The World Bank and the International Monetary Fund (IMF), by operating on a “one dollar, one vote” basis, benefit rich countries and impose economic policies on poor countries that harm the development of these nations, assessed during the G20 Social South Korean economist Ha Joon Chang, author of the best-selling Kicking the ladder: development strategy in historical perspective.
“These institutions [FMI e Banco Mundial] they decide their policies based on one dollar, one vote. Countries have participation according to the money they allocate to these organizations. In other words, they are linked to economic power. The United States has 80% of the votes in these organizations and China only 6%, despite the fact that the Chinese economy is two-thirds of the US economy. With this, rich countries are able to influence all decisions. These institutions are aimed at rich countries and obey their wishes”, says the professor.
The South Korean economist participated in the G20 Social debates this Friday (15) on Global Governance Reform, which proposes changes to institutions such as the UN Security Council, IMF and World Trade Organization (WTO). This is one of the Brazilian government’s priorities for the G20 summitwhich takes place on November 18th and 19th, in Rio de Janeiro.
Joon Chang also criticized the policies of the so-called Washington Consensus, a set of measures defended by the economic mainstream to be applied in all countries. They include, among others, cuts in public spending, privatizations, deregulation of the financial market and relaxation of labor rules, also known as neoliberal policies.
For the South Korean expert, these policies applied since the 1980s in most less developed countries have proven to be a failure. “It is a complete lie that these policies will help countries. In the 1970s, Latin American countries grew more than 3% per year, on average. After neoliberal policies, it started to grow, on average, 0.8% per year. They didn’t deliver growth. Still, they continue to be imposed and rich countries continue to command loans from the World Bank and the IMF”, highlighted Joon Chang.
The book Kicking the scaleby Joon Chang, analyzes the pressure that the developed world puts on poorer countries to adopt certain policies and institutions that were not used by rich countries in the past to achieve development. In other words, rich countries “kick the ladder” that they used to develop, preventing other nations from following the same path.
“We come from a history of domination, colonialism and imperialism. Therefore, we start from different starting points. An economic rule for all is a rule written for the benefits of rich countries in the Global North”, added the South Korean.
Before the G20 leaders’ summit, organized civil society movements and entities discuss at G20 Social the society’s proposals that will be forwarded, by President Luiz Inácio Lula da Silva, to the leaders of the 19 main economies on the planet, plus the European Union and the African Union.
Among the proposals is the reform of international institutions such as the IMF and World Bank so that less developed countries have more decision-making power in these bodies.
donald trump
Analysts consulted by Brazil Agency assess that the debate on global governance reform at the summit of G20 will be limited by the election of Donald Trump as president of the United States, since his last administration ignored international forums.
President Lula’s advisor for International Affairs, Ambassador Celso Amorim, present at this Friday’s G20 Social debate, said that the reform of global governance is an ongoing process and believes that there will be some progress on the topic at this G20.
“I believe that a diagnosis has been made about the need for change in global governance. Now, this is a process that will have to continue in the future.”
Regarding the possibility of Trump interrupting this process, Amorim highlighted that it is necessary to wait. “We’ll see how things evolve. We hope that even in pursuit of your interests, President Trump will also help”, he pondered.
