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Last Updated: Wednesday, 24 September, 2003, 14:59 GMT 15:59 UK
Growing gulf between rich and poor
Viewpoint
By Rick Rowden
ActionAid

The first Arab-hosted annual meetings of the World Bank and the International Monetary Fund, in the Gulf state Dubai, which ended on Wednesday, exposed the widening gap between rich and developing nations.

Little extra help for the poor

Despite Dubai's label as the city of gold - with the highest concentration of jewellery shops in the world - little glittered for poor countries during arguments over aid and the power to shape their own future.

The annual meetings offered cold comfort for those fighting to prevent the 30,000 deaths a day from hunger, to help the billion people denied basic education, and to support the 42 million living with HIV/Aids.

"(The World Bank) should take responsibility for misleading us down the path of rigged prices and poverty
Demba Moussa Dembele
Forum for African Alternatives
The meetings began with a blast from World Bank president James Wolfensohn against developed nations - who give just $56bn in aid, compared to over $300bn spent on farm subsidies and $600bn on defence.

Advocates for developing countries were not impressed.

Alternative views

Demba Moussa Dembele, of the Forum for African Alternatives in Dakar, Senegal. said:

"It was the World Bank which insisted our countries open up to trade and investment from the North and told us to trust in global markets.

"Didn't the Bank know about the market distortions created by subsidies and trade restrictions? It should not just urge the North to change its policies, but take responsibility for misleading us down the path of rigged prices and poverty."

And the meetings ended with a whimper, as efforts to give poor members a bigger say in the Bank and the IMF were put back until next year at the earliest.

Votes remain weighted according to members' financial contributions.

No debt relief

In addition, attempts to salvage the debt relief programme or address the unresolved debt crisis were left wanting.

DEMOCRACY IN THE IMF
Refugees in Sierra Leone

The Bank's policy-setting committee pushed for rich nations to provide urgent development money.

The call's effectiveness will be judged by how many governments take clear steps towards meeting their commitments to provide further aid by 2006.

The Dutch announced plans to divert $2.5bn for education from their aid budget over the next five years - though some may fear its effect on other priorities.

Yet developed nations gave meagre backing for the fast-track initiative by 18 poor countries to advance towards education for all.

At least the welcome initiative from the UK's finance minister Gordon Brown to double international aid to $100bn ran into less hardline resistance from the Netherlands and the Nordic states.

But France remains the only other wealthy country to support the international finance facility, which would let countries boost development spending by selling bonds backed by future aid budgets.

Services and the poor

The Bank released its flagship annual publication, the World Development Report 2004: Making Services Work for Poor People.

It strongly promotes commercialisation of essential public services in developing countries such as health care, education and water utilities.

After voluntary sector consultations with the report's authors, the original pro-privatisation rhetoric of earlier drafts has been diluted.

Documented failures of service privatisations and high price increases for the poor have plagued the Bank's aggressive privatisation agenda.

However, the report still neglects the risks to public health or other national development goals posed by the entry of foreign private corporations into key services.

It also ignores the impact of deregulatory rules, including the GATS (General Agreement on Trade in Services) within the World Trade Organisation.

Advocates for poor countries are concerned that the agenda of rapid privatisation, trade and financial liberalisation, and deregulation continues unabated.

The IMF and World Bank, and the rich countries which largely run them, have not heeded the cries of developing countries heard at Cancun.

This is why aid agencies supported developing country delegates when they used their negotiating strength at the World Trade Organisation meeting in Mexico last week.

It is a strength which may yet herald a brighter era for the world's poorest people.


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