Lawsuits Filed as Police
Plan to Erect Exclusion Zones in DC
by David Madden
Protesters of all stripes - environmentalists,
human rights activists, anti-capitalists, labor groups,
and other concerned citizens - representing over 200
organizations will begoing to Washington DC for the
meetings of the World Bank and International Monetary
Fund the last week of September, to draw attention
to the issues surroundingcorporate-led globalization.
Demonstrators demand that the World Bank and IMF forgive
the debt of Third World countries, and stop funding
projects which, they say, harm the environment and
benefit the rich at the expense of the poor.
Washington DC city officials predicted
in a news briefing that 100,000 protesters would descend
on the city for the World Bank/IMF meetings, and that
the activists would jeopardize peace in the city.
The Washington Post reports that, in
a letter to the White House requesting $30 million
for security, Mayor Anthony A. Williams warned President
Bush of demonstrations "of an intensity, scope,
and magnitude that we have never seen in this city."
The mayor's letter, the Post informs us, was released
at a news conference from which protest organizers
were barred. The city plans to recruit more than 3,000
police officers from other East Coast cities to assist
with security.
In response to the mayor's request,
the Bush administration announced that it would not
pay the entire $30 million the District expects to
spend. Negotiations continue; as of now, the federal
government has agreed to pay more than 50 percent
of the $30 million. Faced with a shortfall, the city
has asked the two international development bodies
to cover the difference between what the federal government
will pay and what the city will spend - something,
the two groups said on August 21, that they will not
do.
As a consequence of the security precautions
already announced, attorneys and organizers for several
protest groups have asked the US District Court to
enjoin authorities from surrounding key sections of
the capital with nine-foot-high hurricane fences and
concrete barriers. Such 'exclusion zones', they contend,
are in violation of the protesters' Constitutional
right to assemble on sidewalks, in streets and in
public parks. The suit names Police Chief Charles
H. Ramsey, the District of Columbia, the director
of the National Park Service, and the federal government
as defendants, and complains that police have refused
to issue demonstration permits.
Protesters also alleged that the high
crowd predictions are an attempt by government officials
to deny them the demonstration permits, although Chief
Ramsey has claimed that he got the figures from the
protesters themselves. Activists have repeatedly chided
DC police for forecasting disturbances, insisting
that the police and their tactics are in fact the
cause of violence in what would otherwise be peaceful
protests.
Brian Becker, co-director of the International
Action Center, one of the main organizing groups,
questioned Ramsey's statements during a C-SPAN news
conference. "We've never used the figure 100,000.
That's the figure Chief Ramsey has been using in the
media, at the same time that he's trying to paint
a picture that civil war will soon descend on Washington
DC."
For more coverage of this story as it
unfolds, refer tothe Urbana-Champaign Independent
Media Center web site at http://urbana.indymedia.org.
During the protests in Washington DC, reporters from
the U-C IMC will be filing reports from the field
on this web site.
More information on the protest and
how you can get involved can be found at the following
web sites:
http://www.globalexchange.org
http://www.beatbackbush.org
http://www.justiceonline.org
http://www.50years.org
http://www.globalizethis.org
http://www.abolishthebank.org,
http://www.iacenter.org
http://www.columbiamobilization.org
World Bank / IMF Questions
and Answers
Q: What is the World Bank?
A: Created at the Bretton Woods conference
in 1944, The World Bank Group is comprised of five
agencies that make loans or guarantee credit to its
177 member countries. In addition to financing projects
such as roads, power plants and schools, the Bank
also makes loans to restructure a country's economic
system by funding structural adjustment programs (SAPs).
The Bank manages a loan portfolio totaling US$200
billion and last year loaned a record US$28.9 billion
to over 80 countries.
Q: What is the IMF?
A: Also created at the Bretton Woods
Conference, the mission of the International Monetary
Fund (IMF) is to supply member states with money to
help them overcome short-term balance-of-payments
difficulties. Such money is only made available, however,
after the recipients have agreed to policy reforms
in their economies - in short, to implement a structural
adjustment program.
Q: Is structural adjustment working?
A: No. Structural adjustment has exacerbated
poverty in most countries where it has been applied,
contributing to the suffering of millions and causing
widespread environmental degradation. And since the
1980s, adjustment has helped create a net outflow
of wealth from the developing world, which has paid
out five times as much capital to the industrialized
countries of the North as it has received.
Q: I know there are a lot of qualified people at the
World Bank and IMF who are experts in economics and
other fields. If structural adjustment doesn't work,
then why are they promoting it?
A: The wealthy Northern countries which
control the World Bank and IMF dictate the agendas
of these institutions, and their interests are best
served by defending the status quo. Furthermore, the
Bank's staff is currently dominated by economists
who havespent their careers defending the validity
of neoclassical economics, the foundation of the World
Bank model of development. This orthodox view holds
sacred the efficiency of free markets and private
producers and the benefits of international trade
and competition. Given the lack of accountability
to outside parties, there is little incentive for
the Bank and IMF to alter the design of structural
adjustment, even when faced with mounting evidence
attesting to the failure of these programs.
Q: I hear a lot about the debt crisis in the Third
World and know that many of the loans are owed to
commercial banks and Northern governments. People
say that some or all of this debt should be canceled,
to give developing countries a chance to recover economically.
Shouldn't they pay?
A: Much of this debt dates back to the
1970s, when it was loaned irresponsibly by commercial
banks and borrowed recklessly by foreign governments,
most of which were not popularly elected and which
no longer hold power. The advent of the debt crisis,
which occurred in the early 1980s due to a worldwide
collapse in the prices of commodities that developing
countries export (e.g., coffee, cocoa) and to rising
oil prices and interest rates, forced these countries
intoa position where they were unable to make payments.
Yet there's no such thing as bankruptcy protection
for a country, regardless of the circumstances. When
the US department store Macy's filed for bankruptcy
under Chapter 11 in January 1992, it received instant
protection from creditors and working capital to remain
open. At the same time, when Russia told the West
that it could not meet its financial obligations to
the World Bank, its government had to wait for more
than a year before the IMF provided financial help.
Q: What is the relationship between debt and structural
adjustment?
A: Since the 1980s the debt situation
has steadily worsened, so that now the total debt
of the developing world equals about one-half their
combined GNP and nearly twice their total annual export
earnings. Because of this crushing debt-service burden,
foreign governments have virtually no bargaining power
when negotiating a structural adjustment program,
and must accept any conditions imposed by the World
Bank and the IMF.
And SAPs themselves, by orienting economies
toward generating foreign exchange, are designed to
ensure that debtor countries continue to make debt
payments, further enriching Northern creditors at
the expense of domestic programs in the South.
Q: How's the World Bank's record on responsible lending?
A: In 1992, an internal World Bank review
found that more than a third of all Bank loans did
not meet the institution's own lending criteria, and
warned that the Bank had been overtaken by a dangerous
"culture of approval." Bank officials, in
other words, felt heavy pressure to push through new
loans even when presented with overwhelming evidence
that the project in question was ill-advised.
Q: Who makes decisions at the World Bank and IMF?
A: Decisions at the World Bank and IMF
are made by a vote of the Board of Executive Directors,
which represents member countries. Unlike the United
Nations, where each member nation has an equal vote,
voting power at the World Bank and IMF is determinedby
the level of a nation's financial contribution.
Therefore, the United States has roughly
17% of the vote, with the seven largest industrialized
countries (G-7) holding a total of 45%. Because of
the scale of its contribution, the United States has
always had adominant voice and has at all times exercised
an effective veto. At the same time, developing countries
have relatively little power within the institution,
which, through the programs and policies it decides
to finance, has tremendous impact throughout local
economies and societies. Furthermore, the President
of the World Bank is by tradition an American, and
the IMF President is a European.
Q: How is it that US business and other companies
benefit from the lending programs at the World Bank?
A: Development projects undertaken with
World Bank financing typically include money to pay
for materials and consulting services provided by
Northern countries. US Treasury Department officials
calculate that for every US$1 the United States contributes
to international development banks, US exporters win
more than US$2 in bank-financed procurement contracts.
Q: Why is this bad?
A: Given this self-interest, the Bank
tends to finance bigger, more expensive projects -
which almost always require the materials and technical
expertise of Northern contractors - and ignores smaller-scale,
locally appropriate alternatives. The mission of the
World Bank is supposedly to alleviate poverty, not
to provide business for US contractors.
For more information on the World Bank, the IMF and
the 50 Years Is Enough Network, see the 50 Years Is
Enough Network's web site at http://www.50years.org.
