Hypocrisy Condemned
at IMF Meeting

Even financial leaders call U.S. subsidies unfair

Washington -- For all the polite nods toward the protesters outside, those in charge of the World Bank and the International Monetary Fund offered few apologies this weekend for the many failed attempts to increase prosperity in the world's poorest countries.

Reflecting the views of their biggest shareholders -- governments of the world's richest countries, led by the United States -- both institutions continued to push poor countries to take steps to stimulate business: privatize industry, improve financial management, embrace free trade.

But as the two institutions wrapped up their annual meetings here Sunday, people inside and outside the elite gathering attacked what some described as a major hypocrisy of the rich countries; their own continued barriers to imports, particularly of agricultural products and textiles.

James D. Wolfensohn, president of the World Bank, accused wealthy countries of "squandering" $1 billion a day on farm subsidies that often have devastating effects on farmers in Latin America and Africa.

Stanley Fischer, who was the Fund's deputy managing director in the 1990s, said protectionist policies by the United states, Europe and Japan were "scandalous."

Oxfam International, a non-profit group focused on world poverty problems, issued a scathing report in which it charged that subsidies to big U.S. cotton farming operations were wiping out African rivals.

The criticisms are not new. But they are more intense this year, and they carried a special sting for the United States. Earlier this year, Congress passed, and President Bush signed, a bill that authorizes more than $100 billion in farm subsidies over the next eight years.

"It is hypocrisy to encourage poor countries to open their markets while imposing protectionist measures that cater to powerful special interests," said Nicholas Stern, chief economist of the World Bank.

Stern estimated that the average cow in Europe receives about $2.50 a day in subsidies, and the average cow in Japan receives nearly $7 a day. By contrast, he said, 75 percent of the people in sub-Saharan African live on less than $2 a day.

The Bush administration agrees in principle with the goal of reducing subsidies, which encourage overproduction and tend to depress prices, as well as tariffs and quotas that block imports.

Protectionism in wealthy countries has a disproportionately large effect on poor countries, because the biggest barriers are on farm products and labor-intensive products like textiles.

Protesters had sought to disrupt the discussions by shutting down the capital. Their efforts fizzled in the face of poor turnout and an overwhelming police presence.

San Francisco Chronicle, September 30, 2002
The Associated Press contributed to this report.

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