Rick Rowden talks to Doug Hellinger, the leader of a groundbreaking probe into World Bank programmes in the developing world, about the initiative’s significance and its lessons for today’s advocacy groups working to change the IMF and World Bank.
In 1996, the Development Group for Alternative Policies (D’GAP) and co-founder Doug Hellinger initiated an international coalition of civil society organisations (CSOs) to conduct a formal investigation with the World Bank. This effort aimed 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 pioneering effort led by civil society organisations (CSOs) worldwide to investigate, from the grassroots level, the impacts of World Bank loan programs. This investigation was based on input from hundreds of local and national organisations from 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 50th anniversary of the IMF and World Bank in 1994. The 1990s marked the high point of international public pressure on 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 1990s marked the high point of international public pressure on international institutions, putting them on the defensive for the first time.
According to 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 worldwide 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 the process itself mattered the most. The truly important part was getting so many people together in such a large-scale investigation. 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 the World Bank had not examined 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).
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.
Critically, Hellinger emphasised that the report revealed the World Bank’s economic policies had negative impacts on the poor, women, small producers, and others because the policies catered to the commercial interests of powerful foreign investors and companies both inside and outside these countries. It indicated that small farmers and domestic businesses could not compete with the influx of often subsidised foreign imports nor afford credit at higher market interest rates. Overall, the report found that the World Bank’s structural adjustment programmes undermined domestic firms, especially SMEs, weakened food security, damaged the natural environment, and deepened poverty. Not only did the policies lead to the deindustrialisation of numerous countries, but the production they fostered tended to be of the low-wage maquiladora type, which did not generate backward and forward linkages. This inevitably resulted in a decline in employment and incomes and, consequently, in consumer demand for local production for the domestic market. Coupled with the enforced withdrawal of government support for food-based agriculture, this led to 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; 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 showed that the World Bank’s economic policies negatively impacted the poor, women, small producers, etc., because the policies did not reflect the needs or interests of people at local levels. The report also found that liberalising their financial sectors led to inflows of speculative capital that increased financial instability and undermined national economic development.
The report showed that the World Bank’s economic policies negatively impacted the poor, women, small producers, etc., because the policies did not reflect the needs or interests of people at local levels.
According to Hellinger, one of the lasting impacts of the SAPRI exercise and report was simply that if you want to understand the underlying causes of poverty, you must have a local base of inputs on the ground. For example, what happens when trade barriers are dropped and cheap goods 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 their profits out of the country rather than recycling them in the local economy? To answer such questions, you must get multiple voices from across countries.
Click HERE for The Mint’s full interview with Doug Hellinger.
