On Friday, April 14, 2000 the International Forum on Globalization (IFG)
held a 12-plus hour non-stop Teach-In at the Foundry United Methodist Church
in Washington D.C. on the subject of "Beyond Seattle -- Globalization: Focus
On The International Monetary Fund And The World Bank ." The following is a
hypertext transcript of David Korten, second speaker in the evening panel on
"The Casino Economy: The Anatomy of Global Control." He was introduced by
John Cavanagh, Director of the Institute for Policy Studies.
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                      One World--One World Government
                    Bretton Woods or The United Nations?

                  IFG Washington - World Bank/IMF Teach-In
                              David C. Korten
                                  4/14/00



     Our first speaker on this panel is a best-friend a movement can
     have in the sense that he has impeccable credentials and total
     devotion. In 1992 David Korten's career took a very surprising
     turn. A former U.S. Agency for International Development field
     specialist and a faculty member at the Harvard University School
     of Business left that world of development elites -- and I think
     we should announce to everyone in that world, We welcome you if
     you want to come over to our side! -- and he founded a new
     organization called the People-Centered Development Forum. Many of
     you know David through his remarkable books, When Corporations
     Rule the World and The Post-Corporate World. He is also the chair
     of the board of a terrific magazine which is helping to lay out an
     alternative future, YES! Magazine. Please welcome David Korten.

     Thank you-thank you all you wonderful people! I missed you all in
     Seattle and I'm glad to be with you tonight.

     A few weeks ago I met with a group of students at Harvard
     University who told me a new international program has just been
     introduced there to prepare students for careers in the World
     Bank. Let us assure that those who join that program have very
     short careers.

     For more than half a century the World Bank and IMF have advanced
     a development model that wantonly destroys the lives of people,
     society, and the planet to make money for the super rich. Together
     they are arguably responsible for more human death and suffering
     than any other nonmilitary organizations in human history -- a
     true plague upon the earth. Closing them down on Sunday and Monday
     will be an important symbolic act toward the larger healing goal
     of permanently closing their doors.

     A newly globalizing civil society is awakening to a basic insight.
     The institutions of global corporate tyranny have only the power
     that we yield to them. We can and we must withdraw that power.

     Indeed, for the first time in human history, we the people of the
     world have the opportunity and the necessity to rethink and
     recreate our institutions to align them with a vision of a world
     built on a foundation of radical democracy that works for every
     person, every community and for the whole of life. We must make
     full use of that opportunity.

     The police violence in Seattle against those who sought only to
     exercise their right of nonviolent political expression exposed
     the visible face of a more subtle tyranny that uses money as its
     instrument of political and social control. Tonight I will focus
     on one example, the use of the debt mechanism, in the name of
     development, to subordinate Southern countries to the interests of
     a small Northern elite.

     Much of my turnaround in relation to the international development
     establishment occurred when I really came to terms with the nature
     of authentic development which is about increasing the capacity of
     a people to use their domestic resources to better meet their own
     needs -- trading with their neighbors at the margin for essential
     resources, goods, and services not reasonably available at home,
     while freely sharing information, technology, and culture as an
     act of cooperation. It is a model eloquently advocated by the
     widely revered British economist John Maynard Keynes, who once
     wrote that:

          I sympathize, therefore, with those who would minimize,
          rather than with those who would maximize, economic
          entanglement between nations. Ideas, knowledge, art,
          hospitality, travel -- these are the things which should
          of their nature be international. But let goods be
          homespun whenever it is reasonably and conveniently
          possible, and above all, let finance be primarily
          national.

     (Got this right out of Herman Daly's book!)

     Authentic development based on such principles offers little
     opportunity for colonial extraction. Whether from intent or from
     ignorance, the North mobilized after World War II through the
     Bretton Woods institutions to assure that authentic self-reliant
     development would gain no foothold in the newly liberated
     colonies.

     It was all so simple. The World Bank trained cadres of young
     economists, teaching them to believe that rapid development
     depends on foreign borrowing to supplement investment based on
     domestic savings. Few seemed to notice the obvious -- that when
     you borrow abroad you are borrowing foreign money that is only
     useful to buy foreign products, thus increasing your economy's
     dependence on imports. You are also building up foreign debts that
     can only be repaid by exporting ever more of your domestic
     resources and production. Almost inevitably you end up at the
     mercy of foreign lenders -- like the World Bank.

     In truth the World Bank has functioned first of all as an export
     financing facility for Northern corporations. That's what the
     lending is really about. And with time the debts created by
     foreign borrowing, that the bank encouraged, grew so large that
     more and ever larger loans were needed just to keep up with the
     payments due on old debts. By the early 1980's the world's bankers
     were concerned that these debts might bring about a collapse of
     the entire global financial system.

     The IMF and the World Bank then swung into action to restructure
     the economies of indebted nations, redirecting their resources to
     loan repayment and opening them further to foreign exploitation.
     Adjusted governments, as you know, were required to:

        * Cut government spending on education, health care, the
          environment, and subsidies for necessities such as food
          grains, and cooking oils.

        * Devalue their national currencies and increase exports by
          accelerating the plunder of natural resources, reducing real
          wages, and subsidizing export-oriented foreign investments.

        * Liberalize financial markets to attract speculative
          short-term portfolio investments, which set the stage for the
          Asian financial crisis John just described.

        * Increase interest rates to attract foreign capital, thereby
          forcing domestic businesses into bankruptcy and imposing new
          hardships on indebted individuals.

        * Eliminate tariffs and other controls on imports, increasing
          the import of consumer goods purchased with borrowed foreign
          exchange, undermining local agriculture and industries unable
          to compete with cheaper imports, increasing the strain on
          foreign exchange accounts, and deepening external
          indebtedness.

     And what happened when you complied? You were rewarded with still
     more loans -- rather like pouring gasoline on a burning house to
     put out the flames. The results, of course, were disastrous. In
     1980 when concern began to mount that the debts were unpayable,
     the total external debt of low and middle income countries was
     $580 billion. In 1997, after fifteen years of structural
     adjustment it totaled $2.2 trillion. In 1996 sub-Saharan Africa
     paid $2.5 billion more in debt service than it received in new
     long-term loans and credits. Africa's interest payments on foreign
     debts are now four times greater than its expenditures for health
     care.

     It is an all too typical case of how the rich use debt as an
     instrument of control to expropriate the resources of the poor.

     It is very interesting if you take a logical extension of the
     structural adjustment policies, it suggests that the World Bank
     and IMF consider the ideal to be a country in which all assets and
     resources are owned by foreign corporations producing for export
     to generate foreign exchange to repay international debts. Their
     ideal country has no public services and all its domestic needs
     are met by goods and services imported from abroad and paid for
     with money borrowed from foreign banks. And they have the audacity
     to insist that this is all for the benefit of the poor.

     Resistance is essential, but resistance alone is also a losing
     strategy. We must claim the initiative to transform a world
     dedicated to the love of money to a world dedicated to a love of
     life. This is why I am deeply involved with YES! Magazine which
     John mentioned, a publication that documents the growing momentum
     behind deep change and tells how we can each connect with the
     countless positive initiatives being taken by people everywhere to
     create a world that works for all. Check out the YES! exhibit
     upstairs in the tabling room.

     So let's look for a moment at alternatives to world rule by the
     Bretton Woods institutions. Here we face a very critical global
     reality.

     Currently, global governance is in fact divided between two
     competing systems: the United Nations system -- comprised of the
     United Nations secretariat and its specialized agencies; and the
     Bretton Woods system -- comprised of The World Bank, the IMF, and
     the World Trade Organization. For all its deficiencies, the United
     Nations has generally aligned with the cause of human rights,
     human development, and the environment. The Bretton Woods
     institutions, by contrast, have consistently aligned with the
     interests of money, banks, and global corporations. We have only
     one world. There must be only one world government, the United
     Nations.

     The founders of the United Nations intended that responsibility
     for managing global economic affairs -- including the overall
     supervision and policy direction of the Bretton Woods institutions
     -- would fall under UN jurisdiction. In reality the Bretton Woods
     institutions separated themselves entirely from the United
     Nations. Though the United Nations has been starved of resources
     and is in desperate need of reform, it remains the appropriate
     focus of our hopes for democratic global governance responsive to
     the needs of people and planet. The challenge of building a
     strong, effective and accountable United Nations is now even
     greater than it was when the UN was founded after World War II,
     because now we must dismantle the Bretton Woods institutions and
     undo the enormous damage they have wrought, while simultaneously
     creating the institutional framework for a planetary system of
     locally rooted, globally cooperative, just, sustainable, and
     compassionate economies based on the principles of authentic
     development and responsive to the needs of all. The following are
     some specific recommendations.

        * By its every action the World Bank increases the foreign
          indebtedness of low income countries. Let us replace it with
          a United Nations International Insolvency Court (that a
          number have recommended) to which indebted countries can turn
          for assistance in freeing themselves from the chains of
          international debt and from IMF conditions without
          sacrificing their ability to provide essential public
          services.

        * The International Monetary Fund forces countries to give up
          control over the flow of money and goods across their
          borders, leading to massive trade imbalances, international
          indebtedness, exploitation, and financial instability. Let us
          replace that institution with a United Nations International
          Finance Organization responsible for:

             o Limiting the build up of international debt, monitoring
               national trade and current account balances, and
               facilitating negotiations toward agreement on corrective
               action where consequential and persistent imbalances
               between imports and exports are found.

             o Helping national governments establish capital controls
               that strengthen domestic employment, domestic
               investment, domestic ownership of productive resources,
               and domestic technical capabilities; and that discourage
               financial speculation.

             o Control money laundering by international and offshore
               banks and tax evasion by individuals and corporations
               using offshore tax havens.

          You begin to get the pattern here. What we need are
          institutions that do exactly the opposite of what the Bretton
          Woods institutions are doing.

        * Then we come to the World Trade Organization, which regulates
          national and local governments to prohibit them from
          regulating transnational corporations, trade, and finance in
          the public interest. Let us replace the World Trade
          Organization with a United Nations Organization for Corporate
          Accountability. This organization would:

             o Coordinate international anti-trust actions to break up
               global concentrations of corporate power, with special
               attention to banking, media, and agribusiness.

             o Initiate dechartering procedures against transnational
               corporations with repeated convictions for criminal
               behavior.

             o Enable those harmed by a corporate subsidiary in one
               country to sue the parent company based in another
               country for damages.

             o Establish an internationally enforceable code of conduct
               covering all corporations with operations in more than
               one country, including a strict prohibition on corporate
               political participation of any kind.

     There is a lot of work to be done at all levels to fix the damage
     created by more than fifty years of Bretton Woods and to set
     humanity on a more positive course, including serious political
     reforms at local and national levels to establish the democratic
     accountability of often badly corrupted governments. No where is
     this more important than here in the United States.

     Regrettably for many of us who grew up loving our country and
     believing it to be the bastion of democracy and the defender of
     world freedom, it is a sad thing to come to the realization that
     the United States government has been the chief architect of the
     destructive policies of the Bretton Woods system and has
     time-after-time acted to undermine democracy and authentic
     development in Southern countries. It is the chief barrier to the
     reform of the destructive structures of corporate globalization.

     For those of us who hold U.S. citizenship we have a special
     obligation to the world to end this travesty through the deep
     reform of our political system. We have for example, too long
     acquiesced in the ritual choice between two largely identical
     candidates both owned body-and-soul by corporate money. In our
     upcoming presidential election let us not waste our votes on Al
     Gore in the futile hope he might eventually actually get around to
     reading Earth in the Balance.

     This year we have the opportunity to vote for a serious candidate
     who has proven time and time again over a long and productive life
     to be an uncorruptible champion of the issues we all care about so
     deeply -- a true modern hero. He will be joining us here tonight.
     His name is Ralph Nader. He is running under the banner of the
     Green Party. We must give him our support and our votes.

     We must prove that we are committed to real change. Vote for Ralph
     and the Green Party, and subscribe to YES! Magazine.