Bloomberg Hits the Washington Consensus

Bloomberg has an excellent story this morning about how the free-trade policies foisted upon poor countries by rich ones have ended up making it harder for the former to feed themselves.

Bloomberg tells the story through the problems of El Salvador, which the World Bank told to grow crops that it could export and import basics like rice and corn—tearing up the nation’s self-sufficiency and leaving them vulnerable to the whims—and distortions—of the global market.

It’s about time someone took a hard look at the Washington Consensus—the program of free trade, privatization and debt reduction—which the World Bank, led by the U.S., arrogantly exported across the world as a condition for aid and financing. I say long overdue, because it’s been apparent for several months that the U.S. was breaking just about every rule that it made other, poorer countries live by.

As food prices have soared in the last year, people are now going hungry because their countries can’t feed themselves.

The increases hit hard in countries such as El Salvador, which had adopted the principles of the Washington Consensus in return for loans. El Salvador’s Central Reserve Bank said the total amount of the lending was “not available.” The Agriculture Ministry did provide this measure of their effects: The country was a net exporter of rice 20 years ago; now it imports 75 to 80 percent of what it consumes.

The World Bank has “given consistently wrong advice,” said Jose Ramos-Horta, the president of East Timor in Asia and the 1996 Nobel Peace Prize winner.

“It is their advice — that buying externally is cheaper than producing — that has resulted in this,” he said.

I like that Bloomberg’s in-depth stories so often take a distinct point of view instead of being wishy-washy, milquetoast neutral. That’s not to say it doesn’t give plenty of space to qualifying points by the free-trade/free-markets side; it does. But it allows its reporters to use their expertise to come to a conclusion.

The story, like many at Bloomberg, could have used some better editing, but that’s a quibble: The wire service is doing some of the best business journalism out there right now.

This story, part three in a series of seven, is a more-than-worthy effort that the rest of the press would do well to follow.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.