IMF Official Defends Globalization

Associated Press / Martin Crutsinger, AP Economics Writer

WASHINGTON (AP) -- International Monetary Fund and Clinton administration officials on Thursday defended their efforts to promote freer trade and greater integration of the global economy, contending they offered the best hope of lifting hundreds of millions of people out of abject poverty.

Globalization -- the bane of thousands of demonstrators in the nation's capital this week who contend that global capitalism has failed to help the poor -- has gotten a bad rap, said acting IMF Managing Director Stanley Fischer.

The demonstrators, seeking to build on their success in disrupting World Trade Organization meetings in Seattle last year, have vowed to form human chains and prevent delegates to the IMF and World Bank meetings from attending Sunday's opening sessions.

In a preview of larger protests planned this weekend, dozens of sign-carrying demonstrators chanted anti-bank slogans Thursday a block from the institution's headquarters two blocks from the White House. Then, they marched about 10 blocks to the National Press Building, hoping to confront WTO Director General Michael Moore, who was speaking inside.

"WTO has got to go," the demonstrators shouted as they carried a large puppet depicting Moore and a huge banner representing an old growth tree. The protesters contend the WTO, the World Bank and the IMF exploit poor countries by allowing sweatshops and destroying the environment. "Stop the war on the poor," they shouted. "Make the rich pay."

But Fischer challenged the protesters to offer an alternative approach to fighting global poverty.

"All the evidence is that the best way to grow is to integrate into the global economy," Fischer said at a news conference, contending globalization "represents the only way we are going to raise people around the world to the same level as people in industrialized countries."

Likewise, Treasury Secretary Lawrence Summers defended U.S. support for the IMF and World Bank before a House Appropriations Committee panel, arguing that while reforms are needed at both institutions, the radical proposals pushed by the demonstrators and other critics go too far.

"By any standard, these institutions provide exceptional value for the money. And through their policies and programs, they can and have had a tangible impact on millions of lives," Summers testified. He asked Congress to approve the administration's request for $1.6 billion in the 2001 budget for the IMF and other multinational lending agencies.

Police, who had already established a security perimeter around both the IMF and neighboring World Bank buildings, increased security Thursday following the Wednesday night arrests of seven protesters and the confiscation of equipment that they allegedly planned to use for blockades.

Police made the arrests after stopping two vehicles filled with "lock boxes," lengths of PVC pipes that demonstrators can use to lock arms and make it difficult to break a "human chain." Police said they also confiscated chicken wire and duct tape and charged the seven with possession of implements of crime.

About 50 peaceful demonstrators gathered at George Washington University, located in the same Foggy Bottom neighborhood, to protest the university's decision to close for the weekend and ban students from having visitors in their dorm rooms.

"To me it is just an egregious example of GW trying to stifle what is to me popular speech," said Kristy Gomes, a senior. The protesters held signs reading "GWU: Serve the students, not corporate greed."

The World Bank on Thursday released a new assessment of global poverty that highlighted how the global financial crisis of 1997-98 had hurt efforts to alleviate poverty, widening the divide between rich and poor.

The report said that while the poverty rate did decline in some large countries, notably China, it rose in many other nations in 1998, the latest year for which data is available. Some 1.2 billion people were forced to get by on less than $1 a day, the report found, a figure essentially unchanged over the past decade.

The bank's World Development Indicators said 57 percent of the globe's population, living in the world's poorest 63 countries, was existing on just 6 percent of total world income, while people living in wealthy countries with one-sixth of the world's population received 80 percent of global income.

Fischer, a former economics professor at the Massachusetts Institute of Technology, said the demonstrations would not stop his agency from addressing reform measures at the spring meeting. The IMF is seeking to implement changes to respond to criticism that it did not handle the 1997-98 global currency crisis adequately.

A top agenda point is speeding up debt relief for the poorest countries, also a top item for the protesters.

"We have the same goal as the demonstrators. We want to reduce poverty all over the world," Fischer said.: