REVISITING AN UNHOLY TRINITY: THE BRETTON WOODS INSTITUTIONS

Let us face the truth: the contemporary world as it is structured-economically and ideologically-constitutes a gateway only to hell for the third world; so, salvation cannot come through the door of collaboration with the oppressor but...

ADEREMI MEDUPIN

By way of intro

Whereas our concern and focus here did not take its inspiration directly or even consciously from the Bible, it would be dishonest not to acknowledge its ultimate popular religious source and relevance. An online platform, Got Questions Ministries, posed the question: What is the unholy trinity in the end times? The response to the intriguing poser is “While the Holy Trinity is characterized by infinite truth, love, and goodness, the unholy trinity portrays the diametrically opposite traits of deception, hatred, and unadulterated evil”. Yes, dear reader, you got it, the unholiness is the label for the devilish thinking and modus operandi which in our prevailing context correctly encapsulates the role of the international financial institutions, otherwise called the Bretton Woods Institutions, being respectively the World Bank (WB), the International Monetary Fund (IMF), and now more recently the World Trade Organization (WTO). It was in July 1944, shortly before the end of World War II that the decision was taken to establish the Bretton Woods institutions, although at that time the WTO had not been created; thus, is pertinent to note that the WTO only came into existence later in the mid-1990s to join the league. To the curious reader, note that Bretton Woods is in New Hampshire, USA and it is where Mount Washington Hotel, which was the venue of the July 1944 United Nations Monetary and Financial Conference held as referenced above, is located. In reality, it is just a village within the town of Carroll, New Hampshire, made famous by the conference event.

Aside from the religious connection, even at the secular level, the invocation of the unholy trinity has assumed a respectable academic status. Way back in 2003, Zed Press published a book in London and New York, titled: “Unholy trinity: the IMF, World Bank, and the World Trade Organization”, authored by Richard Peet with Beate Born et al. From the publisher’s summary, the book shows:

. . . how the world's leading financial institutions - the IMF, World Bank and WTO - have been hijacked by the economic ideology of neoliberalism and the interest behind it, particularly from the 1980s onwards and in relation to their global financial, developmental and trade management roles. Instead of their original clearly defined, circumscribed and even benign responsibilities, they have now become the financial policemen of a global economy characterized by mounting extremes of rich and poor, recurrent instability, and failure over a half century to solve the problems of the developing countries.

This in essence is the historic thesis we’re revisiting in this discussion. Initially, whereas the degree of connivance among the three institutions was like a mere suspicion, with the Bretton Woods Project coming out with a hesitant piece on its website on December 15, 1999, titled: “IMF/WB/WTO: unholy trinity?”. However, their connivance had indeed registered because at the Seattle meeting of the World Trade Organisation (WTO) in late November of that year, the World Bank confirmed that it would expand its work on trade (emphasis, mine-AM). Specifically, in a joint statement from the World Bank, WTO and IMF was a promise: “to build on the strong collaboration between our three organisations to enhance the capacity of developing countries … and help them increase the coherence of economic policy-making.” This led Walden Bello of the Thailand-based NGO Focus on the Global South to express concern that: “The IMF, the World Bank and the World Trade Organisation are in the process of creating an international iron cage”, ganging up to force countries to comply with liberalisation policies.

The emergence and operation of the unholy trinity

As Maria Eleni Voutsaa , George Borovasb and Nikos Fotopoulos explained in their Paper, “The Role of the Bretton Woods institutions in forming and spreading education policies”, published in Procedia Economics and Finance 9 ( 2014 ) pp.83 – 97: Upon the end of WW II, the creation of International Institutions aiming principally at implementing policies towards economic development came to the fore. Given that collaboration is more effective if it takes place through multilateral institutions, the International Institutions gradually emerged as important regulators of the global scene, setting or influencing international developments at various levels. Thus, for the records, by 2022, the World Bank (WB) and the IMF became 78 years old, formed at the initiative of forty-five countries that came together for the first monetary and financial conference of the United Nations but they have since then been dominated by the USA and a few major allied powers who work to generalize policies that run counter to the interests of the world’s populations.

Not surprisingly, beginning effectively from the 1970s, the effectiveness of the institutions became increasingly questionable. In particular, the interventions by the IMF received fierce criticism to such an extent that some people began to insist that the interventions of the institutions actually exacerbate the crises by creating more side effects in the countries in which they intervene. As a staff of the International Labour Research and Information Group (ILRIG) in Cape Town, in a contribution to MR Online argued eloquently in 2007, it was during this period that the United States and the European Union started to use the IMF and World Bank to pry open the economies of Africa, Latin America, and Asia. This was done by forcing these countries to adopt neo-liberal economic policies, which included the poisons of privatization, financial liberalization, trade liberalization, and labour market flexibility. As an informed analyst averred, “the WB and the IMF have systematically made loans to States as a means of influencing their policies. Foreign indebtedness has been and continues to be used as an instrument for subordinating borrowers. Since their creation, the IMF and the WB have violated international pacts on human rights and have no qualms about supporting dictatorships”.

As hinted earlier that the WTO joined the satanic club later than the other two, a word on the Organization appears to be appropriate. The WTO effectively came into being on January 1, 1995- dubiously replacing the General Agreement on Tariffs and Trade (GATT) that had been in existence since 1948 providing the rules for the international trading system. A development in 2020 as a fallout of the COVID-19 pandemic experience provides a historic illustration of how the WTO is the third leg of the unholy trinity of oppression. As reported by Anis Chowdhury and Jomo Kwame Sundaram on November 20, 2020:

The World Trade Organization (WTO) will soon decide on a conditional temporary waiver of Trade-Related Intellectual Property Rights (TRIPS). The waiver was proposed by South Africa and India on 2 October 2020. Two-thirds of the 164 WTO members–mainly developing countries–support it. But sustained European efforts–of Switzerland, the UK and the EU, led by Germany–have blocked progress ahead of the WTO ministerial starting 30 November.

This experience, typical of third world countries in the contemporary international economic order and in particular its trading system, is what broadly and in a highly insightful rendition, Russell Mokhiber-Editor, Crime Reporter and Robert Weissman- Editor, Multinational Monitor- both based in Washington DC explored and exposed as “10 Reasons to Dismantle the WTO”, namely:

The WTO prioritizes trade and commercial considerations over all other values. WTO rules generally require domestic laws, rules and regulations designed to further worker, consumer, environmental, health, safety, human rights, animal protection or other non-commercial interests to be undertaken in the "least trade restrictive" fashion possible — almost never is trade subordinated to these noncommercial concerns.
The WTO undermines democracy. Its rules drastically shrink the choices available to democratically controlled governments, with violations potentially punished with harsh penalties. The WTO actually touts this overriding of domestic decisions about how economies should be organized and corporations controlled. "Under WTO rules, once a commitment has been made to liberalize a sector of trade, it is difficult to reverse," the WTO says in a paper on the benefits of the organization which is published on its web site. "Quite often, governments use the WTO as a welcome external constraint on their policies: 'we can't do this because it would violate the WTO agreements.'"
The WTO does not just regulate, it actively promotes, global trade. Its rules are biased to facilitate global commerce at the expense of efforts to promote local economic development and policies that move communities, countries and regions in the direction of greater self-reliance.
The WTO hurts the Third World. WTO rules force Third World countries to open their markets to rich country multinationals and abandon efforts to protect infant domestic industries. In agriculture, the opening to foreign imports, soon to be imposed on developing countries, will catalyze a massive social dislocation of many millions of rural people.
The WTO eviscerates the Precautionary Principle. WTO rules generally block countries from acting in response to potential risk — requiring a probability before governments can move to resolve harm to human health or the environment.
The WTO squashes diversity. WTO rules establish international health, environmental and other standards as a global ceiling through a process of "harmonization;" countries or even states and cities can only exceed them by overcoming high hurdles.
The WTO operates in secrecy. Its tribunals rule on the "legality" of nations' laws, but carry out their work behind closed doors.
The WTO limits governments' ability to use their purchasing dollar for human rights, environmental, worker rights and other non-commercial purposes. In general, WTO rules state that governments can make purchases based only on quality and cost considerations.
The WTO disallows bans on imports of goods made with child labour. In general, WTO rules do not allow countries to treat products differently based on how they were produced — irrespective of whether made with brutalized child labour, with workers exposed to toxics or with no regard for species protection.
The WTO legitimizes life patents. WTO rules permit and in some cases require patents or similar exclusive protections for life forms.

The software of an unholy architecture

On May 19, 2008, the Share the World’s Resources (STWR) featured a piece: “The IMF, World Bank and trade-an overview” where it averred, that: The failure of the IMF, World Bank and WTO to represent and further the interests of the developing world, through their one-size-fits-all approach, has led to the collapse of trade negations, widespread criticism of their effectiveness, and bitter international protest. Many countries are rejecting the neoliberal ideologies of the ‘unholy trinity’ with intensifying calls for their reform or decommissioning.

In the perspective of the STWR then with focus limited to just the IMF and World Bank, “The mandates of the IMF and World Bank have changed significantly since their creation by the US and UK Governments at The Bretton Woods Conference in July 1944. They were initially designed to ensure global financial stability and economic growth in countries affected by the war - mainly in Europe, a function which they were largely successful in thanks to a generous Marshall Plan initiative”.

Taken together albeit, with varying emphases and degrees of importance, the unholy trinity can be said to have their policies as deriving from the so-called Washington Consensus ably articulated by Eric Toussaint in a piece, “Ecuador’s poisoned loans from the World Bank and the IMF”, published on April 10, 2021, on MR Online platform. The Consensus has the following 10 elements:

strict fiscal policy discipline;
reduction of public spending judged insufficiently viable, such as social spending, subsidies of basic necessities and redirection toward sectors offering a high return on investments;

tax reform, broadening the tax base and reducing marginal tax rates, designed to affect poorer households hardest;

liberalization of interest rates;
competitive exchange rates;
liberalization of foreign trade;

liberalization of foreign direct investment;
privatization of State companies;

deregulation of markets (by abolishing the barriers to importing or exporting goods);
protection of private property, including intellectual property.

These elements of the Washington Consensus- which began with a theory propounded in 1989 by the British economist John Williamson, then teaching in the United States, are converted to guiding principles and forced down the throats of developing economies when they approach the unholy trinity for help on falling into an inevitable debt trap. Meanwhile, apart from elements (i) on fiscal discipline and (iii) on tax reform, all these policy measures are of questionable relevance in the context of the developmental needs of poor countries thus explaining their recorded practical failures.

Of the essentially devilish trio, the World Bank appears to have somehow succeeded in creating the image of the least of three evils especially with its leadership on facilitating access to finance for development by poor countries and dulling popular memory about how the same institutions and in particular the controllers brought about the lack of finance for development in the first place right through the mechanisms of colonialism to contemporary unequal exchange and profit repatriation. This is how the World Bank Group, acting on behalf of the dominating rich economies of the North and West could boastfully proclaim on its website in 2018 via a notice titled: “Financing for Development: New Approach, New Commitment”, that:

Financing for Development entered a new era in July 2015, when the global community agreed to the Addis Ababa Action Agenda, a framework and set of commitments for financing the Sustainable Development Goals. Since this will require far more funding than aid can provide, the World Bank Group, together with other multilateral development banks and the IMF, committed to using billions in investment funding, aid, and grants, in innovative ways to catalyze trillions in the financing of all kinds. In Hamburg in 2017, the G20 reinforced the MDBs’ role in catalyzing development finance.

But of course, as Nigerians of South-South extraction would respond, ‘all na bobo’, it’s all deceit in the long run as nothing changes in terms of the status and terms of the relationship of the poor countries vis-a-vis the rich economies and their handmaid, the unholy trinity. In this vein, it’s hard to find a more fitting assessment of these global financial institutions than the one offered by in Ha-Joon Chang’s 2007 book, “The Myth of Free Trade and the Secret History of Capitalism”, stating that: the WB and IMF present themselves as ‘good Samaritans’ whose only motives are to assist the developing world but they are actually ‘bad Samaritans’ because their motives are essentially selfish. This comes from the fact that the real intention and focus of these institutions “is to create a policy environment in the developing world that is friendly to transnational corporations, an environment which benefits TNCs and small groups of elites in developing countries, but results in deteriorating social outcomes for the majority of the people”. So, what’s to be done? Or, perhaps better put, what can be done?

Options before the victims

What we are getting at is the need to address the following legitimate and enduring question: given the reality on ground, do the third-world countries have an option apart from conformity with the dictates of the unholy trinity inspired by the neoliberal ideology of Washington Consensus? In my view, the correct answer is YES but with a qualification or caveat, which is that the victim must be ready and prepared to cast away the chains of slavery.

The view advanced by STWR appears administratively simple and practical but of such far-reaching positive consequences for the development fate of the victims that its endorsement by the global powers may, possibly forever, remain in doubt. According to the not-for-profit civil society organisation founded in 2003, with Consultative Status at the Economic and Social Council of the United Nations, inspired by Article 25 of the Universal Declaration of Human Rights, which proclaims the right of everyone to an adequate standard of living,

Calls to substantially reform these institutions, and even to progressively dismantle them in favor of representative, pro-poor alternatives which operate within the United Nations framework, are increasingly pertinent in this time of growing economic disparity. They demand serious consideration if the distribution of essential goods and services is to be coordinated in a more sustainable and cooperative manner by the international community.

It should be easy to forge a link between the above calls and the age-long demand for the reformation of the entire UN system rightly decried by Fela Anikulapo in his apt critique of the lopsided and undemocratic voting pattern within the system, decades back.

A Parting Shot: No seat on the fence

In “A World at War” piece by Shawn Hattingh published on MR Online platform on October 25, 2007, there is a stinging critique of the unholy trinity deserving citation and for closing today’s discussion.. In the author’s words:

A savage war is being waged against the majority of the people on Earth by the governments of the North on behalf of their multinational companies. This war is not being fought with bombs or bullets; it is being fought through neo-liberal economic policies. Its weapons are not being delivered by stealth bombers; they are being delivered by the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). The consequences of this onslaught are, however, as deadly as any conventional war. Indeed, the policies being pushed by the imperialists through the IMF, the World Bank, and the WTO have forced billions of people to live in absolute misery. As happens in any war, however, this onslaught has sparked resistance, and this resistance is beginning to turn the tide.

Let every patriot decide where to align: with evil or with good. If, as it has come to unfold, the typical political leader in our country is on the side of the promoters of evil-as championed by the unholy trinity, is not obvious how we want to be judged by history in terms of our alignment and loyalty? I come in peace, please.