[Dissent-bristol-info] IMF/WB/WTO briefing - edited/proofed

[auto_gnome at riseup.net]

Hi as agreed at last info meet, I've proofed & edited this and made it
into 1 briefing paper. I've taken out the links after each paragraph and
just added a list of 'resources' at the end.

Sofia already sent one graphic with her original email (world - sold), if
Paul ain't got it let me know as I have it saved. There's another decent
one here: WTO – world domination
http://subvertise.org/details.php?code=151

Anyway here's the text for Paul to dtp....

Bristol Dissent Group Briefing – The IMF, WB & WTO

The IMF & WB
The IMF (International Monetary Fund) and the WB (World Bank), both formed
in 1944, are global organisations whose main purpose is to manage the
global financial system, and to provide loans for member states that need
them. Both have 184 members.

The IMF and WB lend money to poor countries both by themselves, and they
also act as agents for poor countries in arranging loans from other
countries. But they will only do this if the government of the borrowing
country agrees to certain conditions – certain changes in its state
apparatus and infra structure – changes of a capitalist and liberalist
nature. In other words, the IMF and WB will promise to lend the poor
country money, but only if the poor country privatises and cuts back its
public sector.

The main goal of the IMF and WB is to boost so-called free trade – a
concept dear to capitalists. The problem with their notion of free trade,
however, is that since their power structures are so dominated by a few
rich countries, primarily the USA, they tend to work for the benefit of
those countries rather than for unbiased free trade. The finance ministers
of the seven most industrialised nations (USA, UK, France, Canada, Japan,
Italy, Germany) control 45% of the votes in the IMF’s board. The 41 most
indebted nations control only 3% of the votes.

While the IMF and WB make sure to remove subsidies in poor countries, they
continue to increase financial assistance and subsidies for American
agriculture, cotton and steel. The IMF also facilitated Pakistan in
rescheduling $12.5 billion in outstanding debt to Western countries, after
Pakistani President General Musharraf decided to go against the public
opinion of his country and support the war on terrorism after the
September 11 attacks. After Musharraf’s decision to support the war on
terror, the USA also decided to cancel $1 billion of Pakistans bilateral
debts to the US.
Note: Bilateral = between only two parties; a loan from one single nation
to another. The IMF and World Bank deal with multilateral loans, i.e. they
co-ordinate loans from groups of nations to other groups of nations, or
from groups of nations to single nations.

So what’s the difference?
On the large scale of things the IMF and WB play essentially the same role
in international politics. But they are completely separate (although
often co-operating) institutions and have different purposes.

The IMF was originally founded to stabilise countries’ currencies in
relation to each other, and to oversee the currency exchange market. Since
the IMF is not really a bank, it doesn’t give loans as such. Rather, it
has a pool of money from which member countries can borrow when they need
to stabilise their currency quickly. This can be compared with an
overdraft on a current account. All loans from the IMF must be paid back
within 5 years.

The WB on the other hand, gives longer term loans for more general
purposes. As an investment bank what it essentially does is to
intermediate between lenders and borrowers. It sells bonds to
corporations, individuals, and sometimes governments, and lends that money
to borrowing governments.

Since the WB, like any investment bank, makes a living out of lending
money, it tends to encourage poor countries to take more loans, regardless
of what they are for. For example, the WB was quick to offer loans to
India for the building of a colossal dam project in the Narmada Valley.
Even before any final costs had been computed, and before any studies had
been done on the human cost or environmental impact of the dams, the WB
offered a loan of $450 million to get the project started. Later, an
independent review showed that the project was ludicrous. The resettlement
and rehabilitation of all the people displaced by the projects was not
possible, and the environmental concerns were too great. Only after a
second review had criticised the project further did the WB finally pull
out.

The WTO
The WTO (World Trade Organisation) is an international organisation, which
oversees a large number of agreements defining the "rules of trade"
between its member states. The WTO has two basic functions: as a
negotiating forum for discussions of new and existing trade rules, and as
a trade dispute settlement body. It has 148 member countries.

The WTO was created in 1995 to replace the General Agreement on Tariffs
and Trade (GATT), a series of trade treaties aimed to abolish
international trade barriers such as customs duties and trade taxes.
Before the WTO, governments would tax imported goods so that they would
become more expensive than domestic goods and therefore be less attractive
to consumers. The WTO wants to work against such taxes, since it sees them
as an obstacle to free trade. If a member state thinks that another member
state has breached a previously made agreement, it can file a complaint to
the WTO, which then acts as a kind of court.

The WTO is a capitalist organisation concerned with the well being of
transnational corporations. It puts free trade above anything else – be it
humanitarian concerns or the environment. In 2002 for example, the USA
stopped an agreement designed to give poor countries better access to
cheaper drugs to prevent diseases like aids, malaria and TB. The agreement
would have made it possible for African, Asian and Latin American
countries to buy cheaper Brazilian, Indian and Thai imitations of
expensive American patented medicines. But the USA thought this was
“unfair” and blocked the negotiations.

With the abolition of international trade barriers comes the possibility
for corporations to move their factories to poorer countries where unions
are weak or non-existent, and workers are more likely to accept bad
working conditions.

The WTO can also be used to limit the use of environmental labels such as
the Forest Stewardship Council (FSC) label. The FSC label confirms that a
product has come from a “sustainably managed” forest. The problem is that
these labels can be considered “discriminatory” under WTO rules. Worried
about risking trade sanctions by using the FSC label, countries will be
less likely to use the environmental label.

In May 2003, the USA government filed a complaint under the WTO's dispute
settlement process against the EU ban on GMOs. The WTO challenge was
launched despite the fact that the EU was planning to lift the ban within
months. This case is a scare tactic by the USA to “encourage” countries in
the South to agree to open their markets to genetically engineered (GE)
food. Many countries now fear that if they reject GMOs, they will be met
with huge trade sanctions (which could be worth hundreds of millions, or
even billions of dollars) in the WTO. The US has aggressively gone after a
number of developing country governments already, threatening them with
action under the WTO if they pass laws on GMOs, such as product labelling
that would give consumers the right to choose whether or not they want to
eat these foods.
WTO Decision making
The WTO, unlike other international organisations, bases its decision
making on consensus. This means that the members, rather than voting,
negotiate until an agreement is reached. What's more, all issues must be
resolved at the end of a WTO trade meeting – there must be agreement on
all issues, or else there is agreement on none and the meeting will end in
failure. This puts a great deal of pressure on countries that may be
"holding out" on one issue, to give in - or face a political and/or
economic backlash from other members. This also creates a system of
“trade-offs”, where, because all issues form part of one package,
governments will often trade off something they want on one issue, to give
them a better chance of winning something important on another issue.

Before each Ministerial meeting, there are often "mini-ministerials" which
are meetings of government Ministers held to try to build consensus before
the big meeting. The most difficult issues are discussed, and countries
start to work on "deals." However, because these mini-ministerials are by
invitation only, only a handful of countries are ever present. US, EU
states, Canada, Australia and Japan are a few of those always present.

Resources:
www.wikipedia.org
www.zmag.org
www.imf.org
www.worldbank.org
www.wto.org
www.ifiwatchnet.org
www.greenpeace.org
www.jubilee2000uk.org
Noreena Hertz “I.O.U.” Published by Fourth Estate 2004
Arundhati Roy: The Cost Of Living, Published by Flamingo 1999

(1400 words)