LOBBY COALITION
c/o Action for UN Renewal
3 Whitehall Court, London SW1A 2EL Tel: 020 8399 2547
email: info@action-for-un-renewal.org.uk

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Ensuring that international economic and social institutions become integrated with and accountable to the UN

The World Bank (WB), and the International Monetary Fund (IMF) are the two main institutions actively involved in international economic development activities.

The World Bank consists of four different agencies that make loans or guarantee credit to developing countries - the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for the Settlement of Investment Disputes (ICSID).

The IMF supplies poor countries with money to help overcome short-term balance-of-payments difficulties.

In tandem, the Bank and the IMF provide financial and technical help to poor countries to promote their economic growth and social development. However, this help is given only on condition that the countries concerned agree to implement Structural Adjustment Programmes (SAPs).

SAPs are policy packages which typically call for the privatisation of government-owned enterprises; cuts in government spending, imposition of user fees on social services, promotion of exports, higher interest rates, trade liberalisation and the elimination of tariff protections. These have profound effects on the poor as follows:

WORLD BANK/IMF/ CONDITIONS FOR LOANS	IMPACT ON POOR
Cuts/reduction in social spending on health, education, etc.	Increased school fees force parents to pull children -- usually girls -- from school. Literacy rates go down. Poorly-educated generation not equipped for skilled jobs Higher fees for medical services mean less treatment, more suffering, and needless deaths. Women, already overburdened, must provide healthcare for family members.
Shrink Government; reduce budget by trimming payroll and programmes.	Massive layoffs in countries where government is often the largest employer leave people prepared to work at any wage
Increase Interest Rates: To combat inflation, increase interest charged for credit and awarded to savings.	Small farmers and businesses who can't get capital to stay afloat sell their land and work as tenants or move to poorer land. Businesses shut down, leaving workers unemployed
Eliminate Regulations on Foreign Ownership of Resources and Businesses	Control of entire sectors of the economy is shifted to foreign companies (eg. BMW and Rover in the UK) Governments forced to offer implicit pledges not to enforce labour and environmental laws.
Eliminate Tariffs: Stop collect-ting taxes on imports - often ap-plied to goods which would com-pete with locally-produced goods.	Makes it hard for domestic industries to develop. Producers cannot compete against long-established, richer foreign suppliers, leading to closure of businesses and layoffs.
Cut Subsidies for Basic Goods: Reduce government expenditures subsidising the cost of bread, petroleum, fertiliser, etc.	Raises cost of items needed to survive, frequently leading to civil unrest, and even wars.
Re-orient the Economy from Subsistence to Exports: Give incentives for farmers to produce cash crops (coffee, cotton, etc.) for foreign markets rather than food for domestic consumption, encourage manufacturing to focus on simple assembly (often clothing) for export rather than manufacturing for own country encourage extraction of valuable mineral resources.	Law of supply and demand pushes down price of commodities as more countries produce more, meaning local producers often lose money Best land devoted to cash crops; poorer land used for food crops, leading to soil erosion, and famine. Food security threatened Women often relegated to growing food for family while men work for cash Makes country more dependent on imported food and manufactured goods Forests and mineral resources (oil, copper, etc) overexploited, leading to environmental destruction and displacement of people.

The World Trade Organisation (WTO) was established five years ago. Since then, it has become the vehicle for liberalisation, 'free market', and global decision-making, with the multinationals at the wheel. The WTO has the power to penalise governments who 'interfere' with free trade, leaving the field wide open for multinationals in pursuit of profit.

eg. WTO rules prevented the EU from providing preferential trade arrangements to impoverished Caribbean banana farmers. Its agreement on Intellectual Property Rights (TRIPs) imposes strict rules on patents, copyrights and trademarks, preventing local firms from developing similar products and empowers multinationals to own rights to certain plants and natural derivatives. Very soon, WTO may even empower multinationals to own patent rights to human genes!

Summary: In spite of the enormous power which the Bank, the IMF and the WTO wield around the world they are not answerable to anybody except their shareholders. The major shareholders are the governments of the seven richest industrialised (G7) countries. This lack of international accountability has enabled a few people who hold shares in multinational companies to become very much richer, while millions of people in developing countries remain trapped in abject poverty.

The fate of millions of men, women and children cannot be left to 'the market'. Only the UN can organise and co-ordinate proactive as well as responsive programmes which will ensure equitable and sustainable development.

Ask your MP to urge the Government to: Promote reforms of the IMF, the World Bank and the WTO which will, for instance, improve their transparency, representation and accountability; promote measures to ensure that poverty reduction goals are fully integrated into their programmes; ensure that their activities combat poverty, conflict and environmental problems, and disseminate appropriate technologies to the least developed countries.; ensure the participation of developing countries in negotiations and planning; ensure that any new international rules on trade and investment: a)  allow developing countries to control inward investment so that it advances sustainable development; b)  enforce the responsibilities of foreign investors towards the communities in which they invest; c)  promote poverty reduction, the environment and human rights; d)  improve market access for developing country products.