A Spiraling Race to the Bottom

As detailed further below, for countries seeking financial assistance, the IMF and World Bank provide it but apply a neoliberal economic ideology or agenda as the preconditions to receiving the money. For example:

• They prescribe cut backs, “liberalization” of the economy and resource extraction/export-oriented open markets as part of their structural adjustment.
• The role of the state is minimized.
• Privatization is encouraged as well as reduced protection of domestic industries.
• Other adjustment policies also include currency devaluation, increased interest rates, “flexibility” of the labor market, and the elimination of subsidies such as food subsidies.
• To be attractive to foreign investors various regulations and standards are reduced or removed.

For poorer countries these impacts can be devastating. Factors such as the following lead to further misery for the developing nations and keep them dependent on developed nations:

• Poor countries must export more in order to raise enough money to pay off their debts in a timely manner.
• Because there are so many nations being asked or forced into the global market place — before they are economically and socially stable and ready — and told to concentrate on similar cash crops and commodities as others, it is like a huge price war.
• The resources then become even cheaper from the poorer regions (which favors consumers in the West).
• Governments then need to increase exports just to keep their currencies stable (which may not be sustainable, either) and earn foreign exchange with which to help pay off debts.
• Governments therefore must:
  • spend less
  • reduce consumption
  • remove or decrease financial regulations
  • and so on.
• Over time then:
  • the value of labor decreases
  • capital flows become more volatile
  • and we get into a spiralling race to the bottom.
  • social unrest is often one result.
    • The term “IMF riots” has been used many times to describe the impact of SAPs around the world.
    • See this site’s section on protests around the world for examples of this.
• These nations are then told to peg their currencies to the dollar. But keeping the exchange rate stable is costly due to measures such as increased interest rates etc.
• Investors obviously concerned about their assets and interests can then pull out very easily if things get tough.
  • In worst cases capital flight can lead to economic collapses like we have seen in the Asian/global financial crisis of 1997/98/99, Mexico, Brazil and many other places — of course, the blame by mainstream media and free trade economists is laid on emerging markets and their government’s restrictive or inefficient policies, crony capitalism etc, which is a cruel irony.
• When IMF donors keep the exchange rates in their favor, it often means that the poor nations remain poor, or get even poorer. Even the 1997/98/99 global economic financial crisis around the world can be partly blamed on structural adjustment and overly aggressive and early deregulation for emerging economies.

Competition between companies involved in manufacturing in developing countries is often ruthless. We are seeing what Korten described as “a race to the bottom. With each passing day it becomes more difficult to obtain contracts from one of the mega-retailers without hiring child labour, cheating workers on overtime pay, imposing merciless quotas, and operating unsafe practices.”

— John Madeley, Big Business Poor Peoples; The Impact of Transnational Corporations on the World’s Poor, (Zed Books, 1999) p. 103

This is one of the backbones to today’s so-called “free” trade. In this form, as a result, it is seen by some as unfair and one-way, or extractionalist. It also serves to maintain unequal free trade as pointed out by J.W. Smith.

As a result, policies such as Structural Adjustments have, as described by Smith, contributed to “the greatest peacetime transfer of wealth from the periphery to the imperial center in history”, to which we could add, without much media attention.

Maintaining Dependency and Poverty

One of the many things that the powerful nations (through the IMF and World Bank etc) prescribe is that the developing nation should open up to allow more imports in and export more of their commodities. However, this is precisely what contributes to poverty and dependency.

[I]f a society spends one hundred dollars to manufacture a product within its borders, the money that is used to pay for materials, labor and, other costs moves through the economy as each recipient spends it. Due to this multiplier effect, a hundred dollars worth of primary production can add several hundred dollars to the Gross National Product (GNP) of that country. If money is spent in another country, circulation of that money is within the exporting country. This is the reason an industrialized product-exporting/commodity-importing country is wealthy and an undeveloped product-importing/commodity-exporting country is poor. [Emphasis Added]

...Developed countries grow rich by selling capital-intensive (thus cheap) products for a high price and buying labor-intensive (thus expensive) products for a low price. This imbalance of trade expands the gap between rich and poor. The wealthy sell products to be consumed, not tools to produce. This maintains the monopolization of the tools of production, and assures a continued market for the product. [Such control of tools of production is a strategy of a mercantilist process. That control often requires military might.]

— J.W. Smith, The World’s Wasted Wealth 2, (Institute for Economic Democracy, 1994), pp. 116, 127, 139.

As seen above as well, one of the effects of structural adjustment is that developing countries must increase their exports. Usually commodities and raw materials are exported. But as Smith noted above, poor countries lose out when they

• Export commodities (which are cheaper than finished products)
• Are denied or effectively blocked from industrial capital and real technology transfer
• and import finished products (which are more expensive due to the added labor to make the product from those commodities and other resources)

This leads to less circulation of money in their own economy and a smaller multiplier effect. Yet, this is not new. Historically this has been a partial reason for dependent economies and poor nations. This was also the role enforced upon former countries under imperial or colonial rule. Those same third world countries find themselves in a similar situation. This can also be described as unequal trade:

At first glance it may seem that the growth in development of export goods such as coffee, cotton, sugar, and lumber, would be beneficial to the exporting country, since it brings in revenue. In fact, it represents a type of exploitation called unequal exchange. A country that exports raw or unprocessed materials may gain currency for their sale, but they lose it if they import processed goods. The reason is that processed goods — goods that require additional labor — are more costly. Thus a country that exports lumber but does not have the capacity to process it must then re-import it in the form of finished lumber products, at a cost that is greater than the price it received for the raw product. The country that processes the materials gets the added revenue contributed by its laborers. (Emphasis is original)

— Richard Robbins, Global Problems and the Culture of Capitalism, (Allyn and Bacon, 1999), p. 95

Exporting commodities and resources are seen as favorable to help earn foreign exchange with which to pay off debts and keep currencies stable. However, partly due to the price war scenario mentioned above, commodity prices have also dropped. Furthermore, reliance on just a few commodities makes countries even more vulnerable to global market conditions and other political and economic influences. As Gemini News Service also reports, talking to the World Bank:

More than 50 developing countries depend on three or fewer commodities for over half of their export earnings. Twenty countries are dependent on commodities for over 90 percent of their total foreign exchange earnings, says the World Bank.

— Ken Laidlaw, Market Cure Proposed For Third World’s Battered Farmers, Gemini News Service, December 4, 2001 (Link is to reposted version on this web site)

In addition, as Celine Tan of the Third World Network explains:

Falling [commodity] prices have meant that large increases in export volume by commodity producers have not translated into greater export revenues, leading to severely declining terms of trade for many commodity producing countries. When the purchasing power of a country’s exports declines, a country is unable to purchase imported goods and services necessary for its sustenance, as well as generating income for the implementation of sustainable development programmes.

A vast majority of developing countries depend on commodities as a main source of revenue. Primary commodities account for about half of the export revenues of developing countries and many developing countries continue to rely heavily on one or two primary commodities for the bulk of their export earnings.

— Celine Tan, Tackling the Commodity Price Crisis Should Be WSSD’s Priority, TWN Briefings for WSSD No.14, Third World Network, August 2002

Tan also highlights in the above article that “a fall in commodity prices have also led to a build-up of unsustainable debt.” The lack of greater revenues from exports has knock-on effects, as described further above. The irony is that structural adjustments were prescribed by the IMF and the World Bank due to debt repayment concerns in the first place.

Adam Smith, in his 1776 classic, The Wealth of Nations, regarded as a bible of capitalism also provides some insights. He was highly critical of mercantilist practices of the wealthy nations, while he recognized the value of local industry and the impacts of imported manufactured products to local industries:

Though the encouragement of exportation and the discouragement of importation are the two great engines by which the mercantile system proposes to enrich every country, yet with regard to some particular commodities it seems to follow an opposite plan: to discourage exportation and to encourage importation. Its ultimate object, however, it pretends, is always the same, to enrich the country by the advantageous balance of trade. It discourages the exportation of the materials of manufacture, and of the instruments of trade, in order to give our own workmen an advantage, and to enable them to undersell those of other nations in all foreign markets; and by restraining, in this manner, the exportation of a few commodities of no great price, it proposes to occasion a much greater and more valuable exportation of others. It encourages the importation of the materials of manufacture in order that our own people may be enabled to work them up more cheaply, and thereby prevent a greater and more valuable importation of the manufactured commodities. (Emphasis Added)

— Adam Smith, Wealth of Nations, Book IV, Chapter VIII, (Everyman’s Library, Sixth Printing, 1991), p.577

Reading the above, we can say that structural adjustment policies are also mercantilist. We are constantly told that we live in a world of global capitalism, and yet we see that while free markets are preached (in Adam Smith’s name), mercantilism is still practiced!

Of course, today it is a bit more complicated too. We do have, for example, products being exported from the poorer countries (albeit some facing high barriers in the rich nations). But exporting rather than first creating and developing local industry and economy, means the “developing” country loses out in the long run, (hardly “developing”) because there is little multiplier effect of money circulating within the country, as mentioned above. Furthermore, with labor being paid less than their fair wages in the poorer nations, wealth is still accumulated by — and concentrated in — the richer nations.

Thus we are in a situation where the rich promote a system of free trade for everyone to follow, while mercantilism is actually practised by themselves.

• “Free trade” is promoted by the rich and influential as the means for all nations to achieve prosperity and development.
• The wealth accumulated by the richer countries would seem to strengthen that idea.
• Yet, that would cloud over how such immense wealth was accumulated not so much from “free trade” but from the violent and age-old mercantilism or “monopoly capitalism”.
• In that context, such systems are being practised again today, even though it is claimed to be Adam Smith free trade. It is a system that Adam Smith himself criticized so much.

In 1991, then Chief Economist for the World Bank, Larry Summers, (and US Treasury Secretary, in the Clinton Administration, until George Bush and the Republican party came into power), had been a strong backer of structural adjustment policies. He wrote in an internal memo:

Just between you and me, shouldn’t the World Bank be encouraging more migration of dirty industries to the LDCs [less developed countries]?... The economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable, and we should face up to that... Under-populated countries in Africa are vastly under-polluted; their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City... The concern over an agent that causes a one in a million change in the odds of prostate cancer is obviously going to be much higher in a country where people survive to get prostate cancer than in a country where under-five mortality is 200 per thousand.

— Lawrence Summers, Let them eat pollution, The Economist, February 8, 1992. Quoted from Vandana Shiva, Stolen Harvest, (South End Press, 2000) p.65; See also Richard Robbins, Global Problems and the Culture of Capitalism (Allyn and Bacon, 1999), pp. 233-236 for a detailed look at this.

When looked at in this light, poverty is more than simple economic issues; it is also an ideological construct.

© Polyp/New Internationalist

Earn More, Eat Less

Half a world away [from Zambia] in Washington, the architects of this human disaster dine in comfort and seclusion, spending more on one meal than Masauso Phiri’s wife makes in a year of selling buns in their shantytown. Although most World Bank staff work at its Washington headquarters, those unlucky enough to be posted in the Third World receive ample compensation for their misfortune. This includes subsidized housing (complete with free furnishings), an extended “assignment grant” of $25,000 and a “mobility premium” to defray the cost of child education. Salaries are tax-free and averaged $86,000 in 1995, according to a General Accounting Office report to Congress. No “structural adjustment,” then, for this privileged coterie of bankers and policy analysts. Meanwhile, in Africa a hidden genocide lays waste the continent.

“It’s not right for a bank to run the whole world,” says Fred M'membe, editor of the Zambia Post. “They do not represent anybody other than the countries that control them. What this means in practice is that the United States runs our countries.” He continues: “Look at any African country today, and you'll find that the figures are swinging down. Education standards are going down, health standards going down and infrastructure is literally breaking up.”

— Mark Lynas, Letter from Zambia, The Nation, February 14, 2000

In some countries, more is spent on debt servicing than education. For example, even in the former communist countries that are trying to undergo rapid economic “reform”, education is given a back seat. In fact, the UK-based development and relief organization, Oxfam, goes as far as saying that the IMF policies deny children an education.

Since the Cold War has ended, even wealthier nations are seeing government rollback on some functions, in a similar style to structural adjustment. John McCurtry captures this well, being very critical on the impacts of such adjustments on “life requirements”:

Such systematic overriding of life requirements is now clearly evident from the most undeveloped to the most advanced societies of the world. In the case of Canada, again, infant mortality rates, the quintessential indicator of social health, rose an astonishing 43 per cent in the 1995 Statistics Canada figures, the first recorded rise in over thirty-one years, while child poverty had increased by 46 per cent since 1989. In Africa an estimated 500,000 more children died from the imposed restructuring of their countries' economies to ensure increased flows of money to external banks, while spending on health care declined by 50 per cent and on education by 25 per cent since these structural adjustment programs began.

— John McMurtry, Unequal Freedoms; The Global Market as an Ethical System, (Kumarian Press, 1998), p.305.

And as the crisis of AIDS gets worse in Africa, such measures that reduce health budgets in already poor countries contributed to the problems. (See this site’s section on AIDS in Africa for more on that issue.)

The “Welfare” State has Helped Today’s Rich Countries to Develop

The era of globalization can be contrasted with the development path pursued in prior decades, which was generally more inward-looking. Prior to 1980, many countries quite deliberately adopted policies that were designed to insulate their economies from the world market in order to give their domestic industries an opportunity to advance to the point where they could be competitive. The policy of development via import substitution, for example, was often associated with protective tariffs and subsidies for key industries. Performance requirements on foreign investment were also common. These measures often required foreign investors to employ native workers in skilled positions, and to purchase inputs from domestic producers, as ways of ensuring technology transfers. It was also common for developing countries to sharply restrict capital flows. This was done for a number of purposes: to increase the stability of currencies, to encourage both foreign corporations and citizens holding large amounts of domestic currency to invest within the country, and to use the allocation and price of foreign exchange as part of an industrial or development policy.

— Mark Weisbrot, Dean Baker, Egor Kraev and Judy Chen, The Scorecard on Globalization 1980-2000: Twenty Years of Diminished Progress, Center for Economic Policy and Research, July 11, 2001

Every rich nation today has become developed because in the past their governments took major responsibility to promote economic growth. There was also a lot of protectionism and intervention in technology transfer. There was an attempt to provide some sort of equality, education, health, and other services to help enhance the nation.

The industrialized nations have understood that some forms of protection allows capital to remain within the economy, and hence via a multiplier effect, help enhance the economy.

Yet, as seen in the structural adjustment initiatives and other western-imposed policies, the developing nations are effectively being forced to cut back these very same provisions that have helped the developed countries to prosper in the past.

The extent of the devastation caused has led many to ask if development is really the objective of the IMF, World Bank, and their ideological backers. Focusing on Africa as an example:

The past two decades of World Bank and IMF structural adjustment in Africa have led to greater social and economic deprivation, and an increased dependence of African countries on external loans. The failure of structural adjustment has been so dramatic that some critics of the World Bank and IMF argue that the policies imposed on African countries were never intended to promote development. On the contrary, they claim that their intention was to keep these countries economically weak and dependent.

The most industrialized countries in the world have actually developed under conditions opposite to those imposed by the World Bank and IMF on African governments. The U.S. and the countries of Western Europe accorded a central role to the state in economic activity, and practiced strong protectionism, with subsidies for domestic industries. Under World Bank and IMF programs, African countries have been forced to cut back or abandon the very provisions which helped rich countries to grow and prosper in the past.

Even more significantly, the policies of the World Bank and IMF have impeded Africa’s development by undermining Africa’s health. Their free market perspective has failed to consider health an integral component of an economic growth and human development strategy. Instead, the policies of these institutions have caused a deterioration in health and in health care services across the African continent.

— Ann-Louise Colgan, Hazardous to Health: The World Bank and IMF in Africa, Africa Action, April 18, 2002

Europe is a good example of this. While the phrase “Welfare State” often conjures up negative images, with regards to globalization, it is realized by the European communities that protecting their people when developing helps the societies, economies and cultures to thrive.

It may be that for real free trade to be effective (which itself is a subject of intense debate!) countries with similar strength economies can reduce such protective measures. However, for developing countries to try to compete in the global market place at the same level as the industrialized nations, and before their foundations are stable, is almost economic suicide.

An example of this can be seen with the global economic crisis of 1997/98/99 that affected Asia in particular. A UN report looking into this suggested that such nations should rely on domestic roots for growth, diversifying exports and deepening social safety nets. For more about this economic crisis and this UN report, go to this web site’s section on debt and the economic crisis.

To see more about the relationship of protectionism with free trade, check out this site’s section on Free Trade, which also discusses protectionism, it’s negatives and positives.

IMF and World Bank Reform?

The IMF and World Bank’s policies are very different now from their original intent, as summarized here by the John F. Henning Center for International Labor Relations:

The International Monetary Fund and the World Bank were conceived by 44 nations at the Bretton Woods Conference in 1944 with the goal of creating a stable framework for post-war global economy. The IMF was originally envisioned to promote steady growth and full employment by offering unconditional loans to economies in crisis and establishing mechanisms to stabilize exchange rates and facilitate currency exchange. Much of that vision, however, was never born out. Instead, pressured by US representatives, the IMF took to offering loans based on strict conditions, later to be known as structural adjustment or austerity measures, dictated largely by the most powerful member nations. Critics charge that these policies have decimated social safety nets and worsened lax labor and environmental standards in developing countries. The World Bank (The International Bank for Reconstruction and Development) was created to fund the rebuilding of infrastructure in nations ravaged by World War Two. Its vision too, however, soon changed. In the mid 1950’s, the Bank turned its attention away from Europe to the Third World, and began funding massive industrial development projects in Latin American, Asia, and Africa. Many scholars and activists contend that the Bank’s aggressive dealings with developing nations, which were often ruled by dictatorial regimes, exacerbated the developing world’s growing debt crisis and devastated local ecologies and indigenous communities. Both IMF and World Bank policies remain a source of heated debate.

— John F. Henning Center for International Labor Relations, Institute for Industrial Relations, University of California, Berkeley

While their goals are slightly different then, the IMF and World Bank policies compliment each other:

World Bank and IMF adjustment programs differ according to the role of each institution. In general, IMF loan conditions focus on monetary and fiscal issues. They emphasize programs to address inflation and balance of payments problems, often requiring specific levels of cutbacks in total government spending. The adjustment programs of the World Bank are wider in scope, with a more long-term development focus. They highlight market liberalization and public sector reforms, seen as promoting growth through expanding exports, particularly of cash crops.

Despite these differences, World Bank and IMF adjustment programs reinforce each other. One way is called “cross-conditionality.” This means that a government generally must first be approved by the IMF, before qualifying for an adjustment loan from the World Bank. Their agendas also overlap in the financial sector in particular. Both work to impose fiscal austerity and to eliminate subsidies for workers, for example. The market-oriented perspective of both institutions makes their policy prescriptions complementary.

— Ann-Louise Colgan, Hazardous to Health: The World Bank and IMF in Africa, Africa Action, April 18, 2002

But economics is often driven by politics. As a result of policies by the IMF, World Bank and various powerful nations, basic human rights have been severely undermined in many countries, as also noted sharply by Global Exchange:

By insisting that national leaders place the interests of international financial investors above the needs of their own citizens, the IMF and the World Bank have short circuited the accountability at the heart of self-governance, thereby corrupting the democratic process. The subordination of social needs to the concerns of financial markets has, in turn, made it more difficult for national governments to ensure that their people receive food, health care, and education — basic human rights as defined by the Universal Declaration of Human Rights. The Bank’s and the Fund’s erosion of basic human rights and their perversion of the democratic process have made the institutions a clear and present threat to the well being of hundreds of millions of people worldwide.

— How the International Monetary Fund and the World Bank Undermine Democracy and Erode Human Rights, Global Exchange, September 2001

The IMF and World Bank’s policies have been heavily criticized for many years and are seen as unhelpful and sometimes, unaccountable, as they have resulted in an increased dependency by the developing countries upon the richer nations, as also mentioned at the top of this page. At the same time, the different cultures are not respected when it comes to prescribing structural adjustment principles, either.

In Africa, the effects of policies such as SAPs have been felt sharply. As an example of how political interests affect these instiutions, Africa Action describes the policies of the IMF and World Bank, but also hints at the influences behind them too:

Over the past two decades, the World Bank and International Monetary Fund (IMF) have undermined Africa’s health through the policies they have imposed. The dependence of poor and highly indebted African countries on World Bank and IMF loans has given these institutions leverage to control economic policy-making in these countries. The policies mandated by the World Bank and IMF have forced African governments to orient their economies towards greater integration in international markets at the expense of social services and long-term development priorities. They have reduced the role of the state and cut back government expenditure.

...

The World Bank and IMF were important instruments of Western powers during the Cold War in both economic and political terms. They performed a political function by subordinating development objectives to geostrategic interests. They also promoted an economic agenda that sought to preserve Western dominance in the global economy.

Not surprisingly, the World Bank and IMF are directed by the governments of the world’s richest countries. Combined, the “Group of 7” (U.S., Britain, Canada, France, Germany, Italy and Japan) hold more than 40% of the votes on the Boards of Directors of these institutions. The U.S. alone accounts for almost 20%. (The U.S. holds 16.45% of the votes at the World Bank, and over 17% of the votes at the International Monetary Fund.)

— Ann-Louise Colgan, Hazardous to Health: The World Bank and IMF in Africa, Africa Action, April 18, 2002

The IMF and World Bank are largely controlled and “owned” by the developed nations such as USA, Germany, UK, Japan etc. (The IMF web site has a breakdown of the quotas and voting powers.) The US, for example, controls 17 to 18% of the voting power at the IMF. When an 85% majority is required for a decision, the US effectively has veto power at the IMF. In addition, the World Bank is 51% funded by the U.S. Treasury.

Journalist John Pilger also provides a political aspect to this:

Under a plan devised by President Reagan’s Secretary to the Treasury, James Baker, indebted countries were offered World Bank and IMF “servicing” loans in return for the “structural adjustment” of their economies. This meant that the economic direction of each country would be planned, monitored and controlled in Washington. “Liberal containment” was replaced by laissez-faire capitalism known as the “free market”.

— John Pilger, Hidden Agendas, (The New Press, 1998), p.63

Since the IMF and World Bank protests in Washington, D.C on April 16, 2000, and coinciding with the Meltzer Report criticizing the IMF and World Bank, there has been more talk about IMF reforms. At first thought the reforms sound like the protests and other movements' efforts are paying off. However, as Oxfam notes, some of the reform suggestions may not be the way to go and may do even more harm than good. In their own words:

While some of the reform proposals now being debated are sensible, the thrust of the reform agenda is a source of concern for the following reasons:

• It reflects a growing disenchantment with multilateralism
• It threatens to replace inappropriate IMF conditions with inappropriate conditions dictated by the G7 countries
• It fails to address the real policy issues at the heart of the IMF’s failure as a poverty reduction agency
• It does not address the politicisation of IMF loans, especially with regard to the US Treasury’s influence
• It does not adequately consider the 'democratic deficit' which prevents poor countries from having an effective voice in the IMF

— Reforming the IMF, Oxfam International Policy Paper, April 2000

On the one hand it seems appropriate to demand an end to the IMF. However, such an abrupt course of action may itself lead to a gaping hole in international financial policies without an effective alternative. And that is another topic in itself!

The Asian Development Bank

Like the IMF and World Bank, the Asian Development Bank (ADB) has also fallen under much criticism for its policies, which also require structural adjustments for loans. Through its policies it encourages export-driven, capital and resource-intensive development, just like the other international financial institutions. The largest financing and influence of the bank comes from Japan and the United States.

As summarized from chapter 2 of The Transfer of Wealth; Debt and the making of a Global South:

The escalating dependence of developing countries in the [Asia] region on debt-financed development has a number of negative consequences. These include:

1. the neglect of domestic savings as a source of development finance;
2. cuts in government expenditure for basic social services and basic infrastructure in order to meet debt servicing requirements;
3. an escalation of export-orientated resource extraction to generate hard currency receipts for debt servicing;
4. a reorientation of agricultural production from meeting local needs to production for export in highly skewed regional and global markets;
5. increased dependence on imported, capital intensive technologies as a consequence of tied procurement and project design processes led by foreign consulting companies;
6. increased dependence on and influence of international financial institutions such as the ADB and the World Bank, particularly through the imposition of debt-induced structural adjustment programs and policy based lending.

Also, as with the IMF and World bank, and mentioned in the above link, “governments are using the rubric of poverty reduction to channel taxpayer funds to their private sector companies via the ADB. This is occurring with little or no pubic scrutiny although government representatives will, if necessary, appeal to commercial self-interest to justify continued contributions to the ADB and other multilateral development banks.” As with the IMF for example, loans by the IMF are guaranteed by the creditor country. In essence then, tax payers from the lending countries will bail out the IMF and ADB if there are problems in their policies.

(For more details and statistics etc, the above link is a good starting place.)

The ADB has mentioned its desires to promote “good governance”. However, Aziz Choudry is highly critical in terms of whom this governance would actually be good for:

It has nothing to do with democratisation, humanitarianism or support for peoples' rights. It is a euphemism for a limited state designed to service the market and undermine popular mandates. The term is explicitly linked to the kinds of structural adjustment measures promoted by the ADB — measures for which there is little popular support and which are rapidly increasing economic inequalities.

— Aziz Choudry, The Asian Development Bank - "Governing" the Pacific?, June 6, 2002