.ECO No. 4, 30 September 1994: ENGLISH Produced by: Eco, Facultad de Medicina, Universidad Aut�noma of Madrid, c/ Arzobispo Morcillo 2-4. Room: Seminario V. Tel/Fax: (+34-1) 397 53 40 E-mail: firstname.lastname@example.org CONTENTS * Inside Bankenstein: Happy Hour at the World Bank * A Golden Opportunity? * Nine out of Ten Dictators Prefer World Bank Dollars: Win the Contest!! * Mass Protest against GATT Announced for the Philippines * One of the Voices * IMF Sponsored Economic Reforms Condemn Russian Women Back to the Stove: Russia's Academy of Sciences finds out that Unemployment hits Female Population Hardest * Wanted! * The World Bank is Preying on East European Railways * Warm Welcome for Bankers * Sorry INSIDE BANKENSTEIN: HAPPY HOUR AT THE WORLD BANK by Maike Rademaker Bankers who had already arrived to Madrid yesterday had the possibility to attend the welcome session of Lewis Preston, President of the World Bank, and Michael Camdessus, Director of the International Monetary Fund and other prominent speakers. As this year's annual meeting marks the Bank's 50th aniversary, the speakers prepared a special and self-glorifying speach. Those attending the session however must have thought the speakers came from a different planet. Preston started his speach, as a good banker should, with numbers: In the last 50 years the World Bank financed over 6,000 projects in 140 different countries. He went on summing up some of the "successful" operations and here the story becomes strange. The World Bank, he said, helped to reconstruct Europe after the second world war, assisted new independent nations in Africa and helped Latin America to overcome its dept crisis. In truth, Europe was mainly reconstructed with the help of the Marshall Plan and the Bank's money was only a small contribuiton. As the Bank wasn't need in Europe, it had to look elsewhere, and turned towards developing countries. Africa's "new" independent nations were not new at the time of independence but still in the artificially drawn frontiers of the colonialists - which is one of the causes of the wars going on in Liberia, Ruanda, Angola, etc. Mr. Preston likes to talk about Africa. He is quite aware of the existing problems, specifically in sub-saharan Africa. According to him, this region will be the only one with even more poverty at the end of this century than at present. What he failed to mention in his speach is that the World Bank gave more concessional loans and started more operations in this region than in any other region of the World. From 1985-1989 sub-saharan Africa received an average of 1,609 million US dollars annually to cover 80 operations. In 1994, the Bank lent 2,680 million US dollars (IDA-loans) for 60 operations there. In addition, between 1985-1989, South Asia received an annual average of 1,473 million US dollars for 32 projects and in 1994 a total of 1,896 for 19 operations. The East Asia and Pacific region received less. Despite this heavy investment, all the regions all still in poverty stricken. Despite this fact, in his speach, Preston bragged that an "elevated" number of persons got out of poverty, life expectancy in developing countries has become longer than at any time in history and dieseases have been erradicated. Though this is true, Preston did not put his facts in the context of overall social, political and environmental conditons. In such a context, the improvements he refers to are part of a situation that on the whole has detereorated. This is substantiated by the 1994 OECD Development Assitance Committee and UNDP's Human Development Report. The report states that: "The gap between the rich and the poor has not narrowed over the past 30 years but has in fact widened greatly. In 1962, the richest 20 percent of the world's population had 30 times the income of the poorest 20 percent. Today the gap has doubled to 60 fold... The cost of military peacekeeping operations of the United Nation have increased from less than $300 million in 1988 to over $3.6 billion 1993. For Mr. Preston, the problem of one billion people living in deep poverty is manageable in one way or another, but with the help of the World Bank. Perhaps Preston is thinking of Marcos, the former president of the Phillipines when he talks of people getting out of poverty or of all the other members of the elite minority who benefit from World Bank projects. Probably he does not know about the pneumonic plague in India as a new disease. Nor does he seem to know about the desperate rebelion in Chiapas when he talks of "Mexico as an example of the advantage of rapid economic reforms". He is of course absolutely right when he says that "everyone should be able to participate in the decisions and acts which affect peoples lives," but this is what his own insitution is exactly Not ensuring, as the example of the Arun III dam in Nepal shows. A GOLDEN OPPORTUNITY? The World Bank and the IMF differ in one key respect from all other lenders - whether governments, or banks, building societies or individuals. They have no mechanisms for the rescheduling, reduction or cancellation of debt. Furthermore, the economic conservatism that dominates these institutions has so far inhibited debate on how to reduce or cancel the mounting debt of poorest countries to these institutions. Multilateral debt has been the most intractable element of the debt crisis. This is a matter of growing concern, as the stock of debt owed by developing countries to the Bretton Woods Institutions (BWIs) has grown faster than any other type of debt. It tripled from $98 billion in 1982 to $304 billion in 1992. The stock of debt owed by the most severely indebted, low income countries (SILICS) quadrupled over the decade from $11 billion to well over $43 billion in 1992. Multilateral debt service by these countries increased from $1 billion in 1982 to $3 billion in 1992. This week the British Chancellor, Kenneth Clarke is proposing that 10% of the IMF's gold should be sold, and the proceeds ($4 billion) used to support "a small handful" of countries heavily indebted to the World Bank and IMF. The proposal is minimalist, but even so may be controversial with creditor governments. The IMF's 100 million ounces of gold reserves are worth about $40 billion, almost equal to the total debt owed to multilateral creditors by SILICS. They were originally part of the subscription paid by countries joining the IMF. The gold is now hoarded by the IMF, although it is within the Fund's power to sell it. Their opposition to the use of fund resources for debt relief, is twofold. There is opposition to offering debt reduction at all, on the grounds that this would undermine the credit rating of the BWI's. There are orthodox monetarists - at political as well as official level - who argue that the IMF is the central bank for the world economy, which needs gold reserves to back its activities. This is anachronistic, as the system for fixed exchange rates based on gold was abandoned more than 20 years ago. Central banks have recently been selling their gold reserves, because gold is no longer even a good investment. This week's initiative by one of the IMF's most conservative member countries, Britain, suggests that the UK now accepts the principle of multilateral debt reduction. This will serve the useful purpose of triggering debate within the BWI's and creditor governments about the urgent need to reduce multilateral debt. This gives us the opportunity to raise these issues with our governments. Ann Pettifor; Debt Crisis Network UK. Ted van Hees; Eurodad. NINE OUT OF TEN DICTATORS PREFER WORLD BANK DOLLARS WIN THE CONTEST!! Yes indeed, 9 out of 10 dictators want World Bank money NOW! Submit your list of the 9 most vile dictators to the press office and you could be the lucky winner of a five year free membership to the Rainforest Action Network. Dictators need not still be alive to qualify. MASS PROTEST AGAINST GATT ANNOUNCED FOR THE PHILIPPINES Philippine one-million-member NGO BAYAN has called for national protest against GATT to be staged in Manila on October 20. The organisations representative at the Forum, Mr Cesar Cesar T. Taguba expects tens of thousands of peasants, workers and students and indigenous peoples to come. "Only through the the show and exercise of collective action by the Filippino masses can the government be compelled to diverge from its scheme to ram through the ratification of the GATT", said Taguba. The demonstration will coincide with the final day of the Senate hearings on the GATT, which has been ratified by three countries only so far. The Philippine anti-GATT movement, which is among the world's most active after India, will present itself at a workshop titled "The WB-IMF-GATT and the Phenomenon of Migration: The Philippine Experience" here at the Forum today at 2pm in Aula V. ONE OF THE VOICES The NEAP (Nucleo de Estudos e Abao Popular) is a multidisciplinary team cooperating with other movements and initiatives alongside the victims of exploitation and violence, particularly young girls and women who spend most of their time in the streets of Rio de Janeiro, Brazil. They produce information materials, give advice and actively participate in the Red Pro-menina (Network for Girls). Aparecida Fonseca, sociologist, 36 years old, and mother of three children, came to the Forum because she is convinced that the situation of the marginalized/exploited population of Rio de Janeiro is part of bigger problems related to the Bretton Woods Institutions. NEAP believes solutions to the problems of the disadvantaged people they work with can be found when the people themselves are listened to. NEAP works together with them and looks for initiatives to transform the tradition of exploitation. For more information, visit NEAP's information table outside the main hall or write to: NEAP (N�cleo de Estudos e A�ao Popular) Av. Almirante Tamandare 66/834 Flamengo Rio de janeiro (RJ) 22210-060 BRAZIL Fax: +55-21-220 1617 IMF SPONSORED ECONOMIC REFORMS CONDEMN RUSSIAN WOMEN BACK TO THE STOVE: RUSSIA'S ACADEMY OF SCIENCES FINDS OUT THAT UNEMPLOYMENT HITS FEMALE POPULATION HARDEST Both World Bank and IMF consider it one of their biggest tasks to transform the Russian economy into a free market economy. While over the past year, the World Bank has given huge loans to Russia, the IMF imposed the conditions under which these loans would be added to the hard currency starving Russian budget. However, the promotion of these economic reforms and structural transformation of the Russian economy will lead to mass unemployment: 15-20 million people, or 21-28% of the working population. Until now the unemployment has been artificially suppressed. According to expert estimates real unemployment is 8-10 times higher than the official one. By the end of June 1994, 835,000 people were officially registered unemployed, and the real unemployment rate reached 6.5-8.5 million people. The percentage of women among the official and potential unemployed ranges between 60-80% depending upon the region. The high rate of female unemployment is partly caused by an ineffective job structure, and very conservative social attitudes. But there is also increasing competition of men for jobs traditionally held by women; and poor government policies at the regional and local level. The transition from the free-of-charge, state-donated facilities to full price, commercial services in such spheres of primarily women's activity as health-care, education, tourism, etc. make these occupations attractive to men. This leads to a reduction in available jobs for women. The most radical position of government policy was expressed by Mr. Melikyan, the Minister of Labour, who declared that all women must be redundant before a single man can lose his job. This attitude has been determined by the fact that female unemployment is socially less dangerous than the male one. This attitude is because usually a woman is involved in the household, as she is traditionally the main parent. Thus a woman is sufficiently occupied and that is why she is less socially active in comparison with a man. Regional and local authorities have a simple attitude. The employment of women demands the development of social infrastructure, especially pre-school facilities. But there is no money for this purpose in local budgets. On the contrary, female unemployment eliminates that problem and allows the regional or local authorities to use the objects of social infrastructure for commercial goals. It is impossible to change the situation of female unemployment in Russia simply by stating equal rights. Its transformation demands separate, targeted programme packages of positive action on all levels: federal, regional and local. These include training and retraining women, social and psychological rehabilitation facilities, programmes for creating new working places and supporting employment, all of which must take into account gender aspects. This point of view in its turn demands a change in both the ideology and policy of investments in Russia, and a different form of financing, especially for international projects. Tatiana L. Kliatchko, Senior Researcher, Russian Academy of Sciences WANTED! Experienced Torero needed that has know-ledge of multi-lateral lending institutions. He should be prepared to deal with direct charges. Required for NGO in direct need. THE WORLD BANK IS PREYING ON EAST EUROPEAN RAILWAYS One of the few environment-friendly features of East European "socialism" was the intense development of railways. They were notoriously slow but efficient and saved a lot of non-renewable resources, compared with present transportation policies. Today, few companies use rail freight for their goods. Since 1990, the World Bank lent US$200 million annually to "Europe and Central Asia", as they refer to the former Soviet Bloc. This is a lot of money if properly spent, but it wasn't. Now the World Bank is trying to hammer the last nail in the coffin of East European railways by offering "restructuring" loans. The Bulgarian State Railway, BDZ, for example, was offered US$95 million (plus US$70 million more from the European Bank of Reconstruction and Development - EBRD), on condition that they fire thousands of workers and close "inefficient" local lines. This would decrease availability of rail transport, to the joy of lorry and bus owners. Increasing the amount of hazardous goods transported on roadways means poses serious risks. Twelve years ago it was able to travel from Sofia to London in 48 hours by train at an affordable price. Now the rail ticket from Sofia to Madrid is more expensive than an airline ticket and the trip takes four days. Somebody is killing the railways. Vladimir Dvoretzky, AYEC, Bulgaria WARM WELCOME FOR BANKERS Thursday was the first day that many Foro Alternativo attendees woke up before sunrise. The welcoming demo for the arriving delegates of the IMF/World Bank Conference off the Palacio Municipal de Congresos was the big deal of the day. We stationed ourselves where all the delegates had to pass, and unfurled banners, posed for the media, and sang songs in English and Spanish from the Anti-World Bank songbook, including 'Unhappy Birthday'. We carried our protest to the middle of the road, some of us dressed as protesting victims of resettlement. As a visitor to Spain, I was very surprised at the difficult attitudes, and behaviour of the Police. Still, we protestors from across the world, booing, whistling and parading information on our banners, pointing at the occupants of cars and coaches seemed to work well, as then delegates had to realise that it was -them personally- we were addressing. By now we have all sat through a few plenaries and workshops. Each time people have felt a renewed anger as more and more problems are revealed to them. The things connecting them all are the corrupt and morally bankrupt institutions of the World Bank, the IMF and GATT, which seem to be running this planet into the ground. Sitting and talking about the issues involved is of vital importance, but it is surely not enough. While we sit here, they are on the other side of this city celebrating all the disasters they have caused in the last 50 years. How dare they celebrate: mass evictions, ecological destruction, social and cultural disintegration? Do you feel sad, angry, frustrated? Use your emotions in positive action! Make the World Bank delegates see that we won't put up with it anymore. FIFTY YEARS IS TOO MUCH. Contact the ASEED desk in the foyer. Sorry to Simone Lovera- Bilderbeek, coordinator of the ANPED working group on cultural and biological diversity, and author of the article "World Bank Coup Over Genetic Resources" on page 3 of ECO No. 3. We left out your name by mistake, but that has nothing to do with you being a lawyer (just joking.... really!). ..