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<nettime> ... next week in porto alegre
geert on Fri, 25 Jan 2002 12:16:36 +0100 (CET)

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<nettime> ... next week in porto alegre

(next week the second porte alegre meeting takes place. if there is anyone
going there, please drop a note. I heard that there will be indymedia
caravan starting from porto alegre, visiting social movements in latin
america. what else is happening? ok, attac is going and the personalities,
but how about the media activists, for instance? ciao, geert)


From: Crisinfo-admin {AT} comunica.org
Sent: January 23, 2002 2:04 PM
Subject: Seminar in Porto Alegre

At the World Social Forum in Porto Alegre, the CRIS campaign will
be launched at a seminar on the Social Appropriation and Control
of ICTs.  The seminar program is below.

World Social Forum, Porto Alegre 2002
Communication and Citizenship II:

Seminar on Civil society appropriation and control
of information and communication technology (ICTs)

Friday February 1, 2pm - 6 pm.
Place: Club de Comercio

Communication, media and information technology, are central
elements in globalisation.  They are equally central to people's
struggles for social and economic justice.  Current trends in the
information and communications industry, and in the national and
global policies that govern this industry, tend to restrict people's
rights to communicate.  At the same time, the commodification of
information content, for example, on the Internet, limits cultural and
intellectual diversity.

This seminar will outline these developments and the political
challenges in the field of communication, media and new
technologies.  It will identify civil society initiatives that are
seeking to build alternatives, and that are challenging the increasingly
powerful onslaught on people's rights to communicate, and on their
access to the potential benefits of information and communications
(ICTs). And the Campaign for Communication Rights in the Information
Society (CRIS) will be presented in the context of the upcoming World
Summit on the Information Society.

Part 1: The global scenario:

- Communication and globalization:   Sally Burch, (ALAI)
- The right to communicate and the Information Society:
Sean O'Siochru,  (CRIS)
- ICTs: access, appropriation and control: Valérie Peugeot,

Part 2:  Civil society initiatives:

Presentation of on-going initiatives such as:
Internet Rights; community radio; community networks; alternative
economic models of communication; feminist perspective;
open source soft-ware; governance and legislative issues, etc.  etc.

With a view to the repercussions of global tendencies, alternatives
and proposals they are developing; advances in terms of
appropriation and control of ICTs.

Part 3: Future Interconnections:

Presentation of the World Summit on the Information Society (WSIS) and
the CRIS Campaign.

Discussion on mechanisms and proposals for building a common global

Simultaneous translation will be provided.

Agencia Latinoamericana de Información -ALAI-
Association for Progressive Communications -APC-
Association pour la promotion de l'économie sociale et solidaire


Carrefour Mondial de l'Internet Citoyen


ATTAC Weekly newsletter - Wednesday 23/01/02

Please circulate and distribute.
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++ NEW: Debt & Development - 3


1- Porto Alegre Social Summit Sets Stage for Counteroffensive against

Fisherfolk from India, farmers from East Africa, trade unionists from
Thailand, indigenous people from Central America will be among those
making their way to Porto Alegre. But there will also be a sizable
contingent of people from the Northern countries. And the place will
be graced by personalities who have come to exemplify the diversity of
the movement against corporate-driven globalization-among others,
activist-thinker Noam Chomsky, Indian physicist-feminist Vandana
Shiva, Canadian people's advocate Maude Barlow, and Egyptian
intellectual Samir Amin.

2- Soon in New York City

Join us January 31st (Thursday) through February 1st (Friday) in NYC
for two days of workshops, infosessions, and teach-ins held in
conjunction with The Another World Is Possible Coalition, Eye on
Davos, and The National Student Mobilization.

3- Why not in the USA?

Around the world in the last few years, labor has responded to
globalization and its impact with general or mass political strikes.
In Argentina, India, Spain, South Korea, Bolivia, South Africa, and
France, labor federations have called on their members and sometimes
the entire working class to challenge privatization, austerity,
downsizing, and other symptoms of increased corporate power-by
stopping work.

4- The Mirage of Progress

The past 20 years have been an abject economic failure for most
countries, with growth plummeting. The World Bank publishes data on
the growth of income per person, as do other official sources. But few
economists and almost no journalists have seen fit to make an issue
out of what history will undoubtedly record as the most remarkable
economic failure of the twentieth century aside from the Great

5- The Road to Monterrey

Our aim with this forum is to generate new suggestions on how to
ensure that development will be better financed and that the 2015
Human Development Goals will not represent yet another series of empty
words from Western governments. We invite all those with Internet
access and an interest in these issues to join us.

6- World Bank PSD Strategy : an Overview.

Basic services are threatened - especially in low-income countries -
by the World Bank's Private Sector Development Strategy. By promoting
privatization of infrastructure and social services, imposing user
fees for health and education, and tending to favour international
"deep pockets" over domestic providers, this strategy undermines
democratic processes.

7- Meeting ATTAC worldwide.

1- Porto Alegre Social Summit Sets Stage for Counteroffensive against

By Walden Bello

Porto Alegre is not exactly a Third World city. Located in one of
Brazil's more prosperous states, Rio Grande do Sul, and populated by
people mainly of European stock, this city of 1.2 million people is
First World when it comes to infrastructure and social services. In
fact, it ranks near the very top in terms of the country's "quality of
life" index.


Yet Porto Alegre, site of the World Social Forum (WSF) last year and
again this year, has become the byword for the spirit of the
burgeoning movement against corporate-driven globalization. Galvanized
by the slogan "Another world is possible," some 70,000 people are
expected to flock to this coastal city from January 30 to February 4.
This figure is nearly six times that for last year.

Fisherfolk from India, farmers from East Africa, trade unionists from
Thailand, indigenous people from Central America will be among those
making their way to Porto Alegre. But there will also be a sizable
contingent of people from the Northern countries. And the place will
be graced by personalities who have come to exemplify the diversity of
the movement against corporate-driven globalization-among others,
activist-thinker Noam Chomsky, Indian physicist-feminist Vandana
Shiva, Canadian people's advocate Maude Barlow, and Egyptian
intellectual Samir Amin.


The World Social Forum emerged as a counterpoint to the World Economic
Forum, the annual gathering of the global corporate crowd in Davos,
Switzerland. Proposed by a coalition of Brazilian civil society
organizations and the Workers Party that controls both Porto Alegre
and the state of Rio Grande do Sul, the idea triggered strong
international support from organization such as the French monthly Le
Monde Diplomatique and Attac, an influential Europe-wide organization
supporting a tax on global financial transactions, and received
financial support from progressive donors like Novib, the Netherlands
Organization for International Development Cooperation.

Driven by this energy, the first WSF was put together in a record time
of eight months.

A televised trans-Atlantic debate between representatives of the WSF
and some luminaries attending the WEF was billed by the Financial
Times as a collision between two planets, that of the global superrich
and that of the vast marginalized masses. The most memorable moment of
that confrontation came when Hebe de Bonafini, a representative of the
Argentine human rights organization Madres de la Plaza de Mayo,
shouted at financier George Soros across the Atlantic divide: "Mr.
Soros, you are a hypocrite. How many children's deaths are you
responsible for."

Since its first meeting the stock of the WSF has risen while that of
the WEF has fallen. Already put on the defensive as a gathering to
"discuss how to maintain hegemony over the rest of us," as one of the
debaters on the WSF side put it, the WEF was asked by the Swiss
government to leave Davos on the grounds that it could no longer
guarantee the security of its corporate participants. Sealing off
Davos from demonstrators last year had already necessitated the
biggest Swiss security operation after World War II, and the
authorities anticipated a security and logistical nightmare in the
wake of the September 11 events.

As a result, the WEF is holding its sessions in New York this year,
but many observers say that Davos high up in the Swiss Alps was the
key attraction for corporate executives, and without this "ambience,"
the WEF is headed for oblivion.

The centerpiece of this year's gathering in Porto Alegre are 26
plenary sessions over four days structured around four theme: "the
production of wealth and social reproduction," "access to wealth and
sustainable development," "civil society and the public arena," and
"political power and ethics in the new society." Around this core will
unfold scores of seminars, a people's tribunal on debt sponsored by
Jubilee South, and about 5,000 workshops. Marches and demonstrations
of workers and peasants are also expected, led by the Brazilian mass
organizations CUT (Central Union of Workers) and MST (the Movement of
the Landless) that are among the key organizers of the WSF.


The anti-establishment forces gather in Porto Alegre after a
tumultuous year. Perhaps the apogee of the anti-globalization movement
came during Group of Eight Meeting in Genoa in the third week of July,
when some 300,000 people marched in the face of police tear-gas
attacks. Shortly after the Genoa clashes, in which one protester was
killed by police, there was speculation in the world press that elite
gatherings in non-authoritarian countries might no longer be possible
in the future. And indeed, Canada's offer to hold the next G-8 meeting
in a resort high up in the Canadian Rockies in the province of Alberta
seemed to confirm the fact that the global elite was on the run from
the democracy of the streets.

Then came September 11, which stopped a surging movement dead in its
tracks. The next big confrontation between the establishment and its
opponents was supposed to take place in late September in Washington,
DC, during the annual fall meetings of the World Bank and the
International Monetary Fund. Unnerved by the prospect of a week of
massive protest that was expected to draw some 50,000 people, the
Bretton Woods twins took advantage of the September 11 shock to cancel
their meeting. Without a target and sensitive to the sea change in the
national mood in the US, organizers cancelled the protest and held a
march for peace instead.

The establishment followed up on the unexpected opportunity to reverse
the crisis of legitimacy that had been wracking it prior to September
11 by pressing the developing countries to approve a declaration
launching a limited set of trade negotiations during the Fourth
Ministerial of the World Trade Organization (WTO) in Doha, Qatar, in
mid-November. Third World governments were told that unless they
agreed to talks leading to greater liberalization, they would have to
take responsibility for worsening a global recession that had been
accelerated by the World Trade Center attack.

Taking no chances, the WTO secretariat and the Qatar monarchy had
worked to limit the number of legitimate NGO's attending the meeting
to about sixty. This ensured that the massive demonstrations on the
street that characterized Seattle, which had served as a context for
the famous developing country revolt at the Sheraton Convention
Center, were not present in Doha, and under these circumstances,
developing country opposition collapsed.


Had the WSF meeting been held in late November of December, the mood
of people coming would have been different. The Bush administration
would have been riding high after its devastating triumph in
Afghanistan. However, in the last few weeks, history, cunning as
usual, has dealt Washington two massive body blows: the Enron debacle
and Argentina's economic collapse.

Enron has become the sordid symbol of the volatile mixture of
deregulation and corruption that drove the US' "New Economy" in the
1990's and helped lead it to what is possibly the worst global
recession since the 1930's.

Burdened with an unpayable $140 foreign debt, its industry in chaos,
and 2,000 of its citizens falling under the poverty line daily,
Argentina serves as a cautionary tale of the disaster that awaits
those countries that take seriously the neoliberal advice to
liberalize and globalize their economies.

As the WSF opens, these twin disasters have brought back with a
vengeance the crisis of legitimacy that the global elite and its
project of corporate-driven globalization were experiencing prior to
September 11. Porto Alegre provides the perfect site and the perfect
moment for the counter-offensive on the part of the movements that
believe that "another world is possible."

* Dr. Walden Bello is the executive director of the Bangkok-based
policy and advocacy institute Focus on the Global South and professor
of sociology and public administration at the University of the

Focus on the Global South (FOCUS)
Web Page http://www.focusweb.org

2- Soon in New York City

>From Jan. 31 to Feb. 4, the World Economic Forum (WEF) will be meeting
at the Waldorf-Astoria in Manhattan for its annual summit. Alexander
Downer, who attended the 1998 Summit, describes the Summit as the
world's 'Business Olympics'. The yearly meeting, usually held at WEF
headquarters in Davos, Switzerland, was rescheduled to meet in New
York as a token of support for the injuries our city sustained on
September 11th. In reality, this meeting and the agenda it represents
are an affront to the people of New York, who, like many others around
the world, face a period of economic uncertainty and austerity which
threatens their very livelihoods.

The WEF is, in a way, a big cocktail party for the global corporate
elite. As an organization, it has no power to actually set policy, but
it creates a space in which international "leaders" can hash out their
vision for the rest of us. In their own words, "they are fully engaged
in the process of defining and advancing the global agenda." More
specifically, it's our globe, but it's their agenda.

One way in which the WEF has advanced this agenda was by helping to
create the notorious World Trade Organization (WTO).

For the first time in many years, anti-capitalist protest has returned
to the capitalist heartland, and to the global stage. These protests
open up the ideological space for the articulation of alternative
guiding principles, putting on the agenda the possibility of
transformation away from the current pro-corporate malaise. As the
promotion of capitalist discipline is questioned, protest targeted at
the agents of neo-liberal globalization gains remarkable political
leverage. In this political climate WEF meetings start to take on a
special significance. Since 1996 the WEF has attracted increasingly
militant opposition, and it has responded by attempting to re-chart
the neo-liberal project. The WEF response is to deliberately avoid the
appearance of backroom strategizing, and instead to seek a higher
public profile, attempting to reground its legitimacy by being seen to
engage with prominent advocates of the emerging alternatives. But in
reality the WEF meetings are still overwhelmingly comprised of the
most powerful and wealthy corporations, individuals, and government
officials; in fact, mostly male and mostly representative of the
developed countries.

Below you will find links to information on how you could get involved
in the planning and carrying out of diverse, imaginative, and
impassioned actions against the WEF, including actions in the streets,
a counter-summit being held at Columbia University, and an evening
concert. The main day of action is being planned for Saturday, Feb 2.

Please join the people of New York and the world from Jan 31 to Feb 4
as we say  NO!  to corporate globalization, neo-liberalism, global
economic apartheid, militarism, and the destruction of our planet; as
we present our vision of another, more just, democratic, and
sustainable world.

Thank you.

Another World is Possible Coalition:

Stop the WEF and mobilize for global justice. Site features a
comprehensive calendar of events and information on logistics such as
housing, subway maps, and maps of the Waldorf.

Globalizing Justice: http://www.studentsforglobaljustice.org/

A Call for a WEF Counter-Summit and National Student Mobilization
>From Thursday, January 31st to Sunday, February 3rd 2002 at Columbia
University in New York City
Featuring speakers, workshops on a variety of topics, and more.
*Deadline for proposing workshops is Jan 11.
Check the site for schedules, information on housing, etc., and
subscribe to these lists for more detailed information or to help

Anti-Capitalist Convergence Against the World Economic Forum:

Join us January 31st (Thursday) through February 1st (Friday) in NYC
for two days of workshops, infosessions, and teach-ins held in
conjunction with The Another World Is Possible Coalition, Eye on
Davos, and The National Student Mobilization.
After Friday's activity has ended, a legal vigil will be held in Union
Square, followed by a spokes council, to which each affinity group is
invited to send a representative. Please send a member who is familiar
with the processes of facilitation and consensus.
February 2nd (Saturday) will be the universal day of action against
the World Economic Forum. Legal marches and rallies are being planned
by The Another World Coalition and The International ANSWER Coalition.
ACCNYC is in the process of determining its role in the street action.
More info will be available soon. Check back for scenario updates:

Start spreading the word! Flyers and Agitprop will be soon available
here: www.accnyc.org/outreachIndex.html

*NOTE: for those of you who will be in town:

19  {AT}  2pm Chashama Theatre - 129 W 42nd St (Between Bdway & 6th in
Times Sq)

The NYC Anti-Capitalist Convergence calls on all anarchists and
anti-authoritarians to join us for a regional organizational meeting
in preparation for the mass mobilization against the WEF, January 31
to February 4.

For more information contact - David Graeber drg9 {AT} drg9.mail.yale.edu

Note - Space on Times Square has been provided for this meeting by The
Intergalactic Anarchist Convention - Jan 17 to Jan 20:
<http://www.igac.infoliberationfront.org/> Proceeds benefit May Day
Books and WEF actions-related legal funds.

Check www.nyc.indymedia.org for coverage of the events.

Other relevant links:
http://www.otherdavos.net/ http://www.davos2001.ch/

3- Why Not in the U.S.A.?

Around the World, Mass Political Strikes Challenge the Effects of
Globalization. Why Not in the U.S.A.?

by Kim Moody

Around the world in the last few years, labor has responded to
globalization and its impact with general or mass political strikes.
In Argentina, India, Spain, South Korea, Bolivia, South Africa, and
France, labor federations have called on their members and sometimes
the entire working class to challenge privatization, austerity,
downsizing, and other symptoms of increased corporate power-by
stopping work.

Not too long ago, the Ontario Federation of Labour organized one-day
general strikes in cities across that province called the Days of
Action. In 1998, Puerto Rico's labor movement, including most of its
AFL-CIO unions, struck in opposition to the sale of the public
telephone company.

With the Free Trade Area of the Americas coming down the Fast Track,
why not a general strike throughout the hemisphere, including across
the whole U.S.?

It's a novel idea for a labor movement that, especially since the
1940s, has been focussed on industry-by-industry or company-by-company
bargaining. Since the go-it-alone strategy is not working in an era of
globalization, some changes may be in order.


It has to be admitted that in the United States, general strikes are
as rare as a generous employer. One reason for this is simply that the
business unionists who head up most of our unions are not for it. Back
in the mid-1970s then-AFL-CIO President George Meany said, "We believe
in the American system. We don't take to the streets and we don't call
general strikes and we don't call political strikes."

In one respect Meany was wrong. "We" certainly do take to the streets,
and it hasn't just been in the 1930s or the 1960s. Check out the
streets around Pittston's western Virginia coal mines in 1989, or the
highways hit by "road warriors" from Hormel in the mid-1980s or Staley
in the mid-1990s. What about the Latino drywallers in Los Angeles a
decade ago or the construction workers in New York City a couple of
years ago? And then there were the thousands who marched last June in
Columbia, South Carolina in support of the Charleston 5, members of
the ILA threatened with felony charges for trying to stop scabs.

And does Seattle ring a bell?

Meany was wrong. American workers hit the streets with regularity. But
they don't stop work and hit the streets all at once, together, for a
common goal. In large part this is due to the weak class consciousness
of most American workers that is both a cause and consequence of
business unionism. Over the years, it has been further undermined by a
prosperous past, racial divisions, and an approach to politics and
social programs unique to unions in the United States.

Most accounts of the tightening grip of business unionism after World
War II include the, by then, universal presence of no-strike clauses
in union contracts; the purge of leftists from the CIO; the growing
dependence on the Democratic Party; McCarthyism; increased
bureaucracy; and, of course, the Taft-Hartley Act. All of these played
a role in the triumph of the narrow ideology and practice of business
unionism. But it is important to understand what they did and didn't

All of these events and trends weakened organized labor in important
ways. They wrecked the plan to organize the South, leaving that region
a haven for runaway shops to this day. Bargaining in the electrical
industry was fragmented and seriously undermined by the attacks on the
United Electrical Workers after it was forced out of the CIO.

Most unions, however, emerged from the 1940s larger and
institutionally stronger. Many grew from the 1950s through the 1970s,
although private sector unionism slipped for a time. There were more
strikes in the 1950s than in the 1930s, and many of the big gains in
collective bargaining came in that decade. Real wages, adjusted for
inflation, grew by 250 percent from 1945 to 1975. In most respects,
the unions of the 1950s were stronger than they had ever been and much
more powerful than they would become.


What the very success of the path chosen in the 1940s did do, however,
was to undermine the notion of the labor movement as the
representative of a class and to narrow the vision of most unions.

Frustrated in the late 1940s by a Republican Congress and a rightward
moving Democratic Party, leaders of the individual unions turned
toward a trend begun by the Mine Workers in 1946 when John L. Lewis
negotiated an employer-paid health and welfare fund. "If we cannot
bring this protection to our members by national legislation," said
Textile Workers President William Pollock, "we should insist that this
become part of our contracts."
This trend toward winning social gains union-by-union,
industry-by-industry instead of class-wide was given a boost by the
Taft-Hartley Act, which in an attempt to control union-run plans
actually encouraged them.

It meant, of course, that programs such as improved pensions and
national health care that had been seen by millions as benefiting the
entire working class and others as well, now only came to those whose
union was strong enough to win them from reluctant employers. Whereas
in 1946 the major industrial unions had bargained at the same time for
the same demand and many had struck together, henceforth each union
sought its own way, and fought only for its own members.

Whether they administered industry-wide union-run plans like the Mine
Workers or Teamsters or the company-based health and pension plans
like those in auto, steel, and electrical, top union leaders now stood
over highly complex "private welfare states" that encouraged more
bureaucracy and a greater focus on a particular company's well-being.
It was the companies, after all, not the government or the public as a
whole, which appeared to "pay the bills" for health care and pensions.

Thus, the leaders' and staffers' concern for company profits, already
there for many, was reinforced and deepened. This meant the continual
surrender of workplace organization and power to management in return
for expensive benefits-presumably paid for by the productivity
squeezed out of the members. It meant the abandonment of
cross-industry pattern bargaining and eventually the unraveling of
even single-industry patterns, as union leaders focused on the
 "health" of the big companies that provided the benefits.

Above all, it meant a growing identification with the company, not
only among the leaders, but in the ranks as well. This didn't mean
that workers didn't hate management and resent the indignity and
physical pressure of the demands of production. But the realization
that your pension and health benefits derived from the company-even if
won through struggle by the union-could not help but affect your


The aggressive speed-up and productivity drives of the late 1950s
through the 1960s provoked an upsurge in rank and file militancy,
expressed through wildcat strikes and the formation of reform
movements among coal miners, airline mechanics, auto, steel, postal,
public sector, and trucking workers. Yet the movements and
organizations they created never came together or had much contact
with one another. For all their daring and militancy, these grassroots
workers' movements of the 1960s and 1970s reflected the fragmentation
underwritten by the "private welfare state" that brought both a
measure of prosperity to many and speed-up to millions.

By the early 1980s, the corporate assault on the workplace was joined
by company efforts to cut costs across the board. Now, the wages and
benefits employers had ceded in more profitable times came under
attack along with working conditions. The room for trade-offs shrank
year by year.

For most top union leaders this produced accelerated concern with
company well-being. Labor-management cooperation, jointness, and
partnerships became the alleged salvation of company and union alike.
It might cost jobs as downsizing proceeded, but the goose that laid
the golden egg would be saved-even if the eggs going to the workers
became more scarce.

Even in its own terms this "strategy" has failed. It has not stopped
the erosion of benefits or the loss of jobs. The go-along, go-it-alone
route can't work for workers in a world of global corporations.

Perhaps ironically, the corporate post-September 11 rush to war
profiteering and government hand-outs has made the question of class
all too real for millions, who are being forced to sacrifice jobs or
income in the face of war and recession.

In this context, the fight against the Free Trade Area of the Americas
offers an opportunity to pull organized labor and its allies back
together again. It holds out a chance to retrain our movement in the
idea that an injury to one is an injury to all.

A mass political strike in America? Think about it.

A Striking History

Though rare, mass political strikes have not been completely absent in
American labor history. During the Civil War, as the Confederate army
retreated or disintegrated across much of the South, hundreds of
thousands of slaves walked off the plantations in what W.E. B. DuBois
called the general strike that crippled the Southern economy. There
were no unions and no central coordination, but there was a common

On May 1, 1886 a general strike for the eight-hour day brought much of
industry and commerce to a halt in many cities. It was called not by
the more visionary Knights of Labor but by the predecessor of the AFL.
Some of the very founders of business unionism had called America's
workers into the streets for a common objective.

In 1919, Seattle was shaken by a general strike. The unions-the AFL
and IWW together-ran the city and the local economy for a while. There
were general strikes in San Francisco and Terre Haute, Indiana in
1934. In the same year, the threat of general strikes helped bring
union victories in Minneapolis, Toledo, Milwaukee, and Pekin,

When World War II ended, employers moved to test the new balance of
power. This brought not only the giant industrial strike waves of 1945
and 1946, but a series of local general strikes in 1946. Near total
work stoppages occurred in Oakland, California; Stamford, Connecticut;
Lancaster and Pittsburgh, Pennsylvania; Rochester, New York; and
Houston, Texas. These began as sympathy strikes in support of a
particular group of workers, but turned into political, class

By the end of the 1940s, general strikes had disappeared as anything
more than a dream in the minds of union militants. The CIO leadership
rejected proposals for a general strike in opposition to the
Taft-Hartley Act of 1947-although half a million UAW members did stop
work for five hours.

The Act itself outlawed the sort of sympathy strikes that had sparked
the local general strikes of 1946. The idea of the general strike was
among the casualties as modern business unionism solidified in the
late 1940s.

The Failure of Labor's Democratic Dependency

American labor's dependence on the Democratic Party headed off the
development of the labor-based parties that were typical of most other
industrial nations of the time. While the union preference for
Democrats goes way back, dependence was solidified in 1943 with the
formation of the CIO's Political Action Committee and the explicit
rejection of independent political action. This meant that the CIO's
ambitious political program-including national health care, housing
for all, full employment, civil rights, and more-became dependent on
the goodwill of the Democrats. This will rapidly proved ill indeed.

The CIO's political strategy was a compete failure. The labor vote
collapsed between 1948, when union members voted 81 percent for
Truman, and 1952, when only 57 percent of union members voted
Democratic. From then on, this percentage would rise to the levels of
the 1940s in only one year, 1964, when Barry Goldwater ran the first
truly right-wing Republican campaign.

Dependence on the Democratic Party left the unions with no independent
means of pursuing their political agenda.

Kim Moody
Published in collaboration with Labor Notes. 'Labor Notes' is a
monthly magazine based in Detroit, USA. We are committed to reforming
and revitalizing the labor movement. We report news about the labor
movement that you won't find anywhere else. News about grassroots
labor activity, innovative organizing tactics, international labor
struggles, immigrant workers, and problems that some union leaders
would rather keep quiet. Subscribe and receive a copy of 'Labor Notes'
in your mailbox! Subscription information can be found at our website
at www.labornotes.org

4- The Mirage of Progress

by Mark Weisbrot

Everyone knows that the past 20 years have been an era of rapid
overall economic progress for the vast majority of countries,
especially in the developing world. Tariffs have collapsed and
countries have flung open their borders to international trade and
investment. Technology has progressed as never before, we are told,
with revolutions in such cutting-edge industries as communications,
computers, and the Internet spawning and spreading productivity
miracles around the globe. Of course, there are problems: a widening
gap between rich and poor nations; environmental destruction; and, in
some countries and regions, the poor being left behind. But the engine
of growth has roared ahead. So if we can fix some of the problems,
then growth--and the policies that produced it--will allow future
generations to enjoy a better life. Right?

Actually, it's quite clear that the opposite is true. The past 20
years have been an abject economic failure for most countries, with
growth plummeting. The World Bank publishes data on the growth of
income per person, as do other official sources. But few economists
and almost no journalists have seen fit to make an issue out of what
history will undoubtedly record as the most remarkable economic
failure of the twentieth century aside from the Great Depression.

Consider this: In Latin America and the Caribbean, where gross
domestic product grew by 75 percent per person from 1960 to 1980, it
grew by only 7 percent per person from 1980 to 2000. The collapse of
the African economies is more well known, although still ignored: GDP
in sub-Saharan Africa grew by about 34 percent per person from 1960 to
1980; in the past two decades, per capita income actually fell by
about 15 percent. Even if we include the fast-growing economies of
East Asia and South Asia, the past two decades fare miserably. For the
entire set of low- and middle-income countries, per capita GDP growth
was less than half of its average for the previous 20 years. Also, as
might be expected in a time of bad economic performance, the past two
decades have brought significantly reduced progress according to such
major social indicators as life expectancy, infant and child
mortality, literacy, and education--again, for the vast majority of
low- and middle-income countries.

There is no disputing this data; nor can anyone take issue with the
time periods chosen for comparison. This is not a cyclical phenomenon:
Both of these periods contain a world recession, and the 1970s had
major oil shocks. In fact, if full data were available for the 1950s,
the past 20 years would look even worse.

Yes, growth isn't everything, but it's all that the authorities who
have directed policy for most of the developing world--the
International Monetary Fund, the World Bank, the U.S. Treasury
Department--have promised to deliver. If the basic facts were better
known, one big economic question would occupy center stage with regard
to the developing world: What are the structural and policy changes
that have led to this terrible economic failure?

What Went Wrong?

It is, of course, difficult to isolate the causes of a long-term,
worldwide economic decline that involves so many economies in very
different stages of development. But there is a pattern to the
policies that have emanated from Washington, D.C., during the past 20
years; and a few examples can illustrate a big part of the story.

The Asian financial crisis of 1997 was brought on by an opening of
capital markets that led to a rapid inflow of foreign funds. This was
forcefully promoted by the U.S. Treasury Department, despite the fact
that the affected countries had high domestic savings rates and did
not necessarily need to increase their foreign borrowing. As Nobel
laureate Joseph Stiglitz--the World Bank's chief economist at the
time--has pointed out, the architects of this policy did not have a
single study showing that opening up capital markets led to higher
growth. In this case, the policy had the opposite effect: In 1996 and
1997, there was a reversal of capital flow that amounted to about 11
percent of the GDP of South Korea, Indonesia, Malaysia, the
Philippines, and Thailand. The outflow of funds crashed the local
currencies and set off a financial panic.

Washington intervened in several ways that helped transform the crisis
into a serious regional economic downturn. First, Treasury convinced
Japan to abandon a proposed Asian monetary fund, that would have
provided at least $100 billion to stabilize the currencies before they
went into free fall. Second, the IMF imposed unnecessary fiscal and
monetary austerity on the crisis-ridden economies, with interest rates
as high as 80 percent in Indonesia. There were other major blunders as
well, and the result was disastrous: In 1998 Indonesia's economy
shrank by 13.7 percent and Thailand's by 10 percent.

The Asian crisis spread first to Russia and then to Brazil. This
illustrates another debilitating effect of the period's reckless
liberalization of investment: "Contagion" could now spread panic among
countries that had only the slightest of commercial relationships with
one another. The herd behavior of investors who sought to avoid the
next emerging-market meltdown was the only connection needed.

Once again, the IMF's intervention exacerbated the damage. In both
Russia and Brazil, the organization insisted on maintaining overvalued
exchange rates, propping them up with enormous loans ($42 billion in
Brazil) and high interest rates (up to 170 percent in Russia). In both
cases, the currencies collapsed anyway; the countries had suffered
lost output and high-debt burdens in exchange for no economic gain.
The IMF's only proffered argument for maintaining the overvalued
exchange rates was that a collapse would trigger hyperinflation. But
the hyperinflation never occurred; and both economies responded very
positively to the currency devaluations, with Russia recording its
highest growth in two decades (8.3 percent) in 2000.

This scenario has been repeated most recently in Argentina, where the
government is currently defaulting on the mountain of debt it has
accumulated in maintaining its fixed exchange rate through four years
of recession, a tripling of interest rates, and a phenomenal
$40-billion loan package from the IMF last December. To grasp the
absurdity of the situation that Argentina was drawn into, imagine the
U.S. government borrowing $1.4 trillion--70 percent of the federal
budget--to keep the overvalued dollar from falling.

The transition economies are a special case, but they illustrate the
monumental damage that can be done when America's best and brightest
are given free rein to design a new society. Russia lost about half of
its national income in just a few years after adopting the recommended
"shock therapy" program in 1992. Although the IMF has tried to deny
it, Russia really did follow its program, including immediate
decontrol of prices (which resulted in 520 percent inflation within
three months) and rapid privatization of industry. The government even
met most of the IMF's fiscal and monetary targets, at least until the
economy had collapsed to the point where barter became the preferred
medium of exchange. The result was a newly underdeveloped country with
a per capita income that was less than Mexico's; outside of wars or
natural disasters, it was the worst economic collapse in history.

Other structural and policy changes also slowed growth in low- and
middle-income countries during this period. Tight monetary policies
(high interest rates) were part of a general trend in IMF lending
requirements throughout the developing world. This trend was evident
in high-income areas as well, including the United States and Europe
(where it prevails today), and the resulting slower growth also hurt
developing countries through reduced demand for their exports. In
addition, monetary reserves held by developing countries grew
markedly, probably as a result of more financial instability and
globalization. In terms of forgone investment, the cost of holding the
se reserves is significant--probably between 0.4 and 2 percentage
points of annual growth, depending on the country's accumulation.

The West's Double Standards

The failed policies of the past two decades are often described as a
product of extreme free-market or free-trade ideology. But this is not
accurate. For example, in the countries that sacrificed the economy in
order to maintain a fixed exchange rate--Russia, Brazil, and
Argentina--the free-market solution would have been to abandon the peg
and let the currency fall. In the Asian crisis, one of the few things
that Washington actually did accomplish was to get the governments of
the region to guarantee the privately held debt of foreign lenders,
rather than letting the banks be subjected to the discipline of the

The more consistent pattern is that the national interests of the
developing and transition countries have been increasingly sacrificed
for the sake of more-powerful foreign interests. This is perhaps most
obvious in the case of intellectual-property rights. The global South
already loses some tens of billions of dollars annually to these
foreign monopolies--a drain of resources that will multiply if the
rich countries succeed in implementing the World Trade Organization's
TRIPS (Trade-Related Aspects of Intellectual Property Rights)
agreement. (To put this in perspective: Total Official Development
Assistance from high-income countries to developing ones was $40.7
billion in 1999.)

Patent monopolies are the most costly, inefficient, and--in the case
of essential medicines--life-threatening form of protectionism that
exists today. From an economic point of view, they create the same
kinds of distortions as tariffs, only many times greater. Yet the
attempt to extend U.S. patent and copyright law to developing
countries has become one of the primary objectives of America's
foreign commercial policy.

The expansion of foreign intellectual-property claims not only drains
scarce resources from developing countries but also makes it difficult
for them to follow the more successful examples of late
industrialization, such as South Korea or Taiwan, where diffusion of
foreign technology played an important role. This is part of a more
general problem that is reflected in the economic failure of the past
20 years. There have historically been many paths to development, but
none resembles the collection of policies that Washington foists upon
developing countries today.

The late-industrializing countries used various combinations of
industrial policy and planning, state-owned industries, extensive
controls on subsidies and exchange rates, tariffs, and import
restrictions to reach the point at which their industries and firms
could become internationally competitive. In many respects, these
strategies were similar to those of the high-income countries that
came before them. The United States had a hefty average tariff of 44
percent on manufactured goods as late as 1913.

But the rich countries are now "kicking away the ladder," as economist
Ha-Joon Chang describes it in his forthcoming book by that title. It
is difficult to say how much of the growth slowdown has resulted from
the prohibition of potentially successful development strategies and
their replacement by a rigid adherence to the theory of comparative
advantage. Trade liberalization has historically followed development,
as national economies became competitive on world markets. It would
not be surprising if attempts to reverse this pattern proved to be

In response to such criticisms, the World Bank has produced a series
of papers and arguments purporting to show that the countries that
"globalized" the most during the past two decades were the most
successful. Yet this research proves nothing of the sort, as Harvard
University's Dani Rodrik has demonstrated. It takes the trade share of
GDP as its measure of globalization. But trade share is an outcome,
not a policy variable; it tends to increase with growth. So all that
the World Bank has really shown is that faster-growing countries tend
to increase the proportion of their economy devoted to trade.

Indeed, the World Bank's favorite "globalizers" seem to be three
countries whose growth has accelerated over the past 20 years: China,
India, and Vietnam. But China and India have two of the most protected
domestic markets in the world. China does not even have a convertible
currency, and India retains strict capital controls. So does Vietnam,
where the majority of investment in recent years has been undertaken
by the state.

The successful globalizers, then, are the exceptions that prove the
rule. And if there is any rule that can be gleaned from successful
development experiences, it is that the conditions under which
international trade and investment can contribute to growth and
development are country-specific. Even some of the most basic
questions of international finance, such as whether to have a fixed or
flexible exchange rate, depend on specific national institutions. All
the more reason to let national governments make their own economic

But that is exactly the point that Washington's army of economists and
bureaucrats will not concede. And they have a powerful creditors'
cartel, headed by the IMF, that is able to determine policy for dozens
of borrowing countries. A government that does not comply with the
IMF's conditions will often not be eligible for private credit or, in
most cases, for credit from the World Bank, other multilateral lenders
such as the Inter-American Development Bank, or Group of Seven

Until this cartel is broken--or its policies drastically changed--only
countries whose governments are strong enough to stand up to it will
have a reasonable chance of reversing the economic failure of the
twentieth century's last two decades.

Mark Weisbrot is co-director of the Center for Economic and Policy
Research. Published in collaboration with CEPR www.cepr.net

5- The Road to Monterrey

OneWorld www.oneworld.net, in partnership with Eurodad
www.eurodad.org, has launched an online discussion at
www.debtchannel.org, to help move international policy-makers 'beyond
rhetoric' and towards action at the UN International Conference on
Financing for Development taking place in Monterrey, Mexico at the end
of March.

'The Road to Monterrey' OneWorld DebtChannel.org Discussion Forum will
run from 21 January - 29 March and can be accessed at

Jonathan Wolsey, Eurodad forum moderator says: "Our aim with this
forum is to generate new suggestions on how to ensure that development
will be better financed and that the 2015 Human Development Goals will
not represent yet another series of empty words from Western
governments. We invite all those with Internet access and an interest
in these issues to join us."

The UN International Conference on Financing Development comes as
calls continue to grow for reform to the international financial
architecture and greater participation in international economic
decision-making by developing countries. The OneWorld DebtChannel.org
Discussion Forum will explore these and other Summit themes such as
debt relief, official development assistance, investment flows and
controls, and the Financing for Development process so far. The online
discussion will conclude with responses to the news and decisions in

Kofi Annan, United Nations Secretary-General, has said of the
Financing for Development agenda (May 2001): "Unless we succeed in
mobilizing far greater amounts of resources - both public and
market-led investment - our plans to eradicate poverty and to
accelerate development will be thwarted."

The 'The Road to Monterrey' OneWorld DebtChannel.org Discussion Forum
follows 'From Genoa to the World Bank/IMF Autumn Meetings', a highly
successful online event on debt reduction last year.

For more information contact:

Henk Campher, OneWorld DebtChannel.org editor, t: +27 21 8867208 e:
mailto:henk.campher {AT} oneworld.net

Jonathan Wolsey, Eurodad forum moderator, t: +32 2 543 9060 e:
mailto:jwolsey {AT} eurodad.org


1. OneWorld is a non-profit network that aims to harness the
democratic potential of the Internet to promote sustainable
development and human rights. Its website www.oneworld.net is the
world's leading portal on global issues and a gateway to over 1000
partner NGOs worldwide.

2. Eurodad is a network of non-governmental organisations (NGOs) in 16
European countries. It aims to coordinate the activities of NGOs
working on the issues of Third World debt, structural adjustment, and
financial markets in order to ensure that their views be brought to
bear on decision-makers in Europe, the Bretton Woods Institutions and
other relevant players.

3. The UN International Conference on Financing Development
http://www.un.org/esa/ffd/ (18-22 March Monterrey, Mexico) is the
first time the United Nations will convene for a Summit-level meeting
to address key financial and related issues pertaining to global

6- World Bank PSD Strategy : an Overview.

By S Dossani

The World Bank's Private Sector Development (PSD) Strategy would
expand four types of operations financed by the World Bank Group:
structural adjustment, privatization of infrastructure and services,
social funds,and microfinance.

Two arms of the World Bank Group would partner to privatize
infrastructure and service provision, especially in low-income
countries: the World Bank's private sector affiliate, the
International Finance Corporation (IFC) and the World Bank's soft loan
arm, the International Development Association (IDA). The IFC will
increasingly take the lead in expanding private provision of services,
while IDA will work with governments to design subsidy and other
schemes to offset the costs of private provision to low-income

In the past several months, the Bank's Board of Executive Directors
considered, debated, and rejected successive drafts of the PSD
Strategy. Some officials said that they had never seen the U.S. -- the
main proponent of the Strategy -- in such an isolated position. The
Board has postponed decisions on the PSD Strategy for several weeks.
(In a related decision, the IDA Deputies also postponed action on a
U.S. proposal to convert half of IDA's resources from loans to

The three prongs of the PSD Strategy would:

A. Launch a new and expanded generation of structural adjustment
programs (SAPs) with policy conditions intended to induce borrowers to
adopt "minimum investment standards." The launch of this investment
initiative comes just after the announcement by the World Trade
Organization in November of a new round of negotiations on investment
rules (which will revive the Multilateral Agreement on Investment).
Bank promotion of output-based aid (see "B," below) depends, among
other things, upon easier private sector entry into markets of
low-income countries.

B. Accelerate the privatization of infrastructure and basic services
(e.g., health, education, water) on a commercial basis- that is, with
cost-covering user fees. The International Finance Corporation (IFC)
would help spearhead this process by, among other things, urging
governments to employ more output-based aid (OBA) schemes. OBA schemes
delegate basic service provision to private firms (and NGOs) under
contracts that tie provision of financial support to the outputs or
services delivered. These schemes can be risky, especially in poorly
regulated environments.

Also, because OBA schemes provide back-loaded finance, they often
favor international actors with "deep pockets" rather than domestic

The U.S. is pressuring the shareholders of the World Bank to convert
IDA resources from loans to grants so that, among other things, grant
financing can subsidize private provision of services, including OBA

C. Launch more aggressive efforts to expand the reach of markets by
supporting small and medium-sized enterprises, mainly through expanded
business development services and microfinance schemes.

The Bank plans to revise its operational policies to ensure that
finance is provided on unsubsidized terms. Some loan operations
contain microfinance schemes to enable low-income consumers to borrow
at market rates in order to purchase basic services, such as water.

II. Key Messages

1. Undermining Democratic Processes. The World Bank and other
creditors and donors should not use pressure tactics to induce
recipient governments to privatise basic services. Examples of
pressure tactics include: failing to involve the public and affected
unions in privatization decisions, failing to publicly disclose
information about privatization plans; withholding aid until recipient
governments agree to privatize; running "public information" campaigns
to persuade publics to privatize; and supporting biased cost-benefit
analyses of policy options. Important political decisions about modes
of service delivery should be made by domestic groups, including poor
and vulnerable groups, without outside interference.

2. Privatizing Social Services. The World Bank Group poses as a
"knowledge bank," but the PSD Strategy states that there has been no
evaluation of operations that privatize social services. Yet, new
loans show expanded support for such privatization!

3. Imposing User Fees. People may be deprived of basic services
because (a) exemptions and subsidizes for private primary education
and basic health care may fail to reach the people who need them; (b)
low-income groups may not be able to afford fees, especially for
non-compulsory levels of education and secondary/tertiary health care;
and (c) the PSD Strategy practically overlooks the necessity for
regulation of social sectors.

4. Privatizing into Poorly Regulated Environments. The World Bank
Group is "harmonizing" regulatory standards with those of other
development institutions. In this process, World Bank safeguard (and
other) policies are being weakened with adverse implications for poor
and vulnerable groups and the environment. (Ultimately, this process
may be guided by the WTO's ambiguous emphasis on "least burdensome"

5. Sidelining Domestic Actors. Output-based aid (OBA) schemes
compensate service providers AFTER services have been delivered.
Back-loaded finance will favor international actors with "deep
pockets" over domestic service providers. Domestic actors should not
be sidelined, especially in service sectors.

6. Providing Grants rather than Loans. The Bank has not disclosed the
uses to which grants might be put and, in particular, whether grants
would subsidize OBA schemes. Many groups feel that grants are
inappropriate in certain circumstances. [For instance, according to
Bank publications ("Note on IDA13 and PSD," November 2001), the Bank
envisions subsidizing corporations that have not recouped costs
through tariffs.]

6. Increasing Fiscal Burdens. The PSD Strategy overlooks off-budget
fiscal risks implicit in privatization schemes (e.g., the failed Enron
project in Maharastra). Acknowledgement of risks would undermine
claims that the PSD Strategy would shift performance risk to private
actors and Northern taxpayers

8. Deepening World Bank - WTO Collaboration. The World Bank Group has
not disclosed the ways in which the PSD Strategy will pave the way for
the new WTO agreements on investment and services, which are currently
in the works.

9. Expanding Ineffective Operations. The World Bank's own evaluators
have demonstrated the ineffectiveness of PSD operations in low-income
countries. The Bank should not expand ineffective operations.

For further information, see "News & Notices for IMF and World Bank


7- Meeting ATTAC worldwide.

If you are interested in one of these rendezvous please click on
http://attac.org/rdv/ Then select the country in which it will take
place to find further information.









This weekly newsletter was put together by the « Sand in the Wheels »
team of volunteers. <newsletter {AT} attac.org> <http://attac.org>

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