The multilateral banks have been controlling the economic destiny of our planet to a greater or lesser degree since the end of World War II.  Multilateral banks are those institutions that arose with the Bretton Woods agreements in 1944, i.e., the World Bank (WB), and the International Monetary Fund (IMF). Today we also have the Inter-American Development Bank (IDB), the Asian Development Bank and the African Development Bank. There is also a series of regional development banks, closely linked in orientation, such as the Central American Bank for Economic Integration. The two banking leaders are the WB and the IMF, both in essence controlled by the United States government. (For more information on
the multilateral banks, please see the Chiapas al Día Bulletin No. 234).

By the'80s, there were already piles of evidence on the environmental, social and economic destruction of projects financed by the multilateral banks in the developing world. Also during the '80s the multilateral banks generalized their demand that developing countries implement structural adjustment policies, tested a decade earlier under the Pinochet dictatorship in Chile among other countries. The first symptoms of structural adjustment began to be felt in the '80s as well: growing unemployment and poverty, a widening gap between rich and poor, weak rates of economic growth and a loss of national autonomy in the management of the economy.

The growing havoc brought by the adjustment, in addition to the environmental and social disasters created by ill-conceived loans, led organized civil society to react by creating civil society organizations (CSOs) to fight against (or for reforms of) policies of the multilateral banks. They developed many tactics in an effort to influence the multilateral banks. One of them was to demand a dialogue with the banks for a review of their operating policies.

The CSOs have always had a wide range of opinions regarding the process of dialogue with the multilateral banks. On the one end we have the CSOs that are not willing to even sit down at the same table with the banks, making it clear that there are fundamental political and ideological differences that would prevent any agreement being reached. The ideological gap is too wide and can't be bridged through dialogue. Besides, these CSOs say, the banks simply have no desire to negotiate. It's a public-relations ruse, to improve the banks' image, but lacking in substance and depth.

There are other CSOs that, notwithstanding the ideological gap, have chosen to sit down at the table and talk. This is an effort to test the waters, accepting on good faith the (supposed or real) opening of the multilateral banks, in order to render research, data, analyses, proof, testimonies, proposals and alternatives, and thus trying to reform some of their more dangerous practices. Some of these CSOs that have sparred with the banks for a decade or more in an effort to obtain information, reform bank practices, etc. say they have seen "sincere" attempts to implement reforms, especially on the part of the World Bank and its president James Wolfensohn.

There are still other CSOs that, like the previous ones, have approached the multilateral banks with perhaps critical stances and reformist desires but in the end were bought out. The trips on expense accounts to meetings and forums, as well as the salaries and bonuses in exchange for research and other benefits, ended up, most of the time, undercutting systemic and systematic criticism. In the words of a social activist from the isthmus of Tehuantepec, the CSOs are a "Trojan horse," working "to lower the speed of the true opposition."

But has this dialogue been worthwhile? Have there been any positive results? Do the economic costs for the CSOs (financial and human resources that have been employed in the "battle with the banks") and also the political costs have any relationship to the results?

Evidence from around the world indicates that the disasters are continuing. Recent examples are the bottoming out of Russia's economy in the '90s and the generalized misery of her people, the catastrophe of the Asian crisis and, more recently, the tragedy
in Argentina, attributable in part to the economic policies implemented through pressure from the multilateral banks. As David Korten says in an evaluation of the Bretton Woods institutions 50 years after their creation, the institutions have fulfilled their goals in terms of economic and trade growth, yet have failed in their purpose: "The world has more poor people today than ever before. We have an accelerating gap between the rich and the poor. Widespread violence is tearing families and communities apart nearly everywhere. And the planet's ecosystems are deteriorating at an alarming rate."

So at that level the CSOs do not seem to have had much influence on the multilateral banks. But strangely enough, the banks are uneasy. Uneasy with the CSOs? So it would seem, at least judging by their growing obstinacy toward the CSOs and their arguments.

If we weigh in essays and recent declarations, it would seem that there has been an entrenchment of the more conservative positions within the multilateral banks. The CSOs are finding that there is unwillingness to implement even minimal measures to make the banks' workings more transparent, let alone the promotion of less socially disastrous policies. The multilateral banks continue to defend their willingness to recognize errors, be more responsible and more environmentally friendly, establish responsible citizen and environmental safeguard policies, and give special attention to indigenous peoples, women, children, etc., but the words are now propping up an image, without substance.

This is also the attitude, expressed in other ways, of other international bodies that are setting the economic "rules of the game", such as the World Trade Organization (WTO). An attitude of blocking, downplaying, nonfulfillment, delay, postponement, buying out and snubbing is taking hold.

Yet if civil society and its organizations for accountability seem to have had so little success with multilateral banks' policies, at least judging by the evidence of so much disaster in the world, how do we explain the growing unease on the part of the banks and their even more conservative positions? A working hypothesis is that the multilateral banks seem to have hardened their stance since the September 11 attacks in New York and Washington, or perhaps even a bit earlier.

Briefly, here's why. (1)

It is not a minor worry among the upper echelons of power, principally in Washington, that groups organized in networks have had some success. The term "netwar" was recently coined to mean the war (or struggle) of networked groups. For some strategists, the networks of groups or people with similar interests have become a real force with an ability to bring changes in the established order. These networks can be made up of terrorists, narcotics traffickers, armed groups with their local and international support (the EZLN is an oft-cited paradigm), and, of course, also by the CSOs. For the strategists, all of these groups linked in networks, from Al Qaeda to the human rights networks, are different sides of the same coin ("evil forces" on one side, "benign forces” on the other). They are of the same coin because, for the strategists, these groups are undertaking "netwar", i.e., they struggle as networks and with new tactics. Therefore all networks must be analyzed with the same care, whether they employ violent or peaceful tactics, because the response to their struggles will be similar in either case, although of different intensity.

The September 11 attacks underscored, unequivocally, how netwar can achieve spectacular goals because of new tactics that include the use of new technology, but also new ways of organizing that are not top-down, involving independent action units that are momentarily coordinated. Demonstrating why those who practice netwar have to be confronted with the same response, the strategists point out that both the demonstrators that paralyzed the WTO summit in Seattle in December 1999 and the alleged Al Qaeda members in the September 11 aircraft used new and similar tactics, related to network structures. The ends might be different, even opposed, and so too their methods, but they share similarities at a tactical level. Another important example of network activity is the setback, by mobilized and interconnected civil society, of the forces behind globalization, when the MAI (Multilateral Agreement on Investment) was defeated in 1998. Analysts attribute the defeat of the MAI in large part to the worldwide protests that were organized, almost in unison, through the internet.

For some observers, it is clear that civil society, interconnected in mobilized and informed networks has the capacity to throw "a bit of sand in the well-greased cogs" of globalization. This is the crux of the matter. Organized civil society, linked in networks, is touching a very sensitive nerve--the prevailing economic world order. It is a latent danger, which has already begun to cut its teeth.

How to stop this networked civil society, then, must be one of the concerns of some strategists within the echelons of power. While a strategy to confront it is planned, tested, and polished, it might not be stretching things to think that, for the moment, the order has been sent out: limit or eliminate concessions to the CSOs. Might we be in the wake of George Bush's slogan "you're either with us or you're against us"?

The evidence for greater obstinacy is indirect. Officials from the multilateral banks continue to profess publicly their desire to dialogue and "review" opinions and suggestions from organized civil society. In any event, we might posit the hypothesis of greater obstinacy until evidence shows us otherwise. But recent declarations by CSOs on the multilateral banks are eloquent. Let us see some of them:

In a November 2001 communiqué, US-based Development Gap and International Rivers Network declared: "For all its calls to protesters to leave the streets and engage it in dialogue, the World Bank, six years after James Wolfensohn became its president, is still unprepared to work productively with citizens in the South and North to address the policies and operations of the Bank that most significantly and directly affect them....The Bank remains unbending in its imposition of its economic agenda around the world and unwilling to use the invaluable knowledge with which civil society has been providing it to promote economic justice, progress and stability".

Stephen Corry, general director of Survival International, stated the following in a letter sent to the coordinator of indigenous peoples policy at the World Bank: "As countless studies, evaluations and reports have only too painfully demonstrated, the greatest problem in any discussion of World Bank policies towards tribal peoples is that the policies are continually broken. You are doubtless aware of the many criticisms leveled at World Bank projects during the 1980s and 1990s, but Survival's experience suggests that many of the same problems continue to exist today. To take just one example: nineteen years after the World Bank lent Brazil and its mining company CVRD $900 million to develop the Carajás iron ore deposits, and despite the recognition of all Indian territories within the area being a condition of the project, the Awá Indians in Maranhao state are still waiting for their lands to be officially recognized and protected. This lack of protection has had deadly consequences for the Awá: their land has been invaded by loggers, ranchers and settlers, and many Awá have died."

In yet another testimony to the growing anger and frustration of indigenous groups toward the multilateral banks, less than two months ago, in March 2002, indigenous leaders from around the world wrote to World Bank president James Wolfensohn to express their "deep concern and frustration" regarding the revision of WB policy on indigenous people. The policy, said the indigenous leaders, "sets standards far below human rights standards accepted by and binding on the vast majority of Bank members...The preceding is particularly apparent, for example, in the failure of the revised policy to guarantee indigenous rights to lands, territories and resources [...the] consultations on the policy have been cursory and substantially inadequate. We are extremely disappointed by the process, most of which was taken up with ambiguous and misleading presentations by Bank staff. Additionally, Bank staff responsible for the revision have a priori precluded addressing the issues that we deem most important while at the same time maintaining that the Bank is engaged in good faith consultations with us. These issues are land rights, the right to free and informed consent and self-determination".

A researcher with Focus on the Global South, Shalmali Guttal, published an eye-opening report in March 2002 on the information policies of the WB and the Asian Development Bank (ADB): "What is more important than the information they disclose is what they do not disclose. The World Bank's recently revised information disclosure policy continues to focus on providing people with information about decisions already taken, rather than making available the information needed for the public to participate in decision making. [...] According to the Bank Information Center (BIC), a US based policy research organization that has monitored the World Bank's information disclosure process exhaustively, under the new policy the Bank has essentially abdicated responsibility for its own transparency by pushing such disclosure decisions onto borrowing governments. It has thus clearly chosen to deny the public its right to access key documents regarding structural adjustment lending."

What Guttal states regarding the ADB is also true of the rest of the multilateral banks: "The ADB proudly touts its website, and the number of reports it has published and made available on the website as evidence of its commitment to information disclosure. However [...] what is available on the website or in published form is not pertinent to the ADB's decision-making process. Too many decisions are made through closed, informal discussions that should in actuality be accessible to the public."

Development Gap and the International Rivers Network concluded that the following commonalities occur with initiatives the World Bank has taken in dealing with civil society:

·         “The reneging by the Bank on many of the agreements and commitments it has made with and to the organizations it has engaged regarding the process and product of the endeavors.

·         Efforts by the Bank to control and manipulate the endeavors and to use consultations with civil society to validate and advance its own positions and objectives.

·         Efforts by the Bank, when it has been unable to control initiatives, to distance itself from their outcomes and to avoid implementation of recommendations."

The same common denominators that the CSOs have found in their years' old engagement with the WB are repeated in the case of the Inter-American Development Bank (IADB). Some citizen organizations that have pressured the IADB to obtain more information regarding aspects of the Plan Puebla Panama (PPP) have encountered the same hiding of information, little advance notice of public meetings, "public" consultations that are manipulated to provide the desired conclusions, etc.

In a March 2002 meeting in Washington with civil society organizations, IDB representatives were clear regarding their perception of the role of citizen organizations in the public consultations on the PPP: "...this process is controlled by us; you should not try to control this process. There is the perception that you are trying to control the process. The governments drive the consultation process. Governments have not always done their work. We will find an NGO/civil society group in each country to coordinate the consultations".

In spite of persistent criticism regarding the public consultation process on the PPP, the IDB officials were also clear that the method of participation "was not going to change". At the meeting mentioned above, Marcelo Antinori, IDB coordinator for the PPP, stated that the IDB is "not happy about the consultation process in the region. People in field offices don't give information because 1) they don't know it, and 2) they're afraid to. They will share information if they feel the environment is friendly. There has to be a friendly environment. It is a high priority of the IDB to train our staff on how to deal with civil society. It is not a skill people are born with and especially if you have been working in an organization like this (the Bank) for over a decade. If the IDB doesn't have people to talk about the PPP in all offices, they can be trained. There are countries where it's harder to have meetings (Mexico) because of political issues with the indigenous law that goes way beyond the PPP, so we didn't try anything."

In other words even when the CSOs are able to meet face to face with high-level multilateral bank officials, concrete results are few, due to the enormous quantity of (what we generously will call) "fluff" that officials generate. To pull the wool over our eyes, some might say.

Yet another example? The networks Alliance on the IDB and Rede Brasil concluded last December that after four years of meetings they had had with the executive vice-president of the IDB "little substantive advance has been achieved in key topics that are worrisome" and thus decided to suspend participation until the situation changes.

The old question "What is to be done?" arises. Will the CSOs follow the same tactics of seeking amiable dialogue with the multilateral banks, knowing that the results will be few or none? Or has the moment arrived to shift priorities to "netwar" (although we should refrain from using the term, due to its association with war). Are the tactics mutually exclusive?

It's obvious that the struggle continues on many fronts. The evolution of the networks' tactics over the past few years emphasizes the point. Every CSO in a network must have the independence to undertake the struggle as it sees fit, but it must be interconnected, in formal or informal networks, in order to act in a coordinated fashion when circumstances warrant. The advances in recent years in the struggle for a more just economic order point to the advantages of working in networks.

Miguel Pickard

(1)   For a much more detailed analysis on networks and the new tactics, see the book by John Arquilla and David Ronfeldt “Networks and Netwar”, RAND, 2001.

Sources consulted:

Inter-American Development Bank, discussion document “Citizen Participation in the Activities of the Inter-American Development Bank”, October 27, 2000.

Corry, Stephen, Survival International, Letter to Navin Rai of the World Bank, July 27, 2001.

Development Gap and International Rivers Network, Press Bulletin: “Critics’ attempts at constructive dialogue find World Bank less than engaging”, November 9, 2001.

Fox, Jonathan, University of California, Santa Cruz, “Control y supervisión social sobre la banca multilateral de desarrollo”, July 1996.

Guttal, Shalmali, “Disclosure of Deception?: Multilateral Institutions and Access to Information”, Focus on the Global South, March 2002.

InterAction, Committee on Development Policy and Practice, E-bulletin: Inter-American Development Bank—Civil Society initiative, March, 2002.

Korten, David, “The Failures of Bretton Woods”, article in the book by Jerry Mander and Edward Goldsmith, “The Case Against the Global Economy and for a Turn Toward the Local”, Sierra Club, San Francisco, 1996.

Various indigenous leaders, letter to John Wolfensohn, president of the World Bank, March 15, 2002.

See also the web pages of the Bank Information Center (www.bicusa.org) and Trasparencia (www.trasparencia.org).

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