Eco-nomics

DO THE WORLD BANK, IMF AND WTO HELP THE POOR?
The Reality Of Poverty Today:
Some Conventional Indicators

THE ECOLOGIST Sept.2000
http://www.theecologist.org

1.3 billion people (over a fifth of the world's population) live below the international poverty line of $1/day and a further 1.6 billion (another quarter of the world's population) survive on between one and two dollars In the latter half of the 1990s, one third of the world's willing to work population was either unemployed or underemployed, the worse situation since the 1930s.

In 1960 the combined incomes of the richest fifth of the world's population were 30 times greater than the poorest fifth. By 1991 it was over 60 times and in 1998, 78 times as high.

In 1997, the under 5 mortality rate in industrialised countries was 8/1000 live births. In 1997, the under 5 mortality rate in developing countries was 169/1000 live births In 1993 there were 244 doctors per 100,000 people in the first world In 1993 there were 13 doctors per 100,000 people in the third world In 1997, 41% of the total Third World population had no access to safe water.

In 1997, 57% of the people living in the Third World had no access to sanitation In 1997, 40% of all Third World children under the age of 5 were underweight or starving. In 1996 the average daily intake of calories in the Third World was 2090 cal, unchanged since 1970. About 840 million people worldwide are now malnourished. One in seven children of primary school age is out of school globally. In 1997, external debt payments made-up 92.3% of the GDP of countries of low development Source: United Nations Development Programme,

Were the protests against the World Bank and IMF demonstrators anti-poor?

"I, for one, support the demonstrators. The policies of the international financial institutions are having a debilitating effect on the countries of the South.,"
Chief Arthur C.I.Mbanefo, Chairs of the G77 in New York this year and Nigeria's Permanent Representative to the United Nations.

"We believe consciousness is rising, including in the north, about the inequality and insecurity globalization has brought about the plight of the poor countries. The protests against the WTO, World Bank and IMF were a sign of a changing atmosphere which a more coherent Third World voice can take advantage of." Thabo Mbeki, President of South Africa Who are the real winners?

"The United States has been at the forefront of every one of the eight trade rounds launched since 1948.«" Mike Moore, WTO Director General

"The same businesses that are the most aggressive WTO supporters are also the biggest beneficiaries.«Laura D'Andrea Tyson, former Clinton official

"The world's 200 richest people more than doubled their net worth in the four years to 1998, to more than $1 trillion. The assets of the top three billionaires are more than the combined GNP of all least developed countries and their 600 million people.", United Nations Development Programme, Human Development Report 1999,'

Views from the North and South

"I'm being confronted with people telling me that because of the World Bank children are dying. After working for this organisation for 5 years, that's very painful. I do not understand how you can protest against an organisation that aims to combat poverty" If we are doing something wrong, I 'd like to know." James Wolfensohn, President of the World Bank

We do not have any direct estimate of how many of the poor have been lifted out of poverty as a result of World Bank loans."Michael Walton, the World Bank's Director of Poverty Reduction and Economic Management At the entrance of the World Bank's headquarters in Washington D.C., a large sign reads: 'Our dream is a world without poverty.' Unfortunately neither the World Bank nor the regional development banks are moving rapidly towards that objective or the lesser but more fully achievable goal of raising living standards and the quality of life; particularly for the people in the poorest nations of the world..

The Metzler Report to the US Congress

"The World Bank has claimed that Zambia's reformed healthcare system is a model for the rest of Africa. It's true that there are no queues«" says Dickson Jere of the Zambian Post, "But that's because people are simply dying at home. We, at the Bank, have tried to fully understand this idea over the past few years. We discovered that the poor used the same reasoning as all of us; they have the same human needs.", James Wolfensohn, President of the World Bank

The Human Cost of World Bank User Fees:

Illness forced 43 year old Okoso to leave his job at a Ghanaian gold-mining company. Just three months later, his family's funds exhausted, he stopped going to the local clinic. "If I went to the clinic," he said, "they would make me pay this new fee which, frankly, my family and I cannot afford. I have no work, no salary. We live day to day on what my wife can make selling vegetables in the local market or what my sons can bring home from selling things on the streets. Some days we eat only one meal and we often go to bed hungry." - Dying for Growth,'2000, Common Courage Press

"Globalization can now be seen in a positive light, as the best means of improving the human condition throughout the world."Michael Camdessus, Former Managing Director of the IMF

"The IMF practises an economic totalitarianism which kills not with bullets but with famine."Carlos Andres Perez, former Venezuelan President

"The Reforms that IMF asked Zambia to undertake have brought unemployment and a rise in poverty levels."Frederick Chiluba, President of Zambia

"The IMF has presided over, and fostered, a crisis-prone system." The Metzler Report to the US Congress Our programs are like medicine. Some of the medicine has harmful side-effects, and there are real questions about what the dosage ought to be. The best that can be hoped for is that we are prescribing more or less the right medicine in more or less the right dosage." Michael Mussa, Chief Economist, IMF

"The costs of adjusting to greater openness are borne exclusively by the poor, regardless of how long the adjustment takes. In addition, the consequences of terms of trade changes are far greater for the poor than for the middle or wealthy classes. The poor are far more vulnerable to shifts in relative international prices, and this vulnerability is magnified by the country's openness to trade." Matthias Lundberg & Lynn Squire, 'The Simultaneous Evolution of Growth and Inequality,' 1999, World Bank

"Globalisation appears to increase poverty and inequality." Lundberg & Squire

"Since liberalisation began in Russia in 1989, inequality has doubled, wages fell by almost half, and male life expectancy has declined by more than four years to 60 years."UNDP, 1999

Liberalisation of the economy, including trade reform 'hindered the growth of employment' [in nine Latin American countries], and in addition led to 'a widening gap in wages based on skill level, which is the opposite of what the proponents of the reforms expected."Barbara Stallings & Wilson Peres, 'Growth, Employment and Equity: The Impact of the Economic Reforms in Latin America and the Caribbean, ECLAC,' 2000.

"In early 2000 the Brazilian government announced a plan to spend more than $22 billion over 10 years to fight poverty. Despite the IMF's recently proclaimed commitment to eradicating poverty, Fund officials were sharply critical of the plan. The New York Times quoted the IMF representative in Brazil as saying that 'the government plan established a precedent that could become dangerous"'". John Cavanagh, Institute for Policy Studies

"Although the WTO is not a development organization, it does a lot to alleviate poverty."Mike Moore, Director General of the WTO

"The global economy governed by international financial institutions, the World Trade Organization and Multinational Corporations proposes structural adjustment for countries in the South in the name of fiscal health: the result is increasing poverty, debt, and unemployment. NGO declaration at the UN Conference on Women

"We need to reassure people that globalization is generally a force for good." Mike Moore, Director General of the WTO

"Attempts to respond to the demands of the western-driven market-based globalisation process have only served to atomise the developing world whilst making countries ever more vulnerable to pressures from the most powerful players in the international order, whether these be states or Transnational Corporations. The current global agenda is almost bereft of the concerns of the South."Clement Rohee, Foreign Minister of Guyana and Chairman of the G77

"It is poor people in poor countries who are grasping the opportunities provided by trade and technology to try to better their lives. Mexican farm hands who pick fruit in California, Bangladeshi seamstresses who make clothes for Europeans, and South African phone-shop owners who hawk time on mobile phones to their fellow township dwellers. They and countless other real people everywhere are the human face of globalization. Mike Moore, Director General of the WTO

"Globalisation has failed to spur economic recovery, faster growth, greater employment and poverty eradication in developing countries." Olusegun Obasanjo, President of Nigeria

"The last two decades have produced few gains for the South. Consensus, withall its intimations of Southern participation and agreement, heralded an era of exclusion and dictation -nowhere more so than at the WTO." P.J.Patterson, Prime Minister of Jamaica

"For developing countries as a whole (excluding China), the average trade deficit in the 1990s is higher than in the 1970s by almost 3 percentage points of GDP, while the average growth rate is lower by 2 percent per annum."United Nations Conference on Trade and Development, 'Trade and Development Report,' 1999

"The top fifth of the world's people in the richest countries enjoy 82 percent of the expanding export trade and 68 percent of FDI - the bottom fifth, barely more than 1 percent." The UNDP's Human Development Report, 1999

"Wealth that goes to large companies does not 'trickle down' to the poor via employment opportunities: though the top 100 TNCs control around 14% of all the world's wealth, they employ less than half of one percent of the world's workforce." Christian Aid, 'Fair Shares? Transnational companies; The WTO and the world's poorest communities.

"Globalisation is bad for health" The world Health Organization (WHO) andthe International Labour Organisation (ILO) said the continuing shift of industrial production to low-cost sites in developing countries where worker protection is lower is likely to increase the global incidence of occupational disease and injury (which already kills an estimated 1.1m people worldwide each year). Frances Williams, Financial Times


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