The International Monetary Fund has called on the world's richest countries to boost aid budgets and debt relief efforts to prevent the gathering downturn in the global economy pushing millions more people in the developing world into abject poverty.

International AIDS activists and medical organizations protested at the opening day of meetings of the Board for the Global Fund for AIDS, Tuberculosis and Malaria, in Brussels, and demanded the Global Fund subsidize cheap AIDS Drugs.

The effects of global poverty have been much in the news this week. At a World Bank meeting in Ottowa last weekend, there were prominent calls for an increase in aid from richer to poorer nations. Gordon Brown, the UK Chancellor, called for rich countries to double the aid they give to the poor, while Clare Short, the UK Development Secretary strongly criticised America for "almost turning its back" on the rest of the world. It was a "paradox" that a country that prided itself on its generosity gave only 0.1 percent of its GDP in international aid, compared to Britain's 0.3 percent and the UN target of 0.7 percent, she said. At a recent meeting of EU development cooperation ministers in Brussels, increasing member contributions of aid was high on the agenda, while at the WTO meeting in Doha, the developing world won a significant victory over the right to medicines at times of public-health emergencies.

European diplomats, Clare Short and the World Bank have all cited the ‘Bin Laden effect’ as having a galvanising effect on richer nations view of poverty across the world. The terrorist attacks created an "historic opportunity" for the international community to make a concerted effort to try to solve global poverty, Short said. “The suicide bombers of September 11 appeared not to come from poor countries, but the conditions which bred their bitterness and hatred are linked to poverty and injustice." The World Bank too has come to the view that poverty alleviation in states like Afghanistan is needed to stop them becoming breeding grounds for terrorism, while the World Trade Organisation has promised to address the marginalisation of least developed countries and contribute to a durable solution to world debt. With such a concerted interest in global poverty from many of the biggest players this week, it is hard to believe that half of the world's population still lives on less than $2 a day, while the richest 20 percent consumes more than 80 percent of the world's resources,

But as George Monbiot has argued in this week’s UK Guardian, one of the reasons why the current institutions charged with managing the global economy – the IMF, World Bank, and more recently, the World Trade Organisation - have failed to deliver economic justice and sustainability is because they were not designed to do so. Despite the recent resolutions from the World Bank and WTO on debt cancellation, and a concern for greater global economic equity, these reforms are not, in Monbiot’s words, “in the WTO’s gift”.

As Monbiot demonstrates, the architects of the modern world economy had a vastly different vision than the system we have ended up with today. Many economists at the Bretton Woods conference in 1944 were aware that issues of economic justice would have to be addressed if greater commercial freedom was to work. Among the proposals made at Bretton Woods were calls for an international trade organisation, which as well as working to reduce tariffs would also protect workers rights, transfer technology to poorer countries, and regulate the world economy to prevent big corporations from becoming too dominant. But, Monbiot reports, US corporations blocked the proposals. GATT – the general agreement on tariffs and trade - was strung together on a temporary basis to bring down trade barriers, while negotiations for a proper trade body continued. It never saw the light of day; GATT turned into the WTO, and the moment was lost.

The ITO was not the only institution proposed at Bretton Woods. John Maynard Keynes, the British economist, is often credited as the mastermind behind the IMF and World Bank, the major institutions to emerge from Bretton Woods; but Monbiot argues that in fact, Keynes was bitterly opposed to them, believing that if such institutions managed the world economy, they would preside over deepening inequalities between rich and poor. Keynes called instead for an “international clearing union” which would redeem imbalances in trade, and cancel debt, by the radically simple method of charging creditors the same rates of interest on currency surpluses as those charged to debtors. But, the British delegation, lead by Keynes, was also forced by the US to back down. The US threatened to withdraw its war loan unless Keynes withdrew his proposal, and he ended up having to agree to the bodies that later became the World Bank and IMF.

The problem with the World Bank, IMF and World Trade Organisation is, therefore, that they are constitutionally designed to fail in delivering greater economic justice in world trade. All they can do, in Monbiot’s words, is “set maximum standards for global trade, rather than the minimum standards which might restrain big corporations”. In other words, the IMF, World Bank and WTO police existing inequalities that have been allowed to develop on behalf of richer nations: world debt, tariff inequalities, the lack of regulation; and despite noises to the contrary, pursue these inequalities further in the name of liberalisation.

This is perfectly illustrated by the rejection by WTO of the recent proposal made in Doha, Qatar, by seven African countries that WTO study the impacts of trade liberalisation measures imposed by structural adjustment programmes (SAPs). The proposal - submitted by Kenya, Mozambique, Nigeria, Tanzania, Uganda, Zimbabwe and Zambia - was made in response to the original draft declaration issued by WTO General Council chair Stuart Harbinson in September. These countries pointed out that many developing countries were subjected to "an over-ambitious liberalisation programme" as a result of structural adjustment reform policies that did not offer flexibility in their tariff-cutting exercises. These countries were, as a result, experiencing widespread unemployment and the collapse of local industries.

What is now needed therefore is not the spectacle of Gordon Brown promising to deliver more aid to developing countries, desperately needed though that aid is, nor of the WTO promising everything and delivering nothing. As Monbiot puts it, “if the men who had planned the Bretton Woods conference knew that in 2001 we would be arguing about about how much aid to give to poor nations, they would have packed up and gone home. The stated purpose of their meeting was to render generosity redundant.”

The recent WTO negotiations may be a potential indicator of the way the future of such institutions may develop. While the negotiations at Doha were only a partial success for developing countries, they were also far from a neo-liberal victory that many in the developed world would have liked. Important areas of negotiation have effectively put on hold, to be dealt with in the future; and perhaps most importantly of all, developing countries are prepared to fight their corner much harder than in previous rounds. But, the inadequacy of the WTO as an institution capable of managing these issues was also very much in evidence, and the effectiveness of its future in increasing doubt. Without root and branch reform of world economic institutions, greater economic equity – a more distant dream now than in 1944 – is never going to be established, and the credibility of such institutions restored.

Tinkering with poverty

Doha Dreams?
http://www.fpif.org/commentary/0111dohaconc.html

WTO rejects Africans' request for study of SAP effects before more tariff cuts

http://www.brettonwoodsproject.org/topic/adjustment/a26africadoha.htm

Millions of dollars worth of aid to Malawi suspended due to corruption and the curtailment of the government's privatisation programme will be released soon, a government spokesman told IRIN on Tuesday.

The Progressive Response (PR) is a weekly service of Foreign Policy in Focus (FPIF)--a "Think Tank Without Walls." A joint project of the Interhemispheric Resource Center and the Institute for Policy Studies, FPIF is an international network of analysts and activists dedicated to "making the U.S. a more responsible global leader and partner by advancing citizen movements and agendas." We encourage responses to the opinions expressed in the PR and may print them in the "Letters and Comments" section. For more information on FPIF and joining our network, please consider visiting the FPIF website or email us to share your thoughts with us.

Email the UK government for reform of global trade rules in the run up to the WTO meeting in Qatar. State your concern about Trade Related Intellectual Property agreements (TRIPs).

At the core of the questions facing Ministers at the Conference is whether governments are ready to launch a wider process of negotiations-a new round-and if so, what should its content be. Developing countries, more important in size and sophistication than ever before, are now pivotal to the success of the world trading system. How, then, can their interests be taken into account to strengthen the multilateral system?

A major section of the draft Doha Ministerial Declaration deals with “Market Access for Non-Agricultural Products”, or in short, “industrial tariffs.” Paragraph 16 of the “Harbinson draft” (27 October) has Ministers agreeing to negotiations to reduce or eliminating tariffs in industrial products, with product coverage to be “comprehensive and without a priori exclusions.” An earlier draft (26 September) had allowed “less than full reciprocity” for developing countries, but this was dropped in the present text. Business sources in the US cheered the striking off of the phrase as they felt it would have “skewed tariff negotiations in favour of developing countries,” according to a news report from “Inside US Trade”.

The transatlantic slave trade saw the greatest deportation in history. From the mid 15th century to the closing decades of the 19th century tens of millions of Africans were brutally wrenched from their villages and transported to the plantations and mines of the Americas and West Indies. The impact of this unprecedented movement is still burdening the descendants of these stolen people, and the continent that was their home.

Mt Kilimanjaro in northern Tanzania could lose its entire icecap by 2015, symbolising that global climate change "may be felt first and hardest by the environment and people of Africa", the environmental lobby group Greenpeace reported this week.

The Association for Women's Rights in Development presents The 9th International Forum on WOMEN'S RIGHTS and DEVELOPMENT: RE-INVENTING GLOBALIZATION October 3-6, 2002 Guadalajara, Mexico. How can we re-invent globalization to further the rights of all women? The 9th international AWID Forum will take an innovative approach to this central question. We'll go beyond the all too familiar critique of globalization to examine what we really see as alternatives and how we translate these alternative visions into realities. Deadline for Submission 31 December, 2001.

RSF protested the closure of two private newspapers, the daily "Diario de Bissau" and the weekly "Gazeta de Noticias". "The independent press has been in the authorities' sights since Mr. Yala's election to the presidency of Guinea-Bissau in January 2000," stated Robert Mard, the organisation's secretary-general.

Developing countries have won a breakthrough deal on relaxing drug patents at the World Trade Organisation's Doha meeting. Campaigners hope it will bring down the cost of remedies for treating diseases killing millions of poor people every year.

Weapons, from handguns to fighter jets, are a profitable business. Generous government contracts, huge profit margins, and inevitable cost over-runs ensure spectacular dividends for weapons producers. Conflicts burning throughout the world guarantee plenty of buyers. After a post-cold war decline, global weapons purchases rose in 2000 to $800 billion. In the aftermath of the September 11 tragedies, arms production and sales worldwide will likely continue their upward trajectory--encouraged by national policies and supported by multilateral economic institutions.

The Bush administration has opportunistically draped its call for the launch of a new trade round in the rhetoric of the fight against terrorism. So far it appears that gambit has failed to work, with many developing countries opposed to the outlines of a new round as laid out in the revised October 27 Draft Ministerial Declaration. Particularly galling to Southern members was the failure to include brackets indicating disputed language around text that failed to present alternative or competing perspectives from Southern members.

A two-day hearing on racism in the media held before the Parliamentary Communications Committee has concluded with an agreement on the need for transformation. Industry insiders however warned against using legislation to resolve widespread complaints by blacks of racial stereotyping and control of advertising revenue by white owned media.

Trade ministers at the WTO summit in Doha, Qatar should abandon threats of sanctions against countries trying to obtain medicines for health emergencies such as HIV/AIDS, Human Rights Watch has said.

A new book from IDS, edited by Michael Edwards and John Gaventa and published by Earthscan, explores campaigns to reform the World Bank and the International Monetary Fund; the Jubilee 2000 campaign to end Third World Debt; the movement against Free Trade; the Landmine campaign and several other human rights, social justice and environmental campaigns that have spanned international borders. Earthscan, 2001.

Can the flow of private capital be a substitute for aid? Is the commitment of G7 finance ministers to UN development targets at odds with the vigorous manner in which the IMF is promoting capital account liberalistaion (CAL) – the removal of restrictions on the movement of capital across national boundaries? Will CAL block governments from undertaking pro-poor initiatives?

When unsound southern banks go bust the impact can be devastating. The costs are usually borne by depositors and taxpayers - rarely by those who own and manage errant banks. How can more prudential monitoring and earlier intervention improve bank regulation? Would US-style regulatory mechanisms work in the south?