Washington Post | April 18, 2002 | By Paul Blustein, Washington Post Staff Writer
Among the dark-suited economic policymakers who attend the semiannual meetings of the International Monetary Fund and World Bank, high fives are considered unseemly. But the officials converging on Washington this weekend for the institutions' spring meetings might deem a hearty backslap or two to be in order.
The global economy, which a few months ago was widely feared to be headed into a slump, now appears to be recovering (trouble spots such as Argentina and Japan notwithstanding). And the left-wing groups that bedeviled recent IMF-World Bank meetings are planning to pay only cursory attention to the international financial institutions this time; the demonstrations this weekend will be aimed chiefly at protesting U.S. policy in Afghanistan and the Middle East.
All this is in marked contrast with the last time a major IMF-World Bank meeting loomed, in the fall of 2001. That conclave, which was canceled after the Sept. 11 terrorist attacks, was expected to draw as many as 50,000 activists demonstrating against the free-market policies that the fund and the bank prod developing countries to adopt. An even bigger headache facing international policymakers at that time was the simultaneous slowdown in the United States, Europe and Japan that threatened to get even worse after the attacks.
So the sense of relief -- if not smugness -- is palpable among the barons of the global economy as they prepare for this weekend's gathering.
"In April 2002 it is clear that September 11 did not pull down the global economy for long," Horst Koehler, the IMF's managing director, said yesterday in a speech at the National Press Club. "A recovery is underway now in the United States, and this is already beginning to have a positive impact on the economies in other regions."
In an unusual act of self-congratulation, Koehler added, "it is fair to say the IMF has played a role in this," in part by providing emergency loans that shielded countries such as Turkey and Brazil from succumbing to crises.
The IMF's forecast, which will be officially released today, predicts that the global economy will grow 2.8 percent this year, Koehler said -- hardly a sizzling pace, but substantially better than the 2.4 percent the fund forecast in December. (Some analysts consider the world economy to be in recession when the overall figure dips below 2.5 percent.)
The fund's economists have made particularly large revisions in their forecast for the U.S. economy, which they now predict will expand 2.3 percent this year, compared with the December forecast of 0.7 percent. Koehler said he was happy to announce that he would pay off a bet with Treasury Secretary Paul H. O'Neill by treating him to dinner; O'Neill had wagered that the IMF's earlier forecast was much too pessimistic.
As for the protesters, Koehler didn't mention them in his speech, but their admittedly diminished ability to disrupt the IMF and World Bank meetings is gratifying to officials of the two institutions. "Frankly speaking, we do not expect anything like the events of two years ago," Thomas Dawson, the IMF's chief spokesman, said last week.
Critics of corporate globalization are promising a protest and march on Saturday morning that will have plenty of energy and humor aimed at IMF and World Bank policies.
"What we do not expect to see is large numbers," said Robert Weissman, a representative of the Mobilization for Global Justice, acknowledging that most of the weekend's action will involve other protests, including one supporting the Palestinian cause.
Such statements reflect the recognition by many in the anti-globalization movement of the impact that Sept. 11 has had on their capacity to arouse indignation over issues such as privatization, deforestation and food safety.
Movement leaders are comforting themselves with the hope that they will regain momentum by next autumn, when they are planning to mount much bigger demonstrations against IMF-World Bank meetings scheduled for that time. Some contend that the heightened attention to geopolitical issues could redound to the movement's benefit.
"I think the period where the air was kind of let out of us is rapidly passing," said Soren Ambrose, a representative of the Fifty Years Is Enough campaign. "I don't know if we're back to where we were [before Sept. 11], but we're making the connection between [geopolitical] issues and the economic issues. The concern about the U.S. being hated is to a large extent rooted in the economic arrangements of the global economy -- arrangements run by the IMF, the World Bank and the [World Trade Organization]."
But by allying with groups that are protesting the Bush administration's anti-terrorism policies, organizations such as Ambrose's are risking alienating the U.S. labor movement, which provided key support at events such as the 1999 WTO meeting -- otherwise known as the "Battle of Seattle." Organized labor is not participating in this weekend's protests because of its backing for the White House on the terrorism issue, according to officials of the AFL-CIO, although they noted that they joined several other groups yesterday in issuing a report critical of World Bank policies.
Accordingly, IMF and World Bank officials expect to be able to devote themselves this weekend to addressing immediate economic issues rather than dueling with the protesters. In the IMF's case, one of the main concerns is Argentina, whose economy minister, Jorge Remes Lenicov, complained this week that in exchange for providing Buenos Aires with desperately needed loans the fund is demanding cuts in government spending that could throw 450,000 government employees out of work. He told the Financial Times that "at a time of very high social conflict," it would be "crazy" to insist on mass firings of that scale.
Koehler minced no words yesterday in responding to Remes Lenicov's remarks. "There will be layoffs, but there's no choice," he said, adding that because of Buenos Aires's profligacy in the past, "there is a need to adjust to less wealth and prosperity." If Argentines can bring themselves to "swallow some kind of bitter medicine," he said, "I have no doubt" living standards will improve in the long run.
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