IMF braces for protests
Activists plan to put IMF, World Bank on the hot seat at spring meetings
NEW YORK (CNNfn) - They want it to be another Seattle -- the city now infamous for hosting a much-ballyhooed forum on world trade that spurred images of tear gas and rubber bullets rather than smiling faces of politicians shaking hands and signing trade agreements.|
If Monday's activity in Washington D.C. in and around the International Monetary Fund and World Bank headquarters is any indication, the multitude of groups protesting against this week's spring meetings may get their way.
Arrests and street closings yesterday launched the week in which thousands of demonstrators are expected to converge on the nation's capital to protest global capitalism -- culminating in an attempt to shut down the spring meetings of the World Bank and IMF. An estimated 10,000 to 30,000 people are expected to join various protests aimed at the two organizations, as well as the Group of Seven ministerial meetings slated for the weekend.
The plan, according to the activists, is to delay or suspend the 182-nation meetings in a similar fashion to the street demonstrations that delayed the opening of the World Trade Organization meetings in Seattle last November. There, thousands of protestors representing a list of causes broke windows, looted stores and disrupted the city for several days.
A classic struggle
So far, only a few minor scuffles have been reported in Washington, D.C. Police and Secret Service agents have arrested seven people outside the World Bank building, George Washington University has banned guests in dormitories and officials have closed streets and removed mailboxes to prevent looting or worse.
What it's all about is as classic as it can get -- a difference of opinion between politicians and activists.
For their part, both the IMF and World Bank want to bring as many countries together to provide aid, debt relief, trade and education to help the world's poorer nations create a better standard of living for themselves, and participate in the riches that have showered the First World in the last century.
From the demonstrators' point of view, the meetings are a closed-door assembly of highbrow politicians trying to figure out how to maintain the current world structure of supporting wealthy multinational corporations at the expense of poor people, labor unions and the environment.
"We think this will be the biggest thing to happen to the IMF in its history," said Scott Nova, director of the Citizens Global Trade Watch, one of the many protest groups that plan to be in town for the start of the meetings. "It will serve like Seattle did for the WTO, to put the IMF on the map for people to notice; the IMF is doing some very bad things," he said.
"We respect the demonstrators' right to protest, but who wins by shutting down discussion of some of the world's most pressing problems?" World Bank President James Wolfensohn wrote in an op-ed piece appearing in several publications Tuesday.
In a less physical protest, leaders organizing a boycott of the World Bank said Monday they will not buy World Bank bonds and urged Americans -- from Wall Street to Main Street -- to do the same "to break the power of the World Bank over developing countries."
According to some estimates, the World Bank raises nearly 80 percent of its funds through bonds; the bank in January announced plans to raise as much as $3 billion by selling global bonds to investors over the Internet.
Demonstrations aside, the IMF and World Bank are vowing to forge ahead with their meetings to further their respective objectives.
On the IMF side, which focuses more on the fiscal responsibilities of its member countries, the highlight of the meetings will be debt reduction and elimination -- the main theme of the fall IMF-World Bank meetings. Officials want a consensus to step up efforts to reduce poverty and cut debt levels.
The meetings also pose the first opportunity for the IMF's new top dog -- German national Horst Kohler -- to meet with representatives of other member countries and begin developing a plan for the agency. Kohler succeeds Michel Camdessus as managing director and chairman of the IMF's executive board. Camdessus resigned from the post on Feb. 14.
On the World Bank side, reducing poverty and introducing a global campaign against the HIV-AIDS virus will be the main focus of the meetings, along with a concerted push to open trade barriers between member countries to get goods, services and capital flowing more freely.
"Trade is clearly absolutely vital to economic growth, and there's an increased urgency to open trade barriers and get that process underway," an IMF spokesperson said. "Clearly it wasn't possible to make much progress on the trade front in Seattle."
To be sure, one number that will dominate discussions at this week's meetings is 4.2 percent -- the projected increase in global economic growth this year, according to yet-to-be-released figures compiled by the IMF and released by earlier this month by Reuters. The full report is due Wednesday.
That's because emerging economies have shown a marked recovery from the global financial crisis that began in 1997. The strength of the bounce-back, especially in east and southeast Asia, caused the World Bank to revise its estimate of developing countries' growth in 1999 upward to 3.3 percent -- a partial result of their programs and aid.
One country that could draw some attention is Russia. IMF and World Bank officials glossed over allegations of Russian money laundering and the involvement of the IMF at fall meetings, though insiders had expected the organization to come up with a new way of dealing with Russia's situation and ensuring its loan payments were going to the right places.
Group of Seven
In addition to the meetings will be a series of powwows between ministers of industrialized nations -- notably the Group of Seven, the Group of 10 and the Group of 24.
Ministers from the G7, which includes the United States, Canada, France, Germany, Italy, Japan and the United Kingdom, are expected to focus their discussions more on the current state of international financial markets, trade and economics. Japan's floundering economy and the rising value of its currency is expected to dominate discussions among the group, according to Wall Street analysts.
At issue for Japan has been the surging value of its currency against both the U.S. dollar and the euro. The rising value of the yen has made Japanese goods more expensive for international buyers, particularly the United States, hindering the country's economic progress. Japan's economy has been mired in recession for almost 10 years.
"We'll get Japan saying, 'can you help us?' and the rest of the world saying 'no,'" said Cameron Crise, a currency strategist with Warburg Dillon Read in New York. "The U.S. won't be willing to support intervention in world markets to weaken the dollar and help Japan," he said.
At the last two G7 meetings, ministers said they sympathized with Japan's concern over the high market level of its currency, but weren't prepared to do anything specific about it.