The World's Most Powerful Institution?

July 24, 1994|By FRED POWLEDGE

What's the most powerful institution in the world? No, not the United Nations. And, as gleeful politicians and warlords from Singapore to Beijing to Mogadishu can testify, it's definitely neither the Pentagon nor the White House. Some hints: It's not the least bit democratic. It has more gold than Croesus. And hardly anybody knows very much about it. Of course: It's the World Bank.

The bank and its sister organization, the International Monetary Fund, are 50 years old this year, and those who don't like the way they do business are baking a special cake.

The theme of the party is "50 Years Is Enough." It's an apt slogan for such a diverse coalition of activists. Some think half a century of one sort of promoting development is enough, and it's time for a fundamental reorganization of the bank. Others interpret the slogan as a call for the bank to disappear completely -- somewhat wishful thinking, since it's directed at an institution that's deeply embedded in the world's economy and that grants itself the sort of immunity from control that is usually enjoyed only by the filthy rich.

The campaigners have many complaints about what the World Bank has done in the past five decades, but most can be summarized in two sentences: It has spent billions upon billions of dollars, but it has not done what it was supposed to do. In fact, it has made matters worse.

The groups sharing that view come from a wide spectrum of the community known as nongovernmental organizations (NGOs). They are environmentalists, clergy, economists, partisans of indigenous populations, proponents of better lives for women, backers of sustainable agriculture.

A society of Catholic priests wants the bank to be more accountable to the people whose lives its policies affect. Another group wants the bank to stop pushing chemically intensive agriculture. An organization that once worked for the bank wants governments to withhold funds from the institution until it reforms. Another NGO, the Community Action International Alliance, conducts "reality tours" for people who want to investigate important issues at ground level -- a polluted river, an inadequate transportation network -- and is planning a tour for the World Bank's Washington headquarters later this summer.

The "50 Years" campaign will run throughout the year and around the world, with symposiums, conferences, books, reports, manifestoes and other efforts to educate the public about the bank's harmful effects on the planet. In September and October, when the bank holds a big 50-year conference in Madrid, Spain, the NGOs plan to be there, holding their alternative meeting -- a sort of truth squad for the richest 'N institution on Earth.

Some signs have already emerged that the campaign is rattling the bank's cage. The bank's president, Lewis T. Preston, acknowledged last week that the institution had made some mistakes and needs to rethink its priorities.

The object of all this attention was born in July 1944, at the United Nations Monetary and Financial Conference in Bretton Woods, N.H. The bank, formerly named the International Bank for Reconstruction and Development (IBRD), opened for business June 25, 1946.

The idea behind the new agency was that with the end of World War II, many nations would be hard pressed to find financing for reconstruction. The bank would borrow money on world markets and lend it at attractive rates to countries that needed it.

* Over the years, evidence has accumulated that things haven't gone the way the Bretton Woods planners envisioned. At the heart of the problem, say many of the critics, are "structural adjustment programs." This term, so leaden that only an economist could love it, boils down to the time-honored quid pro quo: I'll give you the money if you promise to do things my way.

A more dignified version is that in exchange for bank cash, the strapped countries promise to cut government spending and subsidies, lower exchange rates and remove barriers to trade.

Structural adjustment programs, say the critics, also mean that the borrowing countries, in playing by the bank's rules, are feeding their addiction to foreign trade and investment. Indigenously grown crops that before had sustained the local populations are abandoned for monocultures that leave the countries at the mercies of the global market and more dependent on pesticides and other chemicals; the government must then pay world prices to import the foods that their people once produced themselves.

Those who want to bring the World Bank under control include the wild-eyed, the moderately critical and everything between.

Some would dismantle the bank totally. One of the publications timed for the 50th birthday celebration is called "Perpetuating Poverty," edited by Doug Bandow and Ian Vasquez. The book makes it clear that its publisher, the libertarian Cato Institute, thinks "50 Years Is Enough" means really enough.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.