The World Bank is Singing a New Tune in Africa

Brandishing an empathetic new tagline on its main website, "Working for a World Free of Poverty", the World Bank is obviously looking to address the main criticisms of its past performance and recast its formerly tarnished image. Yesterday, World Bank President Robert Zoellick finished a week- long visit to Africa in order to vocalize the Bank's committment to economic development despite the deepening recession. Among other things he emphasized that the Bank is... looking toward a world that is no longer dominated by the United States and other advanced economies?

"We need multiple poles of growth and that will make for a more solid and
balanced international economy and there is absolutely no reason that Africa
can't be one of those multiple poles of growth."

To label the call for a more egalitarian economic world-order by World Bank President Robert Zoellick as ironic, would be a supreme understatement. Zoellick, an appointee of George W. Bush, was one of the key signators of the Project for the New American Century (PNAC), a neo-conservative document that believed the US "must have a secure foundation on unquestioned U.S. military preeminence" among other imperial objectives for the 21st century. Certainly, the world has changed enormously since the 1990's with agressive calls for reform in the world economy to empower developing countries in the 21st century. Zoellick proclaimed the Bank's support for an"African Century for Development" and the creation of a new asset management unit to work with government-controlled funds to invest in African economies with the highest growth potential to spur private-sector activity.

Like the Obama administration, (which has also been looking to reform the US image around the world and Africa in particular), the World Bank is clearly focusing on delivering a message of partnership rather than paternalism in relations with African governments. Whether or not the new World Bank rhetoric will match actual World Bank policy depends on the character of the conditionalities placed on African countries in order to receive support. Let's hope they can get it right this time and avoid reviving the "Washington Consensus" of privitization, liberalization, and strict political-economic managment that ruined the prospects of genuine poverty eradication and development in recent years.

All About the Benjamins Baby? The End of American Dollar Hegemony

There is an ever growing possibility that the US dollar's privileged status in the world economy may be eroding, permanently. A necessary step toward a more multi-polar world, why didn't this happen aeons ago?

It was 3 months ago when President Lula da Silva of Brazil remarked that white "blue-eyed bankers" were to blame for the global financial crisis. President da Silva's comments were just one of many diatribes among post-colonial nations against centuries old European and particularly American influence over the world's financial institutions.

Today, emerging powers in the global South met in Russia to discuss a drastic move toward transformation of the global financial architecture. The New York Times, in its standard neoliberal form, fasely described the meeting as a narrow attempt by Russia to challenge perceived American hegemony in the world-system.

For the Kremlin, undermining the dollar as the prevailing medium of exchange reflects a broader Russian belief that the United States exercises a dominance in global affairs that exceeds its diminishing power.

But the article misses the point, which is that something new and of historic proportions is happening in the world economy. In reality, the United States actually does exercise dominance in global affairs that exceeds its diminishing power. Since the 1970's the US dollar has had a virtual monopoly on global exchange. Raw materials, for example are bought and sold for U.S. dollars. Exchange rates between currencies are not fixed but fluctuate all the time, depending largely on speculation about interest rates, and trade balances. There has been no shortage of protest among developing nations against this form of American hegemony.

Today's agreement by China, Russia, India, and Brazil to possibly buy one anothers bonds to lessen dependence on the U.S. , could finally begin a structural shift against the supremacy of the US dollar. Bloomberg Financial News, citing economist Nouriel Roubini, recognized the impending effects of a push-back against US dollar hegemony.

For the U.S., a change in the role of the dollar would risk increasing its financing costs and undermining its preeminent place in the world economy...The currency has dropped 10 percent against the euro in the past three years.

A more horizontal structure of international trade would essentially take out the US as middle-man and level the playing field for developing countries. For the first time in the recent history of global capitalism, there may not be a sole hegemon that controls international exchange. And that may not be such a bad thing.