A Bigger Piece of the Pie
The United Nations, with its diplomatic, peacekeeping, and humanitarian functions, is an unlikely site for guerrilla warfare, but among its diverse sub-agencies a deepening schism has developed. Over the years, the UN system has grown to include numerous subsidiaries with comforting names but steadily diminishing budgets, such as the UN High Commissioner for Refugees (UNHCR), the World Health Organization (WHO), the International Labour Organisation (ILO), the UN Environment Program (UNEP), UN Development Program (UNDP), UNESCO and UNICEF. Who would want to subvert these struggling and benevolent institutions?
Well, tucked away in the UN family are the ugly stepsisters: the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO). Unlike their more impoverished relatives, however, they do not lack resources. Governments give them money; your tax dollars, in fact. The rich people who run the World Bank and the IMF then lend these funds to rich people in poor countries, who steal whatever they can get away with (which is quite a lot) and leave the unfortunate poor people to repay the loans with interest and other miscellaneous surcharges (See “The Permanent Kleptocracy,” June 4, 2004). In 2002, for example, the last year for which we have figures, the Bank and the Fund received billions of dollars more in paybacks than they lent out to their wretched client countries. As a result, they enjoy an especially privileged financial status, and this enables them to launch hostile takeovers of the dysfunctional UN organizations still imbued with some sense of a more idealistic international mission.
The takeover tactic has been quite successful in private sector image repairs, so why not give it a try at the UN? Thanks to the long reach of their usurious terms, the World Bank and the IMF have quietly gathered strength through their lending programs and tipped the balance at the United Nations. Before the mid ’80s, living standards in developing countries actually did improve and people learned more, earned more and felt better because of UN agencies and programs. But that was then: pre-debt crisis. By the 1990s, most development efforts had been subordinated to a single imperative: The repayment of a mountain of fraudulent debt to the World Bank and the IMF, both institutions driven by the economic interests of the rich in the northern countries, operating in tandem with their now-loaded cronies in the global south.
The UN Environment Program, U.N. Development Program, and the World Health Organization have all accepted appealing offers from the World Bank in exchange for allowing greater corporate control of their operations. Even everyone’s favorite Halloween charity, UNICEF, is now more of a trick than a treat for the world’s destitute children. Behind that pretty little princess costume rattling a can at your front door is—I’m afraid so—the World Bank.
Still, a branch office of the U.N. called the Conference on Trade and Development has retained its relative autonomy. UNCTAD was established in 1964 to promote the integration of poor countries into the world economy. In the post-World War II era, UNCTAD was to provide developing and newly de-colonized governments with technical and financial support as their economies became increasingly involved in international markets. The idea was that these countries needed assistance if they were to develop, that is, to raise living standards for their people in a world already dominated by powerful and comparatively affluent countries. At the first UNCTAD meeting, the Group of 77, the largest Third World coalition in the U.N., was established, to promote the collective economic interests of developing countries. The coalition has now grown to include 131 countries.
Over the course of the intervening 40 years, UNCTAD achieved some degree of fairness in international trade terms. Among other things, the Group of 77 helped launch the General System of Trade Preferences in 1968, through which developed countries gave more access to the exports of developing countries. UNCTAD meetings, held every four years, also promoted International Commodities Agreements, designed to stabilize and support the prices of exports crucial to developing countries, such as cotton and sugar. Without these agreements, countries that depended on the price of only a few agricultural exports for income could not make long-term investments in public welfare because future revenues were completely unpredictable.
But on January 1, 1995, the World Trade Organization was born to the World Bank/IMF side of the UN family, and its mission creep toward UNCTAD began. At the outset, it did not attract much attention, but furious opposition to the WTO broke out at the Battle of Seattle in 1999. There, labor unions, environmentalists and consumer groups together protested the WTO’s proposed trade rules. These rules made industry free to flee to the country with the cheapest labor; they allowed huge corporations in rich countries to swallow up smaller companies abroad, and supported private transnational interests buying public services, firing workers and raising rates for water, electricity and kindergarten.
It was not long before the dark shadow of the WTO and the IMF began to loom over UNCTAD. When the tenth UNCTAD meeting convened in Bangkok in February 2000, Michel Camdessus, Managing Director of the IMF, appeared as an honored guest. His scheduled speech bode ill for the Group of 77 and their progressive trade agenda. Although Mr. Camdessus said “poverty was the greatest concern of our time,” and added that the “widening gaps between the most affluent and most impoverished nations were morally outrageous,” many could not help but notice that the IMF had engineered the gaps and that its continuing austerity programs would make them wider still. Around the world, economists agreed that the fiscal policies imposed by the IMF on Brazil, Russia, South Korea, and Indonesia during the late 1990s had pushed these countries over the edge into crisis, with soaring poverty rates.
The encroachment of the IMF into UNCTAD territory was especially alarming. It meant that the one forum where Third World countries could influence the agenda faced an incursion. A group of new insurgents emerged to beat it back: Bakers Without Borders burst out of the crowd at Bangkok and landed a pie on the face of Mr. Camdessus shortly before he pronounced his institution one of “the best friends of the poor,” and the guerrilla campaign to save UNCTAD from the IMF and the World Trade Organization began.
Bakers Without Borders are fighting an insurgent ground war against the “titans of industry.” They call themselves “revolutionary bakers and pie-slingers [who] have achieved in short order what can truly be called a Global Pastry Uprising (GPU).” Of course, the Bakers are not the most serious problem faced by the titans and their gofers at the Bank and the Fund. When the finance ministers of the WTO countries met in Cancun last September, negotiations over trade rules broke down over contentious issues, and protestors had to be shooed away by the Armed Forces. Despite warm letters of support and encouragement for the ministers from Mr. Camdessus’ successor at the IMF, Horst Kohler, and his counterpart, James Wolfensohn, at the World Bank, the ministers went home without a deal.
This lack of progress on the global domination front discouraged the titans, and so they set their sights on the next UNCTAD meeting, which convened this past June in Sao Paulo, Brazil. At first glance, Sao Paulo did not seem an ideal site to launch a titan takeover. Brazil elected a progressive President in November, 2002. Luiz Inácio Lula da Silva now presents Brazil on the world stage as a champion for developing poor countries and has attempted to shame rich countries into opening up agricultural trade. Under Lula the Brazilians are taking a more active role across South America, and the country is seeking a permanent seat on the UN Security Council. Still, the titans let Lula know who remains in charge and what their priorities are: the Bush administration sent Robert Zoellick, the U.S. trade representative who negotiates at the WTO, to Lula’s inauguration.
Consequently, there have been danger signs from Lula, too. Brazil, with the new President’s benediction, agreed to an IMF stranglehold on the national economy, forcing the country to meet a budget surplus target of 4.25 percent. To head the Central Bank of Brazil, Lula chose Henrique de Campos Mereilles, President of BankBoston and FleetBoston’s Global Bank. Social programs could be in trouble and cuts in the pension system appear likely in order to keep up the country’s debt payments. And in January, 2003, Lula spoke to the Bankers at the World Economic Forum in Davos, Switzerland.
Back home, this was not well received. At a news conference in Porto Alegre, Brazil, Bakers without Borders attacked. Lula’s political party president, José Genoino, took a cream pie in the face, launched by the local cadre, Confeiteiros Sem Fronteiras.
And so there was tension at UNCTAD last month. Would President Lula save the Group of 77 or would the nasty stepsisters ride away with the prince? The results were ambiguous. At the close of the meeting, the delegates issued the “Spirit of Sao Paulo” declaration, which, on the one hand, endorsed the last round of WTO negotiations, held in Doha, Qatar: “Multilateral trade negotiations, under the Doha Work Program, should be accelerated with a view to an early and successful conclusion that fully respects the level of ambition referred to at Doha…measures to ensure long-term debt sustainability of developing countries should also continue to be subject to serious consideration and appropriate action.” Development will continue to be held hostage to debt payments, and UNCTAD has adopted the commercial language of the WTO.
But on the other hand, the Spirit of Sao Paulo included whispers of independence. It recognized the importance of market regulation by governments, of social inclusion and a decrease in inequality. It also asserted that national governments must maintain the right to enact policies that promote development, even if these policies oppose the trade rules of the WTO.
The battle is not yet lost. At UNCTAD, at least, resistance is still alive. As the delegates from non-governmental organizations lined up for admittance to the conference room where Lula was to speak, his security people seemed to know it. They feared that his original constituency might stage an ambush with the cameras rolling. Additional screeners suddenly appeared, seizing bags and briefcases, even after all baggage had passed through x-ray machines and metal detectors. Everyone had to face these new specialists, who wore gloves and took their time, squeezing and squashing everything in sight. Even large hats appeared to be suspect.
“They’re looking for pies,” the Brazilians explained.
Gabriela Bocagrande is based in Washington, D.C.