WASHINGTON - Attempts by global financial institutions to synchronize their policies on developing nations threaten to further entrench a one-sided approach to development, fuel instability and widen the gap between the world's rich and poor, watchdog organizations warned Monday.
The alarm comes only a day before two of the world's major wardens of the global economy, the Washington-based World Bank and International Monetary Fund (IMF) were to meet in Switzerland with the Geneva-based World Trade Organization (WTO) to develop a common approach to world economic policies called the ''coherence agenda''.
The meetings will be attended by senior officials of the increasingly controversial bodies, including IMF Managing Director Horst Koehler, WTO Director General Supachai Panitchpakdi and World Bank President James Wolfensohn.
Prospects of the meeting, under the umbrella of the WTO General Council - the organization's highest level decision-making body in Geneva - sends shivers down the spine of critics of the international financial institutions (IFIs), who see their policies as counter productive and in the service of a few rich nations and their sprawling corporations.
''This will limit the room of choices and policy space,'' said Aldo Caliari from the Washington-based Center of Concern, one of 40 groups that signed a petition opposing the meetings and warning of the possible consequences.
''It's like being forced to shop from one shop - same policies and same goods.''
The IFIs say their meeting will help strengthen the global multilateral trading system, which they consider an anchor of strength and stability in the world economy.
Developing nations will benefit by getting increased market access for their products in rich developed countries, they add.
But analysts here say the record and the structure of the organizations, especially the two Bretton Woods Institutions, the IMF and the World Bank (named for the place in the U.S. state of New Hampshire where they were launched in 1944) bode ill for developing nations.
"When you understand how much power the industrial countries hold in the governance of the Bretton Woods institutions, you realize why the trade agenda supported by these institutions tends to be aligned with the negotiating interests of those same countries within the WTO," said Caliari.
The voting structures of the IMF and World Bank are heavily biased towards rich countries. Their leaders, for instance, are chosen through processes open only to U.S. and European citizens.
The IMF and the Bank have for years been peddling trade liberalization, deregulation, privatization and budget austerity to developing countries, and the results, critics say, are disappointing.
Feverish privatization urged by the Bank and the Fund, especially of public services like water and utilities, has smoothed the way for foreign corporations to supply these services and introduce commercial pricing systems, which have often led to higher rates for poor citizens, jeopardizing their access and pushing them further into poverty.
''Economies of developing countries have been characterized by slow and erratic growth, increased instability and rising income gaps,'' said the groups in their Monday statement.
''With the WTO, such misguided and failed policy reforms are being progressively locked-in through trade law backed by the threat of economic sanctions through its dispute settlement mechanism.''
Under the new distributions of roles to be discussed Tuesday, the IMF and the Bank would help ease the way for full liberalization of trade by offering ''technical and financial support''.
The Washington-based organizations would ''assist'' developing nations to manage lower revenues because of reduced tariffs, withstand a period in which their trade preferences in industrialized nations are eliminated, secure funds to support increased trade and, finally, help create export oriented economies.
The IMF and the Bank would also raise the profile of trade in borrowing countries' Poverty Reduction Strategy Papers (PRSP) and Country Assistance Strategies (CAS), documents developed with the support of the two lenders that function as borrowers' economic roadmaps.
In return, the IMF and World Bank will receive observer status in the trade negotiations committee, which handles individual negotiating issues at the WTO and its subsidiary bodies, coupled with a role at the WTO secretariat, a body often accused of bias on disputes between rich and poor countries.
Critics say these plans should cause even more concern.
They say so-called ''technical assistance'' is really one way to force-feed the same policies on developing nations rather than give them the tools to develop independent views and, possibly, development options.
''Technical assistance is being used as a political tool to win support for a 'development agenda' that is heavily disputed in the WTO,'' said Shefali Sharma from the Geneva office of the Institute for Agriculture and Trade Policy in a statement.
''No amount of technical assistance in implementing policies that, in effect, handicap and shackle developing countries in the WTO can improve gains towards development.''
Cooperation between the three bodies is not new. The WTO director general often attends meetings of the IMFC - the assembly of the IMF and Bank governors - and of the development committee, the senior decision making body of the institutions.
Most recently, he attended the IMFC meeting in April 2003 and briefed finance ministers on the Doha trade negotiations and work program, according to WTO documents.
The IMF and the World Bank have also been paying greater attention to trade issues in the past few years, both in the course of their regular country work and research papers. Documents have been flooding out of the two organizations in support of ''free'' trade.
In 2002, they issued a joint staff paper on "Market Access for Developing Countries' Exports", which examined patterns and costs of restrictions and distortions on developing countries' exports.
Copyright 2003 IPS