In Kenya, when you drive straight on the roads, everyone knows you're drunk and intoxicated. Surprised? Well the roads are full of potholes that motorists are compelled to drive in a zig-zag manner.
Kenya Vice President Stephen Kalonzo Musyoka made these comments, to an amused audience at a crucial ILO summit this week in Geneva to discuss the global jobs crisis, to drive home the point that countries like his badly need support and that its time the multilateral agencies wake up instead of standing on ceremony with their 'holier than thou' attitude.
In fact the IMF and the World Bank - generally referred to as the 'Washington consensus' -- came in for a battering never seen before at an international conference, according to experts. And mind you this is at a meeting attended by nine Presidents, five Vice Presidents and dozens of ministers among nearly 5000 delegates. It was the largest-ever gathering at a conference held by the UN agency in its 90th anniversary.
The common view at the Geneva meeting, and mind you coming from the likes of French President Nicholas Sarkozy and Brazilian President Luiz Inacio Lula Da Silva (who virtually told the IMF to 'cut the crap') was that the IMF must reform and cannot, REPEAT, cannot impose conditions any more.
While the IMF, at the G20 (leaders of the 20 most influential countries in the world including India) summit in April, made a categorical statement saying lending in the future will be sans conditions, many observers in Geneva say the agency was still to match its words with deeds.
Raymond Torres, Director of the ILO International Institute for Labour Studies, on Sunday told reporters including a representative of the Sunday Times that many countries are waiting for the IMF decision at the April G20 meeting to take root. "We hope it works because some countries are asking: Where is the promised support?" he said.
Further criticism of the IMF came from ILO's energetic Director General Juan Somavia who said the IMF's business model failed three years and it was forced to downsize and cut 300 jobs.
"In fact I was asked whether we could accommodate some of these professionals".
He said the World Bank and the IMF models which are based on structural adjustment of economies and cutting social spending is now a thing of the past. "They are no longer valid today and won't come into play when the fund offers money to needy countries," he said.
In fact the conditions were so harsh that many countries like China and India were not interested in credit lines that came with conditions. Flushed with funds, the IMF lent 70% of its credit to just one country -Turkey. And that's where the problems began. In the words of Somavia, "can you believe it 70% of its lending to one country?" He says the model of conditionality has failed and the IMF is no more an over-powering institution.
Here are some words of advice from the ILO Chief which are very relevant to Sri Lanka: "Because the world needs resources in this crisis, a number of developed countries are putting money in the IMF as they don't know where else to put the money. Not because they like the IMF model but because there is no option. So sit down in a position of strength and negotiate with the fund. The capacity of the fund to have the same conditions is not going to be there. However if you don't ask for it (social spending resources or funds for a social protection scheme) they are not going to be pushing for it.
The IMF will come and say we would like to fund the Global Jobs Pact and offer a formula. But if you insist that … hey… this is what we want, then they will back off." The ILO, emerging as a strong institution (that leads) after the crisis, was not even considered as a solutions-provider when the troubles broke out. "We didn't have a role. No one asked us what we should be done. On our own we developed the Global Jobs Pact which in effect is talking about all the issues and concerns that most countries have and have programmes to tackle it. What we are doing is to legalise, legitimize them into one document to give it more strength," Somavia said, adding that they put together the Job Crisis Summit in six weeks and brought leaders who never went to the IMF or World Bank.
"Today why are the presidents coming to the ILO? Even at the World Bank or the IMF there are no presidential meetings? That's because we stood for our values (decent work, labour standards, etc), because we rejected (IMF) conditions. They (IMF) tried to weaken us but they didn't weaken our resolve. So we were perfectly placed to come up with solutions for the crisis," Somavia, who has an infectious smile, asserted.
These are bold words and lessons for small countries like Sri Lanka in the midst of tricky negotiations with the IMF. The delay in the IMF has, in some opposition circles, been attributed to the government policy in spending patterns and alleged human rights violations. But this ILO summit is a boost to Sri Lanka vis-à-vis the proposed $1.9 billion bailout package. The clear message from the ILO and leaders like the French and Brazilian Presidents is 'don't give up" and 'fight for what you need (not what they-IMF-wants)'. |
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