World Bank “solutions” still sugarcoat failed economic assumptions

Posted on 27 December 2018

An action in Bali / Photo: Carlo Manalansan

In this previously unpublished article, our executive director, Amy Padilla, reflects on the IMF-World Bank Annual Meetings and the parallel People's Global Conference held in October 2018.

The International Monetary Fund (IMF) and World Bank Annual Meetings in Bali were held in mid-October, amidst controversy regarding repression of independent, people-led initiatives. The Peoples’ Global Conference (PGC) against the IMF-World Bank gained prominence due to attempts of Indonesian state actors to silence the initiative. [i]

PGC organisers faced not only a barrage of threatening messages and false accusations of links to “terrorist” groups, but they also saw regular surveillance by suspected intelligence personnel (even within the halls of the Annual Meetings venue) and police-led sabotage of conference logistics.

For their part, PGC organisers were quick to call out those they saw as the main culprits in the debacle: the Indonesian government which spent more than USD 56 million for the Annual Meetings with its militarised security measures, and the IMF-World Bank with their defensive response to people’s actions that hold the US-led financial institutions and their tarnished legacies to account. Movements were also quick to point out that expensive meetings were held just months after consecutive earthquakes and a tsunami in the country.

Repressing resistance to maldevelopment?

We could hazard a likely reason why the PGC was subjected to such repression. The conference – organised by movements, civil society and Indonesian people’s organisations – sounded the alarm over what they saw as the further “corporate capture of the development agenda.” The Indonesian groups under the Gerakan Rakyat Menentang IMF-WB (People’s Movement against IMF-WB) were critical of both the IMF and the World Bank’s legacy to the global South as an enabler of corporations, and the institutions’ current approaches to “development.”

After its earlier push for public-private partnerships (PPPs) worldwide, the World Bank has hit the stride in the “Maximizing Finance for Development” (MFD) as the latest in its business-led “solutions.” The MFD approach is operationalised as a sequence of stages that prioritises private sector activity and funding for infrastructure projects and “development” programs in the global South.

The cascading stages include strengthening existing privatefirms’ existing activity, opening up for business through investment reforms, further de-regulation, public-private partnerships, and even resorting to using public resources to incentivize businesses. Under MFD, all these have to be considered first before the use of public money for services and infrastructure. This makes public spendingfor social needs less of a last resort and more like a footnote. It further threatens long-lasting impacts: a “development” model where the transformative role of people’s organisations and movements is rendered absent.

The more things change, the more they stay the same

The WB admits that the MFD is not altogether novel as they have been enabling the “private sector” – particularly transnational corporations – for decades.Without being exhaustive, one could cite various cases, all of which violating the peoples’ right to participate and shape their development path.

Aside from government corruption in oil revenues, [ii]communities along the Chad-Cameroon pipeline lost livelihoods and were