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By Root 1038 0

to any country whose economy was in such bad shape that it couldn’t participate in global trade. The World Bank was created specifically to loan money to the governments of countries devastated by World War II so they could rebuild their economies and rejoin global trade. Soon, the World Bank shifted its focus to countries and European colonies in Latin America, Africa, and Asia. The GATT was a complicated treaty set up to reduce national barriers to trade; in 1995 it was replaced by the international organization known as the World Trade Organization (WTO), which has even broader-reaching powers. Note that these are only the three largest of these organizations; there are dozens of additional multilateral banks, government agencies, and trade agreements that replicate the IMF/World Bank/WTO model in regional or sector-specific forms.104

Although some of the original intentions behind these institutions may have been good, their evolution over the past half century has had disastrous results for the great majority of people on the planet, and for the planet itself. Dominated by the biggest players (especially the United States), the IMF, World Bank, and WTO have created and perpetuated huge imbalances in global wealth while trashing the natural environment and destroying communities all the way from Argentina to Zimbabwe and everywhere in between.

While most of us in the United States have few occasions to confirm this harsh truth regarding the negative impacts of IFIs, ordinary folks all over the developing world have extensive hands-on knowledge: these institutions influence their ability to do everything from make a living as farmers, get much-needed medicine, send their kids to school, or escape the grips of poverty.

In Singrauli, India, I met villagers who had been kicked off their land (“involuntary resettlement,” in World Bank speak) in order to make room for a World Bank–funded coal-fired power plant complex. I was struck by the constant background shade of grey caused by the coal ash from the facility. A generation ago, Singrauli was richly forested, with wildlife and clean water and small subsistence farming; today, the coal mining and burning and ash has devastated the air, water, and landscape so intensely that some Indian journalists have dubbed it “the lower circles of Dante’s Inferno.”105 The compensation given to the displaced families was nowhere near enough to make up for their increased distance to fresh water, the loss of farmland, and the destruction of the social fabric due to the relocation.

The problem is not just the actual projects, like highways to nowhere, greenhouse-gas-spewing coal plants, or dioxin-emitting incinerators, but the broader development model that is forced on borrowing countries as well. While the IMF, for example, does loan money to countries in need, these loans too often come with ruthless strings attached, requiring borrowing countries to further deplete their natural resources in order to ramp up exports and to divert funds from public health, education, and other social needs to ensure loan repayment. In other words, they have to lower their already low standard of living in order to meet international debt payments. And if a country refuses these conditions, it finds itself blacklisted from other international lenders, unable to access desperately needed funds.

The World Bank and IMF work hand in hand. Once the IMF requires borrowing countries to export more natural resources, the World Bank is happy to provide the technical expertise and loans needed to extract those resources, using technologies like those described in chapter 1 on extraction. Generally charging interest rates higher than those of local lenders, the World Bank finances roads, ports, power plants, factories, megadumps, incinerators, and dams all over the world. Its projects have been plagued with controversy, from the forced—sometimes violent—displacement of local residents to large-scale destruction of forests, aquifers, and entire ecosystems, as well as systemic corruption. The World Bank’s stated