Program #405
"World Institutions"
Host: Charlayne Hunter-Gault
TRT: 26:42
May 22, 1996

V.O. ANNOUNCE: Principal funding for "Rights & Wrongs" has been provided by The John D. and Catherine T. MacArthur Foundation, the Corporation for Public Broadcasting, and The Open Society Institute. Globalvision presents "Rights & Wrongs: Human Rights Television.

CHARLAYNE HUNTER-GAULT: Hello. I'm Charayne Hunter-Gault and you're watching "Rights & Wrongs," the world's only television program devoted to covering global human rights issues. Our focus this week: human rights in the new world order.

LAWRENCE EAGLEBURGER: The cold war is over. We don't know really in which direction we are headed. It's not the Red Army coming across the Bering Straits that you have to worry about anymore, it's the unemployed army of the south.

V.O. ANNOUNCE: Globalvision presents "Rights & Wrongs: human rights television."

CHARLAYNE HUNTER-GAULT: At the end of World War II the triumphant Western powers began waging a new war, a cold war against a new enemy, global Communism led by the Soviet Union. A number of international organizations were set up to help guarantee global security and economic development. Among them were the United Nations, the international monetary fund, and the World Bank. Today, with the cold war over and the Soviet Union just a memory, these organizations are struggling to redefine and reinvent themselves, as their leaders grapple with new emphasis and fresh approaches and their critics call for reform and even abolition. "Rights & Wrongs" examines the human rights implications of this emerging new world order.

LAWRENCE EAGLEBURGER: With the collapse of the Soviet Union and the end of the cold war, almost everything changed. The givens that we all operated with some confidence are no longer there. We always had a question we could ask ourselves and give ourselves an answer about how important the issue was. That's not there any longer.

CHARLAYNE HUNTER-GAULT: Five decades ago, the answers seemed clearer. With much of Europe and Asia in ruins, global institutions intended to secure peace and prosperity were needed. Among them, the united nations, the international monetary fund, and the World Bank.

V.O. ANNOUNCE: At Bretton Woods, New Hampshire, delegates from 44 allied and associate countries arrived for the opening of the United Nations Monetary and Financial Conference.

CHARLAYNE HUNTER-GAULT: By the end of the 1950's, the reconstruction of Europe and Asia was nearly complete. The cold war battlefield shifted to the third world.

LAWRENCE EAGLEBURGER: Why did we care about the Sandinistas in Nicaragua? Not because of Nicaragua, but because if they succeeded in Nicaragua, how much did it change the balance between the Soviet Union and the United States?

CHARLAYNE HUNTER-GAULT: But this balancing act between superpowers vanished along with the Soviet Union. So did all the easy answers.

LAWRENCE EAGLEBURGER: I'm not saying that there are no answers, but I am saying we are in a time when we have to think a lot harder about what the answers should be than we had to before.

CHARLAYNE HUNTER-GAULT: Times have changed so much in fact that some critics contend global institutions like the United Nations simply should be abolished. Author David Rieff:

DAVID RIEFF: The U.N. as it exists-- weak, corrupt, self-pitying, and largely supine-- is exactly what the great powers want it to be. And so I don't think the chances of the kind of abolition that I would like to see are very high, but I think it would be better for the world, yeah, if we started again.

CHARLAYNE HUNTER-GAULT: In his book, "Slaughterhouse, Bosnia, and The Failure of the West," Rieff says the U.N. often does more harm than good.

DAVID RIEFF: The U.N. is not an effective organization. It has not made the lives of ordinary people better. It's simply a lie on the part of U.N. officials to claim that their activity over the last 50 years has improved the lives of most people.

CHARLAYNE HUNTER-GAULT: Rieff's views are not widely shared. Ian Williams is the author of "The U.N. For Beginners."

IAN WILLIAMS: The United Nations, for all its many faults, of which... And I've been very eager to point out many of its faults, it still has some potential, and it is the only forum where the developing world can be heard. Otherwise they would be completely ignored instead of just mostly ignored, as they are at the moment.

CHARLAYNE HUNTER-GAULT: But Williams believes that the World Bank and the I.M.F. should be done away with.

IAN WILLIAMS: Like Caesar's Gaul, it's divided into three parts. The I.M.F. and the World Bank, I would say, are part of the problem; the U.N. is potentially a part of the solution. The U.N. at least has one country, one vote and can represent people's views. The I.M.F. and the World Bank are locked into the control into the people with the money, and they are the problem.

CHARLAYNE HUNTER-GAULT: Many activists agree. For years, the World Bank and the I.M.F. have been targeted by environmental and human rights groups.

MIKE JENDRZEJCZYK: I mean, right now china, for example, a gross violator of human rights, gets more funds from the World Bank than any government or country in the world. Similarly, the I.M.F. recently just gave another $10 billion to Russia to help underwrite Yeltsin's war against the people of Chechnya.

CHARLAYNE HUNTER-GAULT: A bank spokesperson said that only economic considerations can be taken into account in their decision-making, and bank officials decline to appear on camera to discuss human rights. Instead, they provided a written explanation of how they say the World Bank contributes to the promotion and protection of human rights. One conclusion: in the final analysis, the purposes of the world community may be better served if political human rights are monitored by the relevant U.N. organizations.

PATRICIA ARMSTRONG: The institutions-- and I'll speak more specifically about the World Bank-- have, I think it's fair to say, a phobia about human rights.


CHARLAYNE HUNTER-GAULT: Patricia Armstrong monitors international financial institutions for the lawyers' committee for human rights.

PATRICIA ARMSTRONG: The bank still, with some limited exceptions, refuses to use the terminology, the human rights terminology.

CHARLAYNE HUNTER-GAULT: Terminology is important to the World Bank, which has long sought to avoid association with human rights issues.


MIKE JENDRZEJCZYK: And I think we're playing word games here, frankly, when the bank claims that these are "political issues" that the bank simply is forbidden to deal with by its charter.

CHARLAYNE HUNTER-GAULT: Its position is evolving, however, and bank officials now use words like "governance" and "participation" to describe development-related human rights concerns.

PATRICIA ARMSTRONG: both of these concepts, governance and participation, have human rights at their core-- the freedom to associate, to assemble, to exchange information, to gather information.

CHARLAYNE HUNTER-GAULT: Nevertheless, human rights activists still seem willing to give global economic and security institutions a chance to change-- at least for now.

MIKE JENDRZEJCZYK: Well, there's no question institutions like the World Bank and the I.M.F. are going through enormous growing pains, given the dramatic changes that have taken place in the world. I think the glass is both half empty and half full. On the one hand, you have an institution that is beginning finally to hear voices from outside, including the voices of indigenous local human rights groups around the world. At the same time, you find great inertia and institutional resistance to any kind of change, which I think is inevitable, but it's equally inevitable that that change will have to come. Otherwise, these institutions won't have any role in the future.


CHARLAYNE HUNTER-GAULT: Coming up, we'll explore the future of the united nations and other global security and development agencies with U.N.
Assistant Secretary-General Alvaro De Soto. But first, we'll examine one international institution, the World Bank, and one country where the new world order is having a profound effect on the human rights of ordinary citizens. The country is Mexico, but it could be anywhere in the developing world. Our guide is economist Carlos Heredia, a former Mexican finance ministry official. Since leaving government service, Mr. Heredia has worked on human rights and development issues for a Mexican non-governmental organization known as "Equipo Pueblo." Our story begins in Mexico City, where successive governments have followed a stringent economic program prescribed by the World Bank.

CARLOS HEREDIA: In 1982, the government of Mexico adopted a new economic model designed to attract foreign investment by raising interest rates, suppressing wages, promoting exports and liberalizing trade. It also began deregulating and privatizing virtually the entire Mexican economy. What impact did these economic policy decisions have on the lives of ordinary Mexicans? Economists Rocio Mejia works for one of Mexico's largest banking groups.

(Speaking Spanish)

ROCIO MEJIA (translated): While Mexico became the model that the World Bank promoted through the hemisphere, the result was very negative. The adjustment program caused poverty to increase, destroyed local producers, and made Mexico dangerously dependent on foreign capital.

CARLOS HEREDIA: The effects of the World Bank's economic programs are most noticeable in places like San Miguel Teotongo, a poor neighborhood on the outskirts of Mexico City. The cost of living here keeps going up, but wages do not. When President Salinas was in power, he said that Mexico was headed straight to the developed world. He came to power in 1988. Have things gotten better or worse for you since then?

(Speaking Spanish)

LOCAL RESIDENT(translated): Much worse. Much worse.

CARLOS HEREDIA: One measure of how things have gotten worse is in housing. Rising unemployment and fallen incomes have led to severe overcrowding.
How many apartments are in this building?

LOCAL RESIDENT (translated): There are 13 homes.

CARLOS HEREDIA (translated): Does your husband have a job?

LOCAL RESIDENT: Yes.

CARLOS HEREDIA (translated): What does he do?

LOCAL RESIDENT (translated): He's a door-to-door salesman.

CARLOS HEREDIA (translated): Can you live off his salary?

LOCAL RESIDENT (translated): No, not really. Sometimes we can pay the rent, sometimes it doesn't get paid.

CARLOS HEREDIA (translated): How many people live in this room?

LOCAL RESIDENT (translated): Four.

CARLOS HEREDIA (translated): But you only have one bed.
Does that mean...

LOCAL RESIDENT (translated): Yes, four of us sleep in that bed.

CARLOS HEREDIA (translated): Here in San Miguel, water is scarce and rationed. One result of World Bank policies has been a lack of resources to develop and maintain public services. Residents here only have running water one day every three weeks. And it takes more than a day's wages to buy a pound of meat. The new economic policies are forcing small producers off the land and into increasingly crowded urban slums. Emilio Garcia heads an organization of small farmers.

(Speaking Spanish)

EMILO GARCIA (translated): In Mexico, there are 30 or 40 million people who live in the countryside who live off the land. For us, this is a major cultural issue, and no politician educated at Harvard or some other university in the United States can come and tell us we have to reduce the world population to some small percentage.

CARLOS HEREDIA: World Bank policies called for the removal of export and import trade barriers. As a result, the Mexican economy was opened to large corporations from the north, and Mexican industry now operates at less than one-third of its capacity. Mr. Artiz owns a mid-sized machine shop in Mexico City. Like many Mexican employers, he has become disillusioned with World Bank policies.

RAYMUNDO ARTIZ (Translated): "They said a free-trade export model would stimulate the economy, that businesses making products for export would draw along the medium and small businesses that sell to them."

(Speaking Spanish)

RAYMUNDO ARTIZ (translated): This is a bold-faced lie. It is the government talking about the engine of the economy and the engine of scale. These are great technocratic phrases that have nothing to do with reality.

(Speaking Spanish)

ROCIO MEJIA (translated): Ultimately, in December of '94, the Mexican peso and economy collapsed. The response of the U.S. Treasury was to bail out Mexico's creditors on wall street and impose on Mexico an even more draconian adjustment program.
Since then, close to half of Mexico's enterprises have gone out of business, and another two million Mexicans have lost their jobs. Two-thirds of the population now earn incomes below the poverty line, so more and more people have entered the drug trade and immigration to the United States has surged.

CARLOS HEREDIA: Every day, there are demonstrations against the new economic policies throughout Mexico. Middle-class Mexicans are protesting runaway interest rates charged by the newly privatized and deregulated banks.

(Speaking Spanish)

RENE MORRUA CARDONA: (translated): I borrowed about $14,000 to buy a microbus, but now I have to pay back $28,000. I'm not saying I won't pay-- I want to pay-- but I want to pay something that's fair, something that's right, nothing more.

CARLOS HEREDIA: Representative Maria Del Rosario Robles heads the Social Development Committee of the Mexican Congress.

(Speaking Spanish)

MARIA DEL ROSARIO ROBLES (translated): Well, I don't think the World Bank understands the changes that have taken place in Mexico. It's not dealing with the reality that we face. Every day the number of people joining the ranks of the poor, the new poor, is increasing. With almost two-thirds of the population living below the poverty line, we have to rethink the whole situation and devise new social policies that truly attempt to combat poverty.

CARLOS HEREDIA: But to talk to the people who create Mexico's economic policies, I had to leave Mexico City and travel north to Washington, D.C.

SECRETARY: Good afternoon, Development Gap.

CARLOS HEREDIA: My first stop was at a non-governmental organization that has long been critical of World Bank policies. Doug Hellinger heads Development Gap.

DOUG HELLINGER: I think we make a tremendous error when we mistake these policies of structural adjustment for development policies. They're not development policies. They're really designed to serve the interest not of Mexican people, but of foreign investors, particularly those on wall street. They are designed to push up short-term interest rate, to attract bond capital, yet those same high interest rates destroy small businesses, small farms, and with them millions of jobs. Investors may come to a certain extent, but wages are pushed down, demand is diminished in these countries, and you have the rebound effect of pushing down wages in the United States, as corporations can hold it over workers' heads in the United States that they can go to Mexico.

CARLOS HEREDIA: Hellinger suggested that I go to the U.S. Treasury Department to talk to Lawrence Summers, the former Chief Economist of the World Bank. Today he's Deputy Secretary of the Treasury. Dr. Summers, how are you? Nice to meet you. I'm Carlos Heredia from Mexico. Right now in 1996, most Mexicans are worse off than they were at the beginning of the 1980's, when the structural adjustment policies had started being implemented in my country.

LAWRENCE SUMMERS: Well, I think the assessment is very, very complicated, and there are a variety of problems. I don't think it's right to say that the average Mexican is worse off than...

CARLOS HEREDIA: I'm using the official statistics...

LAWRENCE SUMMERS: Well, there are different way to use official statistics, and there are different indicators of consumption. If you look at life expectancy, if you look at the number of kids who are educated, if you look at the size of average food units, if you look at the average housing units, if you look at the amount of food people are able to eat, I don't think the picture is quite as bleak as you suggest. I believe that the vast majority of Mexicans recognize that an important part of the greater integration into the world economy that is essential if Mexico is to prosper is for Mexico to meet its financial obligations. And I have no doubt that with sound economic policies, Mexico has the prospect of meeting its obligations and enjoying a return to rates of economic growth significantly higher than it has seen in many years. And I think its citizens deserve no less.

CARLOS HEREDIA: Finally, I arrived at the World Bank itself. I spoke with Sajid Javed Burki, Vice President for Latin America and the Caribbean. In the early 1990's, Mexico was supposed to graduate from the World Bank, yet it's fallen into a very deep economic crisis. What went wrong?

S. JAVED BURKI: Number one, I wouldn't say that anything serious went wrong. The recipe is correct now. What's called the liberal solution to economic management, the so-called Washington consensus, the only thing that needs to be added to that is to worry about the impact of these kind of adjustments on the more vulnerable segments of the population.

CARLOS HEREDIA: How are you accountable to the people who are the alleged beneficiaries of your project?

S. JAVED BURKI: I'm accountable to the board of governors, which includes Mexico as a member.

CARLOS HEREDIA: But you're not accountable to the people who are allegedly the beneficiaries of your programs in support of education, food, et cetera?

S. JAVED BURKI: I'm accountable to the government, and I hope the governments are accountable to the people.

CARLOS HEREDIA: What happens if they're not?

S. JAVED BURKI: That's... That's not for me to decide. We work with the governments.

CARLOS HEREDIA: I think that will do. Thank you.

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CHARLAYNE HUNTER-GAULT: We are joined by Alvaro De Soto, Assistant Secretary-General of the United Nations for political affairs. Mr. De Soto, welcome.
Lawrence Eagleburger, former Secretary of State, observed that everything changed at the end of the cold war. In terms of human rights, I mean, how did the U.N.'s approach to human rights change?

ALVARO DE SOTO: It has changed a lot. What you find is that with the end of the cold war, the United Nations was able to do things that were totally unprecedented, which, for instance, included nationwide, long-term monitoring of human rights in particular cases, which is something that we did starting in 1991 in El Salvador; we're doing it now in Guatemala, doing it in Haiti, and also in Rwanda. This is not something that you can do in every case, but that has made a fundamental difference in the situation of human rights in all those cases.

CHARLAYNE HUNTER-GAULT: What about some of the critics who say that the U.N. hasn't performed very well in the post-cold war world, that some of the responsibilities for dealing with human rights that fall, say, in peacekeeping or refugee situations have just not been handled very well?

ALVARO DE SOTO: I think the world got caught off guard. With the end of the cold war, there appeared a whole host of new problems that we were not accustomed to dealing with. A lot of parts of the world and a lot of subject matters were essentially off limits to the united nations until the late 1980's and the early 1990's. And then there was a high expectation that the U.N. could do everything and solve virtually everything, and it turned out that these new problems were very, very difficult to handle, including internal conflict, ethnic conflict, the breakdown of state institutions, particularly in areas for which the major powers used to compete back during the cold war.

CHARLAYNE HUNTER-GAULT: What about those who say that, okay, member states need to make up their minds, but the U.N. also needs internal reform?
That's been... That criticism has been going on a long time. Do you see reforms that need to be taken and that may be being undertaken that will answer some of those criticisms, that will bring the U.N. truly into the new world order?

ALVARO DE SOTO: Obviously there is need to adapt to the new situation that we have out there, but the need is for strengthening rather than weakening it.
And to follow the adage of the architects, form follows function: let's first decide what we want to use this tool for, and then let's design it accordingly.

CHARLAYNE HUNTER-GAULT: Let me ask you about international monetary institutions, because when they do an analysis of problems, their considerations are primarily economic, but there are those who say that these institutions also should take into account the human rights implications. What do you say to that, and is there a way to achieve a balance?

ALVARO DE SOTO: In fact, the World Bank today has a very strong social agenda, and they are getting more involved in the area of governance, good governance, supporting institution-building by governments in order to give them the capability to run their governments much better. The international monetary fund is more, let's say, orthodox. It's more careful in the way it handles a problem, and they don't have that type of an agenda because they're more on the financial and monetary area.

CHARLAYNE HUNTER-GAULT: So if you had to characterize where all of these institutions are now in terms of adjusting and adapting to the new emerging new world situation, how would you characterize that adjustment?

ALVARO DE SOTO: Well, I think the idea is really that we should be working toward an integrated approach to the problems of human security and try to approach them together jointly. And this is one of the high priority items, even though it does sound rather lofty and all-encompassing, but it is one of the high priorities in this era of transition through which we are going now. Cold war is over. We don't know really in which direction we are headed. We don't know what's going to follow the cold war.
All we know is that this is a transition that is probably as important as the end of world war II, world war I, even the Napoleonic wars.

CHARLAYNE HUNTER-GAULT: So is it difficult, or should I say how difficult is it?

ALVARO DE SOTO: It's a mine field out there. It's very, very difficult.
There are new problems that no one ever dreamed of when the U.N. Charter was drawn up in the early 1940's.

CHARLAYNE HUNTER-GAULT: Well, Mr. De Soto, thank you.

ALVARO DE SOTO: Thank you. My pleasure.

CHARLAYNE HUNTER-GAULT: We welcome your comments and suggestions. Please write us or reach us via e-mail. I'm Charayne Hunter-Gault. Thank you for watching "Rights & Wrongs."

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