At the end of September, the International Monetary Fund and World Bank will host their annual fall conferences just a few blocks from GW’s campus. These organizations have the power to influence the economic decisions made by countries throughout the world.
The World Bank finances development projects in developing countries, while the IMF attacks financial crises with loans. Although they have altruistic goals, the policies put forward by these institutions contribute to existing problems within the countries they seek to help. The most pressing concerns are the debt crisis and deterioration of environmental quality within developing countries.
The IMF struggles with debt crises, and the World Bank grapples with environmental degradation. However, both must confront the lack of transparency and democracy within their public relations and voting systems. The specific amounts and what conditions are attached to IMF loans are kept secret. These loans are an integral component of the IMF’s work and should be made available so their impact can be independently assessed. The World Bank and IMF are public institutions that must also be held responsible for their actions.
In terms of democracy, there is no formal procedure to appoint new leaders. Rather, a “gentlemen’s agreement” reserves the top position at the IMF for a European and that of the Bank for an American. Furthermore, the IMF gives the seven wealthiest countries – the United States, England, France, Canada, Germany, Italy and Japan – 46 percent of the total votes. Such a concentration of power produces policies benefiting first-world countries.
When accepting loans from the IMF, developing countries also accept loan conditions mandating opening markets to foreign goods and selling state-run companies to private investors, among others. Other programs cancel debt if countries accept similar economic conditions. But these conditions do not improve the quality of services governments provide and limit access to them.
Loan conditions must be abandoned to fulfill promises made 20 years ago to invest in basic public services. Canceling debt and dropping loan conditions will allow developing countries to contribute to the global economy with the funds they now pay in interest.
The World Bank includes environmental assessments in only 20 percent of its loans contributing to policies that damage the environment. Emphasizing exports leads to over-exploitation of countries’ natural resources that damage long-term economic prospects and place environmental protection at a disadvantage.
In the coming weeks GW students will lead workshops to educate the community. And on Sept. 28, thousands of protesters will gather here to challenge the status quo.
-The writers are seniors majoring in international affairs.