|
Monterrey:
Spinning the Washington Consensus All the Way to Johannesburg by
Neville Gabriel
In recent years, unprecedented
pressure, driven primarily by popular social movements and coalitions of
civil society organisations, has been exerted on international political
and economic policy institutions to break the cycle of increasing world
poverty, inequality, and economic instability associated with the rapid
drive towards globalisation. The form and ideological content of the
globalisation enterprise called the Washington Consensus, due to the
convergence of development dogmas between Washington-based institutions,
emerged discredited as a dictatorship of nameless, faceless, and
unaccountable technocrats obsessed with private market driven growth that
sees the masses of impoverished people as incidental to the wealth
creation project.
The United Nations (UN) conference on
Financing for Development in Monterrey, Mexico, last week offered a unique
opportunity for world leaders to spawn a new spirit of democracy,
transparency, accountability, and justice in global political, economic,
and social development thinking. For the first time, the UN succeeded to
draw together the IMF, the World Bank, the World Trade Organisation (WTO),
private business representatives, and a range of non-governmental
organisations across social sectors into a representative international
political process that uniquely included finance, foreign affairs, and
social development ministers, to address the defining dilemma facing
global human progress:
what is the right relationship
between politics and economics in determining the future of half the
world's population who live in poverty?
The Failure of Monterrey
Monterrey's results were uninspiring.
Halfway through the conference, German government representatives and IMF
and World Bank officials declared a new era in global development thinking
marked by a shift from the Washington Consensus to a new Monterrey
Consensus. The Monterrey Consensus, they said, provides hope that the IMF,
World Bank, and WTO would become more accountable to international
political processes such as those of the UN and puts poverty eradication
and its financing squarely back on the global political agenda after
twenty lost years.
However, a close reading of the
Monterrey Consensus and the dynamics of the conference reveals a different
picture. Monterrey failed to deliver decisive action towards the
internationally endorsed millennium development goals to halve world
poverty by 2015. It resisted a breakthrough for debt cancellation as a
prerequisite to sustainable development, merely rehashing the IMF's failed
Highly Indebted Poor Country (HIPC) debt relief initiative that places
onerous economic and political conditions on debtor countries while
leaving them paying unacceptable amounts of government revenues in debt
servicing. Well-developed proposals for a legal mechanism to break
the political impasse in the debt cancellation debate were put forward by
civil society organisations, but were ignored.
The Monterrey Consensus only
half-heartedly expressed interest in a proposed International Currency
Transaction Tax that would go a long way to control international currency
speculation - the cause of recent economic havoc in developing countries.
It could have been a source of sufficient income to fund the $50bn needed
to meet the millennium development goals.
Monterrey bowed to the status quo in
international power relations by glossing over the need for more
representative global governance mechanisms in the UN, the IMF, and the
World Bank by ignoring credible proposals for a Global Council in the UN
and for the transformation of governance procedures in the IMF and World
Bank towards democracy.
Private Capital Development Remains
the Focus
Aware of this failure, some
industrialised countries tried to put a spin on the failure of Monterrey
by making grand announcements about increased official development aid (ODA)
and the need to go beyond current development commitments.
The US pledged $15bn in ODA between
2004 and 2007. However, this is not real aid. The new US grants will in
fact primarily be directed to "technical assistance" (i.e.
policy advice), direct support to private businesses (presumably to
support US multinationals through export credit agencies), the removal of
exchange controls and trade tariffs, and privatised provision of health
care and education - and only to those countries that follow a 'vigorous
growth agenda' that 'encourages private enterprise through market-oriented
mechanisms'.
The EU on the other hand, announced
their intention to go further on debt cancellation, global governance, and
trade issues. Yet, they were not prepared to argue for this in the
Monterrey Consensus and still continue to play a major role in subsidising
industrialised country agricultural products to the tune of $360bn
annually in contradiction of their own free trade principles.
The Monterrey Consensus maintains the
Washington Consensus focus on trade and foreign direct investment as the
engines of growth to overcome poverty - despite the overwhelming evidence
that this strategy is detrimental to the poor.
It fails to offer the poor a
substantially new vision for a better world. It represents an
expansion of the Washington Consensus from the IMF, World Bank, WTO, and
their political masters and multi-national corporations into UN processes,
with the hope of legitimisation by civil society participation. That is
why the non-governmental organisation
(NGO) caucus at the conference declared that Monterrey was not
their consensus, and refused to endorse it. But Monterrey was not the last
word and civil society organisations will continue to engage in the
ongoing debate.
South Africa at the Forefront
President Thabo Mbeki's address to the
plenary session was instructive about the ongoing process in which
Monterrey is being sold as a turning point. The Millennium Summit set the
goals by declaring millennium development targets, Monterrey provides the
framework in which those goals would be achieved, and the Johannesburg
World Summit on Sustainable Development would fill out the content of an
action plan, he said. But Finance Minister Trevor Manuel made the
significant point in a side event that the Johannesburg Summit should have
preceded the Monterrey Conference if financing mechanisms were to conform
to development needs rather than the other way around. In other words, now
that the economic framework has been set in the Monterrey Consensus,
political considerations and development needs raised in Johannesburg
would have to be limited accordingly. Nonetheless, Mbeki declared that
"we must accept the Monterrey Consensus".
The president's willingness to conform
to Monterrey despite its shortcomings is self-evident: it accords well
with the New Partnership for Africa's Development (NEPAD). NEPAD sees
wealth creation as Africa's biggest challenge. More than that, it views
private investment as the essential missing link in Africa's development.
Indeed, contrary to local consternation that Mbeki's Zimbabwe position
will derail the NEPAD express, NEPAD was given a very high profile in
Monterrey with most industrialised countries and the G77 declaring their
commitment to ensuring NEPAD's success.
Mbeki has clearly succeeded in
positioning South Africa as a highly influential stakeholder in
international development economics and politics. His is seen as a
government without which Africa would have little hope. This was very
evident in Monterrey, not least through the strong role played by Trevor
Manuel in the plum position of special envoy of UN Secretary General Kofi
Annan and chairperson of the World Bank's key policy body, the Development
Committee. South Africa's position will be consolidated in Johannesburg,
under the theme 'People, Planet, and Prosperity' - or more explicitly, a
triple focus on social, environmental, and economic development.
Shrouded beneath that theme is the
more apt problematic of 'power'. A revision of the international power
relations that determine the constraints on environmentally responsible
socio-economic development models is required if the Millennium
Development Goals are to be met. Without that, Africa and the South
will remain in a race to the bottom of the poverty trap. Monterrey failed
to adequately address that structural problem.
The Monterrey Consensus should at best
be regarded as a carefully managed negotiation process in which the
Washington Consensus prevailed, and which the spinners are now driving as
a new model - all the way to Johannesburg.
But it is not the people's consensus.
Ask the 20 million South Africans who live in absolute poverty, the 4.6
million South Africans who have no income at all, the 2.7 million South
African families who have no shelter, the 40% of our population who cannot
find employment, or the millions who were overjoyed to get tax cuts only
to pay increased interest rates due to an unstable currency - even though,
according to the Monterrey-Washington Consensus, our 'economic
fundamentals are in place'. They will all declare together: a better world
is possible!
Neville Gabriel
Director, Justice & Peace Department
Southern African Catholic Bishops' Conference (SACBC)
140 Visagie Street
PO Box 941
PRETORIA
0001
South Africa
Tel. +27 (0)12 323 6458
Fax. +27 (0)12 326 6218
Mobile. +27 (0)83 449 3934
E-mail: ngabriel@sacbc.org.za
http://www.sacbc.org.za | 
