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by
Walden Bello
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 early in Jan. 2001, 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.
Yet 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.
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, 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 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 a 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. 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. 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 Heavily 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-Trans National
Corporation (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.
Walden
Bello is the Executive director of Focus on the Global
South in Bangkok and professor at the University of the
Philippines.
FOCUS is a program of progressive development policy
research and practice, dedicated to regional and global
policy analysis, micro-macro linking and advocacy work.
Web: www.focusweb.org
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