An interview with Doug Hellinger of The Development GAP on the report’s significance and lessons for today’s advocacy groups working to change the IMF and World Bank
Doug Hellinger and his organisation, The Development GAP, were pioneers in driving international civil society participation in global economic programming, including in a major investigative exercise that scrutinised the impact of the economic development policies of the World Bank on the ground in multiple developing countries. On the 20-year anniversary of the high-profile SAPRI report, Rick Rowden asked him about the report’s lasting significance for The Mint.
Background
In 1996, The Development Group for Alternative Policies (D’GAP) began leading an international coalition of civil society organisations (CSOs) in a formal investigative exercise with the World Bank to review the economic, social, and environmental impacts of the institution’s controversial loan conditions and policy advice to developing countries over the previous 15 years known as Structural Adjustment Programs (SAPs). The Structural Adjustment Participatory Review Initiative (SAPRI) was a groundbreaking effort led by civil society organisations (CSOs) around the world to investigate from the grassroots up the impacts of World Bank loan programs based on inputs from hundreds of local and national organisations on the ground in countries of the Global South that participated in the exercise.
The World Bank structural adjustment loan conditions and economic policy reform packages for borrowing countries were highly controversial because the economic hardships associated with implementing the policies had often sparked protests and political unrest across the developing world during the 1980s and 1990s. With the support of its Southern partners, D’GAP had launched with other US economic justice and environmental organisations the 50 Years Is Enough campaign in advance of the 50-year anniversary of the IMF and World Bank in 1994. The 1990s marked the high point of international public pressure on the international institutions, putting them on the defensive for the first time. With the 50 Years Is Enough campaign going global, the new World Bank president, James Wolfensohn agreed to the NGO challenge in 1996 to participate jointly in the CSO-led SAPRI investigative exercise.
The Mint: In what ways did the context of the late 1990s inform the SAPRI exercise?
Hellinger: In some important ways, the groundwork for the SAPRI exercise had been laid by the 50 Years Is Enough network of civil society groups around the world, which had been vociferously complaining about the World Bank’s and IMF’s policies. The high-profile protests against the policies that had occurred across Africa, Asia, and Latin America had raised the profile of the controversial nature of the economic policies of the World Bank and IMF. Apart from the types of textbook explanations offered by economists and government officials, there had never been a truly alternative, bottom-up exploration of the policies or their controversial impacts by people on the ground in developing countries who had been experiencing them first-hand, so the timing was right to undertake the SAPRI investigation.
The Mint: How did so many different types of civil society organisations (CSOs) around the world come together to focus on the same set of negative economic, environmental, and related impacts of institutions like the World Bank?
Hellinger: Traditionally, NGOs in the Global North have had a common tendency to stay quite siloed and focused within their own issue areas of expertise. So, the various groups focused on things like labor rights, environmental concerns, debt cancellation, human rights, poverty reduction, social justice issues, trade policy, etc., typically did not sufficiently talk to one another, even though they were all involved international development issues one way or another. To their credit, US environmental groups challenged the World Bank not only on the ecological impacts of the large dams and roads it financed, but also on the displacement of local populations without their consent. Some groups from different sectors also came to understand how powerful commercial interests in the Global North used their influence to drive both the construction projects and the controversial structural adjustment programs (SAPs) attached as conditions on loans to borrowing countries in the Global South. Meanwhile, many of the social justice groups in the faith-based communities were a bit more timid about challenging the World Bank on economic issues. With time, however, they realised they understood much more about poverty than did the World Bank economists. It just took them awhile to understand this, and then it became possible to forge links with environmental organisations and others in common campaigns. Eventually, a well-rounded critique against the World Bank’s set of economic and development projects and polices was forged, in which many different types of CSOs all started seeing how their issues were related to problems caused by the Bank’s economic and financial imperatives. While these different sectors of activists all had in common the realisation about the importance of listening to local voices on the ground in the affected communities, having these disparate groups mobilise together and act in concert to advocate for changing World Bank policies and programs is not something that happens organically on its own. Active agents are needed to forge cohesion to bring people together across sector specialisations and across countries, and this was a role that D’GAP played leading up to and driving the SAPRI exercise.
In many countries of the South where there are strong CSO communities that are linked to the local level, there exists a more multifaceted and holistic view of the problems across most sectors and population groups. If nothing else, they are closer to the reality, which of course is more integrated than that reflected in the more siloed Northern NGO community. While Southern NGOs tend to take a more integrated approach that can make cooperation more organic and possible, achieving a meaningful impact on a large scale requires a strategic opportunity to make it happen. The SAPRI exercise presented such an opportunity in the way it was structured, with hundreds of organisations across a multitude of sectors and populations in nine developing countries participating in the first stage of their national exercises to share their experiences under SAPs and then collectively choosing the most critical issues for further investigation with the World Bank and their governments.
The Mint: What was so unique about the way SAPRI was set up?
Hellinger: The most significant and unique thing about the SAPRI exercise was the structure and process of the five-year, multi-country investigative exercise, which showed how civil society organisations around the world could coordinate and collaborate on addressing global economic policy debates. It was one of the world’s first such international initiatives based squarely on the experiences of those impacted by these policies on the ground in the affected countries. The final SAPRI report came out at the end of the process, but it was the process itself that mattered the most. Getting so many people together in such a large-scale investigation was the truly important part. The exercise involved the participation of hundreds of CSOs in national forums with the World Bank and their governments in Bangladesh, Ecuador, El Salvador, Ghana, Hungary, Mexico, the Philippines, Uganda, and Zimbabwe on the impacts of World Bank policies on the ground in their respective countries. Such groups included national trade unions, small business and farmers’ associations, environmental and indigenous peoples’ organisations, women’s and community groups, religious and human rights organisations, development and research institutes, NGOs, and associations of youth, pensioners, and the disabled. These forums further narrowed down the issues for participatory research efforts that were pointedly designed to shed light on areas that had not been examined by the World Bank in its typical research. The research results were discussed in second national forums, which typically drew significant political and media coverage. Subsequent national reports became the basis for the final SAPRI Report published in 2004 as Structural Adjustment: The SAPRI Report: The Policy Roots of Economic Crisis, Poverty and Inequality(London: Zed Books Ltd).
The Mint: How were all of these groups coordinated?
Hellinger: A group of Southern and Northern NGOs that developed the structure and “rules of the game” with the World Bank established the Structural Adjustment Participatory Review International Network (SAPRIN). The Network’s steering committee came to include representatives of the head organisations as chosen in each participating country. It included leading civil society activists from across the Global South, including Lidy Nacpil of the Freedom from Debt Coalition in The Philippines; Gemma Adaba of the International Trade Union Confederation (ITUC); Yao Graham of Third World Network-Africa and Charles Abugre of ISODEC, both in Ghana; and Hellen Wangusa of African Women’s Economic Policy Network in Uganda; Kamal Malhotra of Focus on the Global South; Carlos Heredia of Equipo Pueblo in Mexico, Roberto Rubio of FUNDE in El Salvador, and Ivan Cisneros of IEDECA in Ecuador, among many others. The SAPRIN committee also included members based in the US and Europe, who helped protect their Southern counterparts from interference from the World Bank. As the Secretariat, D’GAP’s jobs included fundraising (from non-World Bank sources, mainly in Europe) and administrative and financial management. Each region had its own Regional Coordinator, so the Network was very well structured and the relationships were terrific.
The Mint: And the World Bank agreed to go along with this?
Hellinger: Yes. At the time, World Bank President James Wolfensohn agreed to have the Bank participate jointly in the SAPRI exercise. Wolfensohn said he wanted to knock down the wall between his staff and the people, and bringing in critical CSO voices from outside seemed like a useful way to help him achieve such goals. So, while Wolfensohn may have had his own reasons for getting engaged, World Bank management and most of its staff were not so happy to entertain critical perspectives. Keep in mind, the environmental movement and the 50 Years Is Enough network had successfully raised the profile of the Bank’s controversial projects and policies and it was then experiencing major international scrutiny and public pressure unlike any other time since it was established in 1944. World Bank management felt they needed to control the SAPRI exercise and its conclusions. When they saw that they would not be able to do so, the Bank began to distance itself from the process, to the point of trying to undermine its legitimacy, ending it prematurely, and writing its own embarrassingly flimsy report. But Wolfensohn was impressed by the professionalism of the report SAPRIN wrote and placed it in the World Bank’s bookstore. Still, Bank management and staff with strong links to the US Treasury Department blocked attempts at follow-up, including our pressure to involve local CSO networks in determining national economic strategies as part of the Bank-managed Country Assistance Strategies (CASs) and its Poverty Reduction Strategies.
The Mint: How was the SAPRI exercise funded?
Hellinger: In order to maintain its independence, participants in the SAPRI exercise did not want to take any of its funding from the World Bank. The exercise was instead funded by a consortium of donors that included the governments of Norway, Sweden, the Netherlands, Belgium and Germany; the European Union; the United Nations Development Program (UNDP); the African Development, Charles Stewart Mott, Rockefeller, and W.K. Kellogg Foundations; and various other NGOs, foundations and agencies at the country level.
The Mint: What did the final SAPRI report conclude?
Hellinger: Critically, the report showed that the World Bank’s economic policies had negative impacts on the poor, women, small producers, etc. because the policies catered to the commercial interests of powerful foreign investors and companies both outside and inside these countries and did not reflect the needs or interests of people at local levels. It found that small farmers and domestic businesses had not been able to compete with the flood of often subsidised foreign imports nor afford credit at higher market interest rates. Overall, the report found that the World Bank structural adjustment programs undermined domestic firms, especially SMEs, weakened food security, damaged the natural environment, and deepened poverty. [Notably, similar findings about the negative economic impacts of the IMF and World Bank structural adjustment programs had been documented the year before by the United Nations Development Program (UNDP) in its Human Development Report in 2003]. Not only did the policies lead to the deindustrialisation of a number of countries, but the production it did foster tended to be of the low-wage maquiladora type that did not generate backward and forward linkages. This inevitably led to a drop in employment and incomes and hence in consumer demand for local production for the domestic market. Along with the forced withdrawal of government support for food-based agriculture, the result was the disarticulation of national economies. At the macro level, the report found that, over the previous 15 years, many of the promised gains in economic efficiency, competitiveness, savings, and revenues from the privatisation of public enterprises, labour market ‘flexibilisation,’ and large-scale mining operations had not materialised; that trade liberalisation had tended to increase rather than decrease current-account deficits and external debts of the borrowers; and the growing presence and power of transnational companies, often the greatest beneficiaries of adjustment programs, had diminished the economic sovereignty of many countries and their governments’ capacity to respond to the economic and social needs of their own people. The report also found that the liberalisation of their financial sectors led to inflows of speculative capital that increased financial instability and undermined national economic development.
The Mint: What was the significance of the SAPRI report when it was released?
Hellinger: Historically, the powers that be had always excluded local participation in national development policy making. Many NGOs knew that local people not only had the right to be involved in their own development, but also that good policy could not be made without utilising the excellent knowledge that locals possessed about their regions and their environments. But this knowledge was considered dangerous because it often contradicted the claims of the powerful. So, the significance of the SAPRI exercise was that it was the first time a major international investigative initiative was based on the idea that all sorts of people with first-hand knowledge of local health, education, agricultural, women, environment, labour and other such conditions, had to be brought together – because they were all being impacted by the same structural adjustment development model due to the same imperative their governments faced to open up their economies to foreign investors. The SAPRI report was the first-ever major international effort to bring such local voices into an analysis that would be heard in the halls of power at the World Bank in Washington DC. And it showed that vulnerable people from across the different economic sectors in the countries had to be represented at the table when the Bank and other aid agencies were discussing economic policies with borrowing governments, and in reality often imposing them. If not, their needs and interests would not be reflected in the policies, which would likely be inappropriate for, and detrimental to, the local economy.
The Mint: What was a major lesson learned by the experience?
Hellinger: The experience showed that you can take on the powerful, and that it is necessary to do so by tapping into local knowledge because people are living it on the ground in the affected counties. It showed that spaces can be created for enabling meaningful civil society participation – and not only on specific development projects, but on controversial economic policies, too. The whole idea was to assess this particular set of economic policies in a very public way that challenged the way the World Bank would have preferred to handle it, which was to just sit with individual borrowing governments in quite discussions behind closed doors. The World Bank knew the borrowing governments needed debt relief and new foreign aid and would therefore just say yes to its loan conditions, sometimes even as protests against structural adjustment were happening in their streets. So, the SAPRI effort was all about opening the public debate on these policy issues. We were offering one model, but there are many others. The idea that civil society should have a seat in national economic policymaking – that was what was new at the time – and it was a claim we were staking, together.
People on the ground were able to give us the first global snapshot of what was happening in their countries, express their experiences, and air their grievances to an international audience that was listening for the first time. I think one of the lasting impacts of the SAPRI exercise and report was simply the idea that if you want to understand the underlying causes of poverty, you need to have a local base of inputs on the ground. For example, what happens when trade barriers are dropped and cheap goods come in and undermine local women’s food production? What happens when privatisation allows foreign firms to provide electricity for industries and urban middle classes but ignores the poor people in the countryside? What happens when foreign investors quickly take all of their profits out of the country rather than recycling them in the local economy? To answer such questions, you need to get multiple voices weighing in from across multiple countries. This approach that was pioneered with SAPRI would later influence the design of other international initiatives that also sought to involve civil society groups across multiple countries, such as the World Commission on Dams and, to a certain extent, the Extractive Industries Review.
The Mint: In retrospect, what do you think were the major strengths and weaknesses of the SAPRI report?
Hellinger: One of SAPRI’s strengths was the involvement of literally hundreds of groups, thousands, if you include federation members, which were able to successfully generate great media publicity in their countries. One of its weaknesses was that it did not focus enough on the global economic actors driving the push for structural adjustment policies in the first place, i.e., namely the international financial sector and the international foreign investors that wanted greater access to markets, cheap labor, and resources in developing economies. The World Bank didn’t really want a process that highlighted the influencing role of such actors. Instead, it wanted to put the focus, and the onus, on developing country governments and keep the focus on the individual national levels.
The Mint: Did the report do anything to end the World Bank’s controversial structural adjustment programs?
Hellinger: The 50 Years Is Enough Network had magnified global calls for the end of the World Bank’s structural adjustment policies, and the Jubilee 2000 global debt cancellation movement had built up global calls for a debt-relief initiative – when combined, around the turn of century, both movements made a formidable global force, with both wanting an end to the World Bank’s policies and debt cancellation. What the G7 and World Bank therefore offered was debt cancellation conditioned on a continuation of the Bank’s adjustment policies. This offer, or ultimatum, effectively divided the global CSO community, with some wanting to take the deal in order to get the needed debt cancellation as soon as possible, while others wanted to reject the deal because they opposed the continuation of the policies, which had helped to create the debt to begin with. Ultimately, new global debt cancellation initiatives were reached (HIPC and MDRI), but the World Bank’s structural adjustment policies continued. The names of these programs were changed, often to include the words “poverty reduction” in the new titles, for public relations reasons, but the broad nature of the policies continued – namely, serving the short-term commercial interests of foreign investors and the domestic elite over the long-term needs and interests of local SMEs, women, small farmers, workers, and the poor. The SAPRI report exposed all of this, adding to a generation of work and protest by social forces across the countries of the South. By 2004, the policies of the IMF and World Bank were in such low repute that few developing countries continued to borrow from them until the global financial crisis of 2008 compelled them to borrow again.
The Mint: In response to a journalist’s question about structural adjustment at a 2016 press conference, the then-IMF head, Christine Lagarde, stated: “Structural adjustments? That was before my time. I have no idea what it is. We do not do that anymore.” Any thoughts?
Hellinger: As the old saying goes, the devil’s greatest trick was convincing people that he didn’t exist. By changing the names of their structural adjustment programs to “poverty reduction” programs, the World Bank was somewhat able to move the discussion away from its controversial macroeconomic development policies. We shouldn’t be surprised that financial power is great at controlling the narrative. Margaret Thatcher famously popularised the slogan “There is no alternative (TINA)” to justify her conservative macroeconomic approach, and Francis Fukuyama pushed his ridiculous “End of History” thesis, which was widely believed, and so on. Neoliberal economics had become so ubiquitous across the world that it was difficult to see, particularly for younger generations, how there were any other ways to organise national economic policies. But neoliberalism is (finally) on the ropes now, and the Biden/Sanders agreement to strengthen labour’s position, promote industrial planning, and emphasise more integrated national development, at least in the US, is a good sign for the future and has both economists and political scientists talking about a post-neoliberal era.
The Mint: What advice would you give to today’s CSO advocates who are working on IMF/World Bank reform issues?
Hellinger: Today, CSOs should see past the “poverty reduction” discourse of institutions like the World Bank. Are Bank-supported government economic policies building or destroying the domestic linkages within the national economy? Are they helping to build up domestic firms and local producers for the local market? Are they building local demand for local production? Or are the types of trade agreements, FDI, and attendant policy changes undermining these domestic linkages and destroying local livelihoods and the environment? These are the kinds of critical questions CSOs should still be looking at today when analysing World Bank policy support. Also, you’ve got to be in it for the long haul. It’s the beginning of the end for neoliberal economics, but these things take a long time to change. I hope they will keep up the fight and push to get their partners on the ground a seat at the policymaking table.
