[Nasional-e] The era of market fundamentalism is over

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The era of market fundamentalism is over=20
  Robert Weissman=20

The Washington Post. Thursday, September 26, 2002


Developing countries=20

WASHINGTON Marketization, deregulation, privatization and the =
opportunities for market manipulation offered by inadequate regulation - =
all central elements in the rise and fall of Enron - are now discredited =
in the United States. And in developing countries, where their effects =
have been most devastating, they are the object of widespread public =
opprobrium. Unfortunately, the IMF and the World Bank continue to sing =
from the market fundamentalist hymnal.=20
.
Just as Enron created new markets in exotic commodities such as =
bandwidth, so the IMF and the World Bank have worked to marketize =
services previously in the public and noncommercial realm. Case in =
point: user fees for primary health care. The World Bank continues to =
support such charges, even after reversing its support for education =
fees.=20
.
The effect is to deny poor people access to care. In Papua New Guinea, =
for instance, introduction of user fees led to a decline of about 30 =
percent in the average monthly attendance at outpatient health centers.=20
.
Reckless deregulation in California enabled Enron and other energy =
companies to gouge customers. Similarly, IMF- and World Bank-induced =
deregulation in developing countries has had disastrous consequences. In =
the Philippines and in Ghana, for example, deregulation in the mining =
sector has opened the country to giant multinational companies, =
displacing tens of thousands of residents and paving the way for =
environmental devastation. Central to Enron's international agenda was =
the takeover of privatized electricity and water services in developing =
countries. One country where it sought to gain control of a privatized =
water system was Ghana. Concerns about corruption, including those =
voiced by the World Bank, led to the collapse of the deal. But the World =
Bank continues to push for water privatization in the West African =
nation. In preparation, water prices have doubled, and the bank =
anticipates prices rising for the foreseeable future, even though poor =
Ghanaian consumers can pay as much as 10 to 20 percent of their income =
for drinking water. In a country where one-third of urban consumers are =
not even connected to water pipes, the private operators would have no =
duty to expand service to the poor.=20
.
In the Dominican Republic, World Bank-supported privatization let Enron =
swoop in, buy parts of the electric utility and jack up rates. When =
consumers and the government could not pay the high prices, Enron turned =
off the power. Enron and other buyers of the privatized utility are now =
alleged to have paid too little, thanks to a valuation performed by an =
Arthur Andersen subsidiary. Enron's financial fraud is now legendary, =
but consider the IMF's deceit in Brazil. Everyone knows that the country =
has no prospect of paying off its foreign debt. But rather than =
acknowledging this and working out a discounted payment arrangement for =
creditors, the IMF is making new loans to pay off old ones.=20
.
This has two immediate effects: It enables the private creditors, =
including the big U.S. banks, to be paid off, with debt obligations =
shifted to the IMF; and it enables the IMF to extract austerity measures =
from Brazil that are explicitly intended to lock in fundamentalist =
market policies, no matter which party Brazilians elect in coming =
elections.=20
.
Restraints on corporate power are even more necessary in developing =
countries than in the United States. But the market fundamentalists at =
the IMF and the World Bank continue to systematically unshackle =
corporate activity in the Southern Hemisphere. That is a major reason =
why thousands will demonstrate against the IMF and the World Bank in =
Washington this weekend. Action makes a difference. In 2000, after the =
last major U.S. demonstrations against the IMF and the World Bank, =
Congress passed a law requiring the United States to oppose IMF or World =
Bank loans that include user fees for primary education or health care. =
Partly as a result, Tanzania lifted primary education user fees, and 1.5 =
million additional children, mostly girls, were able to go to school.=20
.
The writer, editor of Multinational Monitor magazine, contributed this =
to The Washington Post.=20


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<DIV><FONT face=3D"Trebuchet MS" size=3D2><FONT face=3D"Times New Roman" =
size=3D3>The=20
era of market fundamentalism is over <BR>&nbsp; Robert Weissman </FONT>
<DIV>&nbsp;</DIV>
<DIV>The Washington Post. Thursday, September 26, =
2002<BR><BR><BR>Developing=20
countries <BR><BR>WASHINGTON Marketization, deregulation, privatization =
and the=20
opportunities for market manipulation offered by inadequate regulation - =
all=20
central elements in the rise and fall of Enron - are now discredited in =
the=20
United States. And in developing countries, where their effects have =
been most=20
devastating, they are the object of widespread public opprobrium. =
Unfortunately,=20
the IMF and the World Bank continue to sing from the market =
fundamentalist=20
hymnal. <BR>.<BR>Just as Enron created new markets in exotic commodities =
such as=20
bandwidth, so the IMF and the World Bank have worked to marketize =
services=20
previously in the public and noncommercial realm. Case in point: user =
fees for=20
primary health care. The World Bank continues to support such charges, =
even=20
after reversing its support for education fees. <BR>.<BR>The effect is =
to deny=20
poor people access to care. In Papua New Guinea, for instance, =
introduction of=20
user fees led to a decline of about 30 percent in the average monthly =
attendance=20
at outpatient health centers. <BR>.<BR>Reckless deregulation in =
California=20
enabled Enron and other energy companies to gouge customers. Similarly, =
IMF- and=20
World Bank-induced deregulation in developing countries has had =
disastrous=20
consequences. In the Philippines and in Ghana, for example, deregulation =
in the=20
mining sector has opened the country to giant multinational companies,=20
displacing tens of thousands of residents and paving the way for =
environmental=20
devastation. Central to Enron's international agenda was the takeover of =

privatized electricity and water services in developing countries. One =
country=20
where it sought to gain control of a privatized water system was Ghana. =
Concerns=20
about corruption, including those voiced by the World Bank, led to the =
collapse=20
of the deal. But the World Bank continues to push for water =
privatization in the=20
West African nation. In preparation, water prices have doubled, and the =
bank=20
anticipates prices rising for the foreseeable future, even though poor =
Ghanaian=20
consumers can pay as much as 10 to 20 percent of their income for =
drinking=20
water. In a country where one-third of urban consumers are not even =
connected to=20
water pipes, the private operators would have no duty to expand service =
to the=20
poor. <BR>.<BR>In the Dominican Republic, World Bank-supported =
privatization let=20
Enron swoop in, buy parts of the electric utility and jack up rates. =
When=20
consumers and the government could not pay the high prices, Enron turned =
off the=20
power. Enron and other buyers of the privatized utility are now alleged =
to have=20
paid too little, thanks to a valuation performed by an Arthur Andersen=20
subsidiary. Enron's financial fraud is now legendary, but consider the =
IMF's=20
deceit in Brazil. Everyone knows that the country has no prospect of =
paying off=20
its foreign debt. But rather than acknowledging this and working out a=20
discounted payment arrangement for creditors, the IMF is making new =
loans to pay=20
off old ones. <BR>.<BR>This has two immediate effects: It enables the =
private=20
creditors, including the big U.S. banks, to be paid off, with debt =
obligations=20
shifted to the IMF; and it enables the IMF to extract austerity measures =
from=20
Brazil that are explicitly intended to lock in fundamentalist market =
policies,=20
no matter which party Brazilians elect in coming elections. =
<BR>.<BR>Restraints=20
on corporate power are even more necessary in developing countries than =
in the=20
United States. But the market fundamentalists at the IMF and the World =
Bank=20
continue to systematically unshackle corporate activity in the Southern=20
Hemisphere. That is a major reason why thousands will demonstrate =
against the=20
IMF and the World Bank in Washington this weekend. Action makes a =
difference. In=20
2000, after the last major U.S. demonstrations against the IMF and the =
World=20
Bank, Congress passed a law requiring the United States to oppose IMF or =
World=20
Bank loans that include user fees for primary education or health care. =
Partly=20
as a result, Tanzania lifted primary education user fees, and 1.5 =
million=20
additional children, mostly girls, were able to go to school. =
<BR>.<BR>The=20
writer, editor of Multinational Monitor magazine, contributed this to =
The=20
Washington Post. <BR></DIV></FONT></DIV></BODY></HTML>

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