GLOBALIZATION AND THE DEVELOPMENT OF UNDERDEVELOPMENT OF THE THIRD WORLD

Indeed, the Bretton Woods twin sisters have failed woefully to alleviate poverty in the world. They have failed because they were never designed to serve the interest of anyone but their shareholders. Instead of promoting economic growth, the IMF and the World Bank have institutionalized economic stagnation in the underdeveloped countries. They are irrelevant to the central goal of eliminating global poverty. Driven by the interests of key political and economic institutions in the Group of Seven (G-7) countries, in particular the United States, the IMF and the World Bank are more concerned about the internal imperative of capitalist expansionism or empire building for capital accumulation. In terms of achieving positive development impact, a Meltzer Report in April 2000 indicates that the World Bank's own evaluation of its projects shows an outstanding 55-60 percent failure rate. The failure rate is particularly high in the poorest countries, where it ranges from 65 percent to 70 percent.30 These are the very countries that are supposed to be the main targets of the Bank's anti-poverty approach. The report states that the rhetoric about focusing on poverty alleviation is contradicted by the reality that 70 percent of the Bank's non-aid lending is concentrated in 11 countries, while the Bank's 145 other member countries are left to divide the remaining 30 percent. Moreover, the report concludes that: "80 percent of World Bank resources have gone, not to poor countries with poor credit ratings and investment ratings, but to countries that could have raised the money in international private capital markets owing to their having investment grade or high yield ratings."31

Furthermore, the World Bank in its quest for capital accumulation lends money to that states noted for atrocities including gross violations of human rights. This has been observed: "In Fiscal Year 2001 alone, the World Bank extended capital commitments totaling $17.3 billion...., in many cases to states that have been the venues for atrocities and abuses committed by either the government or other groups."32 It is important to note that a government engaged in or facilitating atrocities will have less incentive to adhere to international legal norms if it continues to receive funds from the World Bank or the IMF without any consideration of the atrocities or the impunity of those responsible. The issue is not whether the Bretton Woods Twin Sisters should automatically cease all activities in a country at the first sign of humanitarian law violations. The power of the purse is not even used by the institutions as one of the loudest voices, one that can be applied to complement the efforts by the United Nations, some concerned states, and non-governmental organizations (NGOs) to protect civilians and prevent violations of international humanitarian law. Diplomatic pressure will lose its muscle when matched with "reverse" economic incentives to the states that undermine the gross violations of human rights.