an "austerity program," there are riots. In Ecuador, two governments have fallen because of this. Where does the disconnection lie? Why do people who seem so sincerely bent on helping people provoke riots and intense hatred almost everywhere they go?

Joseph Stiglitz famously proclaimed, just before he was forced to resign as the chief economist of the Bank, that the problem was that these institutions were full of third rate economists from first-rate schools. I think the problem is somewhat deeper than that. The problem is twofold: the people who run the Bank still believe in the failed notion of trickle down economics and they also subscribe to the newest utopian philosophy of our day — neoliberalism.

The rationale behind projects like the Chad/Cameroon Pipeline is that they will bring in foreign money that can be used to raise living standards or that by providing infrastructure they will allow development. The vast majority of the revenue from projects like this go to the corporations that build them, in this case ExxonMobil. The host countries get royalties, generally less than 10 percent. And in places as corrupt as Chad where does that meager amount of money go? In this case, a good chunk of it is going to buy guns to suppress an Islamic insurgency in the north of the country. The Bank often helps build dams or power plants in developing countries where 80 percent of the country is off the power grid. Or they build highways through rainforests in places where no one owns cars. These projects only enrich the corporations that help build them and the elites that got the World Bank to finance them in the first place. The concept of enriching the poor by enriching the rich was discredited even before Margaret Thatcher introduced it in the early '80s and it remains that way. Well over 70 percent of the Bank's large infrastructure projects fail to meet their stated goals.

Neoliberalism, the theory that most problems can be solved with open markets and export oriented production, is the other thing hindering the Bank's work. Neoliberalism is a utopian theory; it promises good outcomes for all, after a period of painful adjustment. The only problem is that it has never worked as a model for development. Ever. Though it is espoused in every major school of economics in the world and from every presidential palace, a country has never pulled itself out of poverty with this model. The countries that have 'developed' have aggressively promoted local industry, education and food production. Half of the World Bank's work currently focuses on helping countries find ways to pay back their foreign creditors by restructuring their economies.

This restructuring includes: ending subsidies on basic foods, imposing user fees on health care, privatizing services, shifting production from local consumption to exports and removing barriers to foreign ownership of resources. The Bank and IMF asked Bolivia to privatize its water supply a few years ago. When they did it, prices skyrocketed and three quarters of the people lost access to clean water. Only after massive civil unrest was this decision reversed.

But, you might object, the countries in question bring the Bank and IMF in of their own free will. Yes and no. On major projects, the Bank consults with the finance ministers and other high officials of the affected countries. These officials are often unelected and often work for dictators. In any case, they are partisans of the neoliberal cause (less than 50 percent of Americans believe in neoliberalism, but all our financial policy makers do).

Sometimes, the Bank consults with the local population. Usually these people are terrorized first. In the cases where fair consultations are held, the results are often discarded. When it comes to structural adjustment, countries have almost no choice but to bring in the Bank and Fund. When a country can no longer pay its debts or get new loans, the only places to turn are the Bank and IMF. These institutions then have almost free reign over what happens.

The Bank has good projects. Whenever the Bank works on small, decentralized projects, they succeed. Whenever the Bank invests in community infrastructure, through education or microgrants to small businesses, their success rate is close to 90 percent.

Whenever the Bank invests in massive infrastructure projects, they are almost always failures. When one of these projects fails, people die, forests are destroyed and agricultural land is ruined.

There are many ways to help move the Bank towards adopting more sustainable policies, including one we can use right here at Middlebury. The Bank's biggest arm raises 80 percent of its money through privately held bonds.

A movement is currently afoot to boycott these bonds until the Bank meets certain conditions including: more transparency, an end to funding of fossil fuel projects, an end to structural adjustment and cancellation of the illegitimate debt owed it.

This is not a divestment campaign, we wouldn't have to sell any bonds if we do own them, only publicly declare our unwillingness to buy more until our basic demands are met. Already 48 institutional investors around the world, with total assets of $13 billion have joined the Boycott.

Middlebury was in the front lines of anti-sweatshop work a few years ago; it's time to keep ourselves in the vanguard of the movement for global justice and democracy by joining the World Bank Bonds Boycott.