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Responding to Brown’s Crisis Plan: new world order must be pro poor not pro bank
16 October 2008
Last night, Gordon Brown set out proposals to fix the broken global economy, including fundamental reform of the IMF and World Bank. Analysis of the operations of the World Bank and the IMF leaves the World Development Movement sceptical that reform of these powerful institutions is possible.
Benedict Southworth, director of the World Development Movement said:
“Gordon Brown is absolutely right, the IMF and World Bank do need fundamental reform. If they resist, they should be scrapped. These institutions are undemocratic, unaccountable and are getting it wrong for developing countries. If Brown’s plan is to succeed he must challenge the fundamental economic ideology and build the system again from the basis of pro poor, pro environment and not pro bank approaches.
“Brown has got it wrong when he says that we need to resurrect the Doha round at the World Trade Organisation from the dead. When the round stalled earlier this year, the deal on the table was bad for the world’s poor. We shouldn’t resurrect a proposal that is steeped in the ideology that has caused the current crisis.”
The World Development Movement is calling for a concerted response to the current economic and environment crises we face including:
1. Steer globalisation on course for a low-carbon future.
2. Get capital to serve the needs of society and the environment
3. Ensure democratic and accountable global financial institutions
4. Bring the food system in line with new energy and climate realities 5. Develop trade deals based on cooperation rather than exploitation
ENDS
For more information, please call
Kate Blagojevic
Press officer, World Development Movement
0207 820 4900/4913, 07711 875 345, Email:
Notes to editors
1 World Development Movement has a long track record of analysing the World Bank – see
http://www.wdm.org.uk/resources/reports/debt/outoftime14092006.pdf
http://www.wdm.org.uk/resources/briefings/debt/keptindarkbriefing01042005.pdf
More detailed article is available on request.
• Steer globalisation on course for a low-carbon future. Proposals to de-link economic development from increased greenhouse gas emissions have been set out under an approach dubbed the ‘Green New Deal’. The idea evokes Franklin Roosevelt’s policies for helping out-of-work families following the Great Depression, overlaid with green initiatives, such as massive investment in renewable energies, and establishing an oil legacy fund (paid for by a windfall tax on oil and gas companies) to help pay for the transition to a low-carbon economy.
• Get capital to serve the needs of society and the environment The quasi-nationalisation of the banking sector creates an opportunity – indeed an imperative – for governments to ensure that these institution serve a wider public interest and environmental sustainability agenda. Another pillar of the Green New Deal is to reign in corporate finance via a clamp down on corporate tax havens and financial reporting, re-regulating domestic financial markets, and requiring banks to make cheap credit available for green energy projects.
• Ensure democratic and accountable global financial institutions The ‘police’ of the global financial system, in particular the International Monetary Fund (IMF), have failed, to the point of complicity, in the current crisis. Pushing poor countries to deregulate their financial markets, the IMF has colluded with the world's big banks to foster a spirit of gung-ho, i.e., risk-free financing, that has destabilised banks and entire nations. The IMF and World Bank must now be restructured to be democratically accountable bodies with independent financing and voting systems free from political bullying and corporate bias.
• Bring the food system in line with new energy and climate realities Effectively run as a cartel by a handful of giant corporations, food production and trade has become a speculative activity in the global casino economy, where the losers are millions of hungry people around the world. The future of global food security depends on taking control of land and food production from corporations back to smallholder farmers. Methods of agricultural production must minimise use of oil, conserve soil and water, be climate resilient, and be predicated on a closer and more equitable relationship between producers and consumers.
• Develop trade deals based on cooperation rather than exploitation The European Union is aggressively pushing a series of trade deals which will oblige poor countries to open their financial markets to the very same baking institutions that have wantonly abused deregulated markets here at home. These proposals need to be torn up immediately and replaced with trade deals based on mutual cooperation instead of corporate exploitation, and which allow poor countries the flexibility to protect and nurture sensitive and emerging sectors of their economy.
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