NEW DELHI (2 May 2007) – The decision by President Hugo Chávez of Venezuela to pull his country out of the World Bank and IMF has renewed questions among Southern nations about the legitimacy of these institutions. In India, a broad coalition of community-based organizations has launched an Independent People's Tribunal on the World Bank to evaluate the global lender and demand accountability.
President Chávez announced yesterday that he would completely sever ties with the World Bank Group and the International Monetary Fund, several months after paying off loans 5 years ahead of schedule. Venezuela's announcement reflects a serious movement in Latin America to move away from Washington-based lending institutions and the strings attached to their loans. Criticisms of the World Bank include increasing poverty, environmental destruction, abetting corruption, and limiting national sovereignty.
Across Latin America, the Presidents of Bolivia, Nicaragua and Ecuador have all expressed the desire to rid their countries of the IMF and World Bank. Brazil and Argentina have already effectively ended the IMF's role in their economies, although with little fanfare. Chavez's proposed "Bank of the South" may well show the way towards an economic model and a regional alliance that will alter the global balance of economic power.
In India, grassroots organizations have been campaigning for decades against the devastation wrought by projects of the World Bank Group. The Narmada Bachao Andolan's struggle against World Bank-funded dams on the Narmada set a new precedent for people's resistance movements and their impact on World Bank lending.
More recently in 2004-2005 Parivatan and the Delhi Right to Water Campaign have used the Right to Information Act to prevent a World Bank led project to privatise Delhi's water supply. In 2006, the National Alliance of People's Movements along with associated community based groups such as the United Shop-owners association organized against the Mumbai Urban Transport Project, which displaced over 25,000 families. Taking their case to the World Bank's internal review process the groups succeeded in getting World Bank funding withdrawn from the project.
What are the loans for?
Due to such strong opposition to World Bank projects, the Bank has been shifting its emphasis to policy-based lending. The new strategy paves the way for controversial privatization programs and deepens economic and legal changes intended to strengthen and benefit the private sector at the expense of social welfare programs.
The Bank's clearly stated objective in the latest Country Assistance Strategy for India is to push privatization of basic services such as Education, Health, Power and Water, thereby redirecting the role of government in support of private sector expansion and away from the role of ensuring equity and retribution of assets. In the 2005-2008 Country Assistance Strategy the Bank clearly suggests that the Government of India "improve the private market for health care", "reduce inefficiencies in factor markets by easing restrictions on hiring and firing of workers", and "put in place a market-based food grain policy".
Marking the Bank's ProgressWhile the World Bank is generally viewed as a benign agency with a stated objective of poverty alleviation, critics counter that the real objective is to pave the way for the private investment. Community organizations argue that privatization of basic services such as water and demolition of slums in urban centers is impoverishing large sections of the urban populations and that the trends are increasingly nightmarish. While slum demolitions increase (94,000 slum units demolished in Mumbai in the three months between November 2005 - January 2006 alone), the number of people living in slums continues to increase at a rate of 5-6% annually.
In the rural sector, the Bank is seen as directly aggravating and deepening the agrarian crisis. The World Bank's plan for India 2005-2008 recommends, "bold action from policy makers will be required to move away from the existing subsidy-based regime and instead invest in building a solid foundation for an internationally competitive agricultural sector". However, it is far from certain how this will reduce poverty. Increases in water and electricity charges due to privatization schemes will have a direct impact on farmer sustenance.
Putting the Bank on Trial in People's Court
India's is the World Bank's single largest cumulative borrower with lending totaling about US$60 billion since 1944 and a current indebtedness to the Bank of US$11.3 billion (worldbank.org).
Due to the India's huge indebtedness to the World Bank and concerns around the impacts the loans are having on reducing poverty, community organizations across India are mobilizing for an Independent People's Tribunal on the World Bank Group in India to be held at Jawaharlal Nehru University in New Delhi the 21-24 September 2007. Groups working across almost every sector in India are joining together to study the impacts of World Bank projects and policies. In front of a jury composed of former High Court justices, and eminent national and international academics, participating groups will bring together hard evidence and impacted community testimony to question the World Bank's development model.
A Tribunal of this size on the World Bank will be the first of its kind in India.
