International financial institutions fight their corner at social summit

At the United Nations Social Summit in Geneva, the international financial institutions have been responding to claims that they are to blame for the negative impact of globalisation.

“We are all on a very steep learning curve,” World Bank managing director Mamphela Ramphele told swissinfo. “No one agency is responsible for globalisation. Globalisation has been a marching force, which has forced all of us to rethink the world we live in.”

“Development is a risky business. Anyone who thinks you can have development without mistakes and problems is not living in the real world. We at the bank are always looking to reduce the risks, particularly those that impact on poor people,” Ramphele says.

The central theme of the special assembly of the UN General Assembly, and the accompanying forum for civil society, is social development in a globalising world. There have been growing calls from governments, including Switzerland’s, for a social element to be incorporated into global trade policies.

Opponents of globalisation argue that WTO trade rules favour the industrialised world at the expense of the South, that IMF austerity programmes force poor countries to cut back spending on social projects and that the World Bank could do more about debt forgiveness.

“We don’t have a mandate to go into social areas, although we do have a strong component for special and differential treatment for developing countries,” says WTO spokesman Hans-Peter Werner.

He says that the WTO is prevented from venturing into labour or environmental issues. There have been growing calls for the WTO and the Bretton Woods institutions to have a much closer relationship with UN agencies, such as the International Labour Organisation and the UN Development Programme.

“There was some support for this in Seattle. But developing countries see this as creating another barrier for their exports. They are very hesitant about engaging in any serious discussion,” Werner told swissinfo, adding that the WTO is merely the sum of its member countries.

“We take our decisions by consensus. We have to sit there for weeks, months or even years to negotiate a solution until everyone is in agreement.”

The reason the WTO attracted such anger in Seattle was that opponents feared the new round of global trade negotiations that were meant to be launched there would tip the scales even further towards the industrialised world. But Werner says holding the talks is the only way of getting what the developing countries want.

“By saying no to a new round, you are saying no to further negotiations to alleviate some of the hurdles that developing countries have for their exports. You’re also saying no to a further reduction in subsidies in sectors where developing countries are competitive, such as agriculture. We are the only organisation where you can negotiate market access on a multilateral basis,” he explains.

The WTO is an observer to the General Assembly session, and is hosting a roundtable discussion at the Geneva 2000 forum, entitled Trade and Sustainable Development – Moving the Agenda Forward. While the organisation wants to get its message across, its presence in Geneva is decidedly low-key, unlike the World Bank, which has been highlighting its social projects at the forum.

The bank’s core mission is to fight poverty, and it has been trumpeting the fact that, since the late 1980s, its lending for social projects in developing countries has risen from five per cent of its budget to 25 per cent.

“The role of the World Bank is to examine how globalisation impacts on the poorest of the poor and to come up with strategies that will ensure that those people are not further marginalised,” managing director Ramphele says.

She says that the bank is very keen to continue its strategy of forming partnerships with UN agencies, governments, non-governmental organisations (NGOs) and communities.

“None of us can stand up and say we have been perfect. But I am excited about the opportunities these partnerships can offer us,” Ramphele adds.

She says that the goal of the Social Summit to halve poverty by 2015 is feasible, but it depends on everyone working together – and not just governments and international organisations: “People in civil society have to insist on their right to social services and their right to have accountable governments, so that there is no leakage of resources.”

Ramphele believes it is important that the Bretton Woods institutions take account of the concerns coming from civil society. But she also believes that many of the NGOs are not sensitive to what the international financial institutions are doing.

“We have come here to listen. We already have a debt relief initiative, and we would like to hear how we can make it better. But NGOs also have to be realistic. It’s very easy to shout from the sidelines, when you are not in the kitchen doing the cooking. We want to see a more constructive engagement with the issues.”

by Roy Probert