Bretton Woods Institutions: Enforcers, Not Saviours?

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Aug 7 2019 – According to their own internal evaluations, both the World Bank (WB) and the International Monetary Fund (IMF) have huge credibility deficits due to the policy conditionalities and advice they have dispensed to developing countries in recent decades.

Anis Chowdhury

Washington Consensus
Taking advantage of debt distress in many developing countries early in the 1980s, the WB championed neoliberal reforms, telling countries to ‘privatize, liberalize and globalize’. The IMF added ‘stabilization’ – primarily cutting government expenditure to contain inflation and balance of payments deficits – to the list of conditions for countries to qualify for BWI financial resources.

Accepting these packages of WB advice for economic restructuring, known as ‘structural adjustment programs’ (SAPs), became a condition for access to concessional credit. These claimed to reflect agreement on ‘good’ and necessary policies between the two Washington based BWIs and the US Treasury Department, later dubbed the ‘Washington Consensus’.

WB research later admitted the failure of IMF-WB inspired policy reforms, acknowledging that “…the expected growth benefits failed to materialize, at least to the extent that many observers had forecast. In addition, a series of financial crises severely depressed growth and worsened poverty… both slow growth and multiple crises were symptoms of deficiencies in the design and execution of the … reform strategies that were adopted in the 1990s…”

BWIs’ lost decades
Assessing SAPs in Latin America, where they were first imposed, Sebastian Edwards concluded, “The adjustment process has been quite costly, generating drastic declines in real income and important increases in unemployment. In fact, … in a number of Latin American countries in 1986 real per capita GDP was below its 1970 level!”

Jomo Kwame Sundaram

William Easterly, then a senior WB economist, noted that during 1960-1979, median per capita income growth in developing countries was 2.5 per cent, compared to zero per cent during 1980-1998. With SAPs including trade liberalization, Africa de-industrialized and turned from a food exporter into a net food importer.

By advising developing countries to liberalize their capital account and financial market, the BWIs also advanced the interests of big finance. Professor Jagdish Bhagwati argued that this ‘Wall Street-Treasury complex’ was responsible for the 1997-1998 Asian crisis. The WB and the IMF have provided credit as a means of influencing government policies.

Worsening financial crises
Evaluating the IMF’s role in two 1997-1998 Asian crisis countries, namely Indonesia and South Korea, its Independent Evaluation Office (IEO) observed that Fund surveillance failed to ‘adequately appreciate’ the implications of their financial sector weaknesses and vulnerabilities. The IMF also mishandled the crises, deepening some of their worse consequences.

Raghuram Rajan, then IMF chief economist, is often credited with having warned of the imminence of the 2008-2009 global financial crisis before he left the Fund. If so, the IMF ignored his advice, failing to alert its membership of the coming 2008-2009 financial crisis, leading to the Great Recession and its ongoing aftermath.

In July 2007, a month before the first tremors of the US ‘sub-prime’ mortgage crisis, the IMF updated its World Economic Outlook, claiming: “The strong global expansion is continuing, and projections for global growth in both 2007 and 2008 have been revised (upwards)”!

The IEO attributed IMF inability to recognize risks to “a high degree of groupthink, intellectual capture, a general mindset that a major financial crisis in large advanced economies was unlikely, and inadequate analytical approaches, [w]eak internal governance, lack of incentives to work across units and raise contrarian views…”

Beware BWI policy advice
The IEO found member countries wary of IMF involvement in policy advice due to its “inadequate knowledge of country-specific circumstances, frequent changes of mission chiefs and teams, a perceived lack of even-handedness… and insufficient use of cross-country perspectives or cross-cutting analysis.”

The IMF also displayed double standards, exposing its developed country and other biases. After then UK Prime Minister Gordon Brown raised over US$800 billion in additional IMF funding at the London G20 summit in April 2009, Eurozone bail-outs accounted for four-fifths of total IMF lending between 2011 and 2014, even though the currency bloc had the means to look after itself, with its lower aggregate debt ratio than in the US, the UK and Japan.

Greece, Ireland and Portugal were allowed to borrow twenty times their quotas, thrice the normal limit; such generosity has never been available to Asian, Latin American and African countries in trouble. For the global South, the IMF has imposed fiscal austerity, causing large-scale destitution, distress and malnutrition, according to the Lancet medical journal.

Meanwhile, even The Economist, usually a neoliberal cheerleader, pointed out several flaws of the WB’s most influential publication, the Doing Business Report (DBR). It considered DBR ranking unreliable as countries might amend regulations, as urged by the BWIs, only to improve their rankings to impress foreign investors and donors.

Dubious track record
After two decades of IMF-WB promoted fiscal contraction, liberalization and privatization, then WB President James Wolfensohn acknowledged, “… if we take a closer look, we see something alarming. In developing countries, excluding China, at least 100 million more people are living in poverty today than a decade ago. And the gap between rich and poor yawns wider.”

China, which has contributed most to reducing global poverty in recent decades, has gone its own way during this period, constantly revising development policies to accelerate economic growth and social progress, instead of simply implementing Washington Consensus prescriptions.

More recently, especially under its last President Jim Yong Kim, the WB has reinvented itself yet again, from a creditor for major development projects, to a broker for financialized private sector investment, a “creature of Wall Street”, according to The New York Times. Kim left the Bank early in his second term to join a private investment firm figuring in its proposed new reorientation.

International Day of the World’s Indigenous Peoples 2019

By IPS World Desk
ROME, Aug 7 2019 – There are an estimated 370 million indigenous people in the world, living across 90 countries. They live in all geographic regions and represent 5000 different cultures. These people are inheritors and practitioners of unique cultures and ways of relating to others yet are being forced to give up their ways of life.

In Latin America, for example, 40% of all indigenous peoples now live in urban areas – they account for 80% of those populations in some countries. Globally, they represent 5% of the world’s population, yet account for 15% of all of those in poverty.

Indigenous people speak an overwhelming majority of the world’s 7000 languages. These languages are extensive and complex systems of knowledge that are central to their identity, their cultures, worldviews and expressions of self-determination.

Tragically, many indigenous languages are under threat, as we lose one of these languages every two weeks. According to UNESCO’s Atlas of the World’s Languages in Danger, 230 languages went extinct between 1950 and 2010. Today, a third of the world’s languages have fewer than 1,000 speakers left.

The 9th of August commemorates the International Day of the World’s Indigenous Peoples. This year’s theme will focus on the current situation of indigenous languages around the world, aiming to highlight the critical need to revitalize, preserve and promote indigenous languages to safeguard the life of indigenous cultures for future generations.

Mediating Peace in a Complex World

Special Envoy for Syria Geir O. Pedersen during a visit to Syrian refugees in Mafraq and Zaatari camp in Jordan. May 2019. Credit: UN Photo

By Teresa Whitfield
UNITED NATIONS, Aug 7 2019 – “It is all about orchestration”, was Martin Griffiths’, the UN Special Envoy for Yemen, response to the question of what mediation in Yemen looks like today.

Mediation has always been about orchestration – two decades ago, in their seminal volume Herding Cats: Multiparty Mediation in a Complex World, Chester A. Crocker, Fen Osler Hampson and Pamela All recognised the value of “the mediator’s dexterity with the materials at hand”.

As Jeffrey Feltman argues, there is much to be said for the equation of a mediator with an orchestra’s conductor. But in the current environment of international, national and local fragmentation and multi-level external engagement, the orchestration of relationships with and inclusion of a wide array of actors has taken on new characteristics.

Mediators or envoys in strategic conflicts such as Libya, Syria and Yemen are faced with multiple demands and constraints, yet considerable latitude in the most critical issue of all: how they spend their time.

The three UN envoys charged with leading these processes work under mandates of the Security Council, and the strategic direction of the Secretary-General. Yet in leading the peacemaking effort, they take daily decisions on what they will prioritise that have profound implications for the political direction and impact of their efforts.

These decisions span at least three areas: how to balance building relations with conflict parties with the necessity for diplomacy with regional and international actors?; how to maintain attention to the central political conflict whilst also engaging on other vital, but more localised, issues?; and how, and how much, to engage on the important question of inclusion?.

This is all in addition to the internal attention which needs to be paid to process design and preparation on a range of substantive issues including ceasefires, demobilisation and reintegration programmes, power-sharing arrangements, transitional justice or constitutional reform.

Teresa Whitfield

A mediator’s personal involvement and credibility with the parties is essential to the kind of progress seen in reaching the Stockholm agreement on Yemen in December 2018 for example, where Griffiths’ efforts were bolstered by the last minute presence of Secretary-General António Guterres.

But such efforts, as those by the UN envoy Ghassan Salamé to mediate between Libyan Prime Minister Faiez Serraj and the National Army Commander Khalifa Haftar, and other less visible conflict prevention engagements, take place in parallel to quiet consultations with regional and other actors with leverage and a stake in the conflict as well as more public meetings.

These include Security Council consultations; but also meetings in and around distinct negotiating fora such as the Astana process for Syria; or, in the case of Libya, ad hoc conferences in Paris and Palermo or interactions with the African Union and the League of Arab States.

In each case, multiple agendas are at stake. Mediators will therefore be mindful of the risk that their efforts may be derailed, or the overarching effort undermined by competing processes.

A separate but related consideration is the balancing act between time spent on smaller, short term agreements (local agreements, humanitarian pauses or confidence-building measures) versus thinking and engagement on the central political process.

Evolving military dynamics in Syria have, over the years, necessitated multiple points of focus for international efforts. More recently, in Yemen, time and effort spent forging and trying to implement a fragile agreement between local military actors in Hodeidah was imperative.

But it was also in some respects both a distraction from the core conflict, and perilous: success rested on negotiations between military actors with great potential to spoil the outcome, and its travails held progress on the larger political process hostage.

What inclusion means in today’s mediation processes deserves some pause. Research has drawn attention to the centrality of elite bargaining when stabilising violent conflict, as well as the need for a hard-headed look at the web of political, economic and predatory interests that together form what Alex de Waal termed “the political marketplace.”

Yet the dramatic combination of external and internal fragmentation in contemporary conflicts erodes the possibility of reaching agreement with political and military elites alone. It also informs a broad international consensus on the benefits of inclusion evident, for example, in the twin resolutions on “sustaining peace” adopted by the UN General Assembly and Security Council in April 2016.

Significantly, the 2015 Sustainable Development Goals are anchored in a commitment to “leave no one behind.” In 2018, the UN-World Bank study Pathways for Peace also put strong emphasis on inclusion as a tool for preventing conflict and building sustainable peace.

However, as Christine Bell has argued, there nonetheless remain practical and substantial differences among and between development actors, peacemakers and the human rights community on who is to be included, in what, and how.

Mediators have long recognised the benefits of inclusivity, but with important differences regarding the extent to which it applies to politico-military elites, whose commitment is required to stop the killing, or broader constituencies whose inclusion might contribute to the legitimacy and durability of an agreement but whose direct involvement the conflict parties frequently resist.

Human rights defenders, meanwhile, emphasise norms such as equality and the need for group participation – most visibly that of women, but also other groups such as minorities, indigenous people and youth.

Mediators have adopted specific strategies to promote the inclusion of women when – as is frequently the case – the conflict parties themselves have not favoured either a prominent role for individual women within their delegations, or a means by which a broader range of voices can be heard within a peace process.

In some instances, mediators have created access for existing structures (leading the mediation effort in Liberia in the early 2000s, the Economic Community of West African States (ECOWAS) included the Mano River Women’s Peace Network as an observer to the talks).

In others, they have established new mechanisms to access a diverse range of perspectives and advice. Notable in this respect were the efforts of the former UN envoy for Syria, Staffan de Mistura, who in early 2016 created both a Syrian Women’s Advisory Board and a Civil Society Support Room with whom he engaged regularly and visibly throughout his tenure.

Such inclusion mechanisms – replicated, with modifications, in Yemen with the creation in mid-2018 of a Yemeni Women’s Technical Advisory Group – have been criticised for entrenching women’s “second tier” participation in negotiations.

However, their potential to broaden the base of a political process if and when it advances is significant, especially when complemented by other forms of outreach and engagement.

Even in the absence of formal talks, an envoy’s understanding of the conflict and legitimacy as an interlocutor will be enhanced by consultation with as wide a range of actors as possible.

This point was underlined by de Mistura’s successor, Geir O. Pedersen, who in his first briefing to the Security Council in February 2019 placed emphasis on the wide range of Syrians with whom he had already consulted, while underlining that “there will be no sustainable peace in Syria unless all Syrians are included in shaping the future of their country.”

Delivering this in practice, in Syria as elsewhere, remains extraordinarily difficult. Demands for inclusion in the evolving peace process in Afghanistan, for example, come from women who fear the erosion of hard-won rights, but also youth, victims, representatives of affected regions, ethnic minorities and others.

Meanwhile, mediators will be acutely aware that, while necessary, inclusion in the absence of buy-in from national elites and their regional and international backers will not, on its own, bring peace.

*This article was originally published in the online magazine of UN’s Department of Political and Peacebuilding Affairs.

Nuclear Weapons Must Go: Lessons of Hiroshima & Nagasaki

By Lakshi De Vass Gunawardena
UNITED NATIONS, Aug 7 2019 – It has been 74 years since a nuclear devastation took place. But a clear message stands — that nuclear weapons must go and peace and love must reign.

“Because if we forget the horrific consequences of the use of these devices, the likelihood of repetition is increased.” Jonathan Granoff, President of the Global Security Institute told IPS, as the United Nations marked the tragedies of Hiroshima and Nagasaki.

Art piece From the Love to Hiroshima- Love to Nagasaki Peace Pals Art Awards by artist
Petrov Andreea Eliza – Age 15, Romania

The Atomic Bomb Dome

was the only structure left standing

in the area and was added to

the UNESCO World Heritage

List on December 7, 1996.

 
Its marker reads

As a historical witness that

conveys the tragedy of suffering

the first atomic bomb in human

history and as a symbol that vows

to faithfully seek the abolition of

nuclear weapons and everlasting

world peace.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
The event took place August 6 at the Japan Society, and featured several performances, an interfaith prayer, and guest speakers.

On August 6, 1945 the United States dropped an atomic bomb on the city of Hiroshima, Japan, immediately killing 80,00 people. Three days later, Allied forces unleashed another explosive, and an estimated 40,000 people perished.

Japan surrendered, marking the conclusion of World War II. However, Japan was left to face with dead bodies, illness induced by radiation, and over 70% of buildings extinguished.

Today, both cities are prospering, with Hiroshima’s population exceeding 1.1 million, and radiation levels have officially been deemed low and safe. However, the scars of the attacks linger on in the form of survivors, known as hibakusha.

“I was only 13 then, so I talked back to my mom and slammed the door and I left, and I never saw her again,” Tomiko Morimoto West, survivor of the bombings, recalled at Monday’s event.

Yet, West retained a vehement sense of gratitude citing that “Every day I wake up, I am very grateful.” She then stressed the importance of making sure loved ones know they are loved.

“When you leave home, please hug your family”, West said, concluding that “sometimes that’s the last time you may see the family”.

Against the backdrop of the anniversary, the United States last week abandoned the Intermediate-Range Nuclear Forces Treaty (INF).

“We have never had a nuclear war. Arms control treaties have helped enormously in building trust and taking the arsenals down by over 75%. It is irresponsible to undermine the legal tools, the diplomatic tools, in favor of increased threats,” Granoff said.

That said, “the existing United States policy seems to contemplate the actual uses in war, Granoff noted during his keynote speech, going on to read an official statement by the Joint Chief of Staff of the U.S. Military.

“The scale of Hiroshima & Nagasaki is primitive. If even one current nuclear weapon was used, the damage that one atomic bomb would do is more than 1,000 times powerful than Hiroshima & Nagasaki. It will happen in a future. Mistakes are human character, so it will happen,” Reverend Doctor T. Kenjitsu Nakagaki, President and Founder of the New York HEIWA Peace and Reconciliation Foundation told IPS, when asked if something like Hiroshima and Nagasaki could occur, if nuclear weapons are not abandoned.

Interfaith Prayers and Messages

However, there is hope. “We will learn a new technology- not the technology that melts the polar ice caps, but the technology that can melt the human heart. May we receive that blessing to melt our hearts and melt the hearts of others.” Granoff concluded in his speech.

Nuclear bans also have the support of the UN Secretary-General António Guterres.

“The only guarantee against the use of nuclear weapons is the total elimination of nuclear weapons,” he remarked, in an address, assuring that he is fully committed to working with the hibakusha and all others to realize the shared goal of a world free of nuclear weapons.

It is up to the young generation as well to help ensure the termination of nuclear weapons as well.

“We have a continuing duty to communicate to future generations and the world the inhumanity of nuclear weapons.” Tomihisa Taue, Mayor of Nagasaki urged in a letter, assuring that the government of Japan will steadily press forward with efforts to have the youths of today pass on the stories and experiences handed down to them, concluding that the tragedies of Hiroshima and Nagasaki must never be repeated, and that instead, “we must gravitate towards a more peaceful world”.

When asked what message he had for the future generation, Granoff said: “If we get every issue other than controlling and eliminating nuclear weapons right, it simply will not matter.”

“Young people should demand right knowledge. Critical learning is essential, always see pro and con. Maybe they can write articles and publish it. For me, it is important to realize the precious value of all the lives equally. Some value should be able to change people’s life.” Nakagaki said. He noted that young people should be made aware of the current conditions of nuclear weapons, and thus share what they think on social media.