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Memoria Viva // Paris 2003 Reports // Against war //

World Bank Boycott [en]
12 January 2004

 

The World Bank was founded in 1944 at the end of the Second World War, with the idea to help reconstructing the countries destroyed by the second World War. Actually, its first loan went to the Netherlands. It’s main activities since that time are projects, economic and sector analysis and planning, sectoral and structural adjustment loans, global think tank ‘Knowledge Bank’ and the more and more participation in global diplomacy (i.e. on biotechnology, HIV/AIDS, for Rio+10).

The Bank is actually the World Bank Group which consists of five branches. Theses are
- the International Bank for Reconstruction and Development (IBRD),
- the International Development Association (IDA),
- the International Finance Corporation (IFC),
- the Multilateral Investment Guarantee Agency (MIGA),
- and the International Center for the Settlement of Investment Disputes (ICSID).

Each of them plays a different role. The biggest branch and most famous one is the IBRD. People speaking about the World Bank very often speak about the IBRD. For our campaign it is important to know that the IBRD and the IFC raise 80 per cent of their money on international financial markets. The IDA gets most of its money by rich governments; and the MIGA doesn’t give loans but only guarantees which can be as powerful as well (see Tundu’s report). How big a player a player the World Bank group is show the following figures: It lends around 25 billion dollar a year. Its staff is 10.000 people worldwide (therefrom 7.000 in Washington), not included its consultants. Its influence on specific policies is shown by these figures: From 1981 to 1994 it gave out 238 structural adjustment loans for trade or foreign exchange liberalization in 75 different countries. From 1995 to 1999, 65 per cent of adjustment operations have supported exchange rate and trade policy reforms. Decision-making at the Bank is very hierarchical and not very transparent to the public. At the top are the G-7 officials, followed by the Governors (government ministers). For current decisions, there is the Board, which consists of appointed officials. They are above the management, which is for the staff. The staff itself is organized in networks after sector families since the last reform, to secure a check and control mechanism within the staff. During evaluation and complaints mechanisms, consultation with borrower governments and NGOs takes place.

But the structure has its internal specialties: So the World Bank board representation reflects quite well the inequalities in the World. The World Bank is one (the only?) UN-suborganisation where it’s not one country = one vote but one dollar = one vote (even if each country is represented by one official).

Therefore, the five big countries have a vast majority of the votes. The United States have, with 15 per cent of the votes a quasi veto right. Other big players are Japan with 11 %, Germany with 7 %, Great Britain with 5 % and France with 4 % of the vote. On the other extreme, Sub-Saharan Africa, which consists of 47 countries, holds only 7 % of votes. These inequalities strengthen the belief on who’s actually controlling the World Bank:

”...the belief that the Bank forces its agenda on developing countries is consistent and overwhelming in all regions and virtually all countries”, states a survey of 2600 ‘opinion leaders’ in 48 countries by Princeton Survey Research Associates, commissioned by the Bank. Concerns are not only on its structure, criticizing the World Bank’s meetings, which are not open to the media and the public, but there are also major concerns regarding the World Bank’s performance. These concerns concern the Bank’s

- refusal on impoverished countries’ debt cancellation,
- programs for structural adjustment and austerity policies and limited local input in their shaping,
- financing for environmentally and socially destructive projects, including oil, gas and mining and large-scale dams construction.

But even in its own targets and its goal to reduce poverty one can criticize the Bank performance :
- Less than half the evaluated projects likely to have sustained results, a performance similar to that throughout the 1990s.
- Only 39% of the exiting projects show substantial institutional development impact
- Only 34% of exiting evaluated projects in Africa were of likely sustainability, and only 26 % of likely Institutional Development impact.

Some current controversies are: water privatization in Ghana, the Baku-Ceyhan oil pipeline, the Bank’s subsidies for Enron, to Haliburton and other scandal-hit companies, the Bank’s role in trade policy capacity building, its market-based land reforms, its structural adjustment conditions (see Marta’s presentation), the way the President of the World Bank is selected, the composition and secrecy of the Bank’s Board, the Bank’s forest policy and its policy towards indigenous peoples.

the Banks involvement in Extractive Industries (by Friends of th Earth International)
From 1995 to 1999, 55 billion $ was done to extractive industries (oil, gas and mining) by international financial institutions (IFIs) as the World Bank. But it’s not only this money that counts, when the World Bank decides to invest in some project, other investors and banks are attracted to invest there either. The Bank serves as guarantee and legitimation.

1. environmental impacts:
- chemistries to wash out minerals poison drinking water and spill into nature.
- new industrial infrastructure in sensible regions
- coal, oil, and gas are going to be burnt in industrialized countries and will have an impact on climate change (with effects on the South)
- effects on biodiversity
- ... 2. health impacts
- chemistries to wash out minerals have a direct impact on worker’s health, but also by poisoning water on indigenous communities
- AIDS and sexual diseases by growing prostitution
- very bad information policies of the projects and the WB to concerned people
- ... 3. social impacts
- growing prostitution
- no labor created, if so, only for new coming skilled workers.
- corruption
- violation of human rights
- money goes very often to companies and not to affected people. Policies adopted in beforehand about redistribution were not monitored in the aftermath and mostly not done.
- ...

More than 200 organizations demanded the World Bank to phase out the financing of extractive industries. Chec Republic, Germany, Montana (US) decided not to extract any more by using cyanide; Costa Rica, Wisconsin (US), and the Philippines stopped surface mining. Finally, the World Bank did a study on extractive industries. This report was just published some days ago and recommends to the World Bank to phase out their projects in extractive industries until 2007. The chances that the World Bank adopts the suggestions pointed out in the report are mixed. For example, the recommendation by the World Commission on Dams haven’t been taken into consideration neither.

Why do IFIs invest in extractive industries?
- IFIs are very much controlled by rich countries who benefit from these projects (in their terms).
- lobbying within these countries and within the IFIs by big companies

We should oppose to that for the reasons mentioned above. Concerning the IFIs, rich countries’ citizens have a special responsibility and a special influence, as most of the money comes from them.

The World Bank Boycott (by A SEED Europe)

Why Boycott the World Bank?
The World Bank, one of the most powerful agents of neoliberalism and economic globalisation, enforces policies that sacrifice human and labour rights and the environment to the dictates of multinational corporations and powerful governments. The World Bank, along with the International Monetary Fund (IMF), encourages the privatisation of government services, requires the weakening of labour laws, and undermines small businesses and farmers. Through its devastating structural adjustment lending, the Ba nk also encourages poor countries to increase fees for health and education by requiring the cutting of spending on vital government services. With the help the World Bank and the IMF, corporate giants have become richer while most of the world’s people are poorer.

Despite increasing criticism and appeals from numerous civic organizations and governments in the North and South, the World Bank continues to increase its rate of structural adjustment and harmful lending.

- The World Bank refuses to cancel 100% of the debts of poor countries.
- The World Bank refuses to implement recommendations from the World Commission on Dams.
- Despite the World Bank’s verbal support of workers’ rights to organise, its pro-corporate privatisation policies undermine workers’ rights.
- The World Bank refuses to cease promoting drastic cuts in social spending, leaving governments no alternative but to impose "user fees" on basic services such as primary health care and education.
- The World Bank refuses to adopt measures of transparency and remains unaccountable and undemocratic.
- The World Bank ignores concerns of local people and civil society by imposing a "one style fits all" model of economics on debtor nations.

All these points should be reasons enough why to campaign on the World Bank and its policies.

But how to do that?

One possibility is the Boycott of the World Bank.

What Is the World Bank Boycott?

The World Bank Boycott is a global initiative to demand an end to socially and environmentally destructive World Bank policies and projects through grassroots financial and political power.

The success of the campaign stems from the fact that the World Bank raises 80 percent of its money by selling bonds on private capital markets. Many of the bonds the World Bank sells are held by everyday people and can be found in our pension funds, mutual funds, life insurance schemes, university endowments, churches, local governments, and trade unions. Collectively we have the power to stop the World Bank in its tracks just by making simple choices about where we put our money.

The boycott of World Bank bonds was modelled on the anti-apartheid movement and was conceived of by Haitian, South African, and Ecuadorian groups angered by the effects of the World Bank in their own countries. Campaigns in South Africa, India, Haiti, Canada, the United States, and Europe are already successfully opposing the World Bank. Numerous trade unions, universities, civic groups, local governments, and religious groups have signed onto the boycott.

The World Bank Boycott is an international network of grassroots organisations that are actively working to challenge the legitimacy of the World Bank. The network solidified in April of 2000, when 35 activists and representatives of global social movements presented three core demands to World Bank president James Wolfensohn. The demands of the World Bank Boycott are:

1. An end to structural adjustment and related policies of privatization and austerity 2. 100% debt cancellation for impoverished nations and illegitimate debt 3. A stop to World Bank support for environmentally destructive projects, especially oil, gas, mining, and dam projects.

How are we organised globally?
The international World Bank Boycott network consists of many diverse groups. All localities organise autonomously and engage in diverse courses of action. All groups involved support the demands of the Boycott and act upon an underlying principal of solidarity. The strength of the Boycott is derived by mutually building support for each other across vast regional and cultural expanses.

Who can join?
The World Bank Boycott network is open to anyone that agrees with the demands and wishes to take an active role in challenging the World Bank on the grassroots level. In theory there is no official membership. Face to face meetings occur approximately once every year, and global conference calls are held quarterly. Anyone can get involved in these open forums for regional updates and discussion.

How are decisions made?
The only formalised structure within the World Bank Boycott is the International Coordinating Committee. This is a group of organisations that are committed to the Boycott and its direction. Should any need for global collective decision-making arise, this is the group that is responsible for doing so. Involvement is based upon desire to be included. New members must request to become involved and two current members must endorse the request. Membership is weighed geographically to ensure fair and equal representation. Decisions are taken by consensus.

How are we organised in Europe?
A SEED first launched the World Bank Boycott in Europe at the G8 protests in Genova 2001. Since Genova, we have been building a network of groups in both Eastern and Western Europe that want to challenge the World Bank from their own communities. We are loosely organised around the three demands of the Boycott. All groups are autonomous. Anyone may become active within the European network. We hold a European strategy meeting annually, and hope to implement Europe-wide conference calls.

How are decisions made?
All major decisions for the European level are taken by absolute consensus at meetings. In order to maintain fair representation on the Global level, we have three European positions on the International Coordinating Committee - one for coordinators, one for Eastern Europe, and one for Western Europe. Exact representatives are chosen at each meeting.

What is the role of the coordinators in Europe?
Since the Boycott’s launch, A SEED has assumed the role of European Coordination, but it by no means feels possessive of this role and encourages others to also take it. A SEED would especially like to encourage regional coordinators throughout Europe, as languages and political-financial structures vary greatly. The role of European Coordinators is mostly conceived of in four ways.

- 1. To outreach to new groups that may be interested in the World Bank Boycott.
- 2. To create the needed materials and infrastructure that will allow local grassroots groups to get started with the Boycott.
- 3. To strengthen the existing European network by facilitating communication and coordination.
- 4. To serve as a general info point for the Boycott.

How can I get involved?

We welcome you to get involved in the World Bank Boycott in Europe!

Please contact us at wbboycott@aseed.antenna.nl or through our contact form for more information, materials, and to connect to other groups in your area.

We also recommend you read our Organisers’ Toolkit to get started. It can be downloaded in PDF on http://wbbeurope.org or you can request one to be sent via post by emailing wbboycott@aseed.antenna.nl or calling +31-20-6682236.






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