BOOK REVIEW

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Empty Promises: The IMF, the World Bank, and the Planned Failures of Global Capitalism
50 Years Is Enough Network, editors By Robert Weissman, Essential Action

The nearly six-decade-record of the International Monetary Fund (IMF) and World Bank is marked by one colossal failure after another.

Over the last three decades, the institutions have exerted decisive influence over the shape of economic policy-making in most of the Global South. And with greater power has come even greater failure.

Following the directives of the IMF and World Bank, country after country in the Global South has seen economic growth rates slowed, or even reversed, unemployment skyrocket, inequality rise, rural economies collapse and urban slums mushroom. Governments have cut spending on education and healthcare. Service delivery has worsened. Control of the commanding heights of Global South economies has transferred from public hands to foreign multinationals or narrow bands of domestic elites, with corrupt deals often facilitating the giveaway of public property to private hands.

What can possibly account for this stunning record of repeat failure? Why don't the powers to which the IMF and World Bank are ultimately accountable -- the rich countries, and most importantly the United States-- demand improved performance, or simply replace the institutions with more effective alternatives?

Empty Promises: The IMF, the World Bank, and the Planned Failures of Global Capitalism, a new booklet published by the 50 Years is Enough Network in conjunction with a dozen or so colleague organizations, proposes an answer: "that the institutions are not failing at all -- that they are doing precisely what they are meant to do."

"The claimed missions of the IMF and World Bank are genuinely Empty Promises," asserts the booklet's introduction. The structural purpose is to integrate Global South countries into the corporate globalized economy, paving the way for multinational oil, mining and other companies to extract their natural resources, foreign investors to exploit their labor forces, international banks to reap profits from high-interest loans, and foreign and domestic elites to take control of once-publicly owned enterprises.

Empty Promisesaims to present an accessible overview of the institutions and how they work. The booklet is structured as a series of short essays contributed by groups working in different areas. Some sections explain the different components and programs of the IMF and World Bank, some outline key programs and policies of the institutions. Others deal with closely related issues in the corporate globalized economy, such as the workings of Export Credit Agencies and the proposed Free Trade Area of the Americas(FTAA).

An essay by a Canadian group, the Halifax Initiative, on the IMF's proposed Sovereign Debt Restructuring Mechanism -- a method of writing down borrowing country debts in cases of financial crisis that make repayment impossible -- explains how the proposal would fail to cancel debt while requiring countries to adhere to new structural adjustment requirements. And, as do many of the contributors, the Halifax Initiative elaborates a viable and desirable alternative to the IMF's proposal: a Fair and Transparent Arbitration Process. Such a process "would ensure that creditor interests would be addressed only after the fundamental human rights of people in debtor nations are ensured"
-- meaning meeting human needs would take priority over repaying > loans.

Irrespective of their prior knowledge, readers of Empty Promises will emerge conversant with most of the key policy issues at the World Bank and the IMF, and will know the global justice movement’s critique of the way those policies are being addressed. They will understand the avoidable misery and suffering caused throughout the Global South by the policies imposed by the World Bank and the IMF. And they will see the wide range of possible alternatives available -- in a world where Global South economic policy was not decisively influenced by institutions whose purpose is to serve the global elite rather than the world's majority.

The Empty Promises booklet is co-sponsored by Africa Action, Center for Economic Justice/World Bank Bonds Boycott, Food First & Land Research Action Network, Global Exchange, Halifax Initiative, Institute for Policy Studies/Global Economy Project, Jobs with Justice, Jubilee USA Network, Maryknoll Office for Global Concerns, and the Sisters of the Holy Cross.