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WEB POSTED 04-25-2000

 
 

 

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Challenge World Bankers
Leaders say World Bank/IMF must reform

by Askia Muhammad
White House Correspondent

Even as dozens of heads of state and dozens more foreign ministers from nearly 100 countries---who represent 80 percent of the world�s population from the world�s less developed countries---met in Havana, Cuba, to unveil their strategy for combating poverty in the less-developed-countries, forces in this country rallied in their own way to address that same agenda.

"The current economic order, imposed by the rich countries, is not only cruel, unjust and inhuman, but (it) also carries a racist view of the world which inspired the Nazi Holocaust and concentration camps," Cuban President Fidel Castro told the closing session April 14 of the "South Summit" of the Group of 77---or G-77, a group of developing countries formed in 1964, and which now has 133 member nations, most of which are in the southern half of the globe.

Sounding another theme that resonated among demonstrators here protesting the Spring meetings of the International Monetary Fund (IMF) and the World Bank, Mr. Castro said: "It is vitally important for the Third World to bring about the disappearance of this sinister institution, and the philosophy it represents, and replace it with a body that would regulate international finance and operate on democratic foundations."

He blamed the IMF for a "lack of foresight" and "clumsy handling" of the latest global economic crisis which has paralyzed social development policies, while creating serious internal problems for poor governments since 1997, the time of their greatest need.

G-77 leaders adopted a final declaration outlining the forum�s strategy and action plan, which may become a part of the United Nations� plan for the 21st Century, and which will be debated at the world body�s Millennium Summit, to be held in September at UN headquarters in New York. The declaration demands the reform of the world trade system, because its protectionist measures currently close the door on exports from the South.

The group also wants to create a world finance organization that ensures the full participation of developing countries in the decision-making process for international economic policies; increased aid and exports to less developed nations; greater technology transfers; the cancellation of unsustainable debt that is forcing many countries to pay more in interest than for social services, including education and health; and mechanisms for financing development and to ensure financial stability in the South.

"Many countries have rejected the results of various policy initiatives of the World Bank and IMF," said Arthur Mbanefo of Nigeria, president of the G-77 and Nigeria�s ambassador to the UN, specifically citing required privatization of state-owned industries, crushing debt burdens, and a "one-size-fits-all" attitude that does not account for economic, cultural and political differences among countries. "We are very supportive of demonstrations (in Washington) that could forcefully handle those concerns," he said

"Whether it�s a coincidence or not, the fact that (the G-77 Summit is) happening at the same time as the protest of the World Bank and the IMF speak very much to what gave Seattle its significance," said Phyllis Bennis, a fellow at the Institute for Policy Studies (IPS), a Washington think-tank, referring to Seattle protests of the World Trade Organization last fall.

Ms. Bennis, who was in Havana on the opening day of the Summit, considers the timing important because a combination of outside protestors in Washington--- including environmentalists, trade-unionists, human rights activists, and labor activists---is matched "for the first time in a fairly organized way, by the move of a number of countries of the South to say: �We will no longer accept marginalization from the decision-making processes of these institutions that are so dominant in determining the fate of our countries.�

"These governments are feeling the pressure of knowing that this week they can stand together and condemn some of the practices of the IMF and the World Bank. Next week they�re going to have to be going back, hat in hand, to ask for more loans, because of the history of how the global economic structure has come together," she said.

Despite that caution, according to Ms. Bennis, what emerges very clearly is the sense, not that there shouldn�t be global trade and global rules of trade, but the question is raised: "who makes the rules?"

The current rules lead to the wide perception among G-77 nations that the World Bank and IMF almost "exclusively defend rich creditors," while setting "meddlesome conditions," which allow "unbridled speculation" in the financial markets, according to Mr. Castro, who urged unity among the poor countries and the insistence on a new economic system.

"What we need is a Nuremberg to judge the economic order that (rich developed nations) have imposed on us," Mr. Castro told the opening session. That economic order, he said, "every three years kills more men, women and children of hunger and preventable or curable diseases than World War II killed in six years."

Mr. Castro also argued that the foreign debt owed by developing countries---which has grown from $500 billion in 1980 to $2.5 trillion in 1998---is one of the biggest hurdles for development, and "a time-bomb set to explode" under the foundations of the global economy during some future economic crisis.

But IMF Managing Director Gordon Brown told The Final Call that the financial institution is supportive of debt relief.

"The degree of dialogue that is now entered into, not only with government but with non-governmental organizations, with the churches who are concerned with poverty and debt reduction is far greater than it has been before. And the whole point of the poverty reduction strategies is that individual countries have ownership of their own programs and it is not simply the government of these countries, it is civil society itself," he said.

"And that was the thinking behind the poverty reduction strategies. They were intiated in October, they involve joint action between the IMF and the (World) Bank. They link economic objectives with social justice objectives as well. They are about community and civil ownership of the programs. That is a major advance and I think that will be welcomed by (developing) countries."

At least one member of the Congressional Black Caucus (CBC) strongly agrees with calls for debt relief, and has been active and vocal in advocating debt relief for poor countries, especially those in Africa. "In Niger, Zambia, and Nicaragua, government spending on debt service is greater than government spending on health and education combined," Rep. Maxine Waters (D-Calif.) wrote in an op-ed article appearing in the Los Angeles Times April 14, and in a series of "Dear Colleague" letters to other House members that week.

"Relief from debts is desperately needed by many poor countries, throughout Africa and Latin America," she argued, insisting that debt relief will give those countries a fresh start and improve their ability to serve their people.

The Summit, which included 45 heads of state---including Nigeria�s Olusegun Obasanjo, Libya�s Muammar Gadhafi, South Africa�s Thabo Mbeki, Vietnam�s Tran Duc Luong, Pakistan�s military leader Gen. Pervez Musharraf, UN Secretary General Kofi Annan, Palestinian Authority President Yassir Arafat, as well as the presidents of Namibia, Zambia, Angola, Venezuela, the Dominican Republic, Cambodia, Indonesia---and another 40 or so Foreign Ministers and Parliamentary Chiefs, heard at least one brash new idea about debts, according to Ms. Bennis.

Kenyan non-governmental-organizations (NGO) that were about to renegotiate some loans to their country�s government told the World Bank. "Look, if you�re going to loan more billions to this corrupt government, you�d better make it out as a personal loan to President (Daniel) Arap-Moi. Because, when he is no longer in power, and there is anything remotely resembling a democratic government in Kenya, we�re not going to be accountable for those loans. We�re putting you on notice now, she said."

Whether that will be a model that would even be implemented in Kenya, or followed elsewhere, "who knows?" she asked rhetorically. "But just the notion that it gets asserted is pretty amazing."

Photo: Cuban President Fidel Castro waves at the press during a group photo at the South Summit of developing nations after the inaugural ceremonies in Havana, Cuba, on April 12.

 


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