For global capitalism, the year began a month early, on Nov. 30-Dec.1, 1999, when the Third Ministerial of the WTO collapsed in Seattle. It ended earlier this month with an equally momentous event: the unraveling of the Climate Change Conference in the Hague.

The last year will probably go down as one of those defining
moments in the history of the world economy, like 1929. Of course, the
structures of global capitalism appear to be solid, with many in the global
elite in Washington, Europe, and Asia congratulating themselves for
containing the Asian financial crisis and trying to exude confidence about
launching a new round of trade negotiations under the World Trade
Organization (WTO). What we witnessed, nevertheless, was a dramatic
series of events that might, in fact, lead to that time when, as the poet
says, "all that is solid melts into thin air."

Seattle: the Turning Point

The definitive history of the Seattle events still needs to be written,
but they cannot be understood without the explosive interaction between
the militant and unrelenting protests of some 50,000 people in the streets
and the rebellion of developing country delegates inside the Seattle
Convention Center. Much has been made about the different motivations
of the street protesters and the Third World delegates and the
differences within the ranks of the demonstrators themselves. True,
some of their stands on key issues, such as the incorporation of labor
standards into the WTO, were sometimes contradictory. But most of
them were united by one thing: their opposition to the expansion of a
system that promoted corporate-led globalization at the expense of
social goals like justice, community, national sovereignty, cultural
diversity, and ecological sustainability.
Still, the Seattle debacle would not have occurred without another
development: the inability of the European Union and the United States
to bridge their differences on key issues, like what rules should govern
their monopolistic competition for global agricultural markets. And the
fallout from Seattle might have been less massive were it not for the
brutal behavior of the Seattle police. The assaults on largely peaceful
demonstrators by police in their Darth Vader-like uniforms in full view of
television cameras made Seattle's mean streets the grand symbol of the
crisis of globalization.
When it was established in 1995, the WTO was regarded as the
crown jewel of capitalism in the era of globalization. With the Seattle
collapse, however, realities that had been ignored or belittled were
acknowledged even by the powers-that-be whose brazen confidence in
their own creation had been shaken. For instance, that the supreme
institution of globalization was, in fact, fundamentally undemocratic and
its processes non-transparent was recognized even by representatives
of some of its stoutest defenders pre-Seattle. The global elite's crisis of
confidence was evident, for instance, in the words of Stephen Byers, the
UK Secretary for Trade and Industry: "The WTO will not be able to
continue in its present form. There has to be fundamental and radical
change in order for it to meet the needs and aspirations of all 134 of its
members."
Seattle was no one-off event. Bitter criticism of the WTO and the
Bretton Woods institutions was the not-so-subtle undercurrent of the
Tenth Assembly of the United Nations Conference on Trade and
Development (UNCTAD X) held in Bangkok in February. Indeed, what
brought an otherwise uneventful international meeting to the front pages
of the world press was the pie-splattered face of outgoing IMF Managing
Director Michel Camdessus, who was on the receiving end of a perfect
pitch from anti-IMF activist Robert Naiman.

From Washington to Melbourne

Naiman's act helped set the stage for the first really big post-Seattle
confrontation between pro-globalization and anti-globalization forces: the
spring meeting of the IMF and the World Bank in Washington, DC. Some
30,000 protesters descended on America's capital in the middle of April
and found a large section of the northwest part of the city walled off by
some 10,000 policemen. For four rain-swept days, the protestors tried,
unsuccessfully, to breach the police phalanx to reach the IMF-World
Bank complex at 19th and H Sts., NW, resulting in hundreds of arrests.
The police claimed victory. But it was a case of the protestors losing the
battle but winning the war. Just the mere fact that 30,000 people had
come to protest the Bretton Woods twins was already a massive victory
according to organizers who said that the most one could mobilize in
previous protests were a few hundred people. Moreover, the focus of the
media was on Washington, and the first acquaintance of hundreds of
millions of viewers throughout the world with the World Bank and IMF
were as controversial institutions under siege from people accusing them
of inflicting poverty and misery on the developing world.
From Washington, the struggle shifted to Chiang Mai in the highlands
of Northern Thailand, where the Asian Development Bank (ADB), a
multilateral body notorious for funding gargantuan projects that disrupted
communities and destabilized the environment, held its 33rd Annual
Meeting in early May. So shaken was the ADB leadership by the sight of
some 2000 people asking it to leave town that soon after the conference,
ADB President Tadao Chino established an vice presidential level "NGO
Task Force" to deal with civil society. Fearful of even more massive
protests in 2001, the ADB also shifted the site of its next annual meeting
from Seattle to Honolulu in the belief that the latter would be a secure
site.
Chiang Mai had significance beyond the ADB, however. With a
majority of the protesters being poor Thai farmers, the Chiang Mai
demonstrations showed that the anti-globalization mass base went
beyond middle class youth and organized labor in the advanced
countries. Equally important, key organizers of the Chiang Mai actions,
like Bamrung Kayotha, one of the leaders of the Forum of the Poor, had
participated in the Seattle protest, and they saw Chiang Mai not as a
discrete event but as a link in the chain of international protests against
globalization.
The battle lines were next drawn Down Under, in Melbourne,
Australia, in early September. The glittering Crown Casino by
Melbourne's upscale waterfront had been chosen as the site of the Asia-
Pacific Summit of the World Economic Forum (Davos Forum) which had
become a leading force in the effort to put a more liberal face to
globalization. The casino, many activists felt, was a fitting symbol of
finance-driven globalization. In nearly three days of street battles, some
5,000 protesters were at times able to seal off key entrances to the
Casino, forcing the organizers to bring some delegates in and out by
helicopter, again in full view of television. And again, as in Seattle, rough
handling of demonstrators by the police, many of them mounted,
magnified the global controversy over the event.

The Battle of Prague

Later that month came Europe's turn to serve as a battleground.
Some 10,000 people came from all over the continent to Prague,
prepared to engage in an apocalyptic confrontation with the Bretton
Woods institutions during the latter's annual meeting in that beautiful
Eastern European city in the most beautiful of seasons. Prague lived up
to its billing. With demonstrations and street battles trapping delegates at
the Congress Center or swirling around them as they tried to make their
way back to their quarters in Prague's famed Old Town, the agenda of
the meeting was, as one World Bank official put it, "effectively seized" by
the anti-globalization protesters. When a large number of delegates
refused to go to the Congress Center in the next two days, the
convention had to be abruptly concluded, a day before its scheduled
ending.
As important as the protests in Prague was the debate held on Sept.
23 at the famous Prague Castle between representatives of civil society
and the leadership of the World Bank and the IMF, an event orchestrated
by Czech President Vaclav Havel. Instead of bridging the gap between
the two sides, the debate widened it, since, in response to concrete
demands, World Bank President James Wolfensohn and IMF Managing
Director Horst Koehler were not prepared to go beyond platitudes and
generalities, as if worried that they might overstep the bounds set by
their G-7 masters. George Soros, who defended the Bank and Fund at
the debate, said it all when he admitted that Wolfensohn and Koehler
had "performed terribly" and had blown their most important encounter
with civil society.
After Seattle, much talk about reforming the global economic system
to bring on board those "being left behind" by globalization was emitted
by establishment personalities like Bill Gates, Bill Clinton, Tony Blair,
Kofi Annan, and Nike CEO Phil Knight. The Davos Forum, in fact, placed
the question of reform at the top of the agenda of the meetings it held for
the global elite.
A year after Seattle, however, there has been precious little in the
way of concrete action.
The most prominent reform initiative, the Group of Seven's plan to
lessen the servicing of the external debt of the 41 Highly Indebted Poor
Countries (HIPC) has actually delivered a debt reduction of only $US 1
billion since it began in 1996 - or a reduction of their debt servicing by
only 3 per cent in the past four and a half years!
One year after the Seattle collapse, talk about reforming the
decision-making process at the WTO has vanished, with Director
General Mike Moore, in fact, saying that that the non-transparent,
undemocratic "Consensus/Green Room" system that triggered the
developing country revolt in Seattle is "non-negotiable."
When it comes to the question of the international financial
architecture, serious discussion of controls on speculative capital like
Tobin taxes has been avoided. An unreformed IMF continues to be at
the center of the system's "firefighting system." A preemptive, pre-crisis
credit line at the Fund (which no country wants to avail of) and a
toothless Financial Stability Forum - where there is little developing
country participation - appear to be the only "innovations" to emerge
from the Asian, Russian, and Brazilian financial crises of the last three
years.
At the IMF and the World Bank, similarly, there is no longer any talk
about diluting the voting shares of the US and European Union in favor
of greater voting power for the Third World countries, much less of doing
away with the feudal practices of always having a European head the
Fund and an American to lead the Bank. The much-vaunted consultative
process in the preparation of "Poverty Reduction Strategy Papers"
(PRSP) by governments applying for loans is turning out to be nothing
more than an effort to add a veneer of public participation to the same
technocratic process that is churning out development strategies with the
same old emphasis on growth via deregulation and liberalization of
trade, with maybe a safety net here and there. At the Bank, strong
resistance to innovations that would put the priority on social reforms led
to the resignation of two reformers: Joseph Stiglitz, the chief economist,
and Ravi Kanbur, the head of the World Development Report task force.

Debacle in The Hague

The protests throughout the year had a strong anti-TNC strain, with
the World Bank, IMF, and WTO regarded as servitors of the
corporations. A strong distrust of TNCs had, in fact, developed, even in
the United States, where over 70 per cent of people surveyed felt
corporations had too much power over their lives. Distrust and opposition
to TNCs could only be deepened by the collapse in early December of
the Hague Conference on Climate Change, owing to US's industry's
unwillingness to significantly cut back on its emission of greenhouse
gases. At a time that most indicators are showing an acceleration of
global warming trends, Washington's move has reinforced the conviction
of the anti-globalization movement that the US economic elite is
determined to grab all the benefits of globalization while sticking the
costs on the rest of the world.
Assessing the post-Seattle situation, C. Fred Bergsten, a prominent
advocate of globalization, told a Trilateral Commission meeting in Tokyo
last April that "the anti-globalization forces are now in the ascendancy."
That description is even more accurate now. With the global elite itself
having lost confidence in them, a classic crisis of legitimacy has
overtaken the key institutions of global economic governance. If
legitimacy is not regained, it is only a matter of time before structures
collapse, no matter how seemingly solid they are, since legitimacy is the
foundation of power structures. The process of delegitimation is difficult
to reverse once it takes hold. Indeed, what we might call, following
Gramsci, as the "withdrawal of consent" is likely to spread to the core
institutions and practices of global capitalism, including the transnational
corporation.
2001 promises to be an equally trying time for the globalist project.

* Executive director of Focus on the Global South in Bangkok and
professor at the University of the Philippines.