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World Bank ignores own failure
LETTERS TO THE EDITOR: Financial Times, Jun 23,
2000
From Mr. Stephen Hellinger.
Sir, Your
June
20 article on the World Bank's report on the need for social
protection policies to complement liberal economic reforms in Latin
America are as misleading as the report itself. The problem is not the
"perceptions" of the region's inhabitants that they are now economically
more insecure. Their impoverishment and insecurity have been realities
since Bank-prescribed structural adjustment policies were first
implemented in the 1980s.
Those policies have had a
devastating effect on domestic economies, a fact that is lost in the
Bank's litany of aggregate macroeconomic statistics. Labour-market
"flexibilisation" measures have simultaneously reduced wages, benefits,
job security and the demand for local goods. High interest rates have
starved the producers of those goods of needed capital. Together with
precipitous import liberalisation, these policies have wiped out massive
numbers of small and medium-sized enterprises and farms, gutting national
productive capacity, driving workers and their families into survival
modes and abroad, and destabilising banking systems. At the same time, the
privatisation of public utilities and services has jacked up prices and
reduced access.
These realities are being documented by
SAPRIN, the global civil-society network that has engaged Bank president
James Wolfensohn and his staff in a four-continent assessment of the
impact of adjustment policies. The Bank has so far ignored this and other
evidence of the failure of its own prescriptions, as it acquiesces to the
priorities of the US Treasury. Once again, it is tinkering with patchwork
social measures that divert attention from the core issue. Until the
economic policies themselves are addressed, the region will continue to be
wracked by social, political and financial
instability.
Stephen Hellinger
President, The
Development GAP
SAPRIN Global Secretariat,
927 15th Street,
NW
Washington, DC 20005, US
Copyright © The Financial
Times Limited
Further proof of failure of World Bank
policy
LETTERS TO THE EDITOR: Financial Times, Jul 4,
2000
From Mr. Stephen Hellinger.
Sir, Not
only does Professor Ira Sohn (LETTERS TO THE EDITOR: Financial Times, Jun 30,
2000) misrepresent what I wrote (Letters,
June 23), he also unwittingly contributes to the condemnation of World
Bank policies in the process. Nowhere in my letter do I refer to the 1980s
as Latin America's "golden age". To the contrary, World Bank adjustment
lending, which began in 1980 and reached Dollars 3bn and more than one
half of the region's countries (excluding the small countries of Central
America and the Caribbean) by the mid-1980s, helped push Latin America's
economy into the downward spiral that he so well
documents.
Mexico, once the Bank's poster child, is a case in
point. Since it began adopting Bank and International Monetary Fund
policies in 1982, wages in that country have lost two-thirds of their
purchasing power. The government is bailing out the failed private banks
to the tune of a cool Dollars 100bn, a sum equivalent to the social
security payments owed all Mexicans for the next
generation.
Meanwhile, migration to the US continues
unabated. The world has indeed "moved on", as Prof. Sohn puts it, and it
is not a pretty picture.
Stephen Hellinger
President,
The Development GAP
927 15th Street NW,
Washington, DC 20005,
US
Copyright © The Financial Times Limited
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