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The challenge of community work in a global economy.

Article Excerpt
This article examines how and why five major stakeholders--international financial organizations; NGOs; governmental entities; multinational corporations; and community development projects--have failed to significantly and uniformly reduce aggregate global poverty. The article uses the results of a case study of HIV/ AIDS prevention in a low-income Nigerian city to argue that effective action must involve local and global stakeholders in collaborative partnerships. It concludes by discussing the critical role of facilitators in such partnerships.

Keywords: global economy, community development, NGO, INGO, World Bank, IMF, WTO.

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Globalization is best understood in relative terms since all countries are not impacted equally. For the world's desperately poor, sweatshops and other exploitive workplaces can seem more like opportunity than exploitation. For others in the developed (and developing) world, globalization has meant untold prosperity. While the edifices of capitalist development--megacities, posh hotels and skyscrapers--are growing, poverty rates in developed countries are either frozen or rising, housing costs are becoming unmanageable, and the prices of goods and services are rising faster than wages which is leading to unsustainable levels of personal debt (Karger, 2005). Like Russian dolls, industrial societies are resembling a nation within a nation within a nation. This article will investigate how these forces are shaping policies in the developing world. It will also examine how effective development requires collaborative partnerships by which local people can regain control of development.

Major International Financial Organizations

Numerous international financial organizations, United Nations funds, and private donors are trying to address global poverty and development. However, an economy of space dictates that this section only focuses only on the largest financial organizations.

In 1944 delegates from 45 nations gathered at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire to discuss Europe's shattered economy. Delegates reached a consensus that established a postwar economy around currency exchange rates and free trade. The Conference created the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (World Bank), and the International Trade Organization (ITO) which the U.S. Congress refused to ratify. Instead, the General Agreement on Tariffs and Trade (GATT) was signed in 1947; in 1995 GATT became the World Trade Organization (WTO) (Mason & Asher, 1973).

Organizations Emerging from the Bretton Woods Conference

The IMF

The IMF provides financial assistance to countries experiencing severe financial difficulties. In turn, it requires members' currencies to be exchanged freely for foreign currencies, to inform the IMF of planned changes in financial and monetary policies, and to modify their economic policies based on the IMF advice. Although the IMF administers an emergency lending pool, they are not primarily a lending institution like the World Bank (WB). The IMF perspective is based on the view that international prosperity is rooted in an orderly monetary system that encourages free trade, creates jobs, expands economic activity and raises global living standards (Driscoll, 1996).

Member nations requesting loans and/or organizational consultation are often required to conform to the "Washington Consensus," a set of fiscal reforms developed by neoliberal economists. The name was chosen because it represents the shared themes of Washington-based institutions like the IMF, the WB and U.S. Treasury Department. Consensus principles include:

* Pressuring least developed countries (LDCs) to enact fiscal discipline; tax reforms; market-driven interest rates; currency exchange rates based on market conditions; and strict oversight of financial institutions.

* Coercing borrower nations to adopt aggressive free trade policies by removing import restrictions and tariffs, except for those justified on safety, environmental or consumer protection grounds. Institute legal guarantees of property rights.

* Pressuring borrowers to privatize state-owned or controlled enterprises (Palast, 2003; World Bank, 2002).

The World Bank

Owned by 184 member countries, the World Bank Group is composed of two principal institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The IBRD focuses on middle income and creditworthy poor countries, while the IDA focuses on the poorest countries. Together, these two organizations provide low-interest loans and interest-free credit and grants to poor countries for education, health, infrastructure, communications, etc. WB affiliates include the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency; and the International Centre for Settlement of Investment Disputes (ICSID). The WB is responsible for providing financial advice to LDCs for economic development and poverty reduction. Headquartered in Washington it has local offices in 100 member nations (World Bank, 2006a &2006b; Driscoll, 1996).

Since 1996 the WB has focused on combating corruption in developing nations--it views reduced corruption and improved governance as crucial prerequisites for sustainable development and poverty reduction (Kaufmann, Kraay, & Mastruzzi, 2005). Over the last few years, the WB steadily moved its focus from economic growth to poverty reduction, supporting small scale local enterprises. Despite this new...

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