Global 2000-A Bad Year for Transnational Corporations

Washington's Political Transition Threatens Bretton Woods Twins
By Walden Bello
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2000: The Year of Global Protest against Globalization
by Walden Bello*

The last year will probably go down as one of those defining moments
in the history of the world economy, like 1929. Of course, the
structures of global capitalism appear to be solid, with many in the
global elite in Washington, Europe, and Asia congratulating
themselves for containing the Asian financial crisis and trying to exude
confidence about launching a new round of trade negotiations under
the World Trade Organization (WTO). What we witnessed,
nevertheless, was a dramatic series of events that might, in fact, lead
to that time when, as the poet says, "all that is solid melts into thin air."

For global capitalism, the year began a month early, on Nov. 30-Dec.
1, 1999, when the Third Ministerial of the WTO collapsed in Seattle.
It ended earlier this month with an equally momentous event: the
unraveling of the Climate Change Conference in the Hague.

Seattle: the Turning Point

The definitive history of the Seattle events still needs to be written, but
they cannot be understood without the explosive interaction between
the militant and unrelenting protests of some 50,000 people in the
streets and the rebellion of developing country delegates inside the
Seattle Convention Center. Much has been made about the different
motivations of the street protesters and the Third World delegates and
the differences within the ranks of the demonstrators themselves.
True, some of their stands on key issues, such as the incorporation of
labor standards into the WTO, were sometimes contradictory. But
most of them were united by one thing: their opposition to the
expansion of a system that promoted corporate-led globalization at
the expense of social goals like justice, community, national
sovereignty, cultural diversity, and ecological sustainability.

Still, the Seattle debacle would not have occurred without another
development: the inability of the European Union and the United
States to bridge their differences on key issues, like what rules should
govern their monopolistic competition for global agricultural markets.
And the fallout from Seattle might have been less massive were it not
for the brutal behavior of the Seattle police. The assaults on largely
peaceful demonstrators by police in their Darth Vader-like uniforms in
full view of television cameras made Seattle's mean streets the grand
symbol of the crisis of globalization.

When it was established in 1995, the WTO was regarded as the
crown jewel of capitalism in the era of globalization. With the Seattle
collapse, however, realities that had been ignored or belittled were
acknowledged even by the powers-that-be whose brazen confidence
in their own creation had been shaken. For instance, that the supreme
institution of globalization was, in fact, fundamentally undemocratic
and its processes non-transparent was recognized even by
representatives of some of its stoutest defenders pre-Seattle. The
global elite's crisis of confidence was evident, for instance, in the
words of Stephen Byers, the UK Secretary for Trade and Industry:
"The WTO will not be able to continue in its present form. There has
to be fundamental and radical change in order for it to meet the needs
and aspirations of all 134 of its members."

Seattle was no one-off event. Bitter criticism of the WTO and the
Bretton Woods institutions was the not-so-subtle undercurrent of the
Tenth Assembly of the United Nations Conference on Trade and
Development (UNCTAD X) held in Bangkok in February. Indeed,
what brought an otherwise uneventful international meeting to the front
pages of the world press was the pie-splattered face of outgoing IMF
Managing Director Michel Camdessus, who was on the receiving end
of a perfect pitch from anti-IMF activist Robert Naiman.

From Washington to Melbourne

Naiman's act helped set the stage for the first really big post-Seattle
confrontation between pro-globalization and anti-globalization forces:
the spring meeting of the IMF and the World Bank in Washington,
DC. Some 30,000 protesters descended on America's capital in the
middle of April and found a large section of the northwest part of the
city walled off by some 10,000 policemen. For four rain-swept days,
the protestors tried, unsuccessfully, to breach the police phalanx to
reach the IMF-World Bank complex at 19th and H Sts.,NW,
resulting in hundreds of arrests. The police claimed victory. But it was
a case of the protestors losing the battle but winning the war. Just the
mere fact that 30,000 people had come to protest the Bretton Woods
twins was already a massive victory according to organizers who said
that the most one could mobilize in previous protests were a few
hundred people. Moreover, the focus of the media was on
Washington, and the first acquaintance of hundreds of millions of
viewers throughout the world with the World Bank and IMF were as
controversial institutions under siege from people accusing them of
inflicting poverty and misery on the developing world.

From Washington, the struggle shifted to Chiang Mai in the highlands
of Northern Thailand, where the Asian Development Bank (ADB), a
multilateral body notorious for funding gargantuan projects that
disrupted communities and destabilized the environment, held its 33rd
Annual Meeting in early May. So shaken was the ADB leadership by
the sight of some 2000 people asking it to leave town that soon after
the conference, ADB President Tadao Chino established an vice
presidential level "NGO Task Force" to deal with civil society. Fearful
of even more massive protests in 2001, the ADB also shifted the site
of its next annual meeting from Seattle to Honolulu in the belief that the
latter would be a secure site.

Chiang Mai had significance beyond the ADB, however. With a
majority of the protesters being poor Thai farmers, the Chiang Mai
demonstrations showed that the anti-globalization mass base went
beyond middle class youth and organized labor in the advanced
countries. Equally important, key organizers of the Chiang Mai
actions, like Bamrung Kayotha, one of the leaders of the Forum of the
Poor, had participated in the Seattle protest, and they saw Chiang
Mai not as a discrete event but as a link in the chain of international
protests against globalization.

The battle lines were next drawn Down Under, in Melbourne,
Australia, in early September. The glittering Crown Casino by
Melbourne's upscale waterfront had been chosen as the site of the
Asia-Pacific Summit of the World Economic Forum (Davos Forum)
which had become a leading force in the effort to put a more liberal
face to globalization. The casino, many activists felt, was a fitting
symbol of finance-driven globalization. In nearly three days of street
battles, some 5,000 protesters were at times able to seal off key
entrances to the Casino, forcing the organizers to bring some
delegates in and out by helicopter, again in full view of television. And
again, as in Seattle, rough handling of demonstrators by the police,
many of them mounted, magnified the global controversy over the
event.

The Battle of Prague

Later that month came Europe's turn to serve as a battleground. Some
10,000 people came from all over the continent to Prague, prepared
to engage in an apocalyptic confrontation with the Bretton Woods
institutions during the latter's annual meeting in that beautiful Eastern
European city in the most beautiful of seasons. Prague lived up to its
billing. With demonstrations and street battles trapping delegates at
the Congress Center or swirling around them as they tried to make
their way back to their quarters in Prague's famed Old Town, the
agenda of the meeting was, as one World Bank official put it,
"effectively seized" by the anti-globalization protesters. When a large
number of delegates refused to go to the Congress Center in the next
two days, the convention had to be abruptly concluded, a day before
its scheduled ending.

As important as the protests in Prague was the debate held on Sept.
23 at the famous Prague Castle between representatives of civil
society and the leadership of the World Bank and the IMF, an event
orchestrated by Czech President Vaclav Havel. Instead of bridging
the gap between the two sides, the debate widened it, since, in
response to concrete demands, World Bank President James
Wolfensohn and IMF Managing Director Horst Koehler were not
prepared to go beyond platitudes and generalities, as if worried that
they might overstep the bounds set by their G-7 masters. George
Soros, who defended the Bank and Fund at the debate, said it all
when he admitted that Wolfensohn and Koehler had "performed
terribly" and had blown their most important encounter with civil
society.

After Seattle, much talk about reforming the global economic system
to bring on board those "being left behind" by globalization was
emitted by establishment personalities like Bill Gates, Bill Clinton,
Tony Blair, Kofi Annan, and Nike CEO Phil Knight. The Davos
Forum, in fact, placed the question of reform at the top of the agenda
of the meetings it held for the global elite.

A year after Seattle, however, there has been precious little in the way
of concrete action.

The most prominent reform initiative, the Group of Seven's plan to
lessen the servicing of the external debt of the 41 Highly Indebted
Poor Countries (HIPC) has actually delivered a debt reduction of only
$US 1 billion since it began in 1996-or a reduction of their debt
servicing by only 3 per cent in the past four and a half years!

One year after the Seattle collapse, talk about reforming the decision-
making process at the WTO has vanished, with Director General
Mike Moore, in fact, saying that that the non-transparent,
undemocratic "Consensus/Green Room" system that triggered the
developing country revolt in Seattle is "non-negotiable."

When it comes to the question of the international financial
architecture, serious discussion of controls on speculative capital like
Tobin taxes has been avoided. An unreformed IMF continues to be at
the center of the system's "firefighting system." A preemptive, pre-
crisis credit line at the Fund (which no country wants to avail of) and a
toothless Financial Stability Forum-where there is little developing
country participation-appear to be the only "innovations" to emerge
from the Asian, Russian, and Brazilian financial crises of the last three
years.

At the IMF and the World Bank, similarly, there is no longer any talk
about diluting the voting shares of the US and European Union in
favor of greater voting power for the Third World countries, much
less of doing away with the feudal practices of always having a
European head the Fund and an American to lead the Bank. The
much-vaunted consultative process in the preparation of "Poverty
Reduction Strategy Papers" (PRSP) by governments applying for
loans is turning out to be nothing more than an effort to add a veneer
of public participation to the same technocratic process that is
churning out development strategies with the same old emphasis on
growth via deregulation and liberalization of trade, with maybe a
safety net here and there. At the Bank, strong resistance to
innovations that would put the priority on social reforms led to the
resignation of two reformers: Joseph Stiglitz, the chief economist, and
Ravi Kanbur, the head of the World Development Report task force.

Debacle in The Hague

The protests throughout the year had a strong anti-TNC strain, with
the World Bank, IMF, and WTO regarded as servitors of the
corporations. A strong distrust of TNCs had, in fact, developed, even
in the United States, where over 70 per cent of people surveyed felt
corporations had too much power over their lives. Distrust and
opposition to TNCs could only be deepened by the collapse in early
December of the Hague Conference on Climate Change, owing to
US's industry's unwillingness to significantly cut back on its emission of
greenhouse gases. At a time that most indicators are showing an
acceleration of global warming trends, Washington's move has
reinforced the conviction of the anti-globalization movement that the
US economic elite is determined to grab all the benefits of
globalization while sticking the costs on the rest of the world.

Assessing the post-Seattle situation, C. Fred Bergsten, a prominent
advocate of globalization, told a Trilateral Commission meeting in
Tokyo last April that "the anti-globalization forces are now in the
ascendancy." That description is even more accurate now. With the
global elite itself having lost confidence in them, a classic crisis of
legitimacy has overtaken the key institutions of global economic
governance. If legitimacy is not regained, it is only a matter of time
before structures collapse, no matter how seemingly solid they are,
since legitimacy is the foundation of power structures. The process of
delegitimation is difficult to reverse once it takes hold. Indeed, what
we might call, following Gramsci, as the "withdrawal of consent" is
likely to spread to the core institutions and practices of global
capitalism, including the transnational corporation.

2001 promises to be an equally trying time for the globalist project.

* Executive director of Focus on the Global South in Bangkok and
professor at the University of the Philippines.

*Dr. Walden Bello is executive director of the Bangkok-based
Focus on the Global South, a program of the Chulalongkorn
University Social Research Institute.
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