Revista Yachaikuna
Working Papers
Boletin ICCI Rimai
A monthly publication of the Institute for Indigenous Sciences and Cultures (IISC)
Year 3, No. 25, April 2001

General Edition: Pablo Davalos
Editorial Direction: Luis Macas
Design: Rocamadour
Electronic Edition: Marc Becker


También disponible en español.

The World Bank and the Prodepine project: Towards an ethnic Neoliberalism?


The World Bank is one of the institutions established under the 1944 Bretton Woods agreement that redefined the geopolitical conditions of power following the Second World War. The International Bank for Reconstruction and Development (IBRD, later known simply as the World Bank) was created, along with the its counterpart, the International Monetary Fund (IMF), as a strategic axis in the hegemonic rise of the United States as a world power in the postwar period. Both organizations inscribed their roles within the new power relations established in the second half of the 20th century.

The Cold War was the geopolitical context that informed the most fundamental decisions, strategies, dynamics and relations between the two postwar superpowers, the United States and the Soviet Union. Both considered the planet to be a giant chess board in which smaller nations were treated as pawns in a wider strategy for global power and hegemony.

Within this logic, the US privileged the World Bank as an international organization as part of its drive for political control. Its goals were made evident with the appointment of Robert McNamara as President of the bank, following his tenure as US Secretary of Defense.

The US used the World Bank to launch an intensive campaign of economic assistance and development for poor countries aimed at dissuading them from taking a socialist or otherwise different course to the one defined by the US. In Latin America, the bank has played a key role through the Alliance for Progress, which was initiated as a response to the Cuban revolution in 1959.

However, times change and so do strategies. The fall of the so-called "socialist" block and the establishment of a unipolar world order centered around US hegemony changed the panorama and led to new discourses to justify and legitimize the new geopolitics of the world's power. The fall of the "socialist" block coincided with a redefinition of the roles of the IMF and the World Bank in the early 1990s by the so-called Washington Consensus and the rise of "globalization" - the emerging integration of the world's markets controlled by North American, European and Asian corporations.

It is important to highlight, as a precedent, the role that both the IMF and the World Bank played during the 1980s Latin American debt crisis when economic "structural adjustments" began to be imposed. This crisis directly threatened the US's financial sector and economic growth. It was the IMF, then enjoying a certain legitimacy as an international institution, that was able to intervene and oblige the Latin American countries to shift the cost of the crisis onto their people. Economic austerity measures, dictated and enacted by the IMF under the US's attentive gaze, had begun.

These policies were part of a new model being developed for the State and society. However, as an institution established to help correct short-term economic imbalances, the IMF was incapable of guiding and imposing deeper, long-term changes. The changes required structural reform of the welfare State, one of whose main roles until then had been to provide social services for its citizens based on an internal market that protected employment and national industries. This new order meant establishing a new State with little responsibility to society, referred to by neoliberalists as the "small State". That is, a State that stops concerning itself with regulating and redistributing the nation's wealth among society and allows the market to take over these tasks.

The IMF was unable to manage these structural reforms on its own due to its strictly economic and financial remit, so the World Bank was called in to play this geopolitical role. From then on the World Bank was responsible for carrying through the State reforms, which are no other than the dismembering of the Welfare State and its replacement with a neoliberal "small" State.

The 1990s witnessed the emergence of globalization led by the Washington Consensus following the fall of the Berlin wall. As part of this process the World Bank became one of the major strategic players in defining and imposing the new neoliberal economic world order. Its role is not simply to guarantee changes in the State but to ensure the US's hegemony as the world's power.

From then on, the World Bank began generating entirely new policies and dynamics, which also reflect its aim of cornering and filling existing structures with new policies at the service of the newly emerging unipolar power. For example, in the face of concerns about the environment and the ecology movement, the World Bank has no problem getting involved in this new issue and helps articulate the concept of "sustainable development", bringing it into its neoliberal orbit of deregulation and privatization. In the context of indigenous peoples' demands, neither does it have any problem generating a discourse over "ethno-development". Faced with the growth of poverty as a result of structural adjustment policies, the bank finances programs that appear to criticize these policies, such as the case of the Structural Adjustment Participatory Review Initiative (SAPRI) forums, but which end up by justifying the same policies.

Moving on from its traditional support for development projects in poor countries, the World Bank now supports new initiatives that appear to be a departure from its original goals. The Bank now funds studies and initiatives against corruption, programs for indigenous peoples, legal reforms, modernizing parliamentary systems, and so on.

In Ecuador's case, the World Bank has increased its presence in a number of sectors with a diverse number of actors, including a 'star' project with the indigenous peoples known as the Proyecto de Desarrollo para los Pueblos Indígenas y Negros del Ecuador (PRODEPINE, Development Project for Indigenous and Black Peoples of Ecuador).

It's both a contradiction and a paradox that the World Bank is now working with the Ecuadorian indigenous peoples when just a few years ago, in 1994, it was the same institution that, together with US Aid, pushed for the so-called modernization of the agricultural sector through an ill-fated Agrarian Law introduced by the then President Durán Ballén (1992-1996). This was a law that aimed to destroy indigenous communities through establishing privatization and a free market in land and water within a framework of deregulation and capitalist liberalization. It should be noted that this law proposal led to on of the most significant indigenous uprising of the decade.

However, the World Bank's approach is a strategy. The fact that it has drafted a specific project for indigenous peoples in Ecuador shows that the Bank's political calculations take into account that the country's indigenous peoples, with their well-organized social and political structures and policies, are the most serious obstacle to its liberalizing, deregulating and privatizing policies - a fact borne out by past and recent events. Hence the bank's emphasis on the PRODEPINE development project and its regional geopolitical strategic importance.

Initiated in 1997 and implemented the following year, the PRODEPINE project works within the indigenous movement's organizational structures and is thus poses one of the greatest threats to the movement. In line with the World Bank's strategic aims, the project functions within one of the Ecuador's most important social movements. Its dynamic is framed within the parameters of an assistentialist-paternalist and developmental logic, which generates technical and bureaucratic power structures and threaten to become part of the country's indigenous movement. Recruiting indigenous technicians and providing them with managerial and negotiating skills, the project has become a conduit between the World Bank's neoliberal project and the country's indigenous peoples.

The bank, with its "modernizing" image framed within neoliberal ideology, which PRODEPINE's technicians and bureaucrats convey, is a constant menace to the indigenous organizations' own political project and a source of conflict. However, it is not so much a clash between two different views but rather between two very distinct historical projects. For the World Bank it's a question of legitimizing its deregulation and privatization policies by winning national and international acceptance through its work in development and in 'alleviating' poverty. Thanks to this double game, the bank has managed to neutralize indigenous peoples' opposition against it while it increases its efforts to restructure the Ecuadorian State in its own neoliberal image.

The World Bank acts together with the IMF to block any alternative to the neoliberal project. Its strategy of working with a wide range of actors gives it a lot of legitimacy, and the fact that it has initiated a special project for indigenous people provides it with an important political leverage and cover to achieve its aims. Thanks to PRODEPINE, the bank can permanently monitor the political and organizational capacity and strength of Ecuador's Indigenous movement.

The fact that the PRODEPINE project remains outside the political control of the indigenous movement's organizational structures is symptomatic. It is particularly revealing that while the project funds indigenous organizations, it does not allow them any form of decision making as regards its theoretical and epistemological framework and scope for action. A practice that manages to avoid the charge of 'clientelismo' (a subservient relationship between giver and receiver) but is politically useful when indigenous people begin to question the neoliberal model but are discouraged from mentioning the World Bank and its strategic role in implementing this same model.

During last February's uprising, indigenous people in the Salesian University of Quito were surrounded by the police and army. The International Red Cross, UN agencies and other institutions interceded on their behalf in order to get the Government to allow food and medicines to reach the several thousand people holed up in the University. Local people also supported the indigenous march to Quito. In this situation, when indigenous people most needed support in their struggle, PRODEPINE did not spend a cent to help their brothers and sisters, neither did it make any pronouncement in their favor nor did it try to help the victims of repression in any way. This silence, apart from its complicity, reveals the motives underlying the PRODEPINE project and its technicians and bureaucrats.

In fact, from its implementation in 1998 the project has maintained its distance from all the main political events that indigenous people have been involved in, some of which have led to profound changes in Ecuador. For example, PRODEPINE did not play any role, even a symbolic one, in the 1998 Constituent Assembly, nor in the 1999 uprisings. Its members supported the then President Mahuad when the January 2000 uprising overthrew him. Neither was it involved in the local elections in May of the same year nor has it supported local authorities that the Indigenous movement won. It did not support the February 2001 uprising or even the ensuing dialogues between the Movement and the Government. On the contrary, from 1998 the project has been a point of conflict that impeded strategic unity between the main national indigenous organizations until February 2001.

Recently the PRODEPINE project seems to be undergoing a period of qualitative change now that its 'clientist' networks have started functioning. This was the case during the recent congress of the provincial Movimiento Indígena de Cotopaxi which witnessed PRODEPINE playing a more protagonistic role. From its earlier low profile, the project now appears to be confident and strong enough to begin intervening and interfering in the indigenous movement's organizations. The Cotopaxi congress showed that the project, instead of demonstrating the project's desire to strengthen these structures, sought to weaken and even divide them.

In this way the PRODEPINE project colludes with the Government's aim of weakening the indigenous movement at a time when the current dialogue between the two sides is beginning to exhaust itself politically and when the neoliberal model is failing to consolidate itself.

We are also entering a period of local elections that are going to change relations of power on the national political scene. It's a period that requires that the gains that have been won by the indigenous movement be consolidated and for it to articulate an alternative and viable political position based on its strength for the country as a whole. At this juncture, PRODEPINE will play a strategic role trying to divide, fragment and weaken the indigenous movement's political project. It is therefore important to have a clear perception of the role played by such institutions that are linked to the Movement, while also making decisions that are coherent with the political goals of the indigenous and other social movements.

Institute for Indigenous Sciences and Cultures (IISC)

Address: Buenos Aires 1028 y Estados Unidos
Quito, Ecuador

P.O. Box: 17-15-50B
Tel/Fax 593-2-2229-093
E-mail: icci@waccom.net.ec

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