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U.S.: IMF, World Bank Respond To Their Critics

  • Andrew Tully

The annual spring meetings of the World Bank and the International Monetary Fund have survived a siege of demonstrators who accuse the institutions of insensitivity to the poor and the environment. They are not the only critics of the two institutions. But RFE/RL's Andrew F. Tully reports that the global lending bodies are refusing to apologize for the work they do, even as they begin some internal reforms.

Washington, 18 April 2000 (RFE/RL) -- The World Bank and the International Monetary Fund concluded two days of meetings focusing on two issues: how to help fight the HIV/AIDS epidemic and how to bring more developing countries more fully into the global economy.

The meetings, held in Washington, came at a time when the two financial institutions are facing increased complaints. Their critics range from the leaders of the U.S. Congress worried about how money is spent, to young protesters concerned about the environment and the plight of the poor.

The World Bank's president, James Wolfensohn, concluded the meetings by saying he is puzzled at criticism -- particularly that of the protesters.

One of the most disturbing subjects came up on 17 April, the second of two days of meetings. The World Bank and IMF's joint Development Committee received a report on how to help developing and transitional countries contend with the AIDS epidemic.

The short document included few details, but it said HIV infection is spreading rapidly in Eastern Europe and Central Asia. And it noted that people in the region are aware of how to avoid infection, but are not changing their behavior to stay healthy.

At a news conference Monday that formally closed the meetings, Wolfensohn said he promised the world's finance ministers that his institution would not limit its assistance for concrete programs to fight AIDS.

"I've said to the ministers today -- and I believe I got their endorsement -- that for efforts to finance the fight against AIDS, there will be no limit on the funding that we get from the bank."

The Development Committee also discussed the Asian financial crisis of 1997 from which the region is finally emerging. Wolfensohn said much of the meetings were devoted to anticipating such crises in the future and preventing a recurrence where possible.

The World Bank president also refused to apologize to demonstrators who accused the Bank and the Fund of being complicit in what has become known as the "globalization" of the economy. He said the Development Committee also discussed ways to cut tariffs so that developing countries can export more of their goods and share in the growing prosperity.

The protesters say globalization means a few companies with international reach can dominate world markets. The World Bank and the IMF reply that globalization is giving every country full access to markets regardless of its size or wealth.

The protesters also complain that the two institutions loan money to developing countries with conditions that perpetuate poverty. Wolfensohn expressed puzzlement at the accusation.

"I think we're doing already the things that they were complaining about. And what I couldn't understand is why you would have a group of people, most -- many of whom, not all, many of whom -- have very limited knowledge about what we were doing."

Still, Wolfensohn said, he could not ignore the protests -- for the second time he referred to "the noise in the street" -- and insisted that the Bank and the Fund already have begun reforms that many have called for.

One demand is from a commission empanelled by Congress, which has become increasingly impatient with what it calls duplication of effort by the World Bank and the IMF.

The International Financial Institution Advisory Commission issued a report last month making several broad recommendations for reform of the two world lenders.

At his news conference, Wolfensohn was asked about such duplication of effort. He said there is often "overlap," as he put it, but he was emphatic that the Bank and the Fund maintain separate missions. The IMF focuses on larger economic issues and crisis management. the World Bank focuses on long-term development projects with a focus on alleviating poverty.

But again, the World Bank president was unrepentant. He said the lender cannot adhere to rigid rules to pursue its mission.

"Our predisposition is not to have crisis lending unless it's done within the context of a World Bank program that we can get together. We don't think that's our function. And it would be our hope that more of that should rest with the Fund and less of it with us. But I can't make promises for future crises until we see them."

The formal meetings took place Sunday and Monday, but delegates began arriving in Washington a week ago. Many of them conducted informal meetings on the state of their nations' economies.

The demonstrators also started arriving around the same time, but -- for the most part -- they held off on their protests until Sunday, to coincide with the first day of the World Bank-IMF meetings. Until then, the activists planned strategy and made signs.

Sunday's demonstrations were mostly peaceful. Heavy rain appeared to reduce the number of protesters on Monday, although the clashes with police were more vehement. In the end, hundreds of demonstrators were arrested.