Please note - this is a temporary window. id21 is joining forces with Eldis and therefore the id21 website has been suspended. Soon all id21 content will be available on the Eldis website.

The IMF and World Bank: undermining democracy and rolling back the state?

Why are anti-IMF protests sweeping the developing world? Is it privileged students and anarchists who are behind the wave of unrest? Who are taking to the streets and how are their livelihoods being affected by liberalisation? Are Poverty Reduction Strategy Papers (PRSPs) merely Structural Adjustment Programmes (SAPs) in another guise?

A hard-hitting report from the World Development Movement charts recent civil unrest in 23 developing countries directed against policies championed by the IMF. Citing evidence drawn from official documents that the free market policy model is failing, it points out that protesters in countries of the South come from across the social spectrum. Peasants, the unemployed and indigenous people are joining trade unionists, public sector workers, religious leaders, doctors, teachers, small businessmen and, in some cases, even policemen in venting their anger.

Of the 23 countries documented, three quarters have IMF-sponsored privatisation programmes. In 2001 seventy six people, including a fourteen-year-old boy, were killed, and thousands injured and arrested in protests. In half the countries, civil servants and vital public sector workers protested at policies that have cut their income or led to redundancies. In a third of the countries, people demonstrated against the rising prices of basic goods and services as public subsidies and price controls have been removed.

The report argues that the IMF and World Bank are not heeding the concerns of those suffering from reduced state expenditure, currency devaluation, divestiture of state assets and raised interest rates. PRSPs include the same policy prescriptions as SAPs, albeit couched in the language of development. Developing country governments have little leeway to counter the effects of liberalisation as they remain locked into a dependent relationship with the international financial institutions and donor governments.

Highlights from the 23 country reports include:

of the 77 episodes of civil unrest cited, 18 ended with the deployment of riot police or the army – often against initially peaceful protests
endorsing the bypassing of democratic process, the IMF congratulated Argentina’s government on obtaining emergency powers to legislate by decree on tax policy and public sector reform
pressured by the Asian Development Bank and the World Bank, Nepal suddenly hiked electricity prices by 40 percent
the selling of Johannesburg’s water system to Suez Lyonnaise des Eaux (without any plan to extend supply to poor neighbourhoods) and other privatisations have infuriated South African trade unionists who believed in the ANC’s pledge to provide free basic services to the poorest of the poor
in several countries, teachers and health workers took to the streets at the failure of governments to pay salary arrears or keep wages in line with inflation.

Implications arising from the report suggest that unless the international financial institutions pay more heed to the negative consequences of liberalisation:

in developing countries, NGOs, trade unions and the general public will increasingly blame the IMF and World Bank as the source of poverty
governments will continue to lose legitimacy in the eyes of their citizens
with all other avenues blocked, and developing country governments powerless to act in the interests of their citizens, direct action is sure to increase in intensity.

Source(s):
‘States of Unrest II: Resistance to IMF and World Bank policies in poor countries’ by Mark Ellis-Jones, World Development Movement, April 2002
Also see: ‘States of Unrest I’ by Mark Ellis-Jones, World Development Movement, September 2000

Funded by: World Development Movement

id21 Research Highlight: 19 September 2002

Further Information:
World Development Movement
25 Beehive Place
London SW9 7QR
UK

Tel: +44 (0)20 7737 6215
Fax: +44 (0)20 7274 8232
Contact the contributor: wdm@wdm.org.uk

World Development Movement, UK

Views expressed on these pages are not necessarily those of DfID, IDS, id21 or other contributing institutions. Articles featured on the id21 site may be copied or quoted without restriction provided id21 and originating author(s) and institution(s) are acknowledged. Copyright © 2009 IDS. All rights reserved.

id21 is funded by the UK Department for International Development. id21 is one of a family of knowledge services at the Institute of Development Studies at the University of Sussex. id21 is a www.oneworld.net partner and an affiliate of www.mediachannel.org. IDS is a charitable company, No. 877338.