Interview with Alejandro Bendaña, April 9, 2003
Q – I thought we would talk about the debt and then the World Social Forum, the bigger picture. So tell me what Jubilee South has been doing since we talked last April, what it has been doing, what needs more work.
Well last April we were still in the immediate aftermath of what has been at least an organizational high point in terms of having organized in Porto Alegre in January of 2002 the International Tribunal on Debt. Following that we went to Washington, because this was not simply a propaganda thing, to present the results of the Tribunal. And as an ethical Tribunal invite the IMF and the [World] Bank to respond to what had been the verdict. I don’t know what the legal terminology is, but some of the judges insisted that if you accuse someone, you have to give them the chance to answer back. Anyhow, that was taken and to no one’s surprise there was no response. So the verdict was set down in April and since then it has been disseminated. So at the very least what we have is a very good document which details in theory and on a case by case basis the illegitimacy of the debt: why it should not just be cancelled by the rich countries; why it should not be paid by the poor countries; and what indeed are the reparations and restorations which are due to the countries of the South, the real debt, including the environmental dimension.
In addition to that, Jubilee South, as a broad based South network, has regional dynamics of its own. So that in Africa, for example, the Jubilee South campaigns always give a lot of attention to the question of stolen wealth and the apartheid debt, also known as odious debt. Stolen wealth comes out in Nigeria, and the tens of millions – to say the least, if not hundreds of millions that were taken out by the dictator Abacha, which are known to be in Swiss and in other European banks, of course under a million guises. The ethical and their legal question becomes how does that stolen wealth, how does it become repatriated? How do you get it back? So work is being done on that. While continuing work devolves around questions of the apartheid debt, and the question of reparations, restoration. In South Africa, just to name one case, you have an interesting dynamic because even the Mbeki government has been placed on the defensive. Because the question of reparations has become crossed with that of the results of the Truth and Amnesty Commission, which demanded reparations for the victims of apartheid. And indeed there has been a case introduced by Jubilee South Africa and the Church’s coalition in New York, handled by some fancy lawyer, to sue banks that financed apartheid.
That is one dimension. The other dimensions are the victims of apartheid who feel entitled to some form of reparation. So this is something which fits into the Jubilee purpose, and there the Mbeki government has sort of drawn the line. So that people who are involved in that, like Dennis Brutus, for example, is pushing this very strongly, if you want to find out about that.
If we make the jump to Latin America, you will also find a similar reparations demand. That is to say, a debt that is owed to people on account of genocide, or be it slavery, or US policy in general. In Guatemala, the victims and families of victims of the massacres are also demanding reparations, which they would also be entitled to. So it gets you into the question of re-distributive justice, to say that it is not enough for the truth to be known, as some people would say. If you are going to have justice, and not simply truth, justice entails a component of reparations and restoration. It is the same with reconciliation. You commit a crime against me, and 10 years later we hug and kiss; that doesn’t mean everything is settled and we go on our way. No, there is a debt due, which would have to be handled in a court of law.
So Jubilee South is also pushing in that area. If you follow further in Latin America you have some extraordinary interesting dynamics. Brazil, which is a world unto its own, had an enormously successful plebiscite. We celebrated in Porto Alegre in 2003 two big victories in Brazil. One of which was of course the victory of Lula, but the other one was the organization of a plebiscite, where 6 million people said yes to an auditorship of the debt
This is no small feat. Now how far Lula can take this up is still a matter of debate. But the Jubilee Brazil campaign is going to push him on this, just as he is being pushed on trade and FTAA measures, and in that terrain he is responding. It is more difficult for him, from a government perspective, for any government to tell the IMF to go shove it. But we in civil society can and must do that. And we must pressure our governments in the same way; and that indeed is a way of helping Lula, vis a vi his internal opposition, principally in the Congress. So the battle is there, and now the Brazilians are preparing mechanisms to actually come up with what they would call the social audit of the debt. That is to say you take the debt and say, OK, let’s go through this damn thing. What debt was incurred by whom, when and for what, and did that serve a human purpose? Or was that simply a, represent a jump in interest rates? Or was it a rescheduling for a fraudulent loan? Did it go into somebody’s pockets? Or did it go into some outrageous development or dam project, which is therefore double damage – damage for what is being done environmentally, and damage because you have to pay for the same damage that the Bank is doing to you. So you have to pay for it twice, like apartheid did, you pay for it twice.
Other countries and other campaigns are doing similar things. Interestingly, the Paraguayan campaign, for example, is now working with the Brazilian campaign to see if there can be a Brazilian forgiveness of the Paraguayan debt on account of the Itaipu dam and water distributional arrangement, which had some shenanigans behind it. So there is are lot of questionable debts which were Brazilian credits, but under a new government and a new ethical policy, these have to be reviewed for their legitimacy. Much like South Africa was moved to cancel the Mozambique debt, or the apartheid debt that was owed by the Frontline States to South Africa.
Before jumping into Nicaragua you get in Asia, of course, this whole question of capital controls, which continues to be strong. We in Nicaragua say we wish we had capital to control, so it is not the burning issue here, although it is relevant. So they are phenomena that appeared first in Asia, but then we are seeing them spread all over. For example the turning of internal debt into foreign debt, which is something that is happening here in Nicaragua. And the making, what would you call it, the “publickification” of private debt. Private debt which is assumed by the State and is made a State and public debt. A lot of that happened in Argentina, but you also have seen it in Thailand, where the State intervenes to rescue bankers. This is what happened in Nicaragua too.
In all of our countries we are finding two, and now three collateral factors, which have always been there, but which are striking us more in the face. You ask about developments over 2002. One is the tie in to privatization. Privatization is a source of illegitimate debt. In so far as what is being sold belongs to the public is being sold in ways and at prices that indeed are not fair, and therefore a debt is owed to people. Like the stock of the public electricity company, ENEL, here. The other half just went up for a bid now. At the insistence of the IMF, the IDB and the World Bank, it was sold and was sold way under what many of us feel would have been its real and potential value.
So who pays for that? Whose loss is it? It is not Mr. Bolaños’ loss. It is not even the government’s loss, because they will be out in 3-4 years. It is a sustained public loss. So that is one issue, and that stems from privatization. Of course you know, in the wake of the Sustainable Development Johannesburg Summit, the issue of water has come to the fore. That is the drawing line for privatization, OK, you can’t do this. There are attempts to do that, what Vandiva Shiva calls turning these things into commodities, making common goods transferred into commodities, which is a way of incurring debt. Where something belongs to you and it is taken away from you, justice would demand that either that be returned to you, or you be compensated for that. So we are looking at debt, as we have always said, in environmental terms. This is a much more of a South/North proposition, one which is embedded, to use a popular term, in the nature of corporate globalization itself. Which is a process of continuously accumulating more debt of the South towards the North, which is a process of concentrating more capital, more power, more resources, in fewer and fewer hands.
What else? Well debt is becoming increasingly tied in the Americas to trade issues, the advance of the free trade, the Free Trade Agreement of the Americas (FTAA), and the Central American Free Trade Agreement (CAFTA), that the United States is attempting to ram through.
Q – How are those linked?
We need to be able to show the linkages. The particular triangle we are working on in the Americas is trade – debt, and trade in its broader sense, including the WTO – which means every aspect of your life. The other side of the triangle is militarism. Every one of these mechanisms is a mechanism of dependence. We are not going to fully understand susceptibility to debt blackmail and dependence on foreign loans and foreign investment unless we understand the trade dimension. But in our particular context of the Americas we also see how the commercial and the financial are both mechanisms for control. And when that control seems to slip, in come the Marines, or the threat of the Marines, and Venezuela would be sort of the case example of that.
Militarism means that when people rebel there is not going to be a liberal response, but a very illiberal one. And in the wake of September 11th that is becoming even more institutionalized, because now you have this anti-terrorist cover. So that as we predicted, the anti-globalization movement, and the opposition to privatization movement, and the opposition to the trade agreements can be criminalized. Aside from the fact that we see that many people are being pushed, governments are being pushed to take the US position. Therefore, globalized militarization means that the United States is a lot tougher and more demanding on trade and debt issues.
And so these are very much linked. Mexico and Chile, for example, are probably going to get shafted one way or the other for the position they took, or they did not take, in the Security Council. And then you’ve got little puppet regimes like the one in Nicaragua that will always say, “yes sir”, in the hope that you’ll be able to get more bananas into the United States. And so it’s linked in Bush and Bolaños too. It is thought that the more we show unconditionality toward our ally, the better deal our ally will cut. Which is a false proposition, because the US will screw you in any one of the two ways. And they are not got to give up one iota on agricultural subsidies and on the imports of agricultural goods, or allowing us to protect our agricultural sector. Because that, too, is part of national security now.
Q – To shift directions, I wanted to ask you about what’s been happening in the North with Jubilee USA. You know about this proposal on arbitration.
Yes. Let’s talk about that.
Q - I was at the September meeting of Jubilee where the Europeans presented it and, what was the result? Joki tells me…It went to committee because the people from Jubilee South that were there just said no. So Jubilee USA has come out with a debt cancellation policy, but also they are going forward with this bankruptcy proposal. I wondered what you thought of it.
Okay. This is the FTAP, the Fair and Transparent Arbitration Proposal.
Q – Oh, I’ve never heard the acronym.
Yeah. One more for you to learn: FTAP. It’s been strongly pushed by the German campaigns and some other European ones, less so the US and the Canadian Jubilee campaigns, and less so even the Norwegian ones, but it’s on the agenda. Now, there’s two ways to look at this. The positive way is that the proposal for an arbitration is, on its own terms, good. I mean, you’re proposing that there be something that there is not now, and that is some sort of mechanism or procedure whereby if somebody says “screw you” to the IMF or “we can’t pay”, you won’t have the Marines coming down on you – or the economic version of the Marines, which is IMF credit and World Bank credit and nice donor support assistance cutoffs. This would probably kill more people than the Marines would. So good. That’s one thing. Better that it exist than that it not exist, that we have some sort of Chapter 7 Bankruptcy arrangement. Fine.
Now speaking personally, although there is a broader Jubilee South position on this. And you can look at it in a resource paper which has my name on it. It’s on the Jubilee South web. It’s called, “Repudiation and Arbitration: An Integral Perspective,” which we wrote about a year ago. The argument comes down to this: I think that the danger of the FTAP lies in elevating what could be a useful mechanism and making it a strategy. FTAP is a mechanism, not a strategy. As a mechanism, it can be useful. But if the Jubilee campaign becomes a campaign in order to get an FTAP across and that is its number one point, then I think we’ve gone in the wrong direction. Why? Because Jubilee – and we’ve said it loud and clear – is about the the illegitimacy of the debt. It is about the real debt owed from North to South.
We have to look at it and not fall into the policy trap, i.e., ask what the numbers are or what the procedures would be, or whether the UN is in on it. Instead, let us step back and look at this in the context of our broader struggle. And the broader struggle would say this: if you have a position that your debt is illegitimate; if the people have decided that that debt was illegitimate; and the democratic government says that we are going to abide by that position – then the people’s right to repudiate the debt cannot be subject to arbitration. Your human right to life cannot be subject to arbitration. Your justice is not subject to arbitration. Between justice and injustice there can only be justice. It is not a question of arbitrating between the rapist and the raped. None of this, “did you have your skirt on too high?” No, wrong, period!
I mean that is putting it in a very absolutist, moral, ethical sense, which some would say is exaggerated. But Jubilee does have an ethical founding and is not meant to be a policy mechanism for economists and accountants. So that is a position of principle on which we cannot give in. Secondly, derived from that, what people consider to be illegitimate is illegitimate and is not subject to someone else’s judgment. People from the North should not be asked to say, OK, if the crime is taking place, do you go to the International Court of Justice and the World Court in order to see what can be done.” No, we demand solidarity, and it is not solidarity with a mechanism. But the FTAP can be a means to an end, not an end in itself, and not the only means.
Within those parameters, and if your strategy is ending debt domination, I am not sure that FTAP gets us closer to that. It is sort of an alleviation measure. Again, fine, we are all for aspirins and analgesics, but we want to get at what is causing the pain, the structural injustice. That means not taking us into the policy domain, into little closed rooms in the IMF to discuss what Anne Krugger said or didn’t say, and what the US Treasury might or might not say, or the German government. We need to stay on the moral, ethical high ground, and say “this is wrong and has to be righted.”
Q – I want to tell you something Njoki [Njehu, Director of the 50 Years Is Enough Network] said to me. In regard to this bankruptcy proposal, she said that she wished that Jubilee South could spell out its position more, taking account of the new stuff which has come along, like this bankruptcy proposal.
Yes, we need to do that, and Jubilee South did have a two-day workshop in Porto Alegre – I didn’t see Njoki there – and we thrashed these things out. Because that would be another mistake: we are focusing on the environmental debt; we are focusing on reparations; we are focusing on privatization and the “publickification” of debt. Does somebody want us to leave all that aside so we can go running off and get into a long debate on FTAP? Or we all go run off and chase after HIPC. HIPC is this, HIPC is that. Three years later it is all bullshit. And where are we three years later? Nowhere, and the Bank just said, “Oh, sorry, HIPC didn’t work. Let’s go on to HIPC III or HIPC IV, or Son of HIPC.” In the meantime they did win, because they took away our strategic attention from the primordial matters, which are not unlinked to the war on Iraq, and what the type of debt and privatization and regime is going to be imposed. So wait a minute, whose priorities matter?
Basically, it is a Washington agenda, it is sort of a European agenda. Oh, the IMF now has a paper on its website which talks about arbitration. Let’s make one point clear – they would have never gotten to the point of even discussing arbitration or even mentioning the word had we not pushed them on illegitimacy. That is a result of being radical.
Q – Some at the Jubilee USA meeting and other people I have talked with raise this question: if debt cancellation or default goes through, there won’t be any loans, and then what will these countries do? I don’t know how to respond to that.
Who needs the goddamned loans? If we, Nicaragua, did not have to export dollars we wouldn’t have to import dollars. I mean that is the World Bank's argument, that if you don’t repay the World Bank, then you will not get any more help.
Q – So you don’t need any outside funds or aid?
No. This takes us to the fundamental question of the development model, but the question being put here is, you are an alcoholic, and what are you going to do if you can’t get a drink? OK I will admit there are going to be shakeups, convulsions, and you will have the cold sweats, but the solution is not getting another drink, it is not getting another loan. It is shaking yourself up, taking a risk, maybe going through some hardship, but we are going to have to be able to build up the capacity that we no longer need to take out loans. And that begins by saying that we are not taking out loans to pay old loans. They don’t even come in, they are accounting operations. Debt relief is an accounting operation, it is not fresh funds.
So if a Martian came here and looked at the economic system, he would understand it better than most economists do, because he would say, “wait a minute, Nicaragua is throwing out 800 million dollars to foreigners. It is taking its internal production and getting it into dollars, and throwing those dollars out. Then it needs something, so it needs to bring the dollars back in. Now wait a minute, what about if you used your resources for the internal market, and you would help break that dependency?
And this is not an abstract consideration. We are working for, and we think we may be moving toward having better international conditions for countries to be able to, if not break with the IMF Model, then delink themselves from an international economy. This international political economic regime, the global corporation regime, in which debt is a major factor, is absolutely unsustainable. So we are not talking abstract, we are talking common, and realistic sense. We can’t remain attached to this, it is destroying this country. 42% of children between 6-9 have to work here, UNICEF figures 3 days ago. There was a report on it, look at it in the last “Esta Semana”, you might have seen it, the report on agriculture, Carlos Fernando’s [Chamorro] program. You can get it on the web. They went around and saw small farmers, saying, “I have land. I can make this land produce, but I can’t make it produce because I don’t have credit.” And therefore my kids have had to go off to Costa Rica or somewhere to find employment. So you have got arable land, you have got hard working people, you have got the know-how, and we can’t make that work. However you have to bring chicken legs from Louisiana and rice from Vietnam. There is something fundamentally, humanly wrong with that scheme. There is something fundamentally right if you have a corporate perspective, if you happen to be in government, if you happen to be linked to the banking sector, which is making extraordinary profits.
And where is the capital of the Nicaraguans? Do you know where it is? Do you know where the savings are? They are not even in the country, they are outside. The savings, the capital of the banks is placed outside of the country. It is not given out in the form of credit.
Q –It have an article in the Nation for you on Joe Stiglitz’s book on Globalization and its Discontents, because I want to ask you whether you think that the IMF is losing some legitimacy due to the various critiques that are coming out?
That is part of what we mean when we say “better international conditions”, and it is part of the battle. But you know when Argentina broke, or we have a Tribunal in Brazil, or you have that horrid collapse a few years ago of the Asian Tigers – and then you have an extraordinary book by Stiglitz, which is more important, not because he is saying something we didn’t know, but because of who is saying it and when, that is a crisis of legitimacy. A crisis of legitimacy allows us to organize national bases of power to say, “look folks, look Mr. Bolaños,” although he won’t believe it, “it is possible to break with the IMF, you know, life after the IMF is possible.” There is another possible world there, and you can see it in the little developments, agricultural alternatives, and things like that. They are hope giving.
So I think that the IMF has no legitimacy. The World Bank is losing its legitimacy. Which if you get back to the FTAP is one of the strategic considerations. In so far as the IMF is beginning to address arbitration, it is an attempt to regain its legitimacy. Now you ask me, am I going to help them as Jubilee to regain their legitimacy? No thanks. Because in the first place they are not serious about this mechanism. Even if they were the Treasury would veto it tomorrow. Look at what happened to Paul [O’Neil] when he started getting over-influenced by Bono. So it is not going anywhere. They are not giving an inch.
Q –Do you think Jubilee USA should not be bothering with the bankruptcy proposal?
Well I try to understand their perspective. Jubilee USA, Jubilee campaigns have an obligation to try to influence their own governments. That is what they are for. They are your movements concerned about what they can do. So I sort of see them as, you know, if there is a space there, then go in and engage. What we don’t accept, and this is an old argument, is for the campaigns in the North to begin to say, “Well this is what you have to do too, vis a vis your own government, and please put on your necktie and coat so you can come to the Washington meetings and engage in civil society dialogue and tell them how wonderful this arbitration procedure is.” Now that I will tell you is a personal position.
Q – I thought they were not indulging in that, that Jubilee campaigns in the North gave the leadership to you guys in the South on general policy and politics.
Well it gets back to the questions of whether we want a single global campaign. And I think discussion is always healthy, as long as it does not take us away from more fundamental discussions, because getting into technicalities has always been the trap. It prevents us from getting into the politics, into the power of things. And you know. when you are in the Washington beltway, you do get influenced. Maybe somebody has got to be there. But don’t ask all of us to be there. And there are some people in the South that will want to be there, and will believe in these things, and I have enormous respect for them. But we ain’t all there.
Q – Let me move on to the World Social Forum. What was new this year?
The World Social Forum in many senses has to cope with, first, its success, and secondly, the changed situation, the changed global situation. Maybe the two are linked, because the changed situation is a stepped up aggressiveness and boldness of the US. When governments and the UN feel compelled to address the Social Forum you know it has arrived on the scene as a political force. It has made people rethink fundamental matters.
The changed global situation has forced us to deal more and more with the issue of imperialism in its military dimension. In many senses, the Social Forum is an educational process that step by step is leading people to make the link: that economic fascism can be accompanied by political fascism, and financial intervention is accompanied by military intervention. For us in Latin America, it has never been very hard to separate those two components. But through the events themselves, the US has made a lot of education unnecessary. All you have to do is read the papers to be educated for a change. And look at the pictures. [The war in Iraq was still in progress at the time of this interview.]
So now, the Social Forum is becomeing much more political, it is not simply about economic globalization. It is about employing its political force, and making itself present, in small ways, like missions to Palestine, a mission that went to Baghdad. I was on that. More importantly, February 15th, the world over, was a product of the Social Forum. It is not little sporadic things. And April 12th and some of the others. These are calls that came out of the European Social Forum, picked up by the World Social Forum, and with one authority says “we are all going to be on the streets.” And that is quite a lot of political capital.
And there is also the recognition, not simply of the global dimensions, but also enormous respect for pushing the regional processes, the regional social forums, the local social forums. It is said, “they are out of control.” People in Toronto and Halifax are having their social forums, Manila Social Forums, the Colombians, But what we have are very specific guidelines and declarations of principles. If you want to be part of the Social Forum it is not like being part of the League of Women Voters say. And interestingly enough, because that is an anti-neoliberal platform, we find that a lot of NGOs and campaigns find it difficult to be in there. Also, Jubilee South is closer than many NGOs to a certain type of engagement, to the right of people to engage in non-violent direct action, which doesn’t mean abandoning advocacy. That is to be decided on a national basis. But there is recognition, which was clear from as far back as before Seattle, that advocacy alone would not get you anywhere.
Q – Now last year I suggested that it might be good if there was some unified program coming out of the World Social Forum, and you said that you were not in favor of that. You were in favor of a more disjointed, post-vanguardist vision. At a conference in New York on “Latin American Resistance to Neo-liberalism,” someone from the Movement of Landless Workers in Brazil said that there was no unifying vision, but that each country would be its own laboratory to develop an alternative. In addition, there was an article in The Nation by Marc Cooper, who said, “there was an excess of outrage and a constant shortage of remedies”.
The first remark is indeed accurate, you know. But as for as the second, they don’t get it. The World Social Forum is a process and a space. And we need to keep both of those alive. World Social Forum – anybody and everybody goes, speaks their mind, organizes the way they see fit, or don’t organize, interchange, exchange and that’s it. Now, what is more interesting is the response of those that say “well wait a minute, we’re building up political capital, but how does this political capital make itself felt as a force?”. For that, you’ll have to look from within to the call of the social movements. This is sort of like the political declaration of the Social Forum. But it is not.
Q – I’m not following you there.
Okay. Within the Social Forum, there’s a parallel to all the workshops and stuff. You’ve got central meetings of social movements that are convened politically to ask, how do we get our act together? Sort of asking, okay, where is our action? Where is our organization? Where is our leadership? Some of these people might be a little nostalgic for the [political] party thing. You know one thing that’s clear is that the form of organization is not going to be the traditional one, because a lot of people are in outright rebellion against it.
Q – Yes. You said that last year.
What appears to be disorganization to some, bespeaks a lack of imagination, because it is a form of organization. That’s the way a lot of the grassroots prefer to act: they come together; they act; and then they go their own ways. But secondly, there is a need for some type of political coordination. And because this is a sensitive issue, because the one thing that could kill the forum is to have X leader or Y leader or to have some sort of secretary general and the Politburo. That would split the Forum into hundreds of factions. There is not going to be a Comintern or the Fourth Internationale or the Fifth International. But there is a political convening of the social movements and they can come up with a declaration that is much more explicit and concrete.
Q – These are social movements in different areas, different countries?
Right. And they have met. There is the landless movement of Brazil and a lot of other key organizations, sometimes an NGO, sometimes not. But the process is closely linked to what could be called a secretariat of the WSF. It is where the Social Forum can come out with a political declaration. To be able to say this, this and that. Because otherwise, the Forum as a space and a process doesn’t make declarations, doesn’t make statements. It does not have official representatives or delegates. It spawns and sponsors initiatives, but that’s about it. There’s a saying in the Social Forum that in it everybody represents themselves. And that’s fine. But then you have this mechanism of the articulated social movements which is trying to arrive at minimal sorts of coordination, so that indeed you can get at more coherent, concrete, coordinated political action. One day, maybe all the big social movements – and we are talking about something as big as the landless movement and a lot of the big movements in India – will decide to go on strike, then you might have some shake up. But that has to be a slow process. It’s taking place. You can follow the discussion. There was a call of the social movements which is not the call of Porto Alegre. It’s the call of the social movements.
Q – 50 Years Is Enough is putting together something for the 60th anniversary of the World Bank and the IMF. They want some quotes, some short stamenents about what has been your experience in the last 50 or 60 years with the IMF and World Bank. They want some voices from the Global South. Would you have been better off without the Workd Bank and the IMF?
Let’s talk about the World Bank. Some people say that if they [the Wrold Bank and the IMF] had stuck to the original charter they would be semi decent institutions. I don’t know. What is important is to realize that these institutions are not sources of power, but instruments of power. They are instruments through the US Treasury, of the US government. Sometimes focusing our campaigns against the IMF and against the World Bank, while important in educational terms, because they are symbols, because they represent what is evil, take the attention away from the real culprits, which are the G-7, and more specifically the G-1. Because the other ones are sort of like the 7 dwarfs. We have to keep that in mind. I think it is important to get people to think that the World Bank calls itself a development [institution] and a bank, a development bank, just like the others do. You cannot have both. Either you are a bank or you are a development [institution]. A bank is out to make money, a bank is concerned with its bond ratings, a bank is concerned with getting its money back and making some bucks on the side. It is made to extract more than to give. A bank is the antithesis of development, and development in an integral sense, which is one of shared interest, of common enterprise, of respect for the commonality.
And what is worse is that the Bank becomes absolutely antithetical to development when the Bank even gives up on the notion of development by becoming the principal instrument for privatization. This is where the Bank has gone, from the defender of the public sector to being a branch of big corporations. It is their instrument, along with the International Monetary Fund. Therefore, governments around the world, sometimes even including Canada, will get their house in order, and in a way that is friendly to the interests of US investors and US corporations. And then they have the gall to call that development. And then they preach to us, they tell us that poverty relief will be the product of more private investment and the private sector. They say that is why they support private investment and the private sector.
And what it has done is absolutely the reverse. We were looking at the statistics just yesterday that the three countries in Latin America which have implemented HIPC, besides Guyana, that is to say Honduras, Nicaragua and Bolivia, that have been under the structural adjustment programs, and would be subject to some kind of debt relief, are the same countries today that have the worst distribution of income in Latin America. Yesterday the study was presented in which we saw that the actual beneficiaries of debt relief are going to be the Nicaraguan private bankers. Because most of it is going to be used to pay off internal debt. Much of it was accumulated illegitimately or questionably, and is under legal contestation. In turn, the Nicaraguan bankers are junior partners of US bankers.
So it is interesting because where is the poverty relief? Where is the debt relief? Where is the peace dividend? And you can go on forever. The more the Bank the expands its missions, the more destructive it becomes.
Q – What do you mean expand its missions?
Gets into social programs, gets into health programs, gets into education, gets into governance programs. So it is structural adjustment plus what they call good governance. Which means that the public sector, is becoming defenseless. Power is taken away from the community, it is taken away from the government. And it is being deposited into these institutions.
Q – So refresh my mind, because it was a long time ago since I read your paper. So what does “good governance” mean now?
It is all wonderful, you know, transparency, participation, anti-corruption. Twenty-five years ago the thinking was different, but today the dominant thinking in the Bank, and in development institutions and in the US Treasury is that a government should be run like the corporation. You need efficient, business-like running. Cut the fat. Clean up things. It is what they call state modernization.
Q – Well that is structural adjustment, isn’t it?
No, It is the other part, the mechanics of government: structural adjustment only means your numbers, your balanced budget and liberalization. This is the other side of the coin. You see, when structural adjustment began failing, they said well the problem is not structural adjustment folks, the trouble is that this government just can’t get it together, so why don’t we go in and fix the government? And they call this state modernization. And let’s just fix these institutions, and fix the legislators, and let’s get a good judiciary. Some of it sounds good, and not all of it is bad. But there is a fundamental difference between strengthening a judiciary so that it can be better equipped to deal with disputes between investors and governments and corporations and governments – because that is what they are after – and at a local level to be able to deal with a police or crime against women. Those are two different visions. Whose type of efficiency? That is what we are looking at.