Prague dissent

In Prague, finance ministers made their most emphatic noises yet of sympathy with the protesters' core concerns. "I am aware of the critical debate about globalization, and many questions raised have to be of concern to all of us," said Hoerst Kohler, the IMF's new managing director. James Wolfenson, president of the World Bank, said he believes that many protesters "are asking legitimate questions." Czech President Havel, also meeting co-chairman, went so far as to convene a debate on the global economy between environmental/human rights organizations and world financial leaders such as George Soros.

Yet if the persistence of protest in the past year has moved the IMF and World Bank toward recognizing the economic inequality fostered by corporate globalization, officials still seem bewildered at the roots of what is clearly transnational discontent with the status quo. "If the IMF did not exist already, this would be the time to invent it," Kohler said. "I understand what [protesters] are against, but I am not sure what they are for," said meeting co-chairman Trevor Manuel, finance minister of South Africa.

What Kohler and Manuel are missing is that growing economic inequity, the erosion of living standards for a large part of the world's people, is only half of what alarms the anti-globalization movement worldwide. The other half is the erosion of democracy -- the way countries in deep debt to the IMF and World Bank are simply denied the capacity to establish their own economic rules.

The fruit of this "banker knows best" policy is nowhere more vivid than in the former Eastern bloc nations within a few hours' drive of Prague. The World Bank's own report documents the fallout from the kinds of free-market nostrums the Bank and the IMF have spent years imposing on developing economies. In 1998, the Bank reports, one out of every five people in the former Eastern bloc lived in poverty -- surviving on $2.15 per day -- compared with just one in 25 a decade ago. And this is no temporary condition: About 80 percent of those at the bottom of the economic equation in Poland, Hungary and Russia are likely to remain there. "It appears an underclass is forming," the Bank warns. Suicides of young males in the region have increased by 50 percent, even in the relatively prosperous Czech Republic; healthcare and school enrollment are declining.

While the poverty of the former Eastern bloc is horrifying, Western Europe too is contending with its own localized revolts. Even while Britain's chancellor of the exchequer joined other finance ministers in Prague, for instance, he was fending off rising pressure within his own Labour Party over growing poverty among the U.K.'s elderly; indeed, he was compelled, from Prague, to promise restive Labour an increase in state pensions. Britain, France, Spain and Ireland were all paralyzed in recent weeks by truckers' strikes aimed at lowering taxes on petroleum -- a populist revolt (in an ironic coincidence of interests backed by oil companies) springing from a sense of declining living standards amid economic growth, as Tony Blair belatedly acknowledged this week.

If nothing else, this week's protest in Prague makes it clear that a year after the demonstrations in Seattle, the fight against corporate globalization really is a worldwide phenomenon: Finance ministers have been unable to meet anywhere without having to wade through protestors in the streets.

Waldon Bello, executive director of Focus on the Global South and a leading critic of the IMF and World Bank, believes that the fact that the IMF and World Bank ministers encounter protests everywhere "speaks volumes about the tattered legitimacy of the two institutions." And, he believes, "when legitimacy has vanished and is not regained, it is only a matter of time before the structure collapses, no matter how seemingly solid it is." It is not only globalization critics like Bello who believe the free marketers are on the defensive. "The anti-globalization forces are now in the ascendancy," said economist C. Fred Bergsten of the Institute of International Economics in Washington in a speech earlier this year.

Bello believes that the demonstrations in Prague, following so swiftly on protests in Melbourne, Australia, represent "a critical mass" leading to what authors Brecher and Smith call globalization from below. Bello describes what he calls "deglobalization" as "re-embedding the economy in society, rather than having society driven by the economy."

The finance ministers meeting in Prague, however, seem determined to fight rather than switch; for all the condemnation of anarchists' Molotov cocktail hurling Tuesday, few commentators noted how fundamentally intransigent the world financial institutions remain a year after Seattle.

On Sunday, Canadian Finance Minister Paul Martin boldly proposed a moratorium on third-world debt -- a crisis blamed by reputable charitable agencies for 19,000 child deaths a day worldwide. "We made a commitment last year to faster action and we must make good on this commitment," Martin said. Canada's plan, which doesn't go as far as the full debt forgiveness demanded by the protesters, nonetheless was a significant move beyond the financial institutions' current stance.

But the proposal was soundly rejected by the ministers in Prague. Instead, they agreed to speed up existing debt relief plans. The ministers' rejection of even this modest step ensures that this week's protests will take their place in the long line of Prague dissent. Declared Anne Pettifor of Jubilee 2000, a Christian debt relief organization: "The empty rhetoric on debt relief and poverty reduction rings even more hollow."

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