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Article Excerpt
IN JULY 2005, THE WORLD WAS TREATED TO THE ODD SIGHT OF THE HIGHLY CONSERVATIVE Bush administration, generally considered indifferent if not hostile to the fate of the poor, taking the lead in pushing the other G8 nations to support full debt cancellation for the world's most heavily indebted poor countries (HIPCs), a program later dubbed the Multilateral Debt Relief Initiative (MDRI). This had been a longstanding demand of the global justice movement, which did not see the Bush administration as anything remotely like an ally. (1) Fifty Years is Enough, one of the more radical of these movement organizations, found itself "in the unfamiliar and uncomfortable position of defending the Bush Administration from the suspicions of European governments," which, though often nominally social democratic, advocated more moderate measures (Ambrose and Njehu, 2005; see also Njehu and Ambrose, 2005). This becomes even more curious when one learns that in 2004, the Bush administration successfully pushed through reforms that led the World Bank to convert 45% of the loans given out by its soft loan branch, the International Development Agency, to grants. Administration officials argued that it was absurd to expect desperately poor countries to pay back loans for humanitarian projects that would never turn a profit but were essential to develop, such as HIV/AIDS prevention and education. As with debt cancellation, most European governments were initially reluctant to go along with these reforms and had to be pushed by the Bush administration (Representative Bereuter [R-NY], in U.S. Congress, 2002e; Representative LaFlace [D-NY], in U.S. Congress, 2002b; Moss, 2006; Offenheiser, Oxfam American, in U.S. Congress, 2002f; Treasury Undersecretary Taylor, in U.S. Congress, 2002g). (2)
On the face of it, these policies appear to be an attempt to make the neoliberal system less harsh, at least for the poorest countries. At the same time, in an apparent paradox, the Bush administration's developmental agenda is intended to tighten their regulatory discipline over these same countries through the creation of ex ante (before the event), performance-based standards for aid, a mechanism the Bush administration hoped would lead to stricter enforcement of neoliberal policies. In this article, based on an analysis of seven years (1999 to 2005) of White House testimony to Congress, I argue that these seemingly contradictory policies fit together coherently. On one level, grants, the MDRI, and ex ante, performance-based aid conditionality together formed the elements of the Bush administration's plan to reform the international development system. On another level, these reforms also constituted part of the Bush administration's larger foreign policy agenda. In their testimony to Congress, Bush administration officials from the Treasury and State Departments repeatedly tied reform of the development system to the "war on terror" and "national security." The reforms the Bush administration promoted are thus part of a distinctive neoconservative foreign policy.
Historical Background
The MDRI is the latest in a number of initiatives meant to cope with the Third World debt crisis. When the crisis first broke in the early 1980s, the International Monetary Fund (IMF) and World Bank offered new loans to these debt-ridden countries, in return for a commitment to deep-reaching programs of neoliberal policy reforms, known as Structural Adjustment Programs (SAPs) (Cline, 1995; Glasberg and Ward, 1993; Wood, 1986). Over the long run, this policy of providing new loans to pay off old loans did not stabilize the situation, particularly in the case of the poorest countries, which found themselves ever deeper in debt. By the mid-1990s, the G8 nations realized that many low-income countries were under such high debt loads that they might default on their loans to the IMF and World Bank, endangering the multilaterals' privileged position in the world of finance (Sharma and Kumar, 2002). In 1996, the IMF and World Bank began the HIPC Initiative to deal with this situation; the Initiative was "enhanced" in 1999 to take account of some of the many criticisms leveled against it (see below). The HIPC Initiative covered roughly 40 of the poorest countries (the exact numbers have varied over the course of the program's history), with a disproportionate number of them concentrated in sub-Saharan Africa.
To bring about a reduction in their multilateral debt, the HIPCs needed to go through a series of stages in which they would enact various neoliberal reforms. At the end of this process, if their reforms met with the IMF's approval, their debts would be reduced to what the Fund considers sustainable levels--150% of a country's annual exports. As part of the 1999 "enhancement," the IMF and World Bank made changes to the program that allowed countries to move through it more quickly; the SAPs were renamed Poverty Reduction Strategy Papers (PRSPs) and some mechanisms for popular input, such as public consultations with civil society organizations, were incorporated (Birdsall and Williamson, 2002; Harrison, 2004; IMF, 2000; Sharma and Kumar, 2002).
Critics of the HIPC Initiative charge that the IMF defines sustainability purely in terms of the ability to continue paying off loans, while failing to ensure that the people of these nations are able to live a decent life. The 1999 "enhancement" was meant to respond to these concerns. Critics were not mollified by the changes to the program, since it still required a pairing of neoliberal reforms with what they considered to be an inhumane definition of sustainability. Meanwhile, several countries that had completed the HIPC program returned to unsustainable debt levels, due to the fact that the Bank had based their debt reductions on inflated estimates of economic growth. Critics are also unhappy with the PRSPs, pointing out that, despite the call for popular input, any programs coming out of them must be approved by the IMF and World Bank and must therefore conform to neoliberal standards (Harrison, 2004; Oxfam, 2001; Sharma and Kumar, 2002).
Theoretical Perspectives
The debt crisis, and the various attempts to find solutions to it, such as HIPC and MDRI, exist within the context of the larger international development system. This system is made up of a network of organizations that include the World Bank, the regional multilateral development banks (MDBs), and bilateral government aid agencies such as the U.S. Agency for International Development (USAID) (Wood, 1986; Woods, 2006). Beyond the organizations in the system is an ensemble of discourses, regulatory practices, and material elements, particularly aid money, through which power is exercised (Brigg, 2002). Discourses do not exist in the abstract, but are articulated with certain regulatory systems (Escobar, 1995). Thus, understanding Bush administration measures requires an analysis of its regulatory policies, the rhetoric it used to justify them, and the types of funding provided.
The regulatory apparatus of the international development system seeks to do more than discipline and control developing countries; it also seeks to enhance their productive capacities in particular ways (Brigg, 2002) that reproduce the asymmetry of power between donors and aid recipients. Donor organizations--the IMF, World Bank, regional MDBs, and bilateral aid agencies--use their...
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