Jessica Woodroffe and Mark Ellis-Jones
of unrest:Resistance to IMF policies in poor countries
last year, the media has heralded the dawn of a new movement in Europe
and America, epitomised by protests aimed at the WTO, IMF and the World
this 'new movement', portrayed by the media as students and anarchists
from the rich and prosperous global north, is just the tip of the iceberg.
In the global south, a far deeper and wide-ranging movement has been developing
for years, largely ignored by the media.
follows is a summary of protests and demonstrations
organised by the southern poor. They are
aimed at policies that hurt their livelihoods and, in some cases, undermine
the democratic foundations of their countries. This 'hidden' movement has
a global reach and signals a deep unease at economic policies that keep
the poor in poverty.
All of the
developing countries detailed in this report have experienced civil unrest
in the past year.
civil servants, priests, farmers, students, doctors, trade-union activists,
indigenous peoples and women's groups have called on their governments
to halt the introduction of economic reforms which have by-passed their
national democratic institutions, and have been foisted on them by the
IMF and World Bank. These are poor people, in a desperate situation, who
are striving for respect, dignity and a sense of pride in their lives and
countries. Their voices deserve to be heard.
they're not. Developing countries are still locked into a dependant relationship
with the international financial institutions and donor governments. Despite
the rhetoric of poverty reduction, debt relief and economic stabilisation,
these countries must still implement liberalisation policies which hurt
the poor. This report shows how deeply the poor oppose them.
The IMF has
unprecedented power over these vulnerable countries and is often referred
to as the 'Gatekeeper' because it determines whether to open or shut the
'gate' between a borrowing government and its creditors. Unless the IMF
gives its 'seal of approval', signifying that a government's policies are
'adequate', the government may be unable to access credit and attract foreign
investment. The only way these countries have been able to gain the IMF's
'seal of approval' is by introducing a package of reforms called a Structural
Adjustment Programme (SAP). These reforms often involve the following common
Reducing government expenditure, by making public-sector redundancies,
freezing salaries, and making cuts in health, education and social welfare
The privatisation of state-run industries, leading to massive lay-offs
with no social security provision and the loss of inefficient services
to remote or poor areas;
Currency devaluation and export promotion, leading to the soaring cost
of imports, land use changed for cash crops, and reliance on international
Raising interest rates to tackle inflation, putting small companies out
Removal of price controls, leading to rapid price rises for basic goods
1999, these notorious SAPs underwent a transformation following criticism
of their content and undemocratic nature. At last year's Annual Meetings,
the Enhanced Structural Adjustment Facility (ESAF), responsible for providing
loans to up to 80 countries, was renamed the Poverty Reduction and Growth
Facility (PRGF). In addition, Poverty Reduction Strategy Papers (PRSPs),
which must be drawn up in consultation with civil society, were introduced
to meet fears that governments lacked 'ownership' of SAPs. But early evidence
suggests that PRGF conditions are almost identical to the old ESAF conditions,
and that PRSPs will closely resemble SAPs. The names may have changed but
the economics has stayed the same.
countries outside the remit of the PRGF, the IMF remains as inflexible
as ever. Loans from the IMF are always conditional on the implementation
of structural reforms, and countries seeking the IMF's international 'seal
of approval' are always 'encouraged' to continue with SAP-style policies.
these policies hurt the poor. Developing countries have few choices - either
implement policies ill-suited to their country or risk economic isolation.
Most governments, seeking to retain power and be accepted internationally,
choose the IMF over their own people.
One of the
objectives of IMF and World Bank conditions is to leave economies well
governed and increase stability. Instead, SAPs have undermined the ability
of democratic governments to set their own priorities and policy objectives;
instead, they often rush through economic reforms without adequate legislative
or democratic processes. While governments are held responsible for the
social and economic upheaval which results, the IMF and World Bank escape
institutions have little accountability to any electorate, and remain forever
at arm's length. At best, they offer advice to the governments 'to continue
building the necessary political support for reforms', and at worst distance
themselves completely from failed programmes, blaming inadequate political
will or corruption.
which cut back the role of the state, ignore the basic function of governments
- to provide social services to their citizens. If governments are unable
to provide these services because of budget cuts or debt servicing, governments
lose their legitimacy in the eyes of their citizens.
would be wrong to suggest that developing countries have no responsibility.
Some have embraced the proposals willingly, others have been guilty of
corruption. But our point is that civil society's attempt to democratise
their own governments is made substantially more difficult, if not impossible,
by the imposition of IMF conditions. There is no room for flexibility in
negotiations with the IMF.
is compounded by the current revamp which seeks to dress SAPs up in the
rhetoric of PRSPs, which could make matters much worse. The policies will
stay the same, but instead of being explicitly prescribed by the IMF, they
will be covertly pushed on government officials by 'IMF advisors'. In the
long run, PRSPs will only help the IMF pass the buck when things go wrong.
democracy is undermined and governments are unable to act in the interests
of their electorate, one of the only channels left is for citizens to demonstrate.
Civil unrest, demonstrations
and strikes should indicate to governments, law-makers and the international
community that policies are not working.
In March 2000,
the IMF approves a US$7.2 billion three-year stand-by credit on the condition
that the Government continues with key fiscal and structural reforms. Within
the agreement, there is specific reference to the importance of "the proposed
labour market reform and deregulation", and to "the further reform of the
social security system".
of strikes hits the newly elected centre-left Government as it tries to
introduce reforms of its labour laws in response to discussions with the
IMF. The reforms will dilute the trade-union
movement and reduce the rights of workers. Mr Montoya, one of the leaders
of Argentina's biggest union umbrella group, the General Confederation
of Labour (CGT), has already likened the strikes to the ones which caused
economic and social chaos in 1983-89, leading to the downfall of the then
President, Raul Alfonsin. Montoya says that Mr De la Rue, Argentina's current
President is "committing the same error as Alfonsin".
of labour reforms is passed by the Senate, while thousands of demonstrators
picket Congress, leading to violent clashes with the police in which more
than 30 people are injured and about 50 arrested.
Government cuts in the social security system lead to violent demonstrations
in the Salta region. Peaceful protests erupt into violence after demands
for unemployment benefits and severance pay are ignored by local officials
who can no longer provide them. The protesters set
fire to public offices before being subdued by armed riot police, leaving
dozens injured and many arrested. Rural communities in a similar situation
block roads and organise protests to disrupt visiting government officials
in an effort to voice their concerns about the increasing deterioration
of social provisions.
against the IMF austerity plan, which will raise taxes, reduce social spending
and cut salaries, culminate with 80,000 people taking to the streets.
The protest is called by the three largest trade unions, the Catholic Church
(usually too conservative to support such actions) and politicians, from
both the governing Alianza coalition and opposition parties. Protesters
likened the IMF to a 'financial dictatorship' and promised 'fiscal disobedience'
by refusing to pay their taxes, which have jumped from 8 to 22 per cent.
One of the 14 dissident members of the Alianza coalition states that "we
want to insist that the Government apply the programme for which it was
elected and not this series of adjustments that only serve to shrink the
internal market and create a recession". Guillermo Garcia Canedo, the secretary
of the Social Pastoral Argentine Episcopate of the Catholic Church, backs
the march to uphold the recommendations of Pope John Paul II, who wants
the IMF and World Bank reformed. Canedo says, "It is essential to create
unity among social sectors in order to firmly tell the IMF we have had
enough of its adjustment policy."
a survey by the Argentina-based Centre for Public Opinion Studies, 70
per cent of those polled identify the IMF as responsible for budget
adjustments, 65 per cent believe its policies are not successful, and 88
per cent maintain that the Government should place limits on the IMF's
requirements. In a separate poll, the approval ratings for the Government's
economic policy fall from 35 per cent in January to 13 per cent in July.
defiance of the new IMF-prescribed labour laws, a 24-hour general strike
is supported by more than 7.2 million workers. The President, Fernado de
la Rua, is reported as saying that the Government has no choice but to
meet targets set by the IMF. The report continues that the Government and
the workers are in deadlock, and more strikes and disruptions are inevitable.
Teachers and scientists go on a one-day
to protest against a 12 per cent cut in wages. These wage cuts are in line
with IMF austerity measures.
August, the Financial Times reports how "a wave of discontent
is sweeping across Argentina, eroding the government's political capital
and prompting it to adopt desperate measures to create jobs and kick-start
the economy. But the measures may have backfired and put the brakes on
the economy [and] even supporters of the governing Alliance will be looking
to distance themselves from an unpopular government." The FT fails
to mention the IMF's complicity in the Argentina's social turmoil and the
Government's failed programme of reforms.
Argentine courts find the IMF directly responsible
for Argentina's debt. In an unprecedented judicial ruling, condemning
the illegitimate origins of the country's debt amassed during the military
dictatorship of 1976-83, Judge Jorge Ballestro says that the outstanding
debt is part of "a damaging economic policy that forced [Argentina] on
its knees through various methods, and which tended to benefit and support
private companies - national and foreign - to the detriment of society."
The ruling specifically cities the IMF as being responsible and states
that "it could not pass unnoticed among the IMF authorities who were supervising
the economic negotiations". As the hearing concludes, more than 5,000 people
gather outside the congressional building in the capital to demonstrate
been working with the IMF since 1985, and received an ESAF loan for US$138
million in September 1998, which set out "plans to privatise all remaining
public enterprises", including the water industry. In February 2000, the
IMF grants another US$46.1 million PRGF loan in addition to US$1.3 billion
in debt relief under the Enhanced HIPC Initiative. These are granted on
the condition of Bolivia's continued "progress in the implementation of
adjustment reforms lead to water prices in Cochabamba, Bolivia's third
largest city, rising by as much as 200 per cent, provoking widespreadprotests.
The average water bill is estimated to equal 22 per cent of a monthly wage
of a self-employed man and 27 per cent for a woman. In January, an alliance
of factory workers, farmers, students and environmentalists protest against
the continued high price of water in the city. After the protesters
shut down the city for four days, the Government promises to reverse the
cannot act on its promises due to the IMF conditions.
More than 1,000 protesters take to the streets and are confronted
by a similar number of riot police and soldiers, who disperse them with
baton charges and tear gas.
More than 175 people are injured and two are blinded. The Government
again responds by promising a price freeze until November when they promise
to re-open negotiations.
still do not change. Exasperated by the Government's lack of commitment
to alleviating the situation, more protesters take to the streets, this
time joined by more than 1,000 rural peasants fighting the privatisation
of rural water supplies. Protesters block roads and demonstrations explode
into violence. The town hall is stormed.
President, Hugo Banzer, declares a state of emergency, restricting
civil liberties. Protest leaders are arrested. Rubber bullets are replaced
by real ones. Bolivian television shows an army captain firing into an
unarmed crowd. Only then does the Government revoke the concession of the
multinational controlling the city's water. Reports claim that as many
as eight people are dead, including two farmers, two soldiers, one police
officer and three protesters.
La Paz, there are also scattered protests in which 30 people are injured
and 11 students arrested. In a separate incident, hundreds of police officers
go on strike in the capital, demanding salary increases.
Inter Press Service report claims that the protests are the President's
"lowest point in his two years and eight months in office because it deepened
existing conflicts and created a general feeling of contempt for the government".
It also suggests that the failure of the Government to deal with the protests
democratically is an expression of disenchantment with Bolivia's democracy.
Erick Torrici of the Andean Community of Nations and an expert at the Andean
University says, "Such as it stands, democracy is reaching its limits.
The content of recent demonstrations
responds to a situation that reveals the inadequacies of a merely electoral
democracy." Maria Teresa Segada, a specialist from the Higher University
of Sans Andres, explains further how "when the neoliberal economic model
was implemented in 1985, [with the beginning of SAPs] government leaders
asked the Bolivian people for patience and sacrifice, but now, 15 years
later, patience has run out because the model did not meet expectations."
the country is in turmoil, however, the National Forum on Poverty Reduction,
organised by Jubilee 2000 in La Paz, undertakes the largest public consultation
exercise in the country's history, involving 429 participants, including
90 departmental delegates, 275 representatives from 114 organisations and
64 international representatives. The aim of the forum is to assess key
areas for poverty reduction in the country, and runs alongside the government's
National Dialogue, which is part of its PRSP consultation exercise. Liana
Cisneros from the Latin America Jubilee 2000 Network says, "The creditors'
response to Bolivia's debt crisis has consistently been inadequate. Poverty
levels in Bolivia remain devastating. The IMF would do well to study the
findings of the Forum for ideas on how to reduce poverty."
In November 1998, the IMF offers
Brazil a US$18 billion stand-by loan. Conducting their fifth review of
the agreement the IMF "noted with satisfaction" the success of the Brazilian
economy, although it "encouraged the Brazilian authorities to press ahead
with their privatisation efforts and the further liberalisation of external
on Foreign Debt in Rio de Janeiro claims that "the policies of the IMF
have proved disastrous and have increased the foreign debt even more,
while imposing the endless moratorium on social spending. Those who must
pay the debt are children, workers in rural areas and the countryside,
black people, indigenous people and the environment." The Tribunal, organised
by Jubilee 2000, includes Dr Luiz Cernichiaro, Minister of the Supreme
Court, Federal Judge Dra Maccalos and other prominent lawyers. It has the
backing of trade unions, the Catholic Church and the Landless Movement.
asking whether Brazil should discontinue IMF reforms is backed by more
than a million people. Organised by the National
Council of Bishops and Jubilee 2000, the 'unofficial' referendum is a marked
success. On the 7 September, to mark the end of six days of voting and
Brazil's Independence Day, a demonstration
draws thousands of protesters under the banner of Cry of the Excluded.
All the main cities in Brazil are "crammed", say reports, with more than
100,000 people in Sao Paulo. The Government had previously called
the referendum "stupid" and an isolated project undertaken by "minorities".
In September 1999, the IMF approves
a three-year credit worth US$2.7 billion in support of "the government's
structural reform agenda", which includes policies to "downsize the public
sector, mainly through privatisation, and reduce public sector spending".
In the annual review of this agreement, the IMF "welcomed the continuation
of the recovery of Colombia's economic activity, despite the challenges
posed by the political and security situation", and describes the importance
of dealing with the programme's "social fall-out" if private and foreign
investment is to continue.
About 15,000 workers go on a 24-hour
general strike to protest against IMF-imposed austerity measures being
implemented by President Andres Pastrana. Colombia has the highest unemployment
rate in Latin America, with 20 per cent of the population without work.
The recent 2001 budget is announced by the Finance Minister as the budget
of "sweat and tears", with 5,000 public sector jobs to go and wage increases
to be kept below the rate of inflation. There will be little compensation
of workers as the Government continues its cutbacks on social security
provision. The conditions laid out in the US$2.7 billion IMF loan require
Colombia to further open its economy, privatise public companies and cut
Costa Rica was granted an IMF stand-by credit for US$78 million on the
condition that "private sector participation in areas previously reserved
for the public sector is increased" and "a far greater role by foreign
investors in areas such as electricity generation, insurance and banking"
is provided for. In the 1999 annual review of Costa Rica's economic programme,
the IMF urges the "prompt approval of the draft legislation to open up
electricity generation, telecommunications, and the insurance sector to
private sector participation as essential."
known as the Switzerland of the Americas, Costa Rica has a sound
reputation for democracy, peace and good welfare provision. The Costa Ricans
have managed to by-pass much of the internal conflict and strife which
has racked their neighbours. As The Economist points out, "Costa
Rica has other advantages, rare in the region. These include a democratic
tradition, respect for the rule of law and a well-educated workforce."
reforms, bolstered by the IMF, seem to threaten this previously peaceful
and democratic nation. Since Congress passed a law allowing the state
telecommunications company, the Costa Rican Electricity Institute (ICE)
to be privatised, there have been a series of strikes and demonstrations.
ICE stands as a national symbol of the welfare state and many believe this
is the beginning of further measures to privatise Costa Rica's assets.
The fate of other reforms hinge on the success or failure of the ICE privatisation
- the Government already has plans for the state banks and private insurance.
of a bill outlining the IMF-prescribed privatisation of ICE leads to
widespread protests. During protests on 16 March, one person is killed
in Ochomogo, five are wounded, and several injured, including 30 police
officers, as riot police clash with demonstrators. At least 50 student
protesters are arrested. Television images show police beating youths who
are trying to run away. In Perez Zeledon, five demonstrators are wounded
by police gunfire, 30 police officers are hit with stones, and 50 students
are arrested. Police report that 40 protests have taken place on 21 March
all around the country. On 23 March, 10,000 marchers descend on the presidential
residence demanding the withdrawal of the bill. In a clash with university
students in a San Jose suburb, police beat demonstrators and arrest 52
is met with "unaccustomed brutality by riot
police". Rodolfo Cerdas, a political analyst, says that "these protests
are a struggle to elevate the quality of Costa Rican democracy. We have
a politics of ivory towers. People think politicians only have their own
interests in mind." Opinion polls support his views. A University of Costa
Rica survey finds that 53 per cent oppose the ICE reform while only 20
per cent support it; 92 per cent say they should have been consulted and
84 per cent believe there should be a referendum.
In April 2000,
the IMF grants a stand-by loan worth US$304 million which will mobilise
over $1.7 billion in additional resources from other creditors. The agreement
notes that "the programme [of reforms] is very demanding and successful
implementation will require firm resolve on the part of the authorities,
and the support of the Congress and the public at large". The reforms include
the dollarisation of the economy, wage restraint, the removal of subsidies
and "for important structural reforms in the labour market, the oil sector,
and privatisation". In the first review of this agreement, the "directors
were encouraged by the steps taken to inject more flexibility in the labour
market, increase private sector participation in the economy, as well as
the commitment to phase out price regulations on domestic fuels and electricity.
It was also noted that a more liberal trade regime would complement these
in negotiations with the IMF leave the Government without the means to
reactivate the economy. The deepening economic
crisis, and the social instability it causes, results in the elected President,
Jamil Mahaud, declaring a state of emergency to contain growing
protests. The crisis, which has been escalating for a year, leads to consumer
prices rising by more than 60 per cent and a 7 per cent decline in economic
growth. Confidence in the Government falls sharply, with the national currency,
the sucre, losing 21 per cent of its value. The state of emergency allows
the administration to avert demonstrations which
it believes are "interested in destabilising the government", preventing
groups from congregating and giving the authorities power of dispersal.
US Treasury Secretary, pledges full support for Ecuador, saying that Bill
Clinton has phoned Mahaud to offer his support in the growing climate of
instability. Summers says that the "achievement of stability and confidence
in Ecuador was very much in the interests of the US" and that the IMF is
likely to send a team of delegates to the country.
Quito, military chiefs publicly throw their support behind the President,
dispelling international fears of a coup attempt. They reject "any attempt
to break the legal order" and call for a solution "within the constitutional
and democratic framework".
by the Confederation of Indigenous Peoples, 40,000 Indians plan a week
of protests, including a march on Quito and other major cities, against
the Government's IMF-prescribed policy reforms. Ecuador's Government
deploys 35,000 soldiers and police to control the situation.
protesters call for the President's resignation, an end to the reforms
urged by the IMF, including the dollarisation of the economy, and for an
end to economic instability. Blanca Chancosa, one of the leaders, says
that the President "has not had the political will to fix the country.
He does not have the capacity. Let him step aside so that the people can
designate other persons more honest and with a will to carry out a new
form of government."
protesters occupy Ecuador's Congress building while more than 10,000 protest
outside. The involvement of military guards,
which allow the protesters
inside, fuels speculation of a possible coup attempt despite reassurances
from Carlos Mendoza, head of the armed forces. Protesters also surrounded
the supreme court despite police attempts to disperse them with tear gas.
In Guayaquil, Ecuador's second largest city, demonstrations become violent,
leading to several injuries. Protesters claim that the Government's plan
to scrap the national currency and adopt the dollar will further impoverish
the country. A statement from the White House rejects "the actions of those
who have occupied the Ecuadorian National Congress and are seeking to establish
an unconstitutional regime". Other nations across the continent also condemn
the actions of protesters claiming that they are tantamount to an attempted
flees the Presidential Palace and the military take power. With
an armed guard of troops loyal to him, Mahaud goes into hiding after a
week of demonstrations
and a retraction of Mendoza's previous statement in support of the government.
Gustavo Noboa, becomes the new President in a special session of Congress
in which the military junta hands back power. However, leaders of the protest
movement oppose Noboa's succession, saying he is in the pockets of the
IMF and the US. Antonio Vargas, one of the indigenous leaders, denounces
Mendoza for betraying the protesters,
who want to create a new form of government to target corruption and poverty.
He also says that Noboa has only been installed after pressure from Washington.
confirms that he will continue with the
IMF-advised reforms and hopes to bring the country back to stability,
especially with the backing of the military. The Financial Times
suggests that Noboa will enjoy more support from Congress and from business,
especially after the "country's brief flirtation with a return to a dictatorship
after 20 years". However, the report says that unless the new President
wins the support of the protesters, who oppose the IMF reforms, he too
will face a rough ride.
In order to
qualify for an IMF loan, the Government introduces a package of new laws
to reform the labour market and the financial sector, increase privatisation
efforts, provide oil pipeline permits and, controversially, dollarise the
Educators Union goes on strike for five weeks over the proposed IMF cuts
in spending and salaries. Noboa says he will take a tough stance: "I'm
willing to go all the way with this. If they want to strike for a year,
let them do it. We're not going to back down." Protests by teachers in
Quito are dispersed by riot police using tear gas.
an amnesty for all civilians and military personnel who took part in the
military coup in January. He explains that the amnesty is an effort to
keep the peace in Ecuador. The Government removes fuel price subsidies
in line with their IMF agreement, resulting in the rise of petrol prices.
Noboa tries to explain to critics that "we did the best we could for all
the Ecuadorian people, and in accordance with the IMF".
new President faces his first general strike, organised by trade unions
and church groups, against continued IMF economic reforms.
Wilson Alverez, president of the Workers United Front, a union umbrella
group, says, "We're going to take to the streets to reject the economic
package, reject the miserable increases in salaries and the hikes in fuel
and electricity costs." Among those striking are more than 30,000 doctors,
who stage a 72-hour sit-down protest, as well as teachers, oil workers,
and other public sector workers.
Quito, protesters who try to march on the government palace are met with
tear gas and riot police. One passer-by receives a bullet wound. In Guayaquil,
a bomb explodes outside Citibank and demonstrators are dispersed with tear
a trip to London, Nina Pacari Vega, the Pachakutic leader (the political
party set up by indigenous groups), says that the economic reforms are
unconstitutional and have triggered sharp price increases. "Dollarisation
isn't the most viable way to bring about economic recovery."
Times reports that Noboa was recently visited by Thomas Pickering,
the US state department number three, and by Cesar Gaviria, the head of
the Organisation of American States, who both call on the armed forces
to uphold the constitution, and for certain military officers to face discipline
after January's events. The report also outlines how the President is trying
to win political support for the IMF-imposed economic reforms, promising
consultation with indigenous groups and highlighting the benefits reforms
will bring to the country. But opponents of the reforms remain entrenched
and want plans for dollarisation and privatisation scrapped. Noboa sees
an 8 per cent drop in the polls, with only 43 per cent of the population
backing his Government.
the IMF dollarisation bill through Congress continues to provoke controversy
and results in violent exchanges and physical fighting in the Congress
chamber. The bill causes great rifts within parties and between members
to gain military support to dissolve Congress and end political wrangling
about the IMF reforms. Although military leaders reject the plan to dissolve
Congress, the attempt by Noboa shows he is increasingly worried by political
and economic instability. In a separate move, however, Noboa wins collective
agreement for his cabinet's resignation.
of Indigenous Peoples (Conaie), which was instrumental in the downfall
of the last President, calls for a popular uprising against Noboa. Condemning
the IMF reforms, and saying that Ecuador will become a colony of the US,
the organisation plans a series of strikes.
adopts the dollar as its currency. The IMF states that "dollarisation has
proceeded rapidly and has calmed the financial markets".
transition to the dollar turns into chaos as, due to bad planning, many
people are left without the means to buy or sell. Although trading is now
meant to be in dollars, many small shops and stall-holders have been left
without coins to exchange. Roberto Aguirre, an economist, says that the
Government has rushed dollarisation and has not planned the switch thoroughly
enough. "There has been a lack of foresight by the Government in not providing
coins in time and in sufficient amounts."
The IMF grants
a US$21 million loan on 7 June 2000 under the PRGF. The IMF urges the Honduras
authorities "to proceed quickly with structural reforms, especially the
privatisation of telecommunications and electricity distribution and the
reform of the social security and pension system". On 10 July 2000, Honduras
receives US$900 million in debt relief under the Enhanced HIPC Initiative
in "recognition by the international community of the country's progress
in implementing reforms in macroeconomic, structural and social policies".
- July 2000
of strikes hit the country, demanding an end to IMF public service cuts.
On 12 May, 8,000 hospital workers strike to demand a pay-rise, affecting
28 hospitals and 500 clinics. Riot police are deployed in and around public
hospitals to maintain order. On 26 June, thousands of workers take part
in a national strike demanding an increase in the minimum wage. Protesters
block main roads and the state-run port company, and a number of banana
plantations are closed. On 27 July, thousands of secondary school teachers
go on strike over unpaid wages, affecting about one million pupils. Teachers
have not been paid since February.
general strike on the 24 August opposes IMF backed economic reforms.
The Government's plans to privatise state-owned electricity, telecommunications
and social security sectors to comply with IMF requirements cause disruption
to education, transport and health services. Organised by the Popular Bloc,
and comprising farmers, workers and students, the protest closes universities,
affecting 60,000 students, and blocks services at hospitals and major highways.
On the 28 July 2000, the IMF resumes
lending to Kenya with a US$198 million PRGF loan. The loan is in recognition
of the Government's renewed programme to address the causes of financial
instability and low growth, namely "stop-go macroeconomic policies [and]
slow structural reform". These policies include "macroeconomic and structural
reforms civil service reform [and] privatisation".
demonstration calling for debt relief and an end to IMF conditions ends
in violence and arrests of church leaders;
63 protesters, including 13 nuns and 2 priests, are arrested at a debt
cancellation march in Nairobi. The march, organised by the Kenyan Debt
Relief Network (KENDREN), a network of church groups, human rights organisations
and the Green Belt Movement, was peacefully making its way to the offices
of the World Bank's Representative to present a letter to end Kenya's debt.
Riot police arrive at the end of the march and "broke up the protest with
clubs and tear gas, violently hauling marchers into a waiting vehicle".
There are several injuries, including children and an Islamic sheik (priest).
Spokespersons among the group say it is the first time the Kenyan authorities
have dared to jail a Roman Catholic priest and nuns. The protesters are
eventually released on bail and, at their court hearing on the 22 May,
the charges are dropped.
Andre of the Divine Word Missionaries, one of the arrested marchers, says
in a recent letter, "The IMF and World Bank have power over the financial
decisions of poor countries. Often poor countries have totally lost their
autonomy. They are often recolonised, with the powerful countries dictating
Stakeholders Support Group (SSG), formed by Kenyan opposition party members,
lawyers and NGOs, protests against the IMF's resumption of lending to the
Government, saying the administration has not made the necessary reforms
to stamp out corruption. The Government claims it has made all the reforms
required by the IMF and World Bank, but the SSG wants any new aid tied
to constitutional reform. There are fears that President Daniel Arap Moi
will try to hold on to power after his term of office runs out in 2002,
and the SSG accuses the British government of pressuring the IMF to resume
lending in order to keep him in power.
Daniel Arap Moi complains that the conditions imposed by the IMF and
World Bank for their new aid programme to Kenya are too harsh: "We
have been paying our debts for the past nine years but have not received
anything in return. Our economic growth will definitely slow down as a
result of the conditions. These conditions are the toughest ever imposed
IMF senior advisor for Africa, Jose Fajgenbaum, defends the terms of the
loan approved by the IMF in late July. He says, "Complaints that the loan
conditions infringed on Kenya's sovereignty were an exaggeration", adding
that "the reporting requirements attached to the aid package were normal.
They were the same as had been expected of Kenya as part of previous IMF
grants US$10.6 million credit on 25 October 1999 under ESAF. The Malawi
government is warned in the agreement that "structural reforms will be
critical in achieving success and in accelerating the mobilisation of committed
external assistance. Directors [of the IMF] urge the [Malawi] authorities
to accelerate the pace of structural reforms."
opposing IMF conditions end in violence. Trade
unionists and human-rights activists try to march to the New State House,
where a Consultative Group of western donor countries are meeting government
officials. The protesters, carrying placards protesting against the effects
of SAPs, are stopped by police. They are then dispersed by tear gas.
On 4 August
2000, the IMF approves a stand-by credit worth US$1,031 million for Nigeria's
2000-01 economic programme. The IMF notes "An acceleration of the implementation
of structural reforms is urgently needed, including to tackle serious deficiencies
in the provision of power, telecommunications and petroleum that are obstacles
to growth." While stressing the need for an adequate privatisation framework,
they urge that "there should be no delays in this urgent task". They warn
that this "will require diligence and resolute efforts by the authorities
to overcome evident weaknesses in institutional capacity".
the democratic elections in May 1999 of Nigeria's new President, Olusegen
Obasanjo, the country has continued to experience protests and riots calling
for an end to IMF-induced fuel price rises.
groups show dismay that their elected president is continuing with the
unpopular IMF-advised policies. Nigerian newspapers
report the "same old story", with Obasanjo planning to deregulate the oil
sector and raise petrol prices.
Arigbede, national co-ordinator of the Nigerian Poverty Eradication Forum,
says that Obasanjo is succumbing to IMF and World Bank pressure to implement
the policy: "Obasanjo is pretending that he is taking a decision in the
interest of the people. That is deceitful. Deregulation is going to compound
the poverty situation immensely."Adams Oshiomhole, a union leader, says,
"We are on a mission to rescue the president [who has] been hijacked by
the IMF and the World Bank. This country belongs to Nigerians."
Nigeria Labour Congress (NLC) takes 5,000 workers on a march to show their
opposition to the deregulation of the oil sector. They march on Aso Rock,
where they are attacked by armed police. Gani Fawehimi, a lawyer and human
rights activist, says, "It is sad and ironic that Obasanjo's regime, which
was brought into power by democratic process, is now unleashing autocratic
violence on the representatives of labour who are protesting against the
plan of the regime to increase petroleum from January 2000. The employment
of force by the Nigerian Police, which is directly under the president,
against unarmed protesters, amounted to a violation of the constitution
of this country, particularly the fundamental rights of peaceful protesters."
the National Economic Intelligence Committee warned that deregulating the
oil sector "may compound rather than relieve the situation" and suggested
a number of measures to prevent "importers making huge profits at the expense
of the country and its ordinary citizens". These include consultation with
labour representatives and the passing of an appropriate legislative framework
to channel benefits of deregulation back into the country. It stresses
that raising the price of oil will aggravate an already volatile situation.
continues with the IMF-advised fuel price hike, and in response Nigeria
is crippled by the most serious general strike since the end of military
Oil workers are joined by public sector and transport staff while Lagos
port and highways are blockaded, and both international and domestic flights
disrupted, and all petrol stations closed. Sporadic violence is reported
across Nigeria's cities, leading to several deaths. In Abuja, two police
stations are burned down.
Owusu, Head of the Jubilee 2000 Africa Initiative, says, "Popular outrage
alone does not change the minds of governments under such tremendous pressure
from the IMF to implement stringent measures that are at odds with what
this country and its people desperately need." He adds that "they [the
IMF] are now hell bent on squeezing the last drop of blood out of a new
democratic government that is struggling to restore social and economic
House of Representatives adopts a non-binding motion urging the federal
government to suspend all activities in respect to the IMF loan. The speaker,
Umar Ghali Na'Abba, calls for a full disclosure of information about the
IMF and its relationship with Nigeria: "It is only then that we can be
properly equipped to delve into these things."
securing the IMF loan, the Nigerian Assembly is concerned about further
IMF-advised privatisation. The Assembly starts
a "privatisation consultation", stating that the previous privatisation
programme was inadequate due to the "absence of a complete and properly
attuned legal framework". Nze Chidi Duru, the chairman of the House Committee
on Privatisation, also observes that "the stringent opposition to privatisation
was generally from workers and the labour unions [but] today the array
of complaints has broadened to include many other shares of opinion including
estate surveyors and valuers, engineers, shareholders and many others".
In a linked venture, the Assembly introduces a bill to repeal the previous
privatisation laws and "for the suspension of the privatisation exercise
until an adequate legal framework was provided".
Mutethia, a Nigerian journalist, notes that "African countries are being
asked to impose austerity measures on the populations, to sell state-owned
enterprises to foreign multinationals and give up more and more of their
political independence - those who accept the conditions are offered more
loans and shown as good examples to the rest. Those who do not are subjected
to more subtle economic pressure." The report continues, "In order to qualify
for more aid and loans, the governments in these countries have implemented
one austerity measure after another. The governments have only refused
to implement more measures when it became politically explosive with workers
organising protests and strikes. Yet the IMF has argued that they have
not done enough. The upshot of the austerity measures has been that these
governments have diverted money from development and expenditure on social
services to debt repayments."
In last year's
annual review of Paraguay's economic programme and performance, the IMF
expresses its disappointment at the Government's "lacklustre performance"
resulting from "the failure to implement needed structural reforms". They
offer the following advice: "Directors underscored the importance of sequencing
structural reforms appropriately while proceeding with the necessary changes
in the civil service and the social security system. They also expressed
concern over the high level of the minimum wage vis-a-vis Paraguay's major
trading partners, and noted that the rigidities embodied in present labour
market arrangements would become more evident as the economy opened itself
to world trade. Directors therefore urged the authorities to proceed with
the necessary labour reforms."
In an address
to the IMF and World Bank, Federico Antonio Zayas Chirife, Governor of
the Bank for Paraguay, states how "we [Paraguay] wish to reaffirm here
today that the Paraguayan people are committed to defending our Republic's
democracy and its institutions and are willing to undertake a successful
structural transformation of our society and national economy."
clash with police in demonstrations against 'non-negotiable' IMF reforms. Protesters call
a 48-hour general strike against the Government's plans to privatise its
telephone, water and railroad companies. In Asuncion, over 20 people are
injured and five arrested as riot police attack them with truncheons. In
a linked protest in the east district, 300 protesters are dispersed with
water canons while two buses are set on fire at the bus terminal. Nearly
half of the capital's shops are closed and residents are transported in
military vehicles as protesters
block public transport routes. A presidential spokesperson says that the
policies were 'non-negotiable' because the Government needs to meet IMF
targets to access up to $400 million in loans from the World Bank.
year's annual review of South Africa's economic policies, the IMF notes
"the extremely high level of unemployment" and urges the Government to
accelerate "structural reforms, increase domestic investment, attract foreign
investment, and enhance efficiency". This challenge will require "faster
and deeper implementation of the reforms, most notably in the areas of
labour market reform, trade liberalisation, and privatisation."
of South African trade unions (COSATU) begins a programme of mass actions
to protest against rising unemployment and labour market reforms.
The strikes are planned to stretch over five weeks and be staggered over
different sectors, beginning with automobile, textile, metal and leather
industries and followed by the public sector. Since the end of apartheid
in 1994, COSATU has helped introduce labour laws which protect the right
of workers. But recent attempts by the Government, encouraged by the IMF,
to implement wage restraint and labour flexibility - in order to attract
foreign investment - have meet widespread opposition. The unions believe
that the Government is liberalising the economy too quickly without making
adequate provision for redundancies and job maximisation.
Bezuidenhout, policy executive at SACOB, the South African Chamber of Business,
says, "The government is sticking to what is generally seen as sound economic
policy but the improvement in the economy has not translated into jobs."
Unemployment is estimated at 35 per cent.
Government reforms have been praised by the IMF but have put increasing
pressure on the alliance between COSATU, the ruling ANC party and the South
African Communist Party, risking its continued stability. Government plans
include the amending of labour laws, which the ruling alliance has spent
the last five years putting in place, saying they are too "worker-friendly"
and discourage investment and employment. Opposition leaders believe that
President Mbeki's hard line on leftwing labour activists, his support for
inflation targeting and his plans to accelerate the restructuring of state
assets will jeopardise "the glue that holds together the alliance of the
outside the meeting of IMF and government officials.
One of the protesters, Trevor Ngwane, a city councillor from the Soweto
township, says, "Many of those debts were used to buy weapons and suppress
the people during apartheid. So we are paying twice for it - once with
our lives, and now with an inability to fund critical social services.
Instead of building health clinics the Government is selling off zoos and
libraries to stay in the good graces of the IMF."
Finance Minister, Trevor Manuel, says that the main challenge for developing
is to create an alternative model to global trade and financial institutions
such as the World Bank and IMF. Manuel is chair of the 2000 Annual Meetings
in Prague and says he will use the opportunity to help the cause of developing
countries. But he also notes that "no one has come up with an alternative
model so far", and until developing countries suggest ways of reforming
the institutions, they shouldn't "whinge".
IMF grants a three-year ESAF loan worth US$349 million on 26 March 1999
on the condition that "the Government will increase reforms in the areas
of privatisation, public service, and monetary and banking supervision".
On 27 July 2000, the IMF approves an additional US$13.2 million PRGF loan.
The agreement affirms that "the [Zambian] authorities intend to pursue
a prudent monetary policy and to limit the credit to public enterprises
[and] complete the transition to a private-led economy, including the privatisation
of the remaining public utilities and the operations of the oil sector."
Frederick Chiluba, blames the IMF for the economic problems of his
country, stating that reforms which were meant to bring prosperity to the
country have only brought unemployment and a rise in poverty levels. He
says that western countries have told Zambia "to do certain things" to
help the economy, which would lead to increased economic stability. He
adds, "Then we are told, No, No, No, Africa needs to embrace the spirit
of partnership with NGOs, but where I come from, ZCTU also wants increased
wages. And then the IMF says do not give them, we do not know which way
to go. The problem we have in Africa is that we are rushing reforms as
if that is the only panacea to the problems." He says that if reforms are
rushed and not understood by the people, they may not help at all.
of protesters, demanding an end to IMF SAPs, are dispersed by armed riot
police in Lusaka, Zambia's capital, after trying
to picket the hotel were IMF and government officials are meeting. Organised
by a leading civil society group, Women for Change (WfC), the protesters
blame the IMF and World Bank for continued poverty in their country. "The
IMF are killing us, especially women and children," says Emily Sikazwe
of WfC. In a separate report, Sikazwe explains, "If you want to see the
impact of structural adjustment on Zambia go to the University Teaching
Hospital", the capital's largest hospital. The conditions are awful, she
says, and the wards are full of BIDs (Brought In Dead). She goes on to
explain how IMF and World Bank privatisation policies have resulted in
more than 60,000 people losing their jobs and 420,000 falling into destitution.
She says that "SAPs cause poverty".
urges Zambia to put economy ahead of politics.
IMF First Deputy Managing Director, Stanley Fischer, says that Zambia faces
hard decisions ahead of next year's elections and urges the Government
not to put politics ahead of economic sense. "I leave Zambia optimistic
but cautious. It is hard to take bold economic decisions in an election
year. It is easy to throw away what you have built in five years to achieve
short-term gain when the long run needs are very clear."
'Unwrapping the PRSP: can the IMF deliver
its poverty reduction promises?', World Development Movement, June 2000.
Sapping the poor: a critique of IMF poverty reduction strategies', World
Development Movement, June 2000.
approves US$7.2 billion three-year stand-by credit for Argentina', IMF
Press Release, 10 March 2000.
memorandum of economic policies', IMF Press Release, 14 February 2000.
leader gets tough on unions', Financial Times, 20 January 2000.
labour reform laws passed', Financial Times, 28 April 2000.
social demands weigh upon new president', IPS, 17 May 2000.
unions call for strike to protest IMF austerity plan', AFP, 31 May 2000.
adjustments trigger massive protest', IPS, 31 May 2000.
swept by wave of despair over economy', Financial Times, 17 August
support for Argentine general strike', BBC News Online, 9 June 2000.
teachers and scientists strike', BBC News Online, 29 August 2000.
court ruling condemns Argentina's illegitimate debt', Jubilee 2000, 7 August
approves three-year arrangement under the ESAF for Bolivia', IMF Press
Release, 18 September 1998.
approves second annual PRGF loan for Bolivia', IMF Press Release, 7 February
and IDA support US$1.3 billion debt service relief eligibility for Bolivia
under enhanced HIPC', IMF Press Release, 8 February 2000.
approves second annual PRGF loan for Bolivia', IMF Press Release, 7 February
- water war', Public Services International Research Unit Reports, June
in Bolivia', BBC News Online, 5 February 2000.
protests in Bolivia', BBC News Online, 12 April 2000.
protests claim further lives', BBC News Online, 10 April 2000.
the siege and the market', IPS, 21 April 2000.
civil society asserts demand for involvement in fight for debt cancellation
and poverty reduction', Jubilee 2000, 16 May 2000.
of intent from Brazil', IMF Press Release, 20 April 2000.
completes Brazil Fifth Review', IMF Press Release, 31 May 2000.
says: take the creditors to court for causing the debt crisis', Jubilee
2000, 29 April 2000.
million vote on debt in Brazil', Jubilee 2000, 8 September 2000.
campaigners hold referendum on debt', Jubilee 2000, 1 September 2000.
approves three-year extended fund facility for Colombia', IMF Press Release,
20 December 1999.
completes first Colombia review', IMF Press Release, 7 September 2000.
approves stand-by credit for Costa Rica', IMF Press Release, 29 November
concludes Article IV consultation with Costa Rica', IMF Press Release,
26 October 1999.
shop afire in Costa Rica', The Economist, 8 January 2000.
Rica divided as market reforms do what wars could not,' Financial Times,
6 April 2000.
approves stand-by credit for Ecuador', IMF Press Release, 19 April 2000.
completes first Ecuador review', IMF Press Release, 28 August 2000.
president imposes state of emergency', Financial Times, 7 January
promises help for Ecuador', Financial Times, 10 January 2000.
Indians planning massive protests', Financial Times, 15 January
Congress overrun as Indian protests mounts', Financial Times, 22
president flees palace amid riots', Financial Times, 22 January
Indians angry at betrayal', BBC News Online, 23 January 2000.
leader pledges stability', Financial Times, 25 January 2000.
loan to Ecuador', SAP Alert, Globalisation Challenge Initiative, 20 June
adopts tough stance', Financial Times, 6 June 2000.
faces new economic protests', BBC News Online, 15 June 2000.
against dollarization and IMF', Weekly News Update, Nicaragua Solidarity
Network New York, 18 June 2000.
Indians fight dollarisation', Financial Times, 14 June 2000.
urges compromise', Financial Times, 26 June 2000.
Ecuador Bill under the gun', Financial Times, 7 August 2000.
military thwarts Noboa', Financial Times, 10 August 2000.
Indians call for uprising', BBC News Online, 29 August 2000.
switches to US dollar', BBC New Online, 9 September 2000.
shortage as Ecuador adopts dollar', BBC News Online, 12 September 2000.
completes second Honduras review and approves US$21 million loan', IMF
Press Release, 7 June 2000.
and World Bank support debt relief for Honduras', IMF Press Release, 10
Strike protests IMF privatisation demands', AFP, 29 August 2000.
approves poverty reduction and growth facility loan for Kenya', IMF, 28
2000 campaigns protest trial of Kenyan debt campaigners', Jubilee 2000,
18 May 2000.
debt demonstrators rejoice as charges for 'illegal' march are dropped',
Jubilee 2000, 25 May 2000.
reject new World Bank and IMF lending', News Updates, Bretton Woods Project,
African politics consumes its children', The East African (Nairobi),
30 August 2000.
Bank pushes Kenya to privatise power companies', The East African,
30 August 2000.
completes review and approves US$10.6 million credit tranche for Malawi',
IMF Press Release, 25 October 1999.
2000 campaigners meet donors in Malawi as protesters face tear gas', Jubilee
2000, 26 May 2000.
approves stand-by credit for Nigeria', IMF Press Release, 4 August 2000.
matter of time', Newswatch Nigeria, 12 January 2000.
oil price increase fuels protests', News Updates, Bretton Woods Project,
oil price hike blunder', Newswatch Nigeria, 22 January 2000.
in grip of general strike', Financial Times, 10 June 2000.
People of Nigeria resist the IMF', Stop-IMF email list, 19 June 2000.
parliament rejects IMF', News Updates, Bretton Woods Project, August 2000.
Assembly initiates, debates new privatisation bill', Nigeria Guardian,
16 August 2000.
and globalisation', Nigeria Guardian, 15 August 2000.
concludes Article IV consultation with Paraguay', IMF Press Release, 29
by the Hon Federico Antonio Zayas Chirife, Governor of the Bank for Paraguay',
Joint Annual Discussion of the Board of Governors, 28-30 September 1999.
against strikers protesting IMF privatisation', Stop-IMF email list, 25
concludes Article IV consultation with South Africa', IMF Press Release,
10 March 2000.
African unions in unemployment protest,' Financial Times, 1 February
shifts the emphasis to business', Financial Times, 1 February 2000.
African bitterly criticizes IMF policies', Chicago Tribune, 14 April
for a workable solution', IPS, 29 August 2000.
approves ESAF loan for Zambia', IMF Press Release, 26 March 1999.
completes first review of Zambia under PRGF-supported programme and approves
US$13.2 million disbursement', IMF Press Release, 27 July 2000.
reforms have brought poverty', The Post of Zambia, 9 February 2000.
faces new round of protests', One World News Service, 26 April 2000.
from Zambia', The Nation, 14 February 2000.
urges Zambia to put economics before politics', Development News, World
Bank, 7 August 2000.