Long List of Loan Conditions Keeps Poor in Check

I have an idea for the popular TV game show Fear Factor, if it's still around next summer: contestants would have to wander for days over a treacherous mountain range in order to reach a fence where they would then be tear-gassed as world leaders play golf nearby.

All this would be made possible, of course, by Jean Chrétien's choice of Kananaskis, Alberta as the perfect, inaccessible site for the Group of Eight (G8) summit next June - a choice allegedly made necessary by the volatile encounter between police and protestors at the recent summit in Genoa.

With the Western media in a full lather of rage toward the protestors, it's worth noting that the protestors have actually accomplished something valuable. They have succeeded in pushing the G8 leaders to place African poverty at the top of next year's summit agenda. Without the protests and disruptions of the last few years, it's a safe bet that the starvation and death by AIDS of millions of Africans wouldn't have even made the short list.

So, yes, it's wrong to damage property - and it's awful that a protestor was actually killed - but the vast majority of the 200,000 people who protested in Genoa did so peacefully. Furthermore, the disruption and disorder of the last few years that have so scandalized Western opinion are, in the grand scheme of things, mild compared to the disruption and disorder in the lives of more than a billion people around the world who are living - and dying - on less than US$1 a day.

It's frequently pointed out that the protestors weren't elected by anyone, which is true. But it should be noted that they also weren't paid by anyone - which seems to make their actions incomprehensible to a lot of Western commentators. Particularly baffling to those steeped in the ideology of the marketplace is the thought that there are individuals willing to risk tear gas and bludgeoning in order to champion the cause of people in faraway countries who don't even pay hefty retainers or consulting fees.

This inability to believe that anyone ever does anything for reasons other than personal material gain leads to hostility towards the protestors. Their behaviour is seen as curious, if not downright suspicious. They are dismissed as either confused or simply self-interested - as if there is big money to be made in carrying placards about Third World debt elimination.

So the fact that African poverty will be given its fifteen minutes of fame next June is an impressive achievement on the part of the protestors. The real problem will be getting the G8 leaders to follow through with anything much beyond expressions of deep concern.

Interestingly, Ottawa stands to play a significant role in whatever happens - or doesn't happen - because Canada was chosen by the G8 to lead the African poverty initiative. Furthermore, Finance Minister Paul Martin is chair of the G20 - the group of finance ministers from the G8 as well as from emerging nations like India and China. Mr. Martin appears ready to accept an invitation to extend his chairmanship another year.

Mr. Martin insists that a substantial rethinking about Third World poverty and development is already underway at very senior levels within two key institutions, the World Bank and the International Monetary Fund (IMF). Although he is a governor of both institutions, Mr. Martin isn't shy about criticizing them. In an interview earlier this month, he openly criticized the fact that poor countries seeking loans from the bank and the IMF are forced to accept a long list of conditions. "To go into a country and say, as a condition of getting a loan, you're going to privatize, you're going to reform your pension system ... and here are another forty-five things you're going to do - which no G7 country could do within that short a time period, let alone an impoverished country with a very weak public service - it's just unrealistic and unacceptable. And yet this kind of thing goes on all the time."

It's refreshing to hear someone in Mr. Martin's position acknowledge the coercive nature of the conditions imposed by the bank and the IMF, and openly characterize them as "unacceptable." But this isn't just a bothersome banking practice; it's a key part of the way the West imposes a particular model of development on the Third World. In the past twenty years, the World Bank and the IMF have used their lending power to insist poor countries adopt an extensive menu of pro-market reforms - including privatization, deregulation, free trade, weakened labour protections and open financial markets. The results have been disastrous, with economic growth declining in most poor countries, particularly the poorest African nations.

Any meaningful change should begin by scrapping this heavy-handed approach. Poor countries should be allowed to do things like support and protect their own domestic industries - just as Western nations did when their industries were starting up. But this would run into resistance from Western corporate and financial interests who like the way the World Bank and the IMF are remodelling the world along strict market lines.

Mr. Martin suggests it takes time to bring about a cultural shift among mid-level IMF and bank bureaucrats who are used to dictating terms to impoverished nations. True. But the real problem lies elsewhere. Unless Mr. Martin and others are willing to challenge the rigid pro-market approach and take on powerful corporate and financial interests - and their champions inside the U.S. Treasury Department - it probably doesn't matter what mid-level bureaucrats are thinking.

In the meantime, the media will continue to harass the protestors, whose deviation from the Homo economicus model of naked self-interest continues to confuse and irritate editorial writers. New York Times columnist Thomas Friedman suggested that the Quebec City protestors were actually motivated by a desire to keep the world's poor from sharing in the West's material bounty. He dubbed them "The Coalition to Keep Poor People Poor." But the coalition might as well disband itself. If protestors are allegedly upset by the prospect of the world's poor improving their lot, they can confidently put away their gas masks and get back to the mall - global capitalism can be trusted to keep the poor in check without any help.

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