World Bank Watch: India Has Reason for Anger at WB-IMF

Praful Bidwai

NEW DELHI, Sep 19 (IPS) - The unceremonious deportation from Singapore of several prominent Indian critics of the World Bank (WB) and the International Monetary Fund (IMF) has drawn fresh attention in this country to the autocratic functioning of these financial institutions, now holding their annual meeting in the city-state.

Wilfred D'Costa, general secretary of the Indian Social Action Forum (INSAF), an umbrella organisation for Indian grass roots organisations, said he was detained, frisked and grilled for hours by immigration authorities in Singapore. ''They kept asking me to reveal my links with international anti-globalisation groups and when I could not they cancelled my two-year multi-entry visa and deported me,'' D'Costa told IPS.

D'Costa said he was inclined to blame WB-IMF rather than immigration authorities in Singapore for what happened. ''If they were going to deport me, why were they so keen on confiscating leaflets I carried with me on discredited water and sanitation projects in India, funded by the Bank?''

D'Costa's experience has struck a chord among experts, activists and ordinary people who are already unhappy with this country's experience with ‘structural adjustment programmes' in which international financial institutions are involved.

"These individual cases of visa cancellation represent crude violation of human rights", said Anil Chowdhury of INSAF. "But even worse is the Fund-Bank's complicity in censorship and suppression of freedom. There is no reason why they should have convened their meeting in Singapore, knowing it's a repressive regime which snuffs out all dissent."

Chowdhury said WB-IMF were responsible for the imposition on India's people of elitist "free-market" policies which saw the defeat of the right-wing Bharatiya Janata Party (BJP) in elections in 2004. ‘'They were crucial in designing the ‘Washington Consensus' on prescriptions that cut spending on public services, and promoted liberalisation, privatisation and globalisation which have widened the gap between the rich and the poor in this country.''

India's experience with the Bank's ‘structural adjustment programmes' began with a balance of payment crisis in 1990. This called for a 23 percent devaluation of the Indian rupee, opening up to foreign investment, privatisation of India's massive public sector, the entry of foreign banks and cuts in already low social sector spending.

Curiously, the Bank's proposals were kept secret from the then prime minister Chandra Shekhar and his finance minister by a group of senior bureaucrats in the finance ministry, all of whom were former employees of WB-IMF. Two years later, a political scandal broke after it was discovered that WB-IMF had access to India's 1992-93 budget prior to presentation in parliament and there were allegations the financial institutions even had a hand in drafting the budget bill.

The top apparatuses of WB-IMF function like cabals which rig institutions. Just seven of the IMF's 184 members effectively control it -- the U.S., Japan, Germany, Britain, France, Canada, and Italy. ''They have set the rules so that the poor countries are excluded from decision-making and the rich hog voting quotas,'' Chowdury said.

At the IMF, a major decision requires 85 percent of the vote. This means that the U.S., with 17 percent, has a veto over the Fund's core activities. Britain, Germany, France, and Japan together hold 22 percent. Each has a permanent seat on the board. In contrast to the rich countries' holding of 63 percent, the world's 80 poorest countries have just 10 percent among them.

This "quota" allotment is not in line with distribution of economic power in the real world. For instance, tiny Belgium controls 5.1 percent of the vote in the IMF, more than double the quota allotted to India or Brazil, says Nagesh Kumar, director general of the regional economic think tank Research and Information System for Non-aligned and Developing Countries (RISC) that is located in the Indian capital.

The new economic reality clearly demands that rapidly expanding Asian countries like China and India be given significant say in the running of the IMF, Kumar told IPS in an interview.

Under pressure to raise the Third World's quotas, the IMF responded on Monday with a token increase in the voting shares of China, South Korea, Mexico and Turkey. But second stage reforms that would boost the vote shares of more countries, including India's, is where the real game is expected to begin.

The WB-IMF have recently come under public pressure to become more accountable and are increasingly being forced to respond to concerns about displacement, environmental destruction and human rights violations in India, which recently passed a right to information (RTI) law that gives better access to public documents.

For instance, last year, ‘Parivartan' (change), a voluntary organisation based in the national capital, used the RTI law to obtain and publicise several official documents of the ‘Delhi Water Supply and Sewerage Project' that recorded secret deals between the state utility, Delhi Jal (Water) Board (DJB) and the Bank.

Parivartan's chief Arvind Kejriwal, who went on to win the Ramon Magsaysay (called the Asian Nobel prize) award this year, told IPS that the deal created disproportionate earnings for companies selected by the Bank and had mechanisms to recover costs that would have hiked up water bills several times over, while denying water to poorer people living in the capital city.

Earlier, in the face of a mass movement against the Sardar Sarovar dam on the Narmada river in western India, the Bank was forced to withdraw from the project in 1992. But it has since resumed funding several irrigation schemes.

Many activists regard WB-IMF's professed regard for transparency and accountability as fraudulent. The two institutions, they believe, loathe popular protests and will do their utmost to avoid interacting with NGOs. "If one examines the record, the Bank couldn't care less about human rights", says D'Costa. "It delights in rights violations such as what happened in Singapore."

On Sep. 8, the WB-IMF said: "We believe that all individuals who have been accredited to the annual meetings should be allowed to attend. We strongly urge the Singapore government to act swiftly and reverse their decision on entry and access to the meetings" for them. But the logical thing to do would have been to threaten to cancel the Singapore meeting for breach of an agreement solemnly signed to facility entry and participation of WB-IMF invitees.

"This is not the first time that the WB-IMF have held a meeting in a country where protests are not allowed," says Benny Kuruvilla of the Focus on the Global South in Mumbai. "Three years ago, WB-IMF met in Dubai, where NGOs were not allowed free entry for ‘security' reasons." This is part of a pattern to evade protestors, established since 1999, when the World Trade Organistion (WTO)'s Seattle meeting had to be abandoned.

"The lesson is clear," says Chowdhury: "Instead of preaching transparency and good governance, WB-IMF must first democratise and become accountable. (END/2006)