T N Ur IdM quarter of last I year. In Madrid, the Bret A ton Wood* Institution* — the International Monetary Fund IMF of Fund) and the World Hank IWB nr Bank) — celebrated their 50th birth an mvcr*ary The golden Jubilee meet al the. Palacio de Cougresao* wa* hlktortc in a sense that II saw an uitprece denied divide between the nth and tlr developing countries for the firn lime in the tnsututton* half a century long life-span. It wa* also perhaps tilt first occaMixi when different individual* and non government organisation* (NGOa) raised a vociferous protest against policies and way* of functioning of the two premier world in*tltuUon* Some of the protestor* even 'demanded the dismantling of them on the ground that they have actually promoted *ocial in)u*lke and accentuated inequalities In the Third World rountrse* Though tt 1* audacious to make such a demand of their abolishment, the protestor* have succeeded In doing what tliey *o earr^Mly wanted to. They have sent the message to the Institutions as well a* to the rich natfons that tiie Fund and Bank must reort ent their programmes and pohcle* acx-onllng to (he actual needs of the hundreds ot mil lions of people around the world

Evnllrthai

The WB and 1MF were set up in 1944 al the Bretlon Wood* Conference tn New Bamahare with *unic assigned objective* While the World Bank wa* designed to help re r-onstrucllng and restructuring the Wai devastated Europe lhe IMF wa* created to oversee and work lor a stable (tnnncial system

But the unfolding events look away the Initial respon-

Utility of the WB The War lorn Europe started to rejuvenate Itself with the help of the Marshall Plan, named after the US Secretary of State George Marsha))'. Then the Bank turned Its attention to the developing world and assumed Its present role of a direct lender for specific projects These are projects of mega scale such as dam* and canal works, power plants, roads, major Irrigation projects.

ports and other infrastructural project* that are seemed to be essential for the development fa a country

The Fund, on the other hand c rossed a more eventful time since ft* invpiton From I be very beginning, the Fund membership Is open In uxm tries and each member has to contribute to the Fund* fund according to Ms share of GRP and the arvession to Fund means gaining the drswing right according to a quota A member also acquires the right to vote according to tt* contribution towards the Fund a capital The IMF assist* « member by financing It* trade deficit and other BOP problem* through an Inalru ment tailed Special Drawing Right* I SDR) which are now about SDR 25 billion m ctrvuls Bon Moat of (he industrial countries adopted a floating exc hange rale In 1971 and (he IMF haa bevome the flag beam fa Ilie rale since lien To help the hard currency starved and structural prob lent ridden countries. the Fund has also inuodcMCd win dows like Extended Fund

Facilities (EFF). Structural Fund facilities fSFF). Enhanced EFF and so on. The Madrid Conference In October 1994 witnessed a deadlock when the G-7 countries tried to introduce a new financing window — the Systemic Transition Facility (STF) of SDR 20 billion - to help the former socialist countries of East Europe, without extend Ing any extra SDR facilities to the developing countries.

( <»nditionaliti«.

Whatever honest Intention the G-7 countries had for their •newly found East European '^others' the G9 among the 24 Interim Committee (IC) members of the IMF saw through the game and chose to dig tn their beds In protest This protest was due long long bock against many many issues whkb the Fund and Bank got •way wtlhrait much hindrance Just look at the mesa they have done to most of the Latin American and African econ omies The decade of AOs I* railed a Tost derade' for the Lalln American economies Whenever a country went io get the help of the Fund or the UH IA owTcornr BOP or other trtrvactural m«r«. they attached a long list of pres* riptlnoa and condttlons which the country must loOow tn caw it wanted Io leave the help tie kind and nature fa the coridinorio al I sr had to their loans were mote W less the same aw to opm up the ntMMMiiy through Idler all wing Import* to fe< for eign investment come in tiefay to tiutiiinlae the role fa gosettunent and publu sector

enterprise to slop regulating the market and decide where investment to go. to reduce taxes, specially Income tax. to give incentives to private Investments. not to try to redistribute Incomes and so on. The most appalling aspect of the Fund-Bank policy wa* that the same menu was prescribed to the countries of different goe graphical location, different stages of development, differ ent economic conditions or of different ethnic and cultural set-ups.

Results or ADegHtions

It would be more to the dismay of the Fund Bank Management that the Institutions have little success to be boast of Just look at the condi tlonalitle* they set for the aspirants of the Fund or Bank loan What would be the effects on the Third World countries which go for their loans with these conditionalities' Do the poor of these countries can expect to get a fair treatment In the changed atmosphere where their governments spend little for them in education health and hygiene, medicine, sanitation, public distribution system, or stop controlling the prices of food* or other bask commodities? MrsuH* around the world show that they become the victim* of the Fund * tn Bank • harsh prmcripiwn* On the other hand thrae have resulted in creating a creamy layer in the ilcvrfopitig cuuntrle* wfm have followed their programme* with aflaehcjl condltfonaliue* The creamy group* are di ret tfy bmchied. dricrided and

represented by both the institutions. The attached prescriptions of the IMF have brought consumerism in most of the countries It provided loans but that ram is for that privileged few Proliferation of tax havens and shelters for every kind of financial flows have again benefited that section of the Third World societies So it seems that the IMF has actually aided to widen the gap between rich and poor in a systematic way.

The Bank could be charged with criminal violation of bu man rights and man-made ecological disasters dunr* the project implementation in M ferent parts of the world. An April 1994 internal study on resettfement by the Bank confirmed that at present over

are being dispart by ongoing or future Bank projects. These four million people comprise largely Indigenous peoples and subsistence fanners whose last survival niches will be destroyed The Bank also never assume* responsibility for the failure of any projects.

ft was also being seen that In a same country the Fund and the Batik worked for cross purj»ose* that ultimately resulted In r Jeter lor atSxi of the total situation This paradox became evident In I he sub 'laharan rtonornirs where the Bank a long term «lrvelopmrr>i objec uve Im sins the casually of the Funds terms which wanted to arrest short term fiscal disarray of the countries i>v binding them 14 cut their ex|jrndnurea in human ilrvrl

opment and in other esoenuai pubbe infrastructures. Repeated cutbacks in these essential sectors progressively srfaittted away the cotnpieinen-tary elements needed for a take-off propelled by the private sector. The last, but not the least, allegation against them is that their borrowers end up paying more back to them for what they owe on past*Joans than what they disburse to them in new loans.

Condition

The address by Dr Manmohan Singh the Indian Finance Minister, drew the attention of the gathering of the Palacio de Congress©* to the fact that the world now faces six predominant challenges — unemptoyment. fiscal stabilisation and structural adjustment in developing eco nomics abject poverty in some parts of the world, probiems tn transition in East and Central Europe, systemic risks caused by burgeoning private flows, especially portfolio investment and environment. The Fund and Bank cannot remain aloof from these problems any more. And for that they have to be far more modest and would put priority to the human needs by alleviating poverty and social Injustfee through their programmes. Serving a* the flag bearer of a selected few In the developing countries will further allienatc them from ms jority of the people To be sc leptable to the wider section ■>f xnd to act for a bet

ter future for the Third World people the Bretton Wood* Instltutioa* must reorient their policies and programme* to accommodate more wcU) content* and to addrv** the < ludlmge* Mr Singh has can-dKlxly txMnicl out