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Since Seattle last year, the media has heralded
the dawn of a new movement in Europe and America, epitomised by protests
aimed at the WTO, IMF and the World Bank. However, this 'new movement',
portrayed by the media as students and anarchists from the rich and
prosperous global north, is just the tip of the iceberg. In the global south,
a far deeper and wide-ranging movement has been developing for years, largely
ignored by the media.
States of unrest: Resistance to IMF
policies in poor countries
Introduction
Since Seattle last year, the media has heralded the dawn of a new movement in
Europe and America, epitomised by protests aimed at the WTO, IMF and the
World Bank.
However, this 'new
movement', portrayed by the media as students and anarchists from the rich
and prosperous global north, is just the tip of the iceberg. In the global
south, a far deeper and wide-ranging movement has been developing for years,
largely ignored by the media.
What follows is a
summary of protests and demonstrations
organised
by the southern poor. They are aimed at policies that hurt their livelihoods
and, in some cases, undermine the democratic foundations of their countries.
This 'hidden' movement has a global reach and signals a deep unease at economic
policies that keep the poor in poverty.
Southern
protest
All of the developing countries detailed in this report have experienced
civil unrest in the past year.
Teachers, civil
servants, priests, farmers, students, doctors, trade-union activists, indigenous
peoples and women's groups have called on their governments to halt the
introduction of economic reforms which have by-passed their national
democratic institutions, and have been foisted on them by the IMF and World
Bank. These are poor people, in a desperate situation, who are striving for
respect, dignity and a sense of pride in their lives and countries. Their
voices deserve to be heard.
But they're not.
Developing countries are still locked into a dependant relationship with the
international financial institutions and donor governments. Despite the
rhetoric of poverty reduction, debt relief and economic stabilisation, these
countries must still implement liberalisation policies which hurt the poor.
This report shows how deeply the poor oppose them.
The
Gatekeeper
The
IMF has unprecedented power over these vulnerable countries and is often
referred to as the 'Gatekeeper' because it determines whether to open or shut
the 'gate' between a borrowing government and its creditors. Unless the IMF
gives its 'seal of approval', signifying that a government's policies are
'adequate', the government may be unable to access credit and attract foreign
investment. The only way these countries have been able to gain the IMF's
'seal of approval' is by introducing a package of reforms called a Structural
Adjustment Programme (SAP). These reforms often involve the following common
elements:
? Reducing government
expenditure, by making public-sector redundancies, freezing salaries, and
making cuts in health, education and social welfare services;
? The privatisation of
state-run industries, leading to massive lay-offs with no social security
provision and the loss of inefficient services to remote or poor areas;
? Currency devaluation
and export promotion, leading to the soaring cost of imports, land use
changed for cash crops, and reliance on international commodity markets;
? Raising interest
rates to tackle inflation, putting small companies out of business;
? Removal of price
controls, leading to rapid price rises for basic goods and services.
In 1999, these
notorious SAPs underwent a transformation following criticism of their
content and undemocratic nature. At last year's Annual Meetings, the Enhanced
Structural Adjustment Facility (ESAF), responsible for providing loans to up
to 80 countries, was renamed the Poverty Reduction and Growth Facility
(PRGF). In addition, Poverty Reduction Strategy Papers (PRSPs), which must be
drawn up in consultation with civil society, were introduced to meet fears
that governments lacked 'ownership' of SAPs. But early evidence suggests that
PRGF conditions are almost identical to the old ESAF conditions, and that
PRSPs will closely resemble SAPs. The names may have changed but the
economics has stayed the same.
For countries outside
the remit of the PRGF, the IMF remains as inflexible as ever. Loans from the
IMF are always conditional on the implementation of structural reforms, and
countries seeking the IMF's international 'seal of approval' are always
'encouraged' to continue with SAP-style policies.
All these policies hurt
the poor. Developing countries have few choices - either implement policies
ill-suited to their country or risk economic isolation. Most governments,
seeking to retain power and be accepted internationally, choose the IMF over
their own people.
Demolishing
democracy
One of the objectives of IMF and World Bank conditions is to leave economies
well governed and increase stability. Instead, SAPs have undermined the
ability of democratic governments to set their own priorities and policy
objectives; instead, they often rush through economic reforms without
adequate legislative or democratic processes. While governments are held
responsible for the social and economic upheaval which results, the IMF and
World Bank escape largely unscathed.
These institutions have
little accountability to any electorate, and remain forever at arm's length.
At best, they offer advice to the governments 'to continue building the
necessary political support for reforms', and at worst distance themselves
completely from failed programmes, blaming inadequate political will or
corruption.
SAPs, which cut back
the role of the state, ignore the basic function of governments - to provide
social services to their citizens. If governments are unable to provide these
services because of budget cuts or debt servicing, governments lose their
legitimacy in the eyes of their citizens.
It would be wrong to
suggest that developing countries have no responsibility. Some have embraced
the proposals willingly, others have been guilty of corruption. But our point
is that civil society's attempt to democratise their own governments is made
substantially more difficult, if not impossible, by the imposition of IMF
conditions. There is no room for flexibility in negotiations with the IMF.
This is compounded by
the current revamp which seeks to dress SAPs up in the rhetoric of PRSPs,
which could make matters much worse. The policies will stay the same, but
instead of being explicitly prescribed by the IMF, they will be covertly
pushed on government officials by 'IMF advisors'. In the long run, PRSPs will
only help the IMF pass the buck when things go wrong.
When democracy is
undermined and governments are unable to act in the interests of their
electorate, one of the only channels left is for citizens to demonstrate.
Civil unrest, demonstrations and
strikes should indicate to governments, law-makers and the international
community that policies are not working.
Country reports
Argentina
IMF
overview
In
March 2000, the IMF approves a US$7.2 billion three-year stand-by credit on
the condition that the Government continues with key fiscal and structural
reforms. Within the agreement, there is specific reference to the importance
of "the proposed labour market reform and deregulation", and to
"the further reform of the social security system".
December 1999
A wave of strikes hits the newly elected centre-left Government as it
tries to introduce reforms of its labour laws in response to discussions with
the IMF. The reforms will dilute the trade-union movement and reduce the
rights of workers. Mr Montoya, one of the leaders of Argentina's biggest
union umbrella group, the General Confederation of Labour (CGT), has already
likened the strikes to the ones which caused economic and social chaos in
1983-89, leading to the downfall of the then President, Raul Alfonsin.
Montoya says that Mr De la Rue, Argentina's current President is
"committing the same error as Alfonsin".
27 April 2000
The package of labour reforms is passed by the Senate, while thousands of
demonstrators picket Congress, leading to violent clashes with the police in
which more than 30 people are injured and about 50 arrested.
May 2000
IMF-prescribed Government cuts in the social security system lead to
violent demonstrations in the Salta region. Peaceful protests erupt into
violence after demands for unemployment benefits and severance pay are ignored
by local officials who can no longer provide them. The protesters set fire to public
offices before being subdued by armed riot police, leaving dozens injured and
many arrested. Rural communities in a similar situation block roads and
organise protests to disrupt visiting government officials in an effort to
voice their concerns about the increasing deterioration of social provisions.
31 May 2000
Protests against the IMF austerity plan, which will raise taxes, reduce
social spending and cut salaries, culminate with 80,000 people taking to the
streets. The protest is called by the three largest trade unions, the
Catholic Church (usually too conservative to support such actions) and
politicians, from both the governing Alianza coalition and opposition
parties. Protesters likened the IMF to a 'financial
dictatorship' and promised 'fiscal disobedience' by refusing to pay their
taxes, which have jumped from 8 to 22 per cent. One of the 14 dissident
members of the Alianza coalition states that "we want to insist that the
Government apply the programme for which it was elected and not this series
of adjustments that only serve to shrink the internal market and create a
recession". Guillermo Garcia Canedo, the secretary of the Social
Pastoral Argentine Episcopate of the Catholic Church, backs the march to
uphold the recommendations of Pope John Paul II, who wants the IMF and World
Bank reformed. Canedo says, "It is essential to create unity among
social sectors in order to firmly tell the IMF we have had enough of its
adjustment policy."
In a survey by the
Argentina-based Centre for Public Opinion Studies, 70 per cent of those
polled identify the IMF as responsible for budget adjustments, 65 per
cent believe its policies are not successful, and 88 per cent maintain that
the Government should place limits on the IMF's requirements. In a separate
poll, the approval ratings for the Government's economic policy fall from 35
per cent in January to 13 per cent in July.
9 June 2000
In continued defiance of the new IMF-prescribed labour laws, a 24-hour
general strike is supported by more than 7.2 million workers. The
President, Fernado de la Rua, is reported as saying that the Government has
no choice but to meet targets set by the IMF. The report continues that the
Government and the workers are in deadlock, and more strikes and disruptions
are inevitable.
29 August 2000
Teachers
and scientists go on a one-day strike to protest against a 12 per cent
cut in wages. These wage cuts are in line with IMF austerity measures.
In August, the Financial
Times reports how "a wave of discontent is sweeping across
Argentina, eroding the government's political capital and prompting it to
adopt desperate measures to create jobs and kick-start the economy. But the
measures may have backfired and put the brakes on the economy [and] even
supporters of the governing Alliance will be looking to distance themselves
from an unpopular government." The FT fails to mention the IMF's
complicity in the Argentina's social turmoil and the Government's failed
programme of reforms.
The Argentine courts find the IMF
directly responsible for Argentina's debt. In an unprecedented judicial
ruling, condemning the illegitimate origins of the country's debt amassed
during the military dictatorship of 1976-83, Judge Jorge Ballestro says that
the outstanding debt is part of "a damaging economic policy that forced
[Argentina] on its knees through various methods, and which tended to benefit
and support private companies - national and foreign - to the detriment of
society." The ruling specifically cities the IMF as being responsible
and states that "it could not pass unnoticed among the IMF authorities
who were supervising the economic negotiations". As the hearing
concludes, more than 5,000 people gather outside the congressional building
in the capital to demonstrate their support.
Bolivia
IMF
overview
Bolivia
has been working with the IMF since 1985, and received an ESAF loan for
US$138 million in September 1998, which set out "plans to privatise all
remaining public enterprises", including the water industry. In February
2000, the IMF grants another US$46.1 million PRGF loan in addition to US$1.3
billion in debt relief under the Enhanced HIPC Initiative. These are granted
on the condition of Bolivia's continued "progress in the implementation
of structural reforms."
December 1999/January
2000
IMF structural adjustment reforms lead to water prices in Cochabamba,
Bolivia's third largest city, rising by as much as 200 per cent, provoking
widespread protests. The average water bill is estimated to equal
22 per cent of a monthly wage of a self-employed man and 27 per cent for a
woman. In January, an alliance of factory workers, farmers, students and
environmentalists protest against the continued high price of water in the
city. After the protesters
shut down the city for four days, the Government promises to reverse the rate
increase.
February 2000
The Government cannot act on its promises due to the IMF conditions. More than 1,000
protesters take to the streets and are confronted by a similar number of
riot police and soldiers, who disperse them with baton charges and tear gas. More than 175 people are injured
and two are blinded. The Government again responds by promising a price
freeze until November when they promise to re-open negotiations.
April 2000
Water prices still do not change. Exasperated by the Government's lack of
commitment to alleviating the situation, more protesters take to the streets,
this time joined by more than 1,000 rural peasants fighting the privatisation
of rural water supplies. Protesters block roads and demonstrations explode
into violence. The town hall is stormed.
The President, Hugo
Banzer, declares a state of emergency, restricting civil liberties.
Protest leaders are arrested. Rubber bullets are replaced by real ones.
Bolivian television shows an army captain firing into an unarmed crowd. Only
then does the Government revoke the concession of the multinational
controlling the city's water. Reports claim that as many as eight people are
dead, including two farmers, two soldiers, one police officer and three protesters.
In La Paz, there are
also scattered protests in which 30 people are injured and 11 students
arrested. In a separate incident, hundreds of police officers go on strike in
the capital, demanding salary increases.
An Inter Press Service
report claims that the protests are the President's "lowest point in his
two years and eight months in office because it deepened existing conflicts
and created a general feeling of contempt for the government". It also
suggests that the failure of the Government to deal with the protests
democratically is an expression of disenchantment with Bolivia's democracy.
Erick Torrici of the Andean Community of Nations and an expert at the Andean
University says, "Such as it stands, democracy is reaching its limits.
The content of recent demonstrations
responds to a situation that reveals the inadequacies of a merely electoral
democracy." Maria Teresa Segada, a specialist from the Higher University
of Sans Andres, explains further how "when the neoliberal economic model
was implemented in 1985, [with the beginning of SAPs] government leaders
asked the Bolivian people for patience and sacrifice, but now, 15 years
later, patience has run out because the model did not meet expectations."
While the country is in
turmoil, however, the National Forum on Poverty Reduction, organised by
Jubilee 2000 in La Paz, undertakes the largest public consultation exercise
in the country's history, involving 429 participants, including 90
departmental delegates, 275 representatives from 114 organisations and 64
international representatives. The aim of the forum is to assess key areas
for poverty reduction in the country, and runs alongside the government's
National Dialogue, which is part of its PRSP consultation exercise. Liana
Cisneros from the Latin America Jubilee 2000 Network says, "The
creditors' response to Bolivia's debt crisis has consistently been
inadequate. Poverty levels in Bolivia remain devastating. The IMF would do
well to study the findings of the Forum for ideas on how to reduce
poverty."
Brazil
IMF overview
In November 1998, the IMF offers Brazil a US$18 billion stand-by loan.
Conducting their fifth review of the agreement the IMF "noted with
satisfaction" the success of the Brazilian economy, although it
"encouraged the Brazilian authorities to press ahead with their
privatisation efforts and the further liberalisation of external trade".
April 2000
A
Tribunal on Foreign Debt in Rio de Janeiro claims that "the policies
of the IMF have proved disastrous and have increased the foreign debt
even more, while imposing the endless moratorium on social spending. Those
who must pay the debt are children, workers in rural areas and the countryside,
black people, indigenous people and the environment." The Tribunal,
organised by Jubilee 2000, includes Dr Luiz Cernichiaro, Minister of the
Supreme Court, Federal Judge Dra Maccalos and other prominent lawyers. It has
the backing of trade unions, the Catholic Church and the Landless Movement.
September 2000
A referendum asking whether Brazil should discontinue IMF reforms is
backed by more than a million people. Organised by the National Council
of Bishops and Jubilee 2000, the 'unofficial' referendum is a marked success.
On the 7 September, to mark the end of six days of voting and Brazil's
Independence Day, a demonstration
draws thousands of protesters under the banner of Cry of the Excluded. All
the main cities in Brazil are "crammed", say reports, with more
than 100,000 people in Sao Paulo. The Government had previously called
the referendum "stupid" and an isolated project undertaken by
"minorities".
Colombia
IMF
overview
In
September 1999, the IMF approves a three-year credit worth US$2.7 billion in
support of "the government's structural reform agenda", which
includes policies to "downsize the public sector, mainly through
privatisation, and reduce public sector spending". In the annual review
of this agreement, the IMF "welcomed the continuation of the recovery of
Colombia's economic activity, despite the challenges posed by the political
and security situation", and describes the importance of dealing with
the programme's "social fall-out" if private and foreign investment
is to continue.
3 August 2000
About
15,000 workers go on a 24-hour general strike to protest against
IMF-imposed austerity measures being implemented by President Andres
Pastrana. Colombia has the highest unemployment rate in Latin America, with
20 per cent of the population without work. The recent 2001 budget is
announced by the Finance Minister as the budget of "sweat and
tears", with 5,000 public sector jobs to go and wage increases to be
kept below the rate of inflation. There will be little compensation of workers
as the Government continues its cutbacks on social security provision. The
conditions laid out in the US$2.7 billion IMF loan require Colombia to
further open its economy, privatise public companies and cut back spending.
Costa Rica
IMF
overview
In 1995, Costa Rica was granted an IMF stand-by credit for US$78 million on
the condition that "private sector participation in areas previously
reserved for the public sector is increased" and "a far greater
role by foreign investors in areas such as electricity generation, insurance
and banking" is provided for. In the 1999 annual review of Costa Rica's
economic programme, the IMF urges the "prompt approval of the draft
legislation to open up electricity generation, telecommunications, and the
insurance sector to private sector participation as essential."
Often known as the Switzerland
of the Americas, Costa Rica has a sound reputation for democracy, peace
and good welfare provision. The Costa Ricans have managed to by-pass much of
the internal conflict and strife which has racked their neighbours. As The
Economist points out, "Costa Rica has other advantages, rare in the
region. These include a democratic tradition, respect for the rule of law and
a well-educated workforce."
However, market reforms, bolstered
by the IMF, seem to threaten this previously peaceful and democratic nation. Since
Congress passed a law allowing the state telecommunications company, the
Costa Rican Electricity Institute (ICE) to be privatised, there have been a
series of strikes and demonstrations. ICE stands as a national symbol of the
welfare state and many believe this is the beginning of further measures to
privatise Costa Rica's assets. The fate of other reforms hinge on the success
or failure of the ICE privatisation - the Government already has plans for
the state banks and private insurance.
March 2000
The introduction of a bill outlining the IMF-prescribed privatisation of
ICE leads to widespread protests. During protests on 16 March, one person
is killed in Ochomogo, five are wounded, and several injured, including 30
police officers, as riot police clash with demonstrators. At least 50 student
protesters are arrested. Television images show police beating youths who are
trying to run away. In Perez Zeledon, five demonstrators are wounded by
police gunfire, 30 police officers are hit with stones, and 50 students are
arrested. Police report that 40 protests have taken place on 21 March all
around the country. On 23 March, 10,000 marchers descend on the presidential
residence demanding the withdrawal of the bill. In a clash with university
students in a San Jose suburb, police beat demonstrators and arrest 52
students.
April 2000
A protest is met with "unaccustomed brutality by riot police". Rodolfo
Cerdas, a political analyst, says that "these protests are a struggle to
elevate the quality of Costa Rican democracy. We have a politics of ivory
towers. People think politicians only have their own interests in mind."
Opinion polls support his views. A University of Costa Rica survey finds that
53 per cent oppose the ICE reform while only 20 per cent support it; 92 per
cent say they should have been consulted and 84 per cent believe there should
be a referendum.
Ecuador
IMF
overview
In
April 2000, the IMF grants a stand-by loan worth US$304 million which will
mobilise over $1.7 billion in additional resources from other creditors. The
agreement notes that "the programme [of reforms] is very demanding and
successful implementation will require firm resolve on the part of the
authorities, and the support of the Congress and the public at large".
The reforms include the dollarisation of the economy, wage restraint, the
removal of subsidies and "for important structural reforms in the labour
market, the oil sector, and privatisation". In the first review of this
agreement, the "directors were encouraged by the steps taken to inject
more flexibility in the labour market, increase private sector participation
in the economy, as well as the commitment to phase out price regulations on
domestic fuels and electricity. It was also noted that a more liberal trade
regime would complement these reforms."
7 January 2000
Delays in negotiations with the IMF leave the Government without the means
to reactivate the economy. The deepening economic crisis, and the social
instability it causes, results in the elected President, Jamil Mahaud,
declaring a state of emergency to contain growing protests. The
crisis, which has been escalating for a year, leads to consumer prices rising
by more than 60 per cent and a 7 per cent decline in economic growth.
Confidence in the Government falls sharply, with the national currency, the
sucre, losing 21 per cent of its value. The state of emergency allows the
administration to avert demonstrations
which it believes are "interested in destabilising the
government", preventing groups from congregating and giving the
authorities power of dispersal.
10 January 2000
Lawrence Summers, US Treasury Secretary, pledges full support for Ecuador,
saying that Bill Clinton has phoned Mahaud to offer his support in the
growing climate of instability. Summers says that the "achievement of
stability and confidence in Ecuador was very much in the interests of the US"
and that the IMF is likely to send a team of delegates to the country.
In Quito, military
chiefs publicly throw their support behind the President, dispelling
international fears of a coup attempt. They reject "any attempt to break
the legal order" and call for a solution "within the constitutional
and democratic framework".
15 January 2000
Organised by the Confederation of Indigenous Peoples, 40,000 Indians plan
a week of protests, including a march on Quito and other major cities,
against the Government's IMF-prescribed policy reforms. Ecuador's
Government deploys 35,000 soldiers and police to control the situation.
The protesters call for
the President's resignation, an end to the reforms urged by the IMF,
including the dollarisation of the economy, and for an end to economic
instability. Blanca Chancosa, one of the leaders, says that the President
"has not had the political will to fix the country. He does not have the
capacity. Let him step aside so that the people can designate other persons
more honest and with a will to carry out a new form of government."
22 January 2000
About 3,000 protesters occupy Ecuador's Congress building while more than
10,000 protest outside. The involvement of military guards, which allow
the protesters inside, fuels speculation
of a possible coup attempt despite reassurances from Carlos Mendoza, head of
the armed forces. Protesters also surrounded the supreme court despite police
attempts to disperse them with tear gas. In Guayaquil, Ecuador's second
largest city, demonstrations become violent, leading to several injuries.
Protesters claim that the Government's plan to scrap the national currency
and adopt the dollar will further impoverish the country. A statement from
the White House rejects "the actions of those who have occupied the
Ecuadorian National Congress and are seeking to establish an unconstitutional
regime". Other nations across the continent also condemn the actions of
protesters claiming that they are tantamount to an attempted military coup.
Mahaud flees the
Presidential Palace and the military take power. With an armed guard
of troops loyal to him, Mahaud goes into hiding after a week of demonstrations and a retraction of
Mendoza's previous statement in support of the government.
23 January 2000
Mahaud's vice-president, Gustavo Noboa, becomes the new President in a
special session of Congress in which the military junta hands back power.
However, leaders of the protest movement oppose Noboa's succession, saying he
is in the pockets of the IMF and the US. Antonio Vargas, one of the
indigenous leaders, denounces Mendoza for betraying the protesters, who want to create a new
form of government to target corruption and poverty. He also says that Noboa
has only been installed after pressure from Washington.
Noboa confirms that he
will continue
with the IMF-advised reforms and hopes to bring the country back to
stability, especially with the backing of the military. The Financial
Times suggests that Noboa will enjoy more support from Congress and from
business, especially after the "country's brief flirtation with a return
to a dictatorship after 20 years". However, the report says that unless
the new President wins the support of the protesters, who oppose the IMF
reforms, he too will face a rough ride.
March 2000
In order to qualify for an IMF loan, the Government introduces a package of
new laws to reform the labour market and the financial sector, increase
privatisation efforts, provide oil pipeline permits and, controversially,
dollarise the economy.
May 2000
The National Educators Union goes on strike for five weeks over the proposed
IMF cuts in spending and salaries. Noboa says he will take a tough stance:
"I'm willing to go all the way with this. If they want to strike for a
year, let them do it. We're not going to back down." Protests by
teachers in Quito are dispersed by riot police using tear gas.
June 2000
Noboa grants an amnesty for all civilians and military personnel who took
part in the military coup in January. He explains that the amnesty is an
effort to keep the peace in Ecuador. The Government removes fuel price
subsidies in line with their IMF agreement, resulting in the rise of petrol
prices. Noboa tries to explain to critics that "we did the best we could
for all the Ecuadorian people, and in accordance with the IMF".
15 June 2000
Ecuador's new President faces his first general strike, organised by trade
unions and church groups, against continued IMF economic reforms. Wilson
Alverez, president of the Workers United Front, a union umbrella group, says,
"We're going to take to the streets to reject the economic package,
reject the miserable increases in salaries and the hikes in fuel and
electricity costs." Among those striking are more than 30,000 doctors, who
stage a 72-hour sit-down protest, as well as teachers, oil workers, and other
public sector workers.
In Quito, protesters
who try to march on the government palace are met with tear gas and riot
police. One passer-by receives a bullet wound. In Guayaquil, a bomb explodes
outside Citibank and demonstrators are dispersed with tear gas.
On a trip to London,
Nina Pacari Vega, the Pachakutic leader (the political party set up by
indigenous groups), says that the economic reforms are unconstitutional and
have triggered sharp price increases. "Dollarisation isn't the most
viable way to bring about economic recovery."
26 June 2000
The Financial Times reports that Noboa was recently visited by Thomas
Pickering, the US state department number three, and by Cesar Gaviria, the
head of the Organisation of American States, who both call on the armed
forces to uphold the constitution, and for certain military officers to face
discipline after January's events. The report also outlines how the President
is trying to win political support for the IMF-imposed economic reforms,
promising consultation with indigenous groups and highlighting the benefits
reforms will bring to the country. But opponents of the reforms remain entrenched
and want plans for dollarisation and privatisation scrapped. Noboa sees an 8
per cent drop in the polls, with only 43 per cent of the population backing
his Government.
7 August 2000
Passage of the IMF dollarisation bill through Congress continues to provoke
controversy and results in violent exchanges and physical fighting in the
Congress chamber. The bill causes great rifts within parties and between
members of Congress.
10 August 2000
Noboa fails to gain military support to dissolve Congress and end political
wrangling about the IMF reforms. Although military leaders reject the plan to
dissolve Congress, the attempt by Noboa shows he is increasingly worried by
political and economic instability. In a separate move, however, Noboa wins
collective agreement for his cabinet's resignation.
29 August 2000
The Confederation of Indigenous Peoples (Conaie), which was instrumental in
the downfall of the last President, calls for a popular uprising against
Noboa. Condemning the IMF reforms, and saying that Ecuador will become a
colony of the US, the organisation plans a series of strikes.
9 September 2000
Ecuador formally adopts the dollar as its currency. The IMF states that
"dollarisation has proceeded rapidly and has calmed the financial
markets".
12 September 2000
Ecuador's transition to the dollar turns into chaos as, due to bad planning,
many people are left without the means to buy or sell. Although trading is
now meant to be in dollars, many small shops and stall-holders have been left
without coins to exchange. Roberto Aguirre, an economist, says that the
Government has rushed dollarisation and has not planned the switch thoroughly
enough. "There has been a lack of foresight by the Government in not
providing coins in time and in sufficient amounts."
Honduras
IMF
overview
The
IMF grants a US$21 million loan on 7 June 2000 under the PRGF. The IMF urges
the Honduras authorities "to proceed quickly with structural reforms,
especially the privatisation of telecommunications and electricity distribution
and the reform of the social security and pension system". On 10 July
2000, Honduras receives US$900 million in debt relief under the Enhanced HIPC
Initiative in "recognition by the international community of the
country's progress in implementing reforms in macroeconomic, structural and
social policies".
May - July 2000
A series of strikes hit the country, demanding an end to IMF public
service cuts. On 12 May, 8,000 hospital workers strike to demand a
pay-rise, affecting 28 hospitals and 500 clinics. Riot police are deployed in
and around public hospitals to maintain order. On 26 June, thousands of
workers take part in a national strike demanding an increase in the minimum
wage. Protesters block main roads and the state-run port company, and a
number of banana plantations are closed. On 27 July, thousands of secondary
school teachers go on strike over unpaid wages, affecting about one million
pupils. Teachers have not been paid since February.
August 2000
A 24-hour general strike on the 24 August opposes IMF backed economic reforms. The Government's
plans to privatise state-owned electricity, telecommunications and social
security sectors to comply with IMF requirements cause disruption to
education, transport and health services. Organised by the Popular Bloc, and
comprising farmers, workers and students, the protest closes universities,
affecting 60,000 students, and blocks services at hospitals and major
highways.
Kenya
IMF
overview
On the 28 July 2000, the IMF resumes lending to Kenya with a US$198 million
PRGF loan. The loan is in recognition of the Government's renewed programme
to address the causes of financial instability and low growth, namely
"stop-go macroeconomic policies [and] slow structural reform".
These policies include "macroeconomic and structural reforms civil
service reform [and] privatisation".
April-May 2000
A peaceful demonstration calling for debt relief and an end to IMF conditions
ends in violence and arrests of church leaders; 63 protesters, including 13 nuns
and 2 priests, are arrested at a debt cancellation march in Nairobi. The
march, organised by the Kenyan Debt Relief Network (KENDREN), a network of
church groups, human rights organisations and the Green Belt Movement, was
peacefully making its way to the offices of the World Bank's Representative
to present a letter to end Kenya's debt. Riot police arrive at the end of the
march and "broke up the protest with clubs and tear gas, violently
hauling marchers into a waiting vehicle". There are several injuries,
including children and an Islamic sheik (priest). Spokespersons among the
group say it is the first time the Kenyan authorities have dared to jail a
Roman Catholic priest and nuns. The protesters are eventually released on
bail and, at their court hearing on the 22 May, the charges are dropped.
Brother Andre of the
Divine Word Missionaries, one of the arrested marchers, says in a recent
letter, "The IMF and World Bank have power over the financial decisions
of poor countries. Often poor countries have totally lost their autonomy.
They are often recolonised, with the powerful countries dictating the terms."
The Stakeholders
Support Group (SSG), formed by Kenyan opposition party members, lawyers and
NGOs, protests against the IMF's resumption of lending to the Government,
saying the administration has not made the necessary reforms to stamp out
corruption. The Government claims it has made all the reforms required by the
IMF and World Bank, but the SSG wants any new aid tied to constitutional
reform. There are fears that President Daniel Arap Moi will try to hold on to
power after his term of office runs out in 2002, and the SSG accuses the
British government of pressuring the IMF to resume lending in order to keep
him in power.
August 2000
President Daniel Arap Moi complains that the conditions imposed by the IMF
and World Bank for their new aid programme to Kenya are too harsh:
"We have been paying our debts for the past nine years but have not
received anything in return. Our economic growth will definitely slow down as
a result of the conditions. These conditions are the toughest ever imposed on
Kenya."
The IMF senior advisor
for Africa, Jose Fajgenbaum, defends the terms of the loan approved by the
IMF in late July. He says, "Complaints that the loan conditions
infringed on Kenya's sovereignty were an exaggeration", adding that
"the reporting requirements attached to the aid package were normal.
They were the same as had been expected of Kenya as part of previous IMF aid
programmes."
Malawi
IMF
overview
The
IMF grants US$10.6 million credit on 25 October 1999 under ESAF. The Malawi
government is warned in the agreement that "structural reforms will be
critical in achieving success and in accelerating the mobilisation of
committed external assistance. Directors [of the IMF] urge the [Malawi]
authorities to accelerate the pace of structural reforms."
15 May 2000
Protests opposing IMF conditions end in violence. Trade unionists and
human-rights activists try to march to the New State House, where a
Consultative Group of western donor countries are meeting government
officials. The protesters, carrying placards protesting against the effects
of SAPs, are stopped by police. They are then dispersed by tear gas.
Nigeria
IMF overview
On 4 August 2000, the IMF approves a stand-by credit worth US$1,031 million
for Nigeria's 2000-01 economic programme. The IMF notes "An acceleration
of the implementation of structural reforms is urgently needed, including to
tackle serious deficiencies in the provision of power, telecommunications and
petroleum that are obstacles to growth." While stressing the need for an
adequate privatisation framework, they urge that "there should be no
delays in this urgent task". They warn that this "will require
diligence and resolute efforts by the authorities to overcome evident
weaknesses in institutional capacity".
Despite the democratic
elections in May 1999 of Nigeria's new President, Olusegen Obasanjo, the
country has continued to experience protests and riots calling for an end to
IMF-induced fuel price rises.
December 1999-January
2000
Civil society groups show dismay that their elected president is
continuing with the unpopular IMF-advised policies. Nigerian newspapers
report the "same old story", with Obasanjo planning to deregulate
the oil sector and raise petrol prices.
M Arigbede, national
co-ordinator of the Nigerian Poverty Eradication Forum, says that Obasanjo is
succumbing to IMF and World Bank pressure to implement the policy:
"Obasanjo is pretending that he is taking a decision in the interest of
the people. That is deceitful. Deregulation is going to compound the poverty
situation immensely."Adams Oshiomhole, a union leader, says, "We
are on a mission to rescue the president [who has] been hijacked by the IMF
and the World Bank. This country belongs to Nigerians."
The Nigeria Labour
Congress (NLC) takes 5,000 workers on a march to show their opposition to the
deregulation of the oil sector. They march on Aso Rock, where they are
attacked by armed police. Gani Fawehimi, a lawyer and human rights activist,
says, "It is sad and ironic that Obasanjo's regime, which was brought
into power by democratic process, is now unleashing autocratic violence on
the representatives of labour who are protesting against the plan of the
regime to increase petroleum from January 2000. The employment of force by
the Nigerian Police, which is directly under the president, against unarmed
protesters, amounted to a violation of the constitution of this country,
particularly the fundamental rights of peaceful protesters."
Previously, the
National Economic Intelligence Committee warned that deregulating the oil
sector "may compound rather than relieve the situation" and
suggested a number of measures to prevent "importers making huge profits
at the expense of the country and its ordinary citizens". These include
consultation with labour representatives and the passing of an appropriate
legislative framework to channel benefits of deregulation back into the
country. It stresses that raising the price of oil will aggravate an already
volatile situation.
June 2000
The Government continues with the IMF-advised fuel price hike, and in
response Nigeria is crippled by the most serious general strike since the end
of military rule. Oil workers are joined by public sector and transport
staff while Lagos port and highways are blockaded, and both international and
domestic flights disrupted, and all petrol stations closed. Sporadic violence
is reported across Nigeria's cities, leading to several deaths. In Abuja, two
police stations are burned down.
Kwesi Owusu, Head of
the Jubilee 2000 Africa Initiative, says, "Popular outrage alone does
not change the minds of governments under such tremendous pressure from the
IMF to implement stringent measures that are at odds with what this country
and its people desperately need." He adds that "they [the IMF] are
now hell bent on squeezing the last drop of blood out of a new democratic
government that is struggling to restore social and economic stability".
July 2000
The Nigerian House of Representatives adopts a non-binding motion urging the
federal government to suspend all activities in respect to the IMF loan. The
speaker, Umar Ghali Na'Abba, calls for a full disclosure of information about
the IMF and its relationship with Nigeria: "It is only then that we can
be properly equipped to delve into these things."
16 August 2000
Despite securing the IMF loan, the Nigerian Assembly is concerned about
further IMF-advised privatisation. The Assembly starts a
"privatisation consultation", stating that the previous
privatisation programme was inadequate due to the "absence of a complete
and properly attuned legal framework". Nze Chidi Duru, the chairman of
the House Committee on Privatisation, also observes that "the stringent
opposition to privatisation was generally from workers and the labour unions
[but] today the array of complaints has broadened to include many other
shares of opinion including estate surveyors and valuers, engineers,
shareholders and many others". In a linked venture, the Assembly
introduces a bill to repeal the previous privatisation laws and "for the
suspension of the privatisation exercise until an adequate legal framework
was provided".
James Mutethia, a
Nigerian journalist, notes that "African countries are being asked to
impose austerity measures on the populations, to sell state-owned enterprises
to foreign multinationals and give up more and more of their political
independence - those who accept the conditions are offered more loans and
shown as good examples to the rest. Those who do not are subjected to more
subtle economic pressure." The report continues, "In order to
qualify for more aid and loans, the governments in these countries have
implemented one austerity measure after another. The governments have only
refused to implement more measures when it became politically explosive with
workers organising protests and strikes. Yet the IMF has argued that they
have not done enough. The upshot of the austerity measures has been that
these governments have diverted money from development and expenditure on
social services to debt repayments."
Paraguay
IMF overview
In
last year's annual review of Paraguay's economic programme and performance,
the IMF expresses its disappointment at the Government's "lacklustre
performance" resulting from "the failure to implement needed
structural reforms". They offer the following advice: "Directors
underscored the importance of sequencing structural reforms appropriately
while proceeding with the necessary changes in the civil service and the
social security system. They also expressed concern over the high level of
the minimum wage vis-a-vis Paraguay's major trading partners, and noted that
the rigidities embodied in present labour market arrangements would become
more evident as the economy opened itself to world trade. Directors therefore
urged the authorities to proceed with the necessary labour reforms."
28 September 1999
In an address to the IMF and World Bank, Federico Antonio Zayas Chirife,
Governor of the Bank for Paraguay, states how "we [Paraguay] wish to
reaffirm here today that the Paraguayan people are committed to defending our
Republic's democracy and its institutions and are willing to undertake a
successful structural transformation of our society and national economy."
June 2000
Protesters clash with police in
demonstrations against 'non-negotiable' IMF reforms. Protesters call a 48-hour general
strike against the Government's plans to privatise its telephone, water and
railroad companies. In Asuncion, over 20 people are injured and five arrested
as riot police attack them with truncheons. In a linked protest in the east
district, 300 protesters are dispersed with water canons while two buses are
set on fire at the bus terminal. Nearly half of the capital's shops are
closed and residents are transported in military vehicles as protesters block public transport
routes. A presidential spokesperson says that the policies were
'non-negotiable' because the Government needs to meet IMF targets to access
up to $400 million in loans from the World Bank.
South Africa
IMF overview
In this year's annual review of South Africa's economic policies, the IMF
notes "the extremely high level of unemployment" and urges the
Government to accelerate "structural reforms, increase domestic
investment, attract foreign investment, and enhance efficiency". This
challenge will require "faster and deeper implementation of the reforms,
most notably in the areas of labour market reform, trade liberalisation, and
privatisation."
1 February 2000
The Congress of South African trade unions (COSATU) begins a programme of
mass actions to protest against rising unemployment and labour market reforms.
The strikes are planned to stretch over five weeks and be staggered over
different sectors, beginning with automobile, textile, metal and leather
industries and followed by the public sector. Since the end of apartheid in
1994, COSATU has helped introduce labour laws which protect the right of
workers. But recent attempts by the Government, encouraged by the IMF, to
implement wage restraint and labour flexibility - in order to attract foreign
investment - have meet widespread opposition. The unions believe that the
Government is liberalising the economy too quickly without making adequate
provision for redundancies and job maximisation.
Gerrie Bezuidenhout,
policy executive at SACOB, the South African Chamber of Business, says,
"The government is sticking to what is generally seen as sound economic
policy but the improvement in the economy has not translated into jobs."
Unemployment is estimated at 35 per cent.
Recent Government
reforms have been praised by the IMF but have put increasing pressure on the
alliance between COSATU, the ruling ANC party and the South African Communist
Party, risking its continued stability. Government plans include the amending
of labour laws, which the ruling alliance has spent the last five years
putting in place, saying they are too "worker-friendly" and
discourage investment and employment. Opposition leaders believe that
President Mbeki's hard line on leftwing labour activists, his support for
inflation targeting and his plans to accelerate the restructuring of state
assets will jeopardise "the glue that holds together the alliance of the
ANC".
16 April 2000
Protest outside the meeting of IMF and government officials. One of
the protesters, Trevor Ngwane, a city councillor from the Soweto township,
says, "Many of those debts were used to buy weapons and suppress the
people during apartheid. So we are paying twice for it - once with our lives,
and now with an inability to fund critical social services. Instead of
building health clinics the Government is selling off zoos and libraries to
stay in the good graces of the IMF."
August 2000
South Africa's Finance Minister, Trevor Manuel, says that the main challenge
for developing countries is to create an alternative model to global trade
and financial institutions such as the World Bank and IMF. Manuel is chair of
the 2000 Annual Meetings in Prague and says he will use the opportunity to
help the cause of developing countries. But he also notes that "no one
has come up with an alternative model so far", and until developing
countries suggest ways of reforming the institutions, they shouldn't
"whinge".
Zambia
IMF overview
The IMF grants a three-year ESAF loan worth US$349 million on 26 March 1999
on the condition that "the Government will increase reforms in the areas
of privatisation, public service, and monetary and banking supervision".
On 27 July 2000, the IMF approves an additional US$13.2 million PRGF loan.
The agreement affirms that "the [Zambian] authorities intend to pursue a
prudent monetary policy and to limit the credit to public enterprises [and]
complete the transition to a private-led economy, including the privatisation
of the remaining public utilities and the operations of the oil sector."
9 February 2000
Zambia's President, Frederick Chiluba, blames the IMF for the economic
problems of his country, stating that reforms which were meant to bring
prosperity to the country have only brought unemployment and a rise in
poverty levels. He says that western countries have told Zambia "to do
certain things" to help the economy, which would lead to increased
economic stability. He adds, "Then we are told, No, No, No, Africa needs
to embrace the spirit of partnership with NGOs, but where I come from, ZCTU
also wants increased wages. And then the IMF says do not give them, we do not
know which way to go. The problem we have in Africa is that we are rushing
reforms as if that is the only panacea to the problems." He says that if
reforms are rushed and not understood by the people, they may not help at all.
26 April 2000
Scores of protesters, demanding an end to IMF SAPs, are dispersed by armed
riot police in Lusaka, Zambia's capital, after trying to picket the hotel
were IMF and government officials are meeting. Organised by a leading civil
society group, Women for Change (WfC), the protesters blame the IMF and World Bank for continued poverty in
their country. "The IMF are killing us, especially women and
children," says Emily Sikazwe of WfC. In a separate report, Sikazwe
explains, "If you want to see the impact of structural adjustment on
Zambia go to the University Teaching Hospital", the capital's largest
hospital. The conditions are awful, she says, and the wards are full of BIDs
(Brought In Dead). She goes on to explain how IMF and World Bank privatisation
policies have resulted in more than 60,000 people losing their jobs and
420,000 falling into destitution. She says that "SAPs cause
poverty".
August 2000
The IMF urges Zambia to put economy ahead of politics. IMF First
Deputy Managing Director, Stanley Fischer, says that Zambia faces hard
decisions ahead of next year's elections and urges the Government not to put
politics ahead of economic sense. "I leave Zambia optimistic but
cautious. It is hard to take bold economic decisions in an election year. It
is easy to throw away what you have built in five years to achieve short-term
gain when the long run needs are very clear."
Further information
Introduction
'Unwrapping
the PRSP: can the IMF deliver its poverty reduction promises?', World
Development Movement, June 2000.
'Still Sapping the
poor: a critique of IMF poverty reduction strategies', World Development
Movement, June 2000.
Argentina
'IMF approves US$7.2
billion three-year stand-by credit for Argentina', IMF Press Release, 10
March 2000.
'Argentina memorandum
of economic policies', IMF Press Release, 14 February 2000.
'Argentina leader gets
tough on unions', Financial Times, 20 January 2000.
'Argentina's labour
reform laws passed', Financial Times, 28 April 2000.
'Urgent social demands
weigh upon new president', IPS, 17 May 2000.
'Argentine unions call
for strike to protest IMF austerity plan', AFP, 31 May 2000.
'Government adjustments
trigger massive protest', IPS, 31 May 2000.
'Argentina swept by
wave of despair over economy', Financial Times, 17 August 2000.
'Massive support for
Argentine general strike', BBC News Online, 9 June 2000.
'Argentine teachers and
scientists strike', BBC News Online, 29 August 2000.
'Landmark court ruling
condemns Argentina's illegitimate debt', Jubilee 2000, 7 August 2000.
Bolivia
'IMF approves
three-year arrangement under the ESAF for Bolivia', IMF Press Release, 18
September 1998.
'IMF approves second
annual PRGF loan for Bolivia', IMF Press Release, 7 February 2000.
'IMF and IDA support
US$1.3 billion debt service relief eligibility for Bolivia under enhanced
HIPC', IMF Press Release, 8 February 2000.
'IMF approves second
annual PRGF loan for Bolivia', IMF Press Release, 7 February 2000.
'Cochabamba - water
war', Public Services International Research Unit Reports, June 2000.
'Clashes in Bolivia',
BBC News Online, 5 February 2000.
'Scattered protests in
Bolivia', BBC News Online, 12 April 2000.
'Bolivia protests claim
further lives', BBC News Online, 10 April 2000.
'Banzar, the siege and
the market', IPS, 21 April 2000.
'Bolivian civil society
asserts demand for involvement in fight for debt cancellation and poverty
reduction', Jubilee 2000, 16 May 2000.
Brazil
'Letter of intent from
Brazil', IMF Press Release, 20 April 2000.
'IMF completes Brazil
Fifth Review', IMF Press Release, 31 May 2000.
'Brazil says: take the
creditors to court for causing the debt crisis', Jubilee 2000, 29 April 2000.
'One million vote on
debt in Brazil', Jubilee 2000, 8 September 2000.
'Brazilian campaigners
hold referendum on debt', Jubilee 2000, 1 September 2000.
Colombia
'IMF approves
three-year extended fund facility for Colombia', IMF Press Release, 20
December 1999.
'IMF completes first
Colombia review', IMF Press Release, 7 September 2000.
Costa Rica
'IMF approves stand-by
credit for Costa Rica', IMF Press Release, 29 November 1995.
'IMF concludes Article
IV consultation with Costa Rica', IMF Press Release, 26 October 1999.
'Chip shop afire in
Costa Rica', The Economist, 8 January 2000.
'Costa Rica divided as
market reforms do what wars could not,' Financial Times, 6 April 2000.
Ecuador
'IMF approves stand-by
credit for Ecuador', IMF Press Release, 19 April 2000.
'IMF completes first
Ecuador review', IMF Press Release, 28 August 2000.
'Ecuador president
imposes state of emergency', Financial Times, 7 January 2000.
'Summers promises help
for Ecuador', Financial Times, 10 January 2000.
'Ecuador Indians
planning massive protests', Financial Times, 15 January 2000
'Ecuador Congress
overrun as Indian protests mounts', Financial Times, 22 January 2000.
'Ecuador's president
flees palace amid riots', Financial Times, 22 January 2000.
'Ecuador Indians angry
at betrayal', BBC News Online, 23 January 2000.
'Ecuador leader pledges
stability', Financial Times, 25 January 2000.
'IMF loan to Ecuador',
SAP Alert, Globalisation Challenge Initiative, 20 June 2000.
'Noboa adopts tough
stance', Financial Times, 6 June 2000.
'Ecuador faces new
economic protests', BBC News Online, 15 June 2000.
'Strike against
dollarization and IMF', Weekly News Update, Nicaragua Solidarity Network New
York, 18 June 2000.
'Ecuador Indians fight
dollarisation', Financial Times, 14 June 2000.
'Noboa urges
compromise', Financial Times, 26 June 2000.
'Key Ecuador Bill under
the gun', Financial Times, 7 August 2000.
'Ecuador military
thwarts Noboa', Financial Times, 10 August 2000.
'Ecuador's Indians call
for uprising', BBC News Online, 29 August 2000.
'Ecuador switches to US
dollar', BBC New Online, 9 September 2000.
'Coin shortage as
Ecuador adopts dollar', BBC News Online, 12 September 2000.
Honduras
'IMF completes second
Honduras review and approves US$21 million loan', IMF Press Release, 7 June
2000.
'IMF and World Bank
support debt relief for Honduras', IMF Press Release, 10 July 2000.
'National Strike
protests IMF privatisation demands', AFP, 29 August 2000.
Kenya
'IMF approves poverty
reduction and growth facility loan for Kenya', IMF, 28 July 2000.
'Jubilee 2000 campaigns
protest trial of Kenyan debt campaigners', Jubilee 2000, 18 May 2000.
'Kenyan debt
demonstrators rejoice as charges for 'illegal' march are dropped', Jubilee
2000, 25 May 2000.
'Kenyans reject new
World Bank and IMF lending', News Updates, Bretton Woods Project, April 2000.
'How African politics
consumes its children', The East African (Nairobi), 30 August 2000.
'World Bank pushes
Kenya to privatise power companies', The East African, 30 August 2000.
Malawi
'IMF completes review
and approves US$10.6 million credit tranche for Malawi', IMF Press Release,
25 October 1999.
'Jubilee 2000
campaigners meet donors in Malawi as protesters face tear gas', Jubilee 2000,
26 May 2000.
Nigeria
'IMF approves stand-by
credit for Nigeria', IMF Press Release, 4 August 2000.
'A matter of time',
Newswatch Nigeria, 12 January 2000.
'IMF oil price increase
fuels protests', News Updates, Bretton Woods Project, April 2000.
'The oil price hike
blunder', Newswatch Nigeria, 22 January 2000.
'Nigeria in grip of
general strike', Financial Times, 10 June 2000.
'The People of Nigeria
resist the IMF', Stop-IMF email list, 19 June 2000.
'Nigerian parliament
rejects IMF', News Updates, Bretton Woods Project, August 2000.
'National Assembly
initiates, debates new privatisation bill', Nigeria Guardian, 16
August 2000.
'Africa and
globalisation', Nigeria Guardian, 15 August 2000.
Paraguay
'IMF concludes Article
IV consultation with Paraguay', IMF Press Release, 29 January 1999.
'Statement by the Hon
Federico Antonio Zayas Chirife, Governor of the Bank for Paraguay', Joint
Annual Discussion of the Board of Governors, 28-30 September 1999.
'Violence against
strikers protesting IMF privatisation', Stop-IMF email list, 25 June 2000.
South Africa
'IMF concludes Article
IV consultation with South Africa', IMF Press Release, 10 March 2000.
'South African unions
in unemployment protest,' Financial Times, 1 February 2000.
'Mbeki shifts the
emphasis to business', Financial Times, 1 February 2000.
'South African bitterly
criticizes IMF policies', Chicago Tribune, 14 April 2000.
'Searching for a
workable solution', IPS, 29 August 2000.
Zambia
'IMF approves ESAF loan
for Zambia', IMF Press Release, 26 March 1999.
'IMF completes first
review of Zambia under PRGF-supported programme and approves US$13.2 million
disbursement', IMF Press Release, 27 July 2000.
'IMF reforms have
brought poverty', The Post of Zambia, 9 February 2000.
'IMF faces new round of
protests', One World News Service, 26 April 2000.
'Letter from Zambia', The
Nation, 14 February 2000.
'IMF urges Zambia to
put economics before politics', Development News, World Bank, 7 August 2000.
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