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Publication Details

Reference
Bond, Patrick (2011) Beware ‘social justice’ promises by international bankers. Eye on Civil Society The Mercury   11 October 2011: -.

Summary

In these days of dire economic and environmental crisis, with political
elites under attack from Athens to Washington, the establishment is
desperate for legitimacy. Even International Monetary Fund (IMF) staff
now publicly endorse ‘social justice’ at the same time they tighten
austerity screws.

Recall the context. The 2008-09 financial meltdown was supposedly solved
by throwing money at bankers in Wall Street, the City of London,
Frankfurt, Paris and Tokyo. But it didn’t work, and on BBC’s Newsnight
last Friday, Robert Shapiro of the Georgetown University Business School
blew the whistle on the European debt crisis.

“If they cannot address it in a credible way I believe within perhaps
two to three weeks we will have a meltdown in sovereign debt which will
produce a meltdown across the European banking system,” warned Shapiro.
“We are talking about the largest banks in the world, the largest banks
in Germany, the largest banks in France, that will spread to the United
Kingdom, it will spread everywhere.”

Shapiro also happens to be a consultant to the IMF. Facing a new
meltdown of reputational confidence, the institution’s panicked press
office quickly tweeted, “IMF notes Shapiro is not IMF Adviser on
European activities.” Instead, said the IMF with typical blind
arrogance, “Europe’s growth potential is remarkable. With steady
implementation of the right policies, it can be achieved.”

South Africans should pay attention because Finance Minister Pravin
Gordhan last week offered our tax monies as an emergency R2 billion
bailout loan from Pretoria to Brussels via the IMF. This comes on the
heels of his R2.4 billion bailout offer to Swazi dictator King Mswati,
in spite of widespread opposition by civil society in Swaziland and
South Africa.

What Gordhan explained to SAfm about the European emergency credits last
week was chilling, especially because I will never forget the Natal
Indian Congress classes on revolutionary politics he gave at the Gandhi
settlement in Phoenix a quarter century ago.

SAfm’s Alec Hogg asked, “Even if it is only a small amount, relatively
speaking, that we are putting in, many African countries went through
hell in the seventies and eighties because of conditionality according
to these loans. Are you going to try and insist that there is similar
conditionality now that the boot is on the other foot, as it were?”

“Absolutely,” replied Gordhan, “The IMF must be as proactive in
developed countries as it is in developing countries. The days of this
unequal treatment and the nasty treatment, if you like, for developing
countries and politeness for developed countries must pass.”

Gordhan’s call for more proactive nastiness by the IMF and its Brussels
allies against the Greek, Spanish, Portuguese and Irish poor and working
people, throws African National Congress traditions of international
solidarity into disrepute, of course. (Are you listening, ANC
Disciplinary Committee chairman Derek Hanekom, or is it only Botswana’s
corrupt, Pentagon-linked elite that is worth protecting from Julius
Malema’s proactive nastiness?)

The same attacks are underway in Egypt, where tens of billions of
dollars were funneled to the ultra-corrupt Hosni Mubarak regime from the
State Department, Pentagon and IMF/World Bank. In June, the IMF offered
a $3 billion loan to Egypt so that it could repay the IMF and other
lenders the interest coming due on Cairo’s $33 billion foreign debt. A
genuinely free democracy would have grounds to default on that debt,
because of its ‘Odious’ nature in legal and technical terms.

But as if to whitewash over decades of illegitimacy, acting IMF Managing
Director John Lipsky proclaimed on June 5, “We are optimistic that the
programme’s objectives of promoting social justice, fostering recovery,
and maintaining macroeconomic stability and generating jobs will bring
positive results for the Egyptian people.”

Added the IMF’s Egypt mission head, Ratna Sahay, “Following a revolution
and during a challenging period of political transition, the Egyptian
authorities have put in place a home-grown economic program with the
overarching objective of promoting social justice.”

The following week, Cairo’s military government began implementing a
controversial law banning strikes and the finance minister not only
promised a continuation of neoliberal policies but canceled a proposed
capital gains tax.

In addition to IMF staff, another man who spent nearly three decades
causing immense suffering at the World Bank, Ismail Serageldin, was
recently invited to deliver the Nelson Mandela Annual Lecture, which he
titled, “The Making of Social Justice.”

At Durban High School’s Seabrooke Theatre at 5pm today, at a videoed
repeat of his speech, you can hear Serageldin calling social justice
“the foundation of the modern Republic of South Africa… The light
shining from South Africa has finally reached the northern part of the
continent, where I live.”

Shining light? Does Serageldin not know that inequality, unemployment
and environmental devastation have soared since 1994, thanks mainly to
Pretoria’s adoption of World Bank and IMF policies?

He may simply not care. In an interview with the NGO Share International
a few years ago, Serageldin was asked, “The World Bank has received a
fair amount of criticism in recent years for its policies toward the
poor and the environment. How have those policies changed during your
tenure at the bank?”

The answer was as chilling as Gordhan’s: “I totally reject the criticism
that's being brought forward against the Bank.”

The follow-up question: “One of the most controversial areas of
involvement for the Bank has been its structural adjustment programs.
Some people argue they hurt the poor by forcing governments to reduce or
eliminate subsidies for basic goods in exchange for getting World Bank
loans. Is that still something that the bank is involved with?” Replied
Serageldin, “Sure.”

Serageldin is best known for his prophetic 1995 statement, “Many of the
wars this century were about oil, but those of the next century will be
over water.”

As if to ensure this would be true, Serageldin became a leader of the
water privatization lobby’s World Water Council. Under his tutelage its
main commission aimed “to help formulate global water policies.”

The World Bank push to end operating subsidies and privatise water was
relentless, with Serageldin’s commission arguing that governments should
“treat water like any other commodity and open its management to free
market competition.” As he explained in 2003, “We pay for food. Why
should we not pay for water?”

In Johannesburg as well as Argentina, Bolivia and many other sites, this
philosophy ensured the early 2000s witnessed water wars of World Bank
projects run by French, British and US multinational corporations
against poor people.

If, as it seems, the Mandela Foundation and a Johannesburg audience were
fooled by Serageldin, this only makes it more important for civil
society in Durban, Egypt and everywhere else to ask tough questions to
bankers who talk ‘social justice’ but who walk with a stick that always
applies ‘nasty’ economic pain to society’s most vulnerable.


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