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Performance report

The International Monetary Fund was born out of a conference held in Bretton Woods, New Hampshire toward end of World War II. With specters of the war and the Great Depression peering over their shoulders, the planners hoped to ease postwar international debts and stabilize foreign exchange.

The Bretton Woods system was relatively restrained, allowing for controls on capital, restrictions on international investment, and a variety of development models.

But in the early 1970s it changed, as the United States and European Economic Community adopted a new system of exchange rates. The new "neoliberal" system is unabashedly pro-Free Trade, opposing national restrictions on foreign ownership of companies or direct foreign investment. It espouses the completely free movement of international capital. Its sole development model is based on privatization, exports, and globalization.

It doesn’t work very well. Take the annual growth of the Gross Domestic Product per capita for the periods 1950–73 and 1973–92:

Western Europe

under Bretton Woods: 3.8%
under neoliberalism: 1.8%

U.S., Canada, Australia, and New Zealand

under Bretton Woods: 2.4%
under neoliberalism: 1.2%

Southern Europe

under Bretton Woods: 3.3%
under neoliberalism: 2.6%

Eastern Europe

under Bretton Woods: 4.0%
under neoliberalism: -0.8%

Latin America

under Bretton Woods: 2.4%
under neoliberalism: 0.4%


under Bretton Woods: 1.8%
under neoliberalism: -0.4%


under Bretton Woods: 3.1%
under neoliberalism: 3.5% (the Asian economic "miracle" lasted until 1997)

For the entire period from 1950 to 1992, rich areas got richer and poor ones got poorer, but rate of change (in GDP per capita )varied. Take the increase between the world’s richest region and the poorest —

under Bretton Woods: from 10:1 to 11:1
under neoliberalism: from 11:1 to 16:1

Or between the world’s richest and the poorest countries—

under Bretton Woods: from 35:1 to 40:1
under neoliberalism: from 40:1 to 72:1

Data drawn from Robin Hahnel, "Let’s Review," ZNet (April 8, 2000).


Power to the chickens!

april 10, 2000. The anti-WTO demonstrations in Seattle, Washington last fall seemed to catch the media and the rest of the world by surprise. But spring in Washington, D.C. — that’s a different matter.

Buoyed by their success on the West Coast, activists have been preparing nonstop for the sequel, to coincide with the annual meeting of the International Monetary Fund and the World Bank. The Berkeley-based Ruckus Society upped its training sessions, including an Alternative Spring Break Action Camp in Arcadia, Florida. In San Francisco, Global Exchange has been hosting a weekly series of planning meetings. On Sunday, Cell, the community art collaborative on Bryant, held a street art workshop to prepare puppets, signs, and banners for the local counterpart to the Washington demonstrations on April 17. All over the country, union members, environmentalists, and other activists are packing their backpacks and heading toward the nation’s capital. And in Washington, 3,500 police officers will be on guard, armed with $500,00 worth of new equipment. Round Two is definitely big-time.

The organizations under attack have been preparing for battle as well, in rhetoric that resembles the recent attempts by the tobacco companies to paint themselves as humanitarian do-gooders. On March 14 IMF deputy managing director Eduardo Animat welcomed in a new era: "Together, we can and will make globalization work for the poor." On March 28 the WTO’s brand new director general, Mike Moore, announced a brand new "program of consultations aimed at producing agreement on measures in favor of least-developed countries." And on April 7, World Bank president James D. Wolfensohn announced the publication of "a groundbreaking new study featuring the voices of the world's leading experts on poverty: the poor themselves."

Hallelujah! They’ve seen the light!


Maybe so, but that light is very far off, at the end of a long dark tunnel. Debts incurred in the 1970s are still in place, binding many developing countries to the company store. The World Bank and the IMF still see their role as economic arbiter, with the capacity to impose "structural adjustment programs" unilaterally on needy countries. These programs tend to promote a reliance on production for export, often sacrificing small local businesses and local resources for global success. And according to a New Economy Information Service survey, U.S. corporations prefer to do business with dictatorships, where the adjustments are more likely to go into effect smoothly.

The World Bank and the IMF are still sites where money counts. In these organizations power is weighted according to financial contribution, with the United States and six other major industrialized countries wielding 45 percent of the vote. The whole system is still set up for the benefit of companies in the richer northern countries. The U.S. Treasury Department estimates that American exporters make two dollars in contracts for materials and consulting services for every dollar that the U.S. government contributes to international development banks.

The system was set up to avoid economic chaos. And from one vantage point, it certainly works, at least in the short run. But in a global economy, there’s no way to quarantine the haves if the have-nots come down with an infection. And a number of countries, from Russia to Mexico, display sores still festering from their run-in with the IMF.