The World Bank and the IMF seem to have lost any capacity to defend their own interests or their core mission. They have criticized the Singapore Government for blocking entry to Singapore of NGOs clearly on mission to cause trouble at the joint annual meeting of the two institutions this month.
Their incapacity to see Singapore's action as support for them reflects a deeper problem. They are allowing NGOs to run the organizations down, particularly the World Bank.
The Bank and the Fund have given approval for 400 NGOs from 45 countries to attend the meeting. The Singapore government has banned 20 of the more radical of those NGOs from entering Singapore.
Most notable among the groups are the World Development Movement based in Britain, Focus on Global South, based in Bangkok and INFID, a Western and Indonesian NGO based in Jakarta and Brussels.
Radical protests are costly. The Koreas Rice Farmers Association battled Hong Kong police for three days at the WTO conference last December. The World Development Movement and Focus on Global South were intimately associated with those protests.
INFID recently circulated the "Call for International Actions Against the IFI's (International Financial Institutions)" to members. It was developed at the 2nd "South-North International Consultation on Resistance and Alternatives to Debt Domination" and adopted at the Assembly of Social Movements in Caracas in January.
If these were not clear signs that groups were determined to continue to take radical and possibly violent action against the Bank and the Fund, what were they? The pattern of approach of radical NGOs to international meetings has been the same since the riots at the WTO meeting in Seattle in 1999, including against the Bank in Washington.
The Bank and Fund should have commended the Singapore Government for taking prudent action to reduce the cost of policing the meeting (the Hong Kong WTO meeting cost around US$4O million) and reducing the risk of disruption of the meeting, damage to facilities and harm to delegates.
It would appear the only successful action the Bank has taken to deal with NGOs (or Community Service Organizations, as it prefers to call them) had been to barricade its headquarters in Washington DC, making it as difficult to get into as the State Department.
Its other methods of NGO management have flopped and have resulted in the Bank's watering down its core missions to the detriment of the world's poor who are supposed to be its clients.
Much of the responsibility for this rests with James Wolfensohn. The Bank had been the target of anti-free market ideologues for at least a decade before he took over as President. It used to deal with them by robustly pointing out they were wrong. He instead bought their criticism that the Bank was not doing enough to tackle poverty directly and that it should build social and environmental impacts into its projects and lending.
He failed to recognize that their critiques were fundamentally anti-free market and he weakened the Bank's capacity steadfastly to argue the free market case by giving them credibility. As Christopher Mallaby's book on Wolfensohn ("The World's Banker") shows, his interventions in Bank programs also caused confusion and diluted direction as well.
Mallaby used his book, in part, to show how the more radical NGOs caused important and substantive programs to be scotched. But he missed the bigger story -- how Wolfensohn had allowed the larger NGOs like WWF and Oxfam to capture important areas of Bank policy.
Wolfensohn basically consigned World Bank policy on forestry to WWF. Now, the World Bank will basically not lend to support development of commercial native forestry in developing countries. The result is that in several countries, such as Papua New Guinea and Laos, forestry sectors have languished and economic growth has been slower than it should have been.
He chilled lending on dams and imposed more onerous conditions on human rights and environmental standards on loans, particularly in mining. He also allowed extensive processes of consultation which greatly expanded the avenues for NGOs like Oxfam to stall and interfere in major development projects.
Did this process of accommodation work? He learnt a lesson to which the large NGOs repeatedly subject targets like him. They cannot, do not or will not, control the more radical NGOs. Nor do they defend the institution or individual from those more radical attacks once they have secured their own concessions. It is one of the slyest tricks in NGO politics.
The Bank is still locked in this cycle of dialogue, consultation and continuous erosion of the Bank's credibility and capacity to deliver its core mission. The World Bank website proudly announces the Bank has 120 specialists liaising with Civil Society.
NGO activity in the Singapore program is heavily tilted to the interests of the anti-free market NGOs. They will get a lunch where they can personally question the heads of the Bank and the Fund and a seven day forum, organized by Bank and Fund Staff, at which all their hobby horses can be aired, no matter how marginal. There are sessions on "Deconstructing Reconstruction" and improving the role of "Poor Women in International Trade" and at least three sessions where leading anti-free market NGOs will release reports attacking Bank and Fund policy and institutions.
Can Paul Wolfowitz do something to end the cycle of self-denigration that is steadily eroding the World Bank's core mission? Does he even know he has a problem?
Alan Oxley is a former Chairman of the GATT, the predecessor of the WTO and Chairman of World Growth.