C/W Qu: What role do IGOs play in development? 4/1/18 Aim: Outline the traditional roles of the dominant IGOs in defining development goals and targets, and recent changes to these. Starter: Since 1945, the main IGOs have emphasised the importance of economic development through free trade and self regulating markets, allowing economic processes to follow their course without interference or regulation. Answer these: 1. What does IGO stand for? 2. What is free trade? 3. What's the message below? 4. In the context of development, will IGOs have a favourable reputation or not?
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Context You need to know that the dominant IGOs (World Bank, IMF, WTO) have traditionally promoted neo liberal views of development that are often at odds with a country s economic goals. These are based on: free trade; privatisation; and the deregulation of financial markets. You also need to be able to explain how, more recently, some of these IGOs have also aimed to improve: environmental quality; health; education and human rights. The IMF, World Bank and WTO are perceived differently by different countries and often not positively. One question to ask is whether these organisations should interfere in other countries affairs. You also need to understand what the Structural Adjustment Programme (SAP) is and the perceived issues with this. SAPs, as they are known, are a programme used by the IMF to help countries get out of poverty. They use trade liberalisation, and encourage privatisation, currency devaluation and increased interest rates, whilst minimising the influence of the state to do this. This has created issues for many nations who receive aid. The SAPs are often seen in a negative way but you must appreciate the reasons behind them.
IGO Pub Quiz Picture Round Food and Agricultural WHO 1. Organisation 2. 3. WTO UNEA World Bank OECD 4. 5. 6. UNESCO IMF 7. 8. 9. UNICEF 10. UNDP UNESCO WTO (world trade organisation) World Bank IMF (International Monetary Fund) WHO (World Health Organisation FAO (Food and agricultural organisation) UNEA (United Nations Environment Agency) UNDP (United nations development programme) OECD (organisation for economic co operation and development) UNICEF = United nations international childrens emergency fund Choices
Activities 1. What are IGOs? 2. What is the main ideology of the world bank, IMF and WTO? 3. Why is their model often criticised? 4. What other aims do some IGOs have? 5. Outline the main role of the IMF and world bank. (Use intro sheet and the table on reverse) 6. What are SAPs (extend answer with section on SAPs on pg 2 below the IGO table) 7. Why are SAPs often criticised? 8. Outline the main role of the WTO (use intro sheet and the table on the reverse) 9. Choose two IGOs whose main role is not to encourage economic growth and outline their mission. 10. Why do you think IGO focus has shifted away from economic growth recently? Extension 11. Read the 'face to bottom' sheet about SAPs. Take further notes on what they are, how they work and why they are criticised. 12. Read separate double sided handouts about the WTO and IMF. Take any notes you see fit...but be aware of bias.
1. What are IGOs IGO stands for International or Inter Governmental Organisation. The main ones you need to know about in the context of the promotion of global development are the World Bank, IMF and WTO. Luckily we have touched on these before both in the globalisation unit and the superpowers unit. Their efforts are focused on economic development, seeing it as a springboard for advances on the broader front of human development. They see economic growth as stemming from the creation of a more even and equitable playing field. This in turn relies on such things as free trade, privatisation and the deregulation of financial markets. Such policies allow economic processes to follow their course without interference or regulation which are seen as efficient for economic growth. They essentially reduce individual government control and limit protectionism. This model is heavily criticised in the context of development, however, as it tends to favours countries that are already rich and powerful, leading to the exploitation of poorer countries. It can therefore be argued that such policies are not really done in the interests of poorer countries but in the interests of the rich. It is worth noting at this point that not all IGOs are focused on economic development. IGOs have aslo emphasised the importance of social and environmental themes such as quality of life (including health and education), human rights and environmental quality. Intro to the main IGOs A good example of this are Structural Adjustment Programmes (SAP). These are a programme used by the IMF to help countries get out of poverty. They use trade liberalisation, and encourage privatisation, currency devaluation and increased interest rates, whilst minimising the influence of the state to do this. This has created issues for many nations who receive aid.
2. The main and varied missions of IGOs UNDP (United Nations Development Programme) 1966 Who cares...like you're going to learn or need to learn the number of chuffing member countries! Helps countries make policies and national development plans, and provides expertise for working towards the sustainable development goals. The UNDPs Human development index (HDI) reflects the desire to combine economic and social progress. Food and Agricultural Organisation (FAO) 1945 235,600,657,600,000 Promotes food security and nutrition. World Health Organisation (WHO) 1948 Really? Promotes health and disease eradication UN International Chindren's Emergency Fund (UNICEF) 1946 Google it if you really care Helps look after the rights of chidren UN Environment Agency (UNEA) 2012 193 honestly Promotes improvements in pollution levels and the eradication of teh illegal wildlife trade, assisted by other IGOs. http://www.globalissues.org/article/3/structural adjustment a major cause of poverty Many developing nations are in debt and poverty partly due to the policies of international institutions such as the International Monetary Fund (IMF) and the World Bank. Their programs have been heavily criticized for many years for resulting in poverty. In addition, for developing or third world countries, there has been an increased dependency on the richer nations. This is despite the IMF and World Bank s claim that they will reduce poverty. Following an ideology known as neoliberalism, and spearheaded by these and other institutions known as the "Washington Consensus" (for being based in Washington D.C.), Structural Adjustment Policies (SAPs) have been imposed to ensure debt repayment and economic restructuring. But the way it has happened has required poor countries to reduce spending on things like health, education and development, while debt repayment and other economic policies have been made the priority. In effect, the IMF and World Bank have demanded that poor nations lower the standard of living of their people.
Plenary: So what's the relevance of all this? So Governments (last lesson) and IGOs play a significant role in defining a countries development targets and policies. A dictatorship may prioritise different development goals to a socialist government (military vs education and health for example). A wealthy country may prioritise health, human rights, environmental issues and education whereas a poor indebted country may have to focus on economic reform and growth to meet the SAP requirements of IMF and world bank loans. We can only understand a country's development targets/policies by looking at their government type and their interaction with IGOs. But as thinking about the priorities for human development shift away from just economic growth towards emphasis on health, education, human rights and the environment, a wider range of IGOs are forming and working alongside more traditional economic goals. targets governments development traditional socialist indebted environment SAP priorities IGOs education `1
Top Reasons to Oppose the WTO The World Trade Organization (WTO) is the most powerful legislative and judicial body in the world. By promoting the free trade agenda of multinational corporations above the interests of local communities, working families, and the environment, the WTO has systematically undermined democracy around the world. Unlike United Nations treaties, the International Labor Organization conventions, or multilateral environmental agreements, WTO rules can be enforced through sanctions. This gives the WTO more power than any other international body. The WTO s authority even eclipses national governments. In November 1999, 50,000 people went to Seattle to challenge this corporate agenda and to demand a more democratic, socially just and environmentally sustainable global economy. The protests succeeded in shutting down the trade talks and derailing the expansion of the WTO. Global Exchange stood with those outside the halls and rooms where lobbyists and government delegates negotiated, loudly declaring our opposition to the WTO because: WTO rules are written by and for corporations, putting profits above people and the planet. WTO rules trample labor and human rights. WTO rules render environmental protections illegal. http://www.alexandercollinsconway.com/staging/globalexchange/campaigns/legacy campaigns/global econ 101/global econ 101/ WTO rules stand between dying people and the medicine that will save their lives. 1. The WTO Is Fundamentally Undemocratic The policies of the WTO impact all aspects of society and the planet, but it is not a democratic, transparent institution. The WTO rules are written by and for corporations with inside access to the negotiations. For example, the US Trade Representative gets heavy input for negotiations from 17 Industry Sector Advisory Committees. Citizen input by consumer, environmental, human rights and labor organizations is consistently ignored. Even simple requests for information are denied, and the proceedings are held in secret. Who elected this secret global government? 2. The WTO Will Not Make Us Safer The WTO would like you to believe that creating a world of free trade will promote global understanding and peace. On the contrary, the domination of international trade by rich countries for the benefit of their individual interests fuels anger and resentment that make us less safe. To build real global security, we need international agreements that respect people s rights to democracy and trade systems that promote global justice. 3. The WTO Tramples Labor and Human Rights WTO rules put the rights of corporations to profit over human and labor rights. The WTO encourages a race to the bottom in wages by pitting workers against each other rather than promoting internationally recognized labor standards. The WTO has ruled that it is illegal for a government to ban a product based on the way it is produced, such as with child labor. It has also ruled that governments cannot take into account non commercial values such as human rights, or the behavior of companies that do business with vicious dictatorships such as Burma when making purchasing decisions. 4. The WTO Would Privatize Essential Services The WTO is seeking to privatize essential public services such as education, health care, energy and water. Privatization means the selling off of public assets such as radio airwaves or schools to private (usually foreign) corporations, to run for profit rather than the public good. The WTO s General Agreement on Trade in Services, or GATS, includes a list of about 160 threatened services including elder and child care, sewage, garbage, park maintenance, telecommunications, construction, banking, insurance, transportation, shipping, postal services, and tourism. In some countries, privatization is already occurring. Those least able to pay for vital services working class communities and communities of color are the ones who suffer the most.
6. The WTO is Killing People The WTO s fierce defense of Trade Related Intellectual Property rights (TRIPs) patents, copyrights and trademarks comes at the expense of health and human lives. The WTO has protected for pharmaceutical companies right to profit against governments seeking to protect their people s health by providing lifesaving medicines in countries in areas like sub saharan Africa, where thousands die every day from HIV/AIDS. Developing countries won an important victory in 2001 when they affirmed the right to produce generic drugs (or import them if they lacked production capacity), so that they could provide essential lifesaving medicines to their populations less expensively. Unfortunately, in September 2003, many new conditions were agreed to that will make it more difficult for countries to produce those drugs. Once again, the WTO demonstrates that it favors corporate profit over saving human lives. 7. The WTO is Increasing Inequality Free trade is not working for the majority of the world. During the most recent period of rapid growth in global trade and investment (1960 to 1998) inequality worsened both internationally and within countries. The UN Development Program reports that the richest 20 percent of the world s population consume 86 percent of the world s resources while the poorest 80 percent consume just 14 percent. WTO rules have hastened these trends by opening up countries to foreign investment and thereby making it easier for production to go where the labor is cheapest and most easily exploited and environmental costs are low. 8. The WTO is Increasing Hunger Farmers produce enough food in the world to feed everyone yet because of corporate control of food distribution, as many as 800 million people worldwide suffer from chronic malnutrition. According to the Universal Declaration of Human Rights, food is a human right. In developing countries, as many as four out of every five people make their living from the land. But the leading principle in the WTO s Agreement on Agriculture is that market forces should control agricultural policies rather than a national commitment to guarantee food security and maintain decent family farmer incomes. WTO policies have allowed dumping of heavily subsidized industrially produced food into poor countries, undermining local production and increasing hunger. 9. The WTO Hurts Poor, Small Countries in Favor of Rich Powerful Nations The WTO supposedly operates on a consensus basis, with equal decision making power for all. In reality, many important decisions get made in a process whereby poor countries negotiators are not even invited to closed door meetings and then agreements are announced that poor countries didn t even know were being discussed. Many countries do not even have enough trade personnel to participate in all the negotiations or to even have a permanent representative at the WTO. This severely disadvantages poor countries from representing their interests. Likewise, many countries are too poor to defend themselves from WTO challenges from the rich countries, and change their laws rather than pay for their own defense. 10. The WTO Undermines Local Level Decision Making and National Sovereignty The WTO s most favored nation provision requires all WTO member countries to treat each other equally and to treat all corporations from these countries equally regardless of their track record. Local policies aimed at rewarding companies who hire local residents, use domestic materials, or adopt environmentally sound practices are essentially illegal under the WTO. Developing countries are prohibited from creating local laws that developed countries once pursued, such as protecting new, domestic industries until they can be internationally competitive. California Governor Gray Davis vetoed a Buy California bill that would have granted a small preference to local businesses because it was WTO illegal. Conforming with the WTO required entire sections of US laws to be rewritten. Many countries are even changing their laws and constitutions in anticipation of potential future WTO rulings and negotiations. 5. The WTO Is Destroying the Environment The WTO is being used by corporations to dismantle hard won local and national environmental protections, which are attacked as barriers to trade. The very first WTO panel ruled that a provision of the US Clean Air Act, requiring both domestic and foreign producers alike to produce cleaner gasoline, was illegal. The WTO declared illegal a provision of the Endangered Species Act that requires shrimp sold in the US to be caught with an inexpensive device allowing endangered sea turtles to escape. The WTO is attempting to deregulate industries including logging, fishing, water utilities, and energy distribution, which will lead to further exploitation of these natural resources.
What is the IMF? The International Monetary Fund and the World Bank were created in 1944 at a conference in Bretton Woods, New Hampshire, and are now based in Washington, DC. The IMF was originally designed to promote international economic cooperation and provide its member countries with short term loans so they could trade with other countries (achieve balance of payments). Since the debt crisis of the 1980 s, the IMF has assumed the role of bailing out countries during financial crises with emergency loan packages tied to certain conditions, often referred to as structural adjustment policies (SAPs). The IMF now acts like a global loan shark, exerting enormous leverage over the economies of more than 60 countries. These countries have to follow the IMF s policies to get loans, international assistance, and even debt relief. Thus, the IMF decides how much debtor countries can spend on education, health care, and environmental protection. The IMF is one of the most powerful institutions on Earth yet few know how it works. 1. The IMF has created an immoral system of modern day colonialism that SAPs the poor The IMF along with the WTO and the World Bank has put the global economy on a path of greater inequality and environmental destruction. The IMF s and World Bank s structural adjustment policies (SAPs) ensure debt repayment by requiring countries to cut spending on education and health; eliminate basic food and transportation subsidies; devalue national currencies to make exports cheaper; privatize national assets; and freeze wages. Such belttightening measures increase poverty, reduce countries ability to develop strong domestic economies and allow multinational corporations to exploit workers and the environment A recent IMF loan package for Argentina, for example, is tied to cuts in doctors and teachers salaries and decreases in social security payments.. The IMF has made elites from the Global South more accountable to First World elites than their own people, thus undermining the democratic process. 2. The IMF serves wealthy countries and Wall Street Unlike a democratic system in which each member country would have an equal vote, rich countries dominate decision making in the IMF because voting power is determined by the amount of money that each country pays into the IMF s quota system. It s a system of one dollar, one vote. The U.S. is the largest shareholder with a quota of 18 percent. Germany, Japan, France, Great Britain, and the US combined control about 38 percent. The disproportionate amount of power held by wealthy countries means that the interests of bankers, investors and corporations from industrialized countries are put above the needs of the world s poor majority. 3. The IMF is imposing a fundamentally flawed development model Unlike the path historically followed by the industrialized countries, the IMF forces countries from the Global South to prioritize export production over the development of diversified domestic economies. Nearly 80 percent of all malnourished children in the developing world live in countries where farmers have been forced to shift from food production for local consumption to the production of export crops destined for wealthy countries. The IMF also requires countries to eliminate assistance to domestic industries while providing benefits for multinational corporations such as forcibly lowering labor costs. Small businesses and farmers can t compete. 4. The IMF is a secretive institution with no accountability The IMF is funded with taxpayer money, yet it operates behind a veil of secrecy. Members of affected communities do not participate in designing loan packages. The IMF works with a select group of central bankers and finance ministers to make polices without input from other government agencies such as health, education and environment departments. The institution has resisted calls for public scrutiny and independent evaluation. 5. IMF policies promote corporate welfare To increase exports, countries are encouraged to give tax breaks and subsidies to export industries. Public assets such as forestland and government utilities (phone, water and electricity companies) are sold off to foreign investors at rock bottom prices. In Guyana, an Asian owned timber company called Barama received a logging concession that was 1.5 times the total amount of land all the indigenous communities were granted. Barama also received a five year tax holiday. The IMF forced Haiti to open its market to imported, highly subsidized US rice at the same time it prohibited Haiti from subsidizing its own farmers. A US corporation called Early Rice now sells nearly 50 percent of the rice consumed in Haiti.
6. The IMF hurts workers The IMF and World Bank frequently advise countries to attract foreign investors by weakening their labor laws eliminating collective bargaining laws and suppressing wages, for example. The IMF s mantra of labor flexibility permits corporations to fire at whim and move where wages are cheapest. According to the 1995 UN Trade and Development Report, employers are using this extra flexibility in labor laws to shed workers rather than create jobs. Workers in the U.S. are also hurt by IMF policies because they have to compete with cheap, exploited labor. The IMF s mismanagement of the Asian financial crisis plunged South Korea, Indonesia, Thailand and other countries into deep depression that created 200 million newly poor. The IMF advised countries to export their way out of the crisis. Consequently, more than US 12,000 steelworkers were laid off when Asian steel was dumped in the US. 7. The IMF s policies hurt women the most SAPs make it much more difficult for women to meet their families basic needs. When education costs rise due to IMF imposed fees for the use of public services (so called user fees ) girls are the first to be withdrawn from schools. User fees at public clinics and hospitals make healthcare unaffordable to those who need it most. The shift to export agriculture also makes it harder for women to feed their families. 8. IMF Policies hurt the environment IMF loans and bailout packages are paving the way for natural resource exploitation on a staggering scale. The IMF does not consider the environmental impacts of lending policies, and environmental ministries and groups are not included in policy making. The focus on export growth to earn hard currency to pay back loans has led to an unsustainable liquidation of natural resources. For example, the Ivory Coast s increased reliance on cocoa exports has led to a loss of two thirds of the country s forests. 9. The IMF bails out rich bankers, creating a moral hazard and greater instability in the global economy The IMF routinely pushes countries to deregulate financial systems. The removal of regulations that might limit speculation has greatly increased capital investment in developing country financial markets. More than $1.5 trillion crosses borders every day. Most of this capital is invested short term, putting countries at the whim of financial speculators. During the bailout of Asian countries, the IMF required governments to assume the bad debts of private banks, thus making the public pay the costs and draining yet more resources away from social programs. 10. IMF bailouts deepen, rather then solve, economic crisis During financial crises the IMF stepped in as the lender of last resort. Yet the policies imposed as conditions of these loans were bad medicine, causing layoffs in the short run and undermining development in the long run.
SAPs