SYNOPSIS: Globalization critic responds to Krugman's attack on the cashew industry

As someone whose central organizing principles in life include figuring out how to reduce and undermine the power and legitimacy of the International Monetary Fund, the World Bank, the World Trade Organization, and kindred institutions, I have to say that the week of protests and education in Washington against these institutions was like a breath of fresh air, not least because for a brief moment I had a taste of what it would be like to live in a country with a truly free press - as opposed to one controlled by corporations.

Not that all of the press coverage was wonderful. But in the print media at least, our mobilization created an opening that many conscientious editors and reporters used to do real reporting about the destructive impacts of IMF and World Bank policies, real reporting about the people, organizations, campaigns, and values of our movement, and real reporting about the political agendas of people in developing countries. The Washington Post ran a front page story on how the IMF and the World Bank devastated Haitian rice farmers. Its Metro section reported on the "egalitarianism" of the protesters and their commitment to democratic decisionmaking. Its Business section reported the launch of the World Bank bond boycott. The Boston Globe quoted Noam Chomsky on the destructive policies of the IMF and the World Bank. Time Magazine ran a story on the destructiveness of IMF-World Bank policies in Tanzania. The Village Voice reported that the World Bank destroyed Mozambique's cashew nut processing industry. The International Herald Tribune reported in a front page story that leaders of developing countries meeting in Cuba and representing more than 80% of the world's population had endorsed the protests in Washington.

The protests are over, and now comes the blowback on the editorial and the op-ed pages, which, of course, more closely reflect the priorities of the owners than do the news pages. Today's Washington Post lead editorial attacks the protesters and slavishly praises the police that beat them. The lead editorial in the New York Times parrots the claims of the big business lobby that the U.S.-China trade deal will benefit workers in China and the U.S. The NYT Op-Ed page has a diatribe against the protesters from David Frum of the ultra pro-business Manattan Institute. And last but not least from my point of view the NYT op-ed page has an attack on me personally - as a stand-in for all the protesters and critics of corporate globalization, of course - by ersatz liberal economist Paul Krugman. Of course, I fired off a letter in response: if the NYT is true to form, they will refuse to print it.

Krugman's column attacks an article I wrote which was posted on the A16 web site (www.a16.org), and which recounted how the World Bank and the IMF destroyed Mozambique's cashew nut processing industry. (For the full story, see "Power Without Responsibility: the World Bank and Mozambican Cashew Nuts" in the Review of African Political Economy, www.roape.org.) Krugman parrots the Bank's line that its policy of forcing Mozambique to remove protections for its cashew industry, destroying 10,000 jobs in the process, was in the interest of Mozambican peasants, and suggests that those of us telling this story don't have our facts right.

Krugman's column gets only one thing right: the destruction of Mozambique's cashew nut processing industry by the World Bank and the International Monetary Fund is my favorite example showing why the destructive power of these institutions must be dramatically reduced. It illustrates that the IMF and the Bank exercise colonial power over developing countries; that (like Krugman) they are sloppy economists; that dogmatic trade liberalization also hurts developing countries; and that the "Heavily Indebted Poor Countries Initiative" of the IMF and the World Bank is unworthy of U.S. funding since it preserves the destructive power of the IMF and the Bank over poor countries like Mozambique.

On the paramount question of democracy, Krugman doesn't contest that the IMF and the World Bank imposed their policies on Mozambique-- contrary to their claims about "negotiation" and "dialogue."

As to whether the World Bank's diktat was good economic policy for Mozambique, it is Krugman who needs to do his homework. Krugman ignores the 1997 Deloitte & Touche study commissioned by the World Bank, which found that Mozambique's peasants did not gain anything from liberalized exports of raw cashews. This single fact demolishes Krugman's entire defense of the Bank's policy. The study also found that Indian subsidies to its cashew nut processing industry made competition unfair, and that Mozambique earns an extra $130 per ton processing its own cashews, "sufficient reason to support the processing industry against competition from India."

Krugman's arrogance in defending such errors on the basis of abstract principles, without knowledge of crucial facts, illustrates why it is not only immoral, but also unwise, to allow foreign economists to make such crucial decisions for developing countries.

And yet this arrogant attitude is the one we see filling the op-ed pages. It comes as no surprise. And it reminds us why so many of the protesters loathe the corporate media - it was with some relish that many protesters barred journalists from crossing protest lines on April 16th.

"The greatest form of sanity that anyone can exercise is to resist those forces trying to repress. oppress and fight down the human spirit." M. Jamal