1.  THE SITUATION AND CONDITIONS.

Thirty million people still die of hunger every year, and more than 800 million are under-nourished. In 1960 the richest 20% of the world’s population had an income 30 times higher than tha of the poorest 20%.

Today the wealth of that 20% is 82 times higher. Of the 6 billion inhabitants of this planet, barely 500 million live in comfort, leaving 5.5 billion living in need.

I. Ramont, The year 2000, ERA Email Network, 3.1.2000.

Workers in Mexico are not better off. They're worse off. Wages in 2000 maquiladora plants employing Mexican workers have not risen. They've fallen. Well-known US corporations, encouraged by official policy, are paying about one-fifth US minimum wage.

J. Wright, "Humanity at mercy of corporate spirit", ERA Email Network, 18.7. 1999.

"…after 50 years of the functioning of the global development enterprise one notes that not one has achieved the hoped for benefits…" 193.

F. Apffel-Marglin, Ed., The Spirit of Regeneration in Andean Culture, 1998.

World inequality is increasing.

"There exists… a solid set of data on the worldwide distribution of income. The information was developed through an exhaustive and highly competent study made by Braniko Milanovic, an economist at the World Bank. He burrowed into the incredible amount of statistical data buried in the World Bank’s computers. His study…demonstrates that, in fact, inequality increased during those years…1988-1993.

In 1998
The bottom 10% had .9% of income, but in 1993 they had .8%
The bottom 20% had 2.3% of income but in 1993 they had 2.0%
The bottom 50% had 9.6% of income but in 1993 they had 8.5%
The bottom 75% had 25.9% of income but in 1993 they had 22.3%
The bottom 85% had 41% of income but in 1993 they had 37%
The top 10% had 46.9% of income but in 1993 they had 50.8%
The top 5% had 31.2% of income but in 1993 they had 33.7%
The top 1% had 9.3% of income but in 1993 they had 9.5%

See Milanovic’s account in True World Income Distribution…, "The Economic Journal, 1122, J an, 2002, 51-92.
J. B. Foster, The rediscovery of imperialism, Monthly Review, Nov 2002, p. 15.

In the 1980s Latin American income per capita fell 11% In Sub Saharan Africa it was no higher at the end of the 1980s than at the start of the 1960s. 87 Real Mexican wages fell more than 40% 1982-1988. In Costa Rica real wages fell 176% between 1980 and 1991. Poverty rose from 21% to 28% of people, between 1987 and 1991. 87

18% of full time American workers are paid the same or less than the poverty line. 91

M. Renner, Fighting For Survival, 1997. P. 83.

"…after 50 years of the functioning of the global development enterprise one notes that not one has achieved the h oped for benefits…" 193.

F. Apffel-Marglin, Ed., The Spirit of Regeneration in Andean Culture, 1998.

In Africa "Average income per capita is lower than at the end of the 1960s."

A. Gelb, Can Africa Claim the 21st Century?, 2000.

It is "…beyond dispute that the plight of many of the three-quarters of the human race who inhabit them has got worse over the last 25 years…"  153

         H.Schutt, The Trouble With Capitalism, Zed, 1988.
 

The Sri Lanka-based International Water Management Institute projected earlier this year that by 2025, only about a quarter of the world's population will have enough fresh water. Roughly a third of the world's population will have too little water to meet their needs.
 

LET THEM DRINK PEPSI The Globe and Mail, August 5, 2000
You can see our site at www internationalscope com

         Hotson on Hixon, Sustainable Economics, 7.6, Nov., 1999, p., 125.
 

UNICEF estimates that in 1995 1 million children died but would have lived had they been exclusively breast fed for the first 6 months. 57.

        J. Madeley, Big Business, Poor People, Zed Books, 1999.

Doll makers in Thailand are paid 42 pence a day.  P.104.    Nike workers in China are paid 23 pence an hour.

             J. Madeley, Big Business, Poor People, Zed Books, 1999.

There are 850 Export Processing Zones.  112

        J. Madeley, Big Business, Poor People, Zed Books, 1999.

‘In most developing countries there is little evidence that tourism has helped development."  138.

            J. Madeley, Big Business, Poor People, Zed Books, 1999.
 

1.5 billion people receive under $1 per day income, and are hungry much of the time.  "In Africa most people were worse off in the 1990s than in the 1980s."  6

            J. Madeley, Big Business, Poor People, Zed Books, 1999.

Rural poverty has grown by 10 to 20 percent in a number of Latin American countries in the past three years, according to a report released…by…regional director for Latin America and the Caribbean of the International Fund for Agricultural Development.  The study reports that more than 90 million Latin American and Caribbean peasant farmers currently live below the poverty line, while 47 million live in extreme poverty."

             Bdyer@prout.org

At least 13 countries have less food per person than 30 years ago.  More than half the countries on which there is information do not have enough food to give all a minimum necessary amount.  332.

            C. Caufield, Masters of Illusion; The World Bank and the Poverty of Nations, Macmillan, 1996.

Half the world’s people are affected by malnutrition, when those overweight in the rich countries are added.

                World Health Organisation, 1996, Micronutrient Malnutrition; Half the world’s Population Affected.

Worldwaltch claims that world food production would only be sufficient for 480 million people if water was not being over used; i.e., if sources were not being depleted.

            Worldwatch News Release, 20.1.2000, p. 10.

Rural poverty has grown by  10-20% in Central America, Venezuela, Mexico and Brazil, since 1997.

            G. Gonzales,  Globalization’s impact; Rural Poverty on the Rise, Nov. 2000.

"In the 1980s"…the rates of poverty, illiteracy, morbidity and mortality grew throughout most of the non-industrialised world.  These trends were by and large the consequences of development, not the result of a lack of it."

            G. Teeple, Globalisation and the Decline of Social Reform, Toronto, Humanities Press, 1995.  Pp. 137-138.

The World Health Organisation says 1.2 billion people are affected by hunger, and 2 to 3.5 billion suffer deficiency of vitamins and minerals.

Meanwhile in the rich countries 1.2 billion are overweight!

            G. Gardner and B. Hallweil, Underfed and Overfed, Worldwatch, Paper 150, March, 20

Brenner refers to "…the countries which euphemistically are called developing.  In almost all these countries a modest rise in productivity was accompanied by a deterioration in the living standards of the majority of the population and an increase in affluence of a minority."

            Y. S. Brenner, The Rise and Fall of Capitalism, Aldershot, Elgar, 1991. PO. 4.

The number of people living in poverty has risen from 1.1 billion in  1985 to 1.2 billion in 1998, and will be 1.3 billion in 2000.

            W Bello, From Melbourne to Prague;  The struggle for a deglobalised world,  Economic Reform Newsletter,  12, 15, Dec., 2000,p. 8.

There is falling per capita income in Sub-Saharan Africa.  50% of Africans live in absolute poverty.  "In the foreseeable future there are no good reasons to think that capitalist development is going to transform the situation."

             J. S. Saul and C. Leys, "Sub-Saharan Africa in Global capitalism", Monthly  Review, 51, 3, July-Aug 1999, p. 24. (13-30.)

"Growth maximising strategies have isolated the poor and in many respects have made their lot worse...economic growth and development are not equivalent concepts..." (21)

"...the condition of the poor continues to deteriorate." (65)

                 J. Friedman, Empowerment; The Politics of Alternative Development,  Blackwell, Cambridge, 1992, p.  21.

. . . . Real wages in most African countries have fallen by 50-60%
per cent since the early 1980s. In Mexico, Costa Rica and Bolivia average wages have fallen by a third since 1980. . . ."

"In an article United States public and private debt: 1791 to 2000 Professor Bob Blain comes to the essence of the situation. "Debt in all
categories of the (US) economy has been growing explosively - the debt for state and local governments, farmers, consumers, home buyers and, largest portion of all, debt for corporations. . . . '

"… total public and private debt has grown to about $20,000,000,000,000. That is $20 trillion, and it will continue to grow, like a snowball rolling downhill, by ever larger amounts."

Let us now consider the debt problem from a global perspective, and examine figures from the 1998/99 World Development Report. If we consider I low income nations collectively, in 1980 their total external debt was 26.6% of their GDP. In 1996/7 the external debt to GDP ratio was 60.6%. Now many of these low income third world nations are at a point of total economic collapse.

The figures for middle income nations provide an interesting comparison. In 1980 the total external debt to GDP ratio for middle income nations was l 18.8%. In 1996/7 the external debt to GDP ratio was 28.0%.

D. Keane, "Preparing for the global economic crisis", ERA
Email Network, 23.2.2000.

D. Keane, "Preparing for the global economic crisis", ERA
Email Network, 23.2.2000

                 Fidel Castro, Address to the South Summit, Monthly Review, July-August,  2000, p. 159.

"...everywhere the situation is worsening dramatically..."(236)

...the triumph of market economics is deepening inequalities everywhere, both inside countries and internationally..." (222)

"Not only is an ever larger part of the population (including in the industrialised countries) excluded from all participation in national life and consigned to extreme poverty, but whole countries have now been marginalised from the major flows of trade and information." (222)

             G. Rist, The History of Development, London, Zed, 1999.
 

. . . . Real wages in most African countries have fallen by per cent since the early 1980s. In Mexico, Costa Rica and Bolivia average wages have fallen by a third since 1980. . . ."

            D. Keane, "Preparing for the global economic crisis, ERA Email Network, 23.2.2000.

One fifth of the world's children live in poverty; one-third of the world's population lack access to essential drugs. Each year, 12 million children under five die, and 95 percent of them die from poverty-related illness; more than half a million mothers die in childbirth, and more than one
million babies die of tetanus.  What contribution have globalisation and free trade made to  solving those problems? The theory that wealth trickles down and that the richer Bill Gates gets, the richer people in Asia will get, is one of the most ludicrous illusions that could possibly be imagined.

             T. Bern, "Free us from trade", Ecologist, 30.6. Sept. 2000.

The number of people globally living in poverty that is, on less  than a dollar a day - increased from 1.1 billion in 1985 to 1.2 billion in 1998, and is expected to reach 1.3 billion this year. (3) According to a recent World Bank study, the absolute number of people living in poverty rose in the 1990s in Eastern Europe, South Asia, Latin America and the Caribbean, and sub-Saharan Africa..

W. Bello, From Melbourne to Prague, in ERA Email Newsletter, 2, 15,
Nov.Dec 2000.

"More than 5 million people, most of them children, die every year from illnesses caused by drinking poor quality water."

S. Grusky, "IMF forces water privatisation on poor countries", Third World Resurgence, 127/128., p. 12.

ABOUT 14 million people die each year from infectious diseases, manyof which are preventable or treatable, such as acute respiratory infections, diarrhoeal diseases, malaria and tuberculosis.

M. Barlow, Thirst for justice, Yes, Summer, 2001, p. 24.

Indeed, by the early 1970s, it had become a commonplace to argue that throughout much of the Third World growth was accompanied by increased inequality. (Griffin 1989: 165).

The experience of the 1950s and 1960s suggested that, while growth was important, it was by no means a sufficient condition to induce broad based development. In fact, growth could be impoverishing for a significant section of the population if it was paid for by a steady deterioration in the distribution of income and assets. In many countries, growth has been accompanied by declining standards of living.

J. Brokman, Popular Development, OUP, 1996, , p. 202

Barry (1987 xiv) reports that, by the 1980s, rural landlessness had tripled since the 1960s and that about 80 percent of farmers possessed insufficient land to feed their families; at the same time, 85 percent of the best land was used for agro- exports and 45 percent of total arable land was devoted to cattl e grazing.

J. Brokman, Popular Development, OUP, 1996,43.

In Africa, Saha (1991: 2760) finds that liberalization and structural adjustment measures designed to promote primary exports have deepened the underdevelopment of other economic sectors and, most troublingly, have hastened a destructive process of deindustrialization in many countries.

For India, Krishnaswamy (1991: 2417) reports that recent liberalization policies threaten 'the very fabric of the Indian nation' through an excessive centralization of economic decision-making, the distortion of democraticinstitutions, and the neglect of the bulk of the economy that lies outside ofa few modern industrial sectors.
…
Indeed, the relatively successful. Experience of a few (especially East Asian) NICs with export-led development is the exception rather than the rule for the developing world. '

J. Brokman, Popular Development, OUP, 1996,43.

Cuban President Fidel Castro informed the U.N.'s March, 2002 conference in Monterrey, Mexico that "the existing world economic order constitutes a system of plundering and exploitation like no other in history" - not exactly a ringing endorsement of globalisation-as-sustainable-development. He then stormed from the meeting, lingering barely long enough to enjoy a standing ovation.

the structure of the real-world global financial system ensures that the benefits of global growth accrue mainly to the already wealthy, those who designed and promote the globalisation agenda (and who mostly live in the G8 nations).

Many debtor nations are forced under World Bank-International Monetary Fund structural adjustment programs to spend more of their income servicing debts to the world's richest nations than providing social services to their own impoverished citizens.

And to raise the money they often have no choice but to plunder their natural resources. The data, however, cannot be so readily dismissed. In the 1960s "only" three dollars flowed North for every dollar flowing South; by the late 1990s, after 30 years of unprecedented growth and increasing globalisation, the ratio had grown to seven to one.

Squeezing the poor. Maybe Castro's right. Maybe that's all globalisation really is about.

William E. Rees, professor at the University of British Columbia

NATIONAL ECONOMIC DEVELOPMENT CANNOT BEGIN WITHOUT PROTECTION.
"...no country, past or present, has taken off into sustained economic growth and moved from economic backwardness to modernity without large-scale government protection and subsidization of infant industries and other modes of insulation from domination by powerful outsiders. This includes Great Britain, the united States, Japan, Germany, South Korea and Taiwan, all highly protectionist in the earlier takeoff phases of their growth process."

E. S Herman, "The Threat of Globalisation", Economic Reform Australia Newsletter, 2nd Dec., 1999.

The U S government, on behalf of US drug companies, is trying to block developing countries access to less expensive, generic, life-saving drugs."

Top 10 reasons to oppose the World Trade Organisation, Sustainable
Economics, 8. 2. March 2000, 33-34.

"More than 80 countries now have per capita incomes lower then they were a decade or more ago…" p. 3

The Ecologist Report, Globalising Poverty, Sept., 2000,

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"Development has become practically synonymous with capital accumulation which effectively serves as both the means and the end."

R. Biel, The New Imperialism, Zed., 2000.P. 72.

Economists at the UN "...have shown that there is no empirical evidence that (Foreign Investment) or FDI liberalisation produced growth and development in developing countries..."   "There is no empirical evidence that FDI is an engine of growth..."  "...FDI flows into Latin America in the 1990s were 13 times higher than in the 1970s, but the average growth in the 1990s was 50% lower."

             C. Raghavan , "European Community's fresh start on investment rules in  WTO", Third World Resurgence, 108/109, 1999, p. 30.

"Economic growth, the aim of everyone involved, has indeed occurred -- but far from bringing the good life, it has only increased inequalities and marginalisation ."  (218-219)

"End of game...The huge enterprise that began in both North and South at the end of the second World War, with the aim of accelerating 'development', has come to a complete end."  (220)  "...hope that all the world's inhabitants will enjoy material affluence has now vanished..."   (220)

             G. Rist, The History of Development, London, ZED.

    Satisfactory development cannot take place without protection:

"...no country, past or present, has taken off into sustained economic growth and moved from economic backwardness to modernity without large-scale government protection and subsidization of infant industries and other modes of insulation from domination by powerful outsiders.    This includes Great Britain, the united States, Japan, Germany, South Korea and Taiwan, all highly protectionist in the earlier takeoff phases of their growth process."

        E. S Herman, "The Threat of Globalisation", Economic Reform Australia  Newsletter, 2nd Dec., 1999.

"For two decades most of the peoples of Africa and Latin America have seen their conditions deteriorate, not improve."

Anti-capitalism theory and practice, 2000, p. 5. Socialist Worker Pamphlet,

Indeed, the economic growth experienced between 1990-97 contributed very little to the eradication of poverty. As is shown in Figure 2, although the total level of poverty went down from 41% to 36% from 1990 to 1997, in none of the cases did it reach the level before 1980.8 The
'lost decade' (1982-90), due to the external debt crisis, wiped out the
gains that had been obtained in the 1945-1980 period.

H. Campodonico and M. Chiriboga, The financial .crisis of Latin America, Third World Resurgence, 2000, p. 27.

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"...Disney pays six cents in Haiti for garments it sells for $19.99 in the United States...

             W. Tabb, "Progressive globalism", Monthly Review, 50, 9 , 1999. (p. 8.)

"…it has become clear that wealth does not automatically trickle down to people…"

Towards Sustainable Economics; Challenging Neo-Liberal Economic Globalisation, Friends of the Earth, 2000  http://www.foei.org/whatsnew/1_
Dec_Summ.ht

"...the evidence of the past two decades indicates that very little trickle-down has ever taken place....In Britain (information from the Department of Social Security showed that for 1979-1991/2)...the poorest tenth of the population suffered a 17% fall in real income."

        J. Rapley, Understanding Development Theory and Practice in the Third  World, London, Riener, 1996.

Wages for footwear workers in China and Thailand were 23 ? 46 pence per hour.   106.  In Indonesia "…to attract foreign investment, the minimum wage is set at just 6% above the poverty line."  107.

             J. Madely, Big Business, Poor Peoples, Zed, 1999.

_______________________________________________________________________________________________________

"Current economic policies, such as those promoted by the World Bank, and the IMF, effectively redistribute resources from the poor to the rich, aggravating poverty and inequality."

 Towards Sustainable Economics; Challenging Neo-Liberal Economic Globalisation, Friends of the Earth, 2000  http://www.foei.org/whatsnew/1_
Dec_Summ.htm

         M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

___________________________________________________________________________________________________________
 
 

"The modern world is built on the suffering and brutalisation of millions." (213)

"Third world workers who are in the electronic and textile industries are paid p to 20 times less than their counterparts in Western Europe, the United States, or Japan for doing the same job with at least the same productivity."  (213

             A. Escobar, Encountering Develpment, Princeton, Princeton University  Press, 1995.
 

President Johnson …"… is on record as having said, at Camp Stanley, Korea in 1966; "Don’t forget there are two hundred million of us in a world of three billion. They want what we’ve got and we’re not going to give it to them."

J. Gerasis, "Imperialism and Revolution in Latin America", in R. D. Laing and Cooper, The Dialectics of Liberation. 81, 82-83.

Rowbotham's commentary on the "monumental injustice" of Third World debt: "It is an injustice amounting to international slavery and extortion; it is an aggressive injustice, involving he subjection of whole nations and their sovereign peoples, operating on a scale that exceeds the total of all the more obvious efforts a dominance by individual nations indulging in warfare over the centuries."  It is an injustice that is"...so profound and total and shameful that it is quite without any parallel in the history of human affairs."  (148)

             M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

"The debt crisis has allowed the North to bind the South even closer to serve its own economic interests - the creation of a global economy where TNCs are free to seek out greater profits..."

             D. Richads and S. Jones, "The road to Marakech; the story of the global  supermarket", Clean Slate, 14, Autumn, 1999, p.  12-13.

INAPPROPRIATE DEVELOPMENT

Under World Bank and IMF policies "Where industrialisation and agricultural improvement has taken place, this has been almost exclusively orientated towards the export markets.  Small and medium scale domestic development for internal consumption has been almost totally neglected."  (147)

             M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

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In every case, the result has been the same: each economy that has followed IMF prescriptions has seen widespread social dislocation. Hundreds of thousands of jobs have been lost, and standards of living have plunged drastically, even for those who still have jobs. The cost of internationally traded goods and services has increased, due to local currency devaluation against the U.S. dollar (the denomination in which most goods are traded on global markets). Poverty and malnutrition have increased, as have the number of related deaths. However, foreign investors have been able to purchase goods    and services, raw materials, and even entire corporations more cheaply since the onset of the crisis than before.  The neo-liberal economic program has made things worse for the large majority of Filipinos.

A neo-liberal approach to development, as advocated by the World Bank and the IMF, has only benefited the global capitalist political-economic networks (including certain Filipino partners), and the Philippine state; and these benefits all come at the direct cost of the large majority of Filipinos.

            K. Scipes, "Global economic crisis, neo-liberal solutions and the Philippines.", Monthly Review, Dec., 1999, p. 1

 

As Mulayam SinghYada, the leader of a major political party, stated in Parliament: "There is famine in Orissa, Andhra Pradesh, Uttar Pradesh, Madhya Pradesh, Maharashtra and Bihar, Gujarat. This is a serious matter. The tragedy is that while people starve, the godowns are overflowing. 300 to 400 million Rupees are being spent daily to stock food of which 35% is rotting. What was the reason that the government under pressure of rich countries, decided to let the people starve merely in order to reduce the budget? Eight hundred tribal children have died of starvation in Maharashtra. Four starving women from Orissa tried to sell her child for 300 Rupees in Calcutta. In the famine stricken regions of Orissa, children are being sold for a few thousand rupees because of starvation. Wives are being sold into bondage".

People are starving because the policy structures that defended rural livelihoods, and access to resources and markets, and hence entitlements and incomes, are being systematically dismantled by structural adjustment programs, driven by the World Bank, and by WTO rules imposing trade liberalization.

After the Great Bengal Famine of 1942 which killed more than 2 million people, India's policies after independence put livelihoods and food security first, rather than trade and commerce. Land reform put land back in the hands of the peasants and cultivators, thus removing a root cause of poverty. The economic "reforms" under globalization reverse these reforms by corporatizing agriculture, displacing small peasants, and removing limits on land ownership. Displaced peasants cannot have incomes or entitlements.

Vandana Shiva, "The real reasons for hunger", Observer (London), Sunday June 23, 2002

"The global economy governed by international financial institutions,  the World Trade Organisation and Multinational Corporations proposes structural adjustment for countries in 14% of the South in the name of fiscal health; the result is increasing poverty, debt, and unemployment."  (NGO declaration at the UN Conference on Women.)

     The Ecologist Report, Globalising Poverty, Sept., 2000, p. 4.

Re SAPS "…it was the poor who paid the price.  And it was the TNCs who gained as they came in on the coat tails of the adjustment programs."  21

                J. Madeley, Big Business, Poor People, Zed Books, 1999.

The World Bank strategy implemented in Peru in August 1990 resulted in  fuel prices increasing by 31 times overnight, and the price of bread increasing by 12.  The real minimum wage declined by more than 90%  The price of many consumer goods was higher than in New York.

             M. Chussodovsky, in ERA Email Newsletter, 2/5/2000.

Through its notorious structural adjustment programmes (SAPs), it (the IMF) has imposed harsh economic reforms in over 100 countries in the developing and former communist worlds, throwing hundreds of millions of people deeper into poverty.   The results, however, have  brought ruin to national economies, cut-backs in schools and hospitals, increased poverty and hunger, and environmental harm…

 According to Professor Michel Chossudovsky, in sub-Saharan Africa, the devaluation of the CFA franc imposed by the IMF and the French Treasury in early 1994, abruptly "compressed the real value of wages and government expenditure by 50 per cent". Such outcomes are widespread.  Costa Rica, the first Central American country to implement a SAP, saw real wages decline by 16.9 per cent between 1980 and1991, while during the first four years of Hungary's SAP, the value of wages fell by 24 per cent.

…governments must often cut social spending since this doesn't generate income for the federal budget. Consequently, in the
1980s alone, expenditures on health in IMF-World Bank programmed countries in Africa declined by 50 per cent,
according to the UN Economic Commission for Africa.  Meanwhile, to reduce budget deficits, fees for medical services
are often increased, leading less treatment, more suffering   and needless deaths.

In Zimbabwe, spending per head on health care has fallen by a third since 1990 when a structural adjustment programme
was introduced. UNICEF reported in 1993 that the quality of health services had declined by 30 per cent since then; twice as
many women were dying in childbirth in Harare hospital compared to 1990; and fewer people were visiting clinics and
hospitals because they could not afford user fee,. In the Philppines, an IMF programme has caused allocations
to preventative health care budgets for malaria and tuberculosis to fall by 27 per cent and 36 per cent respectively, and
immunisation programmes to fall by 26 per cent.

In Kenya, the introduction of fees for patients of Nairobi's Special Treatment Clinic for Sexually Transmitted Diseases
(vital for decreasing the likelihood of transmission of HIV/AIDS) resulted in a decrease in attendance of 40 per cent
for men and 65 per cent for women over a nine month period.

            J. Cavanagh et al., "The IMF formula, ", The Ecologist Report, Globalising Poverty, Sept., 2000, p  24.

According to the international People’s Tribunal in their 1993 Tokyo verdict, "…the general consequences of SAPs have been, a sharp increase in unemployment, a fall in the remuneration of work, an increase in food dependency, a grave deterioration of the environment, a deterioration in health care systems, a fall in admissions to educational institutions, a decline in the productive capacity of many nations, the sabotage of democratic systems and the continued growth of external debt."

One major conclusion; "…the policies instituted by international institutions in obedience to strategies adopted by the G7 are the cause of the brutal and massive impoverishment of popular majorities, particularly in the South and East…"

            S. Amin, Capitalism in the Age of Globalisation, Zed Books, 1997. P. 13.

"Structural adjustment programmes imposed by the World Bank since the 1980s in exchange for debt relief has made it easier for TNCs to manufacture products for export, extract valuable natural resources, obtain generous investment incentives, take adantage of cheap labour conditions, redirect local production priorities, and endlessly repatriate profits, unfetered by government intervention or regulation."

            Tony Clarke, "Twilight of the corporation", The Ecologist, 29, 2.  May/June, 1999, p. 158.
 

"It is generally acknowledged that adjustment programs have been devastating for the poor and have increased in come inequality and social instability.  ...they have wrecked the national productive capacity of many countries."

             M. Givel, "Structural Adjustment and Debt, ERA Email Network, 31st,  July, 1999.

A UN report says that two decades of structural adjustment programs mandated by the IMF and the World Bank have systematically undermined the rights of millions of poor people across the Third World..."

"...structural adjustment represents a political project, a conscious strategy of social transformation at the global level, primarily to make the world safe for transnational corporations." ... "...structural adjustment programs serve as a transmission belt to facilitate the process of globalisation, through liberalisation, de-regulation, and reducing the role of the state in national development. ...the state no longer acts as a buffer against the world economy, but plays an integral role in globalisation."

             S. Singh, "Making the world safe for TNCs", Third World Resurgence,  108/109, 1999, p. 62

The IMF has conditioned approval of a loan to Ecuador on the modification by parliament of a law that earmarks for health and education 10 percent of revenues from the oil exports that will be piped through a new heavy crude pipeline still under construction.

The revenues attained from the OCP pipeline, which will carry crude from the Amazon jungle region to Pacific coast ports, must go exclusively towards servicing debt, International Monetary Fund (IMF) spokespersons told
Ecuador's negotiators in Washington.p.4).

ECUADOR: IMF Wants Future Oil Revenues to Service Debt, not Health, by Kintto Lucas
QUITO, May 29 2002

In 1993 the International People's Tribunal concluded "...the general consequences of SAPs have been; a sharp increase in  unemployment, a fall in the remuneration of work, an increase in food dependency, a grave deterioration of the environment, a deterioration in health care systems, a fall in admissions to educational institutions, a decline in the productive capacity of many nations, the sabotage of democratic systems and the continued growth of external debt."   They stressed that the policies of the World Bank and IMF "...are the cause of the brutal and massive impoverishment of popular majorities" and "...these policies do not provide any solution to the general crisis of contemporary society; on the contrary, they aggravate its development..."  (13)

"The brutality of (the interventions) is aimed at clear political objectives; to dismantle the productive structures of the countries of Eastern Europe and the former USSR in order to reincorporate them into world capitalism as subordinate peripheries, and not as equal partners; to demoralise the working classes; and to reinforce the new comprador bourgeoisie."  (34)

"In agriculture the Bank has focused on destroying the autonomy of the peasant world, breaking te subsistence economy. ... It has promoted the exploitation of forests for exportation, no matter how scandalous the damage to ecology..." 24

"...the Bank's global strategy has never been concerned either before or after 1980 with the condition of the poor..."   "...the Bank...has always shown a preference for the regimes most aligned with Washington and its allies.." (25)

              S. Amin, Capitalism In The Age of Globalisation, London, Zed    Books,  1997.

"Almost without exception, the development model offered by the IMF and the World Bank has led, not to prosperity, but directly to a poverty far worse than the original state from which the countries started."  (137)

         M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

The International Monetary Fund is "...an institution whose economic policies kill thousands of poor children in the developing world each day..."

             R. Naiman, IMF, WTO :"I can change!" Peamble Centre, ERA Email  Network, 10th April, 1999.

"A weakened, debt-ridden Indonesia was forced to give international capital what it wanted, an economy foreign capital could enter on its own terms ithout government restrictions."

             W. A. Tabb, "Turtles, Teamsters and Capital's Designs", Monthly Review,   July-August, 2000, p. 38.

"Between 1980 and 1989 some thirty-three African countries received 241 structural adjustment loans.  During that same period, average GDP  per capita in those countries fell 1.1% p. a., whilst per capita food production also experienced steady decline.  The real value of the minimum wage dropped by over 25%, government expenditure on education fell from $11 billion to $7 billion and primary school enrolments dropped from 80% in 1980 to 69% in 1990.  The number of poor people in these countries rose from 184 million in 1985 to 216 million in 1990, an increase of 17%"

             M. Rowbotham, The Grip of Death, London, Carpenter, 1998.

For two decades, the IMF has exerted a stranglehold over developing  country economies, denying them the funding they need to make foreign debt payments and avoid default, unless they enact 'structural adjustment" policies".

The basic idea of these policies is to open countries' labour markets and natural resource riches to multinationals, shrink the size and role of government, rely on market forces to distribute resources and services and integrate poor countries into the global economy.

Key structural adjustment policies include: privatizing government-owned  enterprises  and government-provided services, slashing government spending, orienting economies to promote exports, lifting trade restrictions, implementing higher interest rates, eliminating subsidies on consumer items such as foods, fuel and medicines and imposing tax increases.

Structural adjustment has been successful at its intended effort to diminish the scope of government and integrate developing countries into
the global economy.

But it has increased suffering in developing countries immeasurably. In most of the world's poorest nations undergoing structural adjustment, poverty has increased, health care systems have collapsed and income inequality has skyrocketed.

Developing countries that have done well in recent decades, primarily those in Asia, including China, have succeeded by violating central tenets of structural adjustment: they have maintained a strong government role in the economy, and they have protected certain parts of their economy. Not surprisingly, people in developing countries have protested strongly against IMF policies. Countries throughout the world have witnessed "IMF riots" following IMF-ordered lifting of price subsidies for goods such as bread and gasoline.

            R. Mokhiber and R. Weissmanh, "IMF on the ropes", Economic Reform Australia, Email Network, 21.3.2000

The IMF' role is to promote the interests of metropolitan capital...not to solve Southeast Asia's crisis.

The IMF's intervention "...has systematically destroyed the basis of the old dirigiste development strategy in South Korea by dismantling the chaebols and weakening the links between the state and industry; it has protected foreign lenders by extracting government guarantees for private debt, at least in Thailand and South Korea; it has forced these two countries to permit full foreign ownership of financial institutions; and it has despite all  adverse reactions, successfully held out in favour of financial liberalisation.

"Thus the acuteness of the crisis, instead of signifying a failure of the IMF, represents its success, since this creates prpecisely the occasion for it to 'roll back' all vestiges of dirigisme and open these economies to domination by metropolitan capital."

             P. Patnaik, "Capitalism in Asia," Monthly Review,  July-Aug, 1999, p. 62.

"Humanity is undergoing in the post-cold War era an  economic crisis of unprecedented scale leading to the rapid impoverishment of large sectors of the world population...This is by far the most serious economic crisis in modern history."

"...some 500 billion dollars worth of  Russian assets...have been confiscated through the privatisation programs and forced bankruptcies and transferred into the hands of Western capitalists...an entire economic and social system is being dismantled."

"The worldwide scramble to appropriate wealth through 'financial manipulation' is the driving force behind this crisis."  This is"...a form of financial and economic warfare.  No need to recolonise lost territory or send in invading armies.  In the late twentieth century the outright 'conquest of nations"  meaning the control over productive assets, labour, natural resources and institutions can be carried out in an impersonal fashion from the corporate boardroom."

"The appropriation of global wealth through this manipulation  of market forces is routinely supported by the IMF's lethal macro-economic interventions which act almost concurrently in ruthlessly disrupting national economies all over the world."

"In 1997 more than 100 billion dollars of Asia's hard currency reserves had been confiscated and transferred into private financial hands...real earnings and employment plummeted virtually overnight leading to mass poverty."

"In Thailand 565 domestic banks and financial institutions were closed down on orders of the IMF, unemployment virtually doubled over night.  In Korea in 1997 "...an average of 200 companies (were) shut down per day...4,000 workers were driven onto the streets every day as unemployed."

The banks lend the money the financiers use to cause these crises (by speculating against a national currency).  When national central banks try to support their currency, they borrow from the banks to do it!   They are then called in by the IMF to advise in the bankruptcy programs, which means they are in the front line when it comes to buying  up ruined firms at basement prices.  Thus, "The world's largest money managers set countries on fire and are then called in as firemen (under the IMF /'rescue' plan) to extinguish the blaze."

Note that the large sums organised to pay off the debt of a country that has been targeted will not benefit the country; it will go to the banks to which the country is indebted.  It is a process of bailing out the banks.

When rich countries put up large sums to bail out troubled countries, again it is the big banks from which their governments borrow the money...and get the interest etc, (which comes from  taxpayers).   "...the issuing of US public debt to finance the bail-outs is  underwritten and guaranteed by the same group of Wall Street merchant banks involved in the speculative assaults."

"...a handful of commercial banks and brokerage houses have enriched  themselves beyond bounds; they have also increased their stranglehold over governments and politicians around the world."

These banks are also central in the efforts to persuade governments to further deregulate international capital transactions and flows...the very factor that is responsible for the damage.  The IMF, WTO etc are eager to do this.  For instance the IMF is to change its Articles with the intention of "...making the liberalisation of capital movements one of the purposes of the
fund..."

             M. Chossudovsky, "Financial warfare", http://ww.corpwatch.org/trac/globalization/financial/warfare/html
 

The havoc they (IMF and WTO) cause is terrible and they do it with impunity; accelerated impoverishment and destruction of the social structures of entire populations, who are deprived of the most basic rights, driven from their homes and left fighting for survival; the weakest state collapse under the weight of structural adjustment policies and debt, unable to guarantee their people's security or provide a minimum of working public services.  The consequences are a return to barbarism and ethnic conflict, ever more crises bringing plummeting living standards and soaring unemployment, a widespread increase in inequality and poverty, even in the supposedly richest countries..."

             C. De Brie, "Transatlantic wheeling and dealing", ERA Newsletter, 1999,  p. 8.
 

"In Zimbabwe spending per head on  health care has fallen by a third since 1990 when a SAP was introduced.

                 D. Keane, http://www.nw.com.au/-keane/civilrep/Part3/33Meltdown.htm

In Uganda $2 per person is spend on healthcare, compared with 11.5 pounds per person on debt repayments.  Real wages in most African countries have fallen by 50-60% since the early 1980s.   In Mexico, Costa Rica and Bolivia average wages have fallen by a third since 1980."   See the JUBILEE2000(UK) website.

Structural adjustment has also been a central cause of the lack of any progress in the campaign against poverty.

            W. Bello, From Melbourne to Prague, in ERA Email Newsletter, 2, 15, Nov.Dec 2000.

Third World leaders are told that, in order to get more loans to pay off the old loans, they must implement "structural adjustment" reforms. These include:

o selling state enterprises to the private sector in order to make governments more efficient

o raising producer prices for agricultural goods so farmers will have the incentive to grow and market more food

o devaluing local currencies (in line with their world market value) to make exports more competitive in foreign markets

o reducing government budget deficits by cutting consumer subsidies and charging user fees for social services such as health care and education

o encouraging free trade by dropping protectienist measures and by reducing regulation of the private sector

o creating incentives to attract foreign capital

             K. Danker, Fifty Years is Enough, Boston, South End., 1994.

"In almost every country that the IMF has gone into, there have been increased problems and hardships for the people."

H. Kaur, Get Asian fund going fast", Third World Resurgence, 127/128, p. 9.

No Third World country that has borrowed from the World Bank has subsequently found its way out of debt.

M. Rowbotham, Goodbye America, 2000, p. 21.

World Bank teams control the Third World economies undergoing SAPs; they make the key decisions. 21, 18 The World Bank has made "…a virtual takeover of developing nations." 28

M. Rowbotham, Goodbye America, 2000, p. 21.

… in the 1980s and early 1990's, when structural adjustment programs were imposed on over 70 developing countries. After over 15 years, there were hardly any cases of successful adjustment programs. What structural adjustment had done, instead, was to institutionalize stagnation in Africa and Latin America, alongside rises in the levels of absolute poverty and income inequality.

W. Bello, Deglobalisation, Australian Options, Nov., 2000, p. 3.

The general consequence of SAPs, however, has been severe economic contraction,

particularly in production for the domestic market.

Brokman, Popular Development, 1996, 161.

However, considerable evidence has accumulated from various developing countries that SAPs have generally failed to stimulate investment and growth and have produced increasing socioeconomic and spatial polarization, with particularly devastating results for the poor and other disadvantaged groups.

Brokman, Popular Development, 1996, 161.

As the negative impact of SAPs on the poor and disadvantaged has become more apparent, criticism has mounted from various sources. Critics from the academic community and many international organizations contend that issues such as basic needs provisions, poverty alleviation, and sustainable development have been ignored in the macroeconomic, growth oriented agenda of SAPs.

Brokman, Popular Development, 1996, 167.

A l998 investigation by the Boston Globe concluded that 45 of the 50 top-selling drugs approved in the US between l992 and l997 had received government funding at some stage of development. The drug industryis one of the most profitable industries in the world .

K. Singh, Patents vs patients, Third World Resurgence, 131/132, p. 13.

A variety of arm-twisting tactics were used against South Africa to re-amend the Act. In 1998, for instance, the USTR suspended additional benefits under the Generalised System of Preferences, a trade scheme that allows poor countries to export products to the US at reduced duties.

In April 1999, the USTR office placed South Africa on the Special 301 'watch list'. The US also tried to bribe African countries not to undertake compulsory licensing. The Export-Import Bank of the US announced in July 2000 that it would make $500 million in loans available to African countries each year for buying AIDS medicines - but with the proviso that these loans could only be used to purchase drugs from the US TNCs.

K. Singh, Patents vs patients, Third World Resurgence, 131/132, p. 13.

Bias Toward the Interests of TNCs and Core Capitalist Countries ~
From this perspective, the imposition of SAPs on Third World countries by the IMF, World Bank, and other multinational financial organizations plays a vital role in the establishment of new conditions facilitating the expansion and deepening of global capitalism in the South (Biggs 1987; Foxley 1982; Pastor 1987). As well as directly acting on behalf of the international banking system and its investors, the IMF and World Bank indirectly serve the broader interests of Northern-based transnationals in
penetrating Southern markets (George 1988; Kreye and Schubert 1988; Stein 1992; Wade 1992).

A critical part of the outward-oriented 'trickle down' strategy that is a centerpiece of SAPs is the provision of a hospitable environment in the South for trade and foreign investment by TNCs. Harris (1989: 21) states: 'The main role of the IMF and World Bank is the construction, regulation and support of a world system where multinational corporations trade and move capital without restrictions from national states.' For Bernstein (1990: 23), this means that we cannot understand the real significance of SAPs without first 'locating the distinctive place and global role of the World Bank [and IMF] within imperialism, and within its postwar nexus of international financial and regulatory institutions.'

J. Brokman, Popular Development, OUP, 1996, 141.

The IMF-world Bank's ''Economic Medicine.' by Michel Chossudovsky.
Through the imposition of deadly macroeconomic medicine, the IMF and the World Bank are responsible for destroying national economies and
impoverishing millions of people. Since the early 1980s, the ''macro-economic`stabilization" and "structural adjustment" programs imposed by the IMF and the World Bank on developing countries (as a condition for the renegotiation of their external debt) have led to the impoverishment of hundreds of millions of people. Contrary to the spirit of the Bretton Woods agreement which was predicated on "economic reconstruction" and stability of major exchange rates, the structural adjustment program has largely contributed to destabilizing national currencies and ruining the economies of developing countries. Internal purchasing power has collapsed, famines have erupted, health clinics and schools have been closed down, hundreds of millions of children have been denied the right to primary education. In several regions of the developing World, the IMF-imposed reforms have been conducive to a: resurgence of infectious diseases including tuberculosis, malaria and cholera. While the World Bank's mandate consists in "combating poverty" and protecting the environment, its support to large scale hydroelectric and agro-industrial projects has also speeded up the process of deforestation and the destruction of the natural environment, leading to the forced displacement and eviction of several million people.

In the aftermath of the Cold War, macro-economic restructuring also supports global geopolitical interests. Structural adjustment is used to undermine the economy of the former Soviet block and dismantle its system of State enterprises. Since the late 1980s, the IMF-World Bank "economic medicine'' has been imposed on Eastern Europe, Yugoslavia and the former Soviet Union with devastating economic and social consequences. While the social and institutional framework is fundamentally distinct, a form of structural adjustment has also been applied in the developed countries. Whereas the macro-economic therapies under the jurisdiction of national governments, tend to be less brutal than those imposed on the South and the East, the theoretical and ideological underpinnings are broadly similar. The same global financial interests are served. Monetarism is applied on a planetary scale, the process of global economic restructuring strikes at the very heart of the rich countries. The consequences are unemployment, low wages and the marginalization of large sectors of the population. Social expenditures are curtailed and many of the achievements of the Welfare State are repealed. State policies have also encouraged the destruction of small and medium sized enterprises. Low levels of food consumption and malnutrition are also hitting the urban poor in the rich countries. According to a recent study, 30 million people in the United States are classified as '`hungry'.... Since the mid-1980s, the impact of structural adjustment including the derogation of the social rights of women and the detrimental environmental consequences of economic reform have been amply documented. While the Bretton Woods institutions have acknowledged "the social impact of adjustment", no shift in policy direction is in sight. In fact, since the late 1980s coinciding with the collapse of the Eastern block, the IMF-World Bank policy prescriptions (now imposed in the name of "poverty alleviation") have become increasingly harsh and unyielding.

Social Polarization and the Concentration of Wealth. In the South, the East and the North, a privileged social minority has accumulated vast amounts of wealth at the expense of the large majority of the population. This new international financial order feeds on human poverty and the destruction of the natural environment. It generates social apartheid, encourages racism and ethnic strife, undermines the rights of women and often precipitates countries into destructive confrontations between nationalities. Moreover, these reforms --when applied simultaneously in more than one hundred countries-- are conducive to a "globalization of poverty", a process which undermines human livelihood and destroys civil society in the South, the East and the North.

From 'The Globalization of Poverty, Michel Chossudovsky, Zed Books, 1997.

Consider, for instance, that, in accordance with WTO regulations, markets throughout the world are being systematically
opened up to highly subsidised US food products. It has already begun in India with devastating results. There are somewhere
between two and three billion small farmers in India, China, Indonesia, Thailand, and other parts of South and Southeast Asia,l
where the average farm size is only a few acres.Few are likely to survive the opening up of their markets - few too of the artisans, small shopkeepers and street vendors who depend entirely on the farming community. Most will be forced to seek refuge in the slums of the nearest conurbations and, without land on which to grow their food, without jobs - as the level of unemployment in these slums is already horrific - and without any unemployment benefits, they will be reduced to a state of total destitution.

Planet Dialectics: Explorations in Environment and Development. Wolfgang Sachs (Senior Research Fellow, Wuppertal Institute, Germany). London & NY: Zed Books, Nov 1999.

The World Bank's aid programs, designed to open up markets in poor countries to foreign investment, have been increasingly accused of leaving a trail of environmental destruction and poverty in their wake. The bitter legacies of "structural adjustment" programs -- under which the World Bank loans money to developing countries on the condition that they slash social spending, eliminate tariffs and subsidies, and shift their agricultural production from feeding their own populace to growing cash crops for export -- have sparked a firestorm of protest, both in the developing and the developed

world.http://www.gristmagazine.com/maindish/harris041003.asp</a>
Breaking the Bank ; The economic heresy of Herman Daly ,by Lissa Harris ,
10 Apr 2003
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7.  STRUCTURAL ADJUSTMENT PACKAGES DO NOT WORK

Failure of IMF STRATEGIES.

Before 1980, when the World Bank and IMF set out to rearrange the economies of developing nations, nearly all of them adhered to Keynesianism or socialism. Following the "import-substitution model," they build locally owned industry through government investment, behind a protective wall of tariffs and capital controls. In those supposed economic dark ages, spanning roughly from 1960 to 1980, per-capita in-come grew by 73 percent in Latin America and by 34 percent in Africa. By comparison, since 1980, Latin American income growth has slowed to a virtual halt --- to less than 6 percent
over twenty years-while African incomes have declined by 23 percent.

Bolivia and Argentina in flames--IMF to blame, Sabine Kurjo McNeill. Feb., 2003.
sabine@globalnet.co.uk

The UN Research institute for development concluded in 1995 that most SAPs have been failures and that even those that showed macro goals have detrimental social consequences." 86

M. Renner, Fighting For Survival, 1997. P. 83.

Exhaustively examining documents and interviewing all kinds of experts, the CoMmission came up with the devastating conclusion that with most of its resources going to the better off countries of the developing world and with the astounding 65-70 per cent failure rate of its projects in the poorest countries, the World Bank was irrelevant to the achievement of its avowed mission of global poverty alleviation.

                W. Bello, ‘From Melbourne to Prague", ERA Email Newsletter, Nov-Dec./. 2000, p. 8.

The World Bank and the IMF insist that they know what's best for every country, and that their policies promote growth and development. These claims are generally accepted at face value, in many cases even by their opponents. In fact, critics often accuse them of being overly concerned with economic growth, and not paying enough attention to the needs of the poor or to protection of the environment.

But the record on economic growth is their most spectacular failure. Over the last 20 years, low- income and some middle-income countries throughout the world have implemented he economic policies of the World Bank and the IMF ? often under the threat of economic strangulation. The worst disaster has been in Russia and the states of the former Soviet Union, which lost more than 40 percent of their national income in the 1 990s.  This is worse than our own Great Depression.

Income per person in sub-Saharan Africa has declined about 20 percent over the last 20 years. In Latin America, it has barely grown: maybe 7 percent over the whole two decades.

By contrast, both of these regions showed vastly superior economic growth in the previous two decades, before the IMF and Bank's "structural adjustment" policies became the norm. From 1960 to 1980, income per person grew 34 percent in Africa and 73 percent in Latin America.

The only region that has grown rapidly over the last 20 years has been South and East Asia. But this region had similarly rapid growth in the previous two decacles. And these are the countries that have most disregarded Washington's instructions. China, which quadrupled its national income over the last 20 years, does not even have a convertible currency.    In short, there is no region in the world that the Bank and the Fund can claim as a success story - while their failures have been widespread and devastating.
 

                    Energyresources@onelist.com, 2000.

Yet the World Bank, IMF, WTO, Ministries of Development, UN Agencies and, to their discredit, most development NGOs
are virtually united in their belief that exports to the North are a route for funding improvements in living conditions of the
poor in the South…Yet the NGO movement's own research and that of the World Bank shows that, with the exception of the Newly
Industrialised Countries (NICs), in the period before the 1997 Asian financial crisis, the position of the majority in such
export-dependent countries did not improve and in many cases worsened.

                 C. Hines, Globalisation’s cruel smokescreen, , The Ecologist Report, Sept., 2000.
 

 Much evidence against the effetiveness of Structural Adjustment  Packages is reviewed by Dasgupta.

Dasgupta quotes much evidence that IMF and World Bank policies do not work.  For example, "...mostly savings and investment and GDP  fall." (109)  One study found that contrary to the neo-liberal ideology, the bigger the government sector in the economy the greater the growth rate!  (109)

Nowhere has domestic industry prospered under a SAP.  (116)

In 16 of 23 African countries which had experienced SAPs in the 1980s per capita income fell.  The same happened in 11 of 13 Latin American countries.

The evidence indicates that privatising does not make enterprises work any better. (119)

Countries undergoing SAPs do not reduce their dependence over time.  (136)

The only countries that have industrialised successfully have ben East Asian, and they have contradicted every principle of the SAP!   Outside East Asia, and possibly South Asia "...one is hard put to come across cases where the Structural Adjustment model has proved to be a success."(135)  "...there can be no doubt that structural adjustment has failed the test of time."  (136)

SAPs  stress reducing government size and activity.  However the size of government is positively  correlated with growth! (Ram, l198, "Government size and economic growth", American Economic Review, l76, 1, March, p. 16.)

SAPs reduce growth.

A study of sub-Saharan Africa found that repeated devaluations did not increase exports.  110.

Devaluations improve the external economy, i.e., exports, but they slow the internal economy.

In 17 of 23 African SAPs per capita income fell.  In 11 of 13 Latin American case it fell.  (P. 110.)

Dasgupta says he IMF always tries to solve the state's financial problems by cutting spending, never by increasing tax collection from the rich.

The goal is to keep wages down while  helping the rich to make higher profits.   (p, 112.)

There is no comprehensive evidence that trade liberalisation increases exports., (!)  (p. 114.)

SAPs were supposed to produce an  agricultural boom, but agriculture has done badly  under SAPs.

The World Bank is strongly against a nation  attempting to build self-reliance; all must become increasingly dependent on the global economy.

The most important issue, land reform , is ignored.

There is no evidence that domestic industries have bloomed under structural adjustment anywhere. " (p .  116.)
"Most studies show that structural adjustment gives rise to povrty, unemployment, lowering of wages and a lower level of health and education."  (p. 122.)

Investment declines.

Thre have been only two successful cases, Ghana and Chile, and Chile is a somewhat special  case.

"To say the least the results are far from  inspiring."  "the  countries that have been most subservient to the world bank and IMF ...seem to have performed the wrlst, becom ing significantly poorer after sveal rounds of structura adjust ent and stabilisation loans."  (p. 135.)

What about Taiwan, South Korea, Singapore and Hong Kong?  Dasgupta concludes that East Asian countries that have had spectacular success "...have flouted virtually each and every norm of the structural adjustment package... " (p. 135.)  See also 298.  "It is not liberalisation that has brought growth ; it has been the other way around."

Sub-Saharan Africa's sad experience shows how structural adjustment has made its countries poorer."  (p. 377.)

Structural Adjustment Packages "...have caused widespread misery; poverty and unemployment are growing."   (p. 377.)

"Taking all these countries' experiences together, at the minimum there is no evidence that structural adjustment works."   "...it has inflicted an irreversible damage  and has become instrumental in transferring resources out of their rickety economies to the richest nations of the world." (p. 378.)

                 B. Dasgupta, (1998), Structural Adjustment, Global Trade and the New 

Politcal Economy of Development, London, Zed             Books.

In Chile the number of private enterprises fell from 500 to 13 between 1973 and 1978.  (p. 119.)

Protection of industries, especially agriculture, by rich countries has increased since 1980.   (p. 139.)

                  B. Dasgupta, (1998), Structural Adjustment, Global Trade and the   New Politcal Economy of Development, London, Zed Books.

Dagupta describes the effort banks made to push loans of petro dollars to the Third World.   "...the international banks were now flush with funds and were willing to lend to anybody Between 1970 and 1980 the amount borrowed mutiplied by nine."   The banks were competing against each other to lend, so "...they threw the usual conservative banking norms to the wind".  Many Third World countries borrowed more than was wise.

                 B. Dasgupta, (1998), Structural Adjustment, Global Trade and the   New Politcal Economy of Development, London, Zed Books, p. 80.

"Liberal ideology and liberal society will be swept away in the deluge that is to come."  p. 5.

Important in their argument is that globalisation is weakening the cohesion of the nation.  The unit of social organisation will be the tribe, racial group, locality.  (See p. 15.)  The world is retribalising.
 "...the direction of the global economy is precisely the opposite direction to one necessary for ecological sustainability.  Human hubris --insolent pride about our technical prowess -- will ensure that a remorseless fall, an ecological nemesis will occur.......we believe that a collapse of civiizaton...is inevitable." (p. 22.)

 J.W. Smith and G. Lyons, Global Anarchy in the Third Millenium?  Race,  Place and Power at the End of the Modern Age,  New York, St. Martins  Press, 2000

The Governor of California had decided that  the additive must be taken out of sale by 2003 after studies showed that it may cause cancer and other problems in humans.

In a similar case decided earlier a tribunal ordered Mexico to pay $16.6 million to a Califronian company after Mexican governments had refused to allow the company to operate a hazardous waste facility near dwellings.  NAFTA tribunals meet blehind closed doors, with no public participation.

            Environment News Service, Sept 11 ,2000.

In 1992 the World Bank estimated that poverty had increased in most develping countries.

                 B. Schneider, The Scandal and the Shame, New Delhi, Vikas,  1995.

Mahathier,  Prime  Minister of Malaysia, said at the 2000 South Summit, if globalisation implies economic integration of all countries, why should it mean only  the free flow of capital but not workers?  Their workers should be allowed to migrate to rich countries to compete for jobs there, just as the powerful corporations of the rich are allowed to compete with their tiny counterparts in poorer countries.

"If it is right for big corporations of the rich to displace small weak corporations of the poor, why is it so wrong for poor workers to displace rich workers in the rich countries?"

 "Mahathier said the economic turmoil in East Asia has resulted in the rich taking what belongs to the poor.  As banks and businesses collapsed and share prices plunged, the rich moved in to buy the devalued shares and acquire the companies."

                 M. Khor, "Let the south in on globalisation", Third World Resurgence,  117, 2000.

"Two decades of so-called neo-liberal structural adjustment have left behind economic failure and social disaster."

"There are more poor, unemployed and hungry people in Latin America now than at any other hard time in its history."

"Trade liberalisation has essentially consisted in th unilateral removal of protection instruments by the south.  Meanwhile , the developed nations have failed to do the same to allow the Third World exports to enter their markets.

The rich nations have pushed for freedom of trade in sectors where they have enormous advantages, such as information technology.  "On the other hand, agriculture textiles...have not even been able to remove the restrictions agreed upon...because they are not of interest to developed countries."

"The world economic order works for 20% of the population but it leaves out, demeans and degrades the remaining 80%"

                 Fidel Castro, Speech to the South Summit, 2000, Third World  Resurgence, 117. 2000, p. 27.

"Not a single example exists where "macro- economic, structural reform" - he means laissez-faire capitalism imposed by the IMF and World Bank - has alleviated mass poverty. Throughout the developing world, especially Africa, structural adjustment programs" have destroyed jobs and public services, while shaping local economies to the demand of transnational capital. In the IMF's most "success countries in sub-Saharan Africa, 13 children die every minute from the likes of diarrhoea and malnutrition."

 (Source unknown.)

According to its own evaluations 65-70% of World Bank development projects for the poorest countries fail to have a positive development impact.

             W. Bello, "Meltzer Repot on Bretton Woods Twins Buillds Case for  Abolition but Hesitates", Focus on Trade 48, (April 2000.)

The Failure of Structural Adjustment

… in the 1980s and early 1990s, when structural adjustment programs were imposed on over 70 developing countries. After over 15 years, there were hardly any cases of successful adjustment programs. What structural adjustment had done, instead, was to institutionalize stagnation in Africa and Latin America, alongside rises in the levels of absolute poverty and income inequality.

W. Bello, From Melbourne to Prague, in ERA Email Newsletter, 2, 15,
Nov.Dec 2000.

However, under Jim Wolfensohn's command, the World Bank seemed likely to escape the massive damage sustained by its sister institutions -until the US Congress' Meltzer Commission in I February of this year. After exhaustively examining documents and interviewing all kinds of experts, the Commission came to the devastating conclusion that with most of its resources going to the better off countries of the developing world, and with the astounding 65-70 per cent failure rate of its projects in the poorest countries, the World Bank was irrelevant to the achievement of its avowed mission of global poverty alleviation.

B y signing on to the Agreement on Agriculture (AOA), developing countries had agreed to open up their markets while allowing the big agricultural superpowers to consolidate their system of subsidized agricultural production.
By setting up the WTO, countries and governments discovered that they had set up a legal system that enshrined the priority of free trade above every other good.

W. Bello, Deglobalisation, Australian Options, Nov., 2000, p. 3.

However, considerable evidence has accumulated from vanou~ev~ping countries that SAPs have generally failed to stimulate investment and growth and have produced increasing socioeconomic and spatial polarization, with particularly devastating results for the poor and other disadvantaged groups. ' ' ~ ~
_R
Liberalizat~on measures have driven up prices for many foods and other basic goods. Government spending cutbacks have worsened problems of unemployment and the deterioration of basic infrastructure and social services. The cumulative impact of these factors has lowered income levels, diminished purchasing power, and reduced access to essential social services and other basic needs for the popular sectors. As always, it appears that the most vulnerable and disadvantaged sectors of Third World societies have been the most negatively impacted. As levels of absolute poverty have increased and social programs have been cut, rising hunger and malnutrition have put severe pressures on many poor families. Such pressures have begun to show up in various behavioral indicators (e.g., number of abandoned children, incidence of family violence, youth crime and delinquency). These ---' '
. . . _
As the negatlve Impact of SAPs on the poor and disadvantaged has become more apparent, criticism has mounted from various sources. Critics from the academic community and many international organizations contend that issues such as basic needs provisiQns, poverty alleviation, and sustainable development have been ignored in the macroeconomic, growthoriented agenda of SAPs.

M, Chusodowsky, The Globalisation of Poverty, 1997.

______________________________________________________________________________________________________
 
8.  DEVELOPMENT AS PLUNDER

See also takeover sections in Globalisation Documents.

Globalization since the end of the Cold War has been viewed increasingly as neo-imperialism by many even outside of the radical left.

"Comprehensive analysis of neoliberalism",MAI-NOT network owner-mai-not@flora.org, June 2002.

Today capital is deploying a new strategy to assert its power and neutralise people’ resistance.  Its name is economic globalisation, and it consists in the dismantling of national limitations to trade and to the free movement of capital."

Peoples’ Global Action Network  protests against WTO, Third World  Resurgence, 95. P. 32.
 

Economic globalisation, as promoted by the World Trade Organisation, is a planned project of exclusion that _siphons the resources and knowledge of the poor of the South into the global marketplace and strips people of their life support systems, livelihoods, and lifestyles. Global trade rules, as enshrined in the WTO's Agreement on Agriculture (AOA) and in the Trade Related Intellectual Property Rights (TRIPs) agreement, are primarily rules of robbery, camouflaged by arithmetic and legalese. In this economic hijack, the corporations gain, and people and nature lose.

        V. Shiva, The threat to Third World farmers, The Ecologist Report, Sept., 2000.

"GLOBALISATION IS A PROCESS THAT CAN BE CALLED RECOLONISATION…A NEW FORM OF COLONIALISM IS OPPERATING."

         Third World Resurgence, 118/119, 2000, p. 44M.
 

An example of how the rich world pressures poor countries to comply:

President Jacques Chirac has been offering debt relief … for several years on the condition that they privatize their public sector to the advantage of French multinationals. Bouygues, Vivendi and other large French multinationals have bought whole sectors of the economies of the old French African colonies at discount prices thanks to this policy.  Finally, we must not forget that all these debt relief initiatives are linked to structural adjustment programs imposed by the creditor nations which, even if they now refer to them as 'Poverty Reduction Strategy Paper", force the countries concerned to continue opening their markets to goods from developed countries and extend fiscal policies that place the burden of taxation on the poor (VAT rates in Western Africa are in the range of 18 to 21% whilst pretending the need to encourage private investment, capital is not taxed directly). These policies also lead to widespread privatization of the water and energy sectors (Vivendi applauds this), the continuation of a policy of exporting at any cost which has detrimental effects on food safety (food crops are abandoned in favor of crops that can be exported) and is  preventing the conservation of natural resources (deforestation and extreme exploitation of raw material and fuel resources), the privatization of communal land, the further lowering of public sector starvation wages, in short the application of hard-line neo-liberalism with a sprinkling of targeted subsidies for those in 'abject'' poverty…

         Economnic Reform Australia, Email .Newsletter, 8. 9. 2000.

Globalisation is a process that can be called recolonisation..,. A new form of colonialism is operating...we cannot just talk of sharing better the benefits of globalisation. We have to fight the system we have today.

                    Martin Khor, E.R.A. Newsletter, July/August 2000

"The World Bank increasingly supports the rich."

                    B. Rich, Still Waiting, The Ecologist Report, Globalising Poverty, Sept, 2000, p. 8.
 

The world Bank "…has viewed itself as an agent whose task is to support capital’s penetration of the Third World through the transnationals."  24.

"In agriculture, the bank has focused on destroying the autonomy of the peasant world, breaking the subsistence economy…"

"Finding a solution to the problem (of development) is not on the agenda, simply because this is not in capital’s interests."

                    S. Amin, Capitalism in the Age of Globalisation, Zed Books, 1997.
 

"The world is experiencing a new age of conquest, reminiscent of the days of colonialism.  But whereas the protagonists of previous phases of conquest and expansion were national states, this time the drive for global domination is coming from big companies and conglomerates, major industrial groupings and the private finance sector.  Never before have the world's masters been so few in number and so powerful...This conquest goes hand in  hand with considerable destruction."

                        I. Ramonet, "The year 2000", email newsletter from  BDyer@PROUT.lorg.nz, 15th DEc., 1999.

"The most effective means for ensuring a lasting colonisation of Third World countries is to set up a Westernised elite, hooked on a model of economic development which it is willing to promote regardless of the interests of the majority of its citizens."

                         E. Goldsmith, "Empires without armies", The Ecologist, 29. 2. May/June  1999, p. 155.

"The aim of 'development' is not to improve the lives of Third World citizens, but to ensure a market for Western goods and services, and a source of cheap labour and raw materials  for big corporations.  Global development is imperialism without the need for military conquest."

                     E. Goldsmith, "Empires without armies", The Ecologist, 29. 2. May/June  1999, p. 154.

"The world is now ruled by a global financial casino staffed by faceless bankers and hedge-fund speculators ..."

Tony Clarke, "Twilight of the corporation", The Ecologist, 29, 2.  May/June, 1999, p. 161.

"Development now seems little more than a window dressing for economic colonialism."  (Schwarz and Schwarz, 1998, p. 3.)

"Mahathier (Prime Minister of Malaysia) said the economic turmoil in East Asia has resulted in the rich taking what belongs to the poor.  As banks and businesses collapsed and share prices plunged, the rich moved in to buy the devalued shares and acquire the companies."

M. Khor, "Let the south in on globalisation", Third World Resurgence,  117, 2000.

Rist refers to considerable agreement that "...development has resulted in material and cultural expropriation."  (243)

                         G. Rist, The History of Development, London, Zed, 1999.

Third World debt is really a mechanism for transferring wealth from the South to the North.  Each year sub-Saharan Africa reimburses almost $15 billion, 1. e. four times more than it spends on health and education.

 Third World Debt Relief a Sham ~ —
Source: Bob Olsen <bobolsen@interlog. com

For Dan Glickman, a steady and fast-track opening of the Indian market for its agricultural commodities and products was absolutely essential. With the phasing out of the quantitative restrictions and trade barriers in agriculture, which restricted the flow of cheap and subsidised food grains, set to be completed by April 2001, all eyes were fixed on bringing in certain structural changes in Indian farming that protected the economic interest of the American farmers. What happens in the process to the very survival of the 550 million Indian farmers, 80% falling in the category of small and marginal, is certainly of no interest to the American government, and for some strange reasons to the successive Indian governments as well.

One year of drought is enough to push a farmer into a deep well of poverty for another two to three years. Fifty years after Independence, life for millions of people somehow surviving in the drylands continues to be worse than before.

And while the US has been on the forefront asking countries to do away with agriculture subsidies, its own subsidies to the farming community have gone up by 700% since 1996.

D. Dharma, "From sustainable to corporate agriculture", Third World Resurgence, 120/121, 2000.

Another way plunder occurs.  Corporations are finding species which Third World people have developed over long periods of selective breeding, and patenting them (after making slight changes)   "…the corporate patenting of locally cultivated plant varieties has forced potato farmers in Scotland, rice farmers in Thailand and many others to pay royalties for genetic material that was once communally shared."

                E. Fields, US corporation drops Indian rice patent, Yes, Winter 2001, p 10.
 
  Northern governments and international financial institutions have used the tremendous leverage afforded to them by the debt crisis to dismantle alternative, more autonomous development projects in the South in favour of mainstream strategies that stress global integration, austerity, and 'trickle down' economics.

J. Brokman, Popular Development, OUP, 1996,

_________________________________________________________________________________________________
 
 

One million ha per year are transferred from production of food for local people to production of crops to export.   39.

                J. Madeley, Big Business, Poor People, Zed Books, 1999.

… food growing land is being taken over from small farmers by an elite of large companies to produce cash crops such as flowers, or luxury commodities such as shrimps, for export. For those farmers that remain on the land, this corporatisation of agriculture has clearly increased poverty, locking them into a new form of bondage with  unfair and unequal contracts that deprive them of the majority of the revenue generated by the exports.

Similarly, in Brazil during the 1970s, agricultural exports, particularly soybeans, (almost all of which went to feed Japanese and European livestock), were boosted phenomenally. At the same time, however, the hunger Brazilians spread from a third of the population in the 19605 to two thirds by the early 19805. Even in the 1990s, as Brazil became the world's third largest agricultural exporter - the area planted to soybeans having grown 37 per cent from 1980 to 1995, displacing forests and small farmers in the process - per capita production of rice, a basic staple of the Brazilian diet, fell by 18 per cent.

IThe Mexican government, meanwhile, has put over two million  corn farmers out of business over the past few years by allowing in imports of heavily subsidised corn from the United States. A flood of cheap imported grain has also driven local farmers out of business in Costa Rica. The number growing corn, beans, and rice, the staples of the local diet, fell from 7o,ooo to 27,000. That is the loss of 42,300 livelihoods. The same has taken place in Haiti, which the IMF forced open to imports of highly subsidised US rice at the same time as it banned Haiti from subsidising its own farmers. Rice imports grew from virtually zero to 200,000 tonnes a year, at the expense of domestically produced staples. As a  result, Haitian farmers have been forced off their land to seek work in sweatshops, and people are worse off than ever: according to the IMF's own figures, 50 per cent of Haitian children younger than five suffer from malnutrition and per capita income has dropped from around $600 in 1980 to $369 today.

Kenya, which had been self-sufficient until the 19805, now imports 80 per cent of its food, while 50 per cent of its exports are accounted
for by agriculture. In 1992, EU wheat was sold in Kenya at a price which was 39 per cent cheaper than that at which it was purchased by the EU from European farmers. In 1993, it was so per cent cheaper. Consequently, imports of EU grain rose and, in 1995, Kenyan wheat prices collapsed through oversupply, undermining local production and creating poverty.

Far from ending hunger and promoting the economic interests of small farmers, agricultural liberalisation has created a global food system that is structured to suit the powerful vested interests, to the detriment of poor farmers around the world.

A. Mitllet," Land loss, poverty and hunger", The Ecologist Report, Globalising Poverty, Sept., 2000, p. 44.

Because of structural adjustment, food security has declined dramatically in many developing countries. The shift from domestic to export-oriented agricultural production has undermined people's ability to provide for their families by reducing the amount of food cultivated for household consumption. The increased dependence on food imports that it creates places countries in an extremely vulnerable position, because they lack the foreign exchange to import enough food, given falls in export prices and the need to repay debt. It should come as no surprise therefore that 80  per cent of all malnourished children in the developing world live in countries where farmers have been forced to shift from food production for local consumption to the production of crops for export to the industrialised world. Furthermore, as Davison Budhoo, a former IMF economist, notes, export orientation "has led to the devastation of traditional agriculture and the emergence of hordes of landless farmers in nearly every country in which the Fund operates".

The IMF's focus on export-led growth has also led countries to extract natural resources at unsustainable rates. .. From the onslaught  of the debt crisis of the early 1980s, the IMF-World Bank have  'set the stage' for the demise of the peasant economy across the  region with devastating results. Now, in Ethiopia, 15 years after the last famine left nearly one million dead, hunger is once again stalking the land.

M. Chussodowsky, "The real cause of famine in Ethiopia", The Ecologist Report, Globalising Poverty, Sept., 2000.

The Dole Fruit company of USA now owns the majority of high-quality land in the southern islands of the Philippines.  As  its land  holdings keep expanding, the poor are crowded into the remaining, poorer-quality land.  The best fruit is exported.  The lucrative profits, taxed at absurdly low rates, leave the country to fill coffers in the US.  As multinational agribusiness increases its profits by replacing farm workers with fossil fuel-guzzling machines, more and more people become jobless.  As competition for jobs rises wages fall.  Destitute peasants migrate to the slums and crowded alleys of the cities where, in turn job competition drives wages down and rent up.  80

                     D. Korten, The Post Corporate World, p. 6.

India can buy only a quarter of the food it could otherwise have grown with the export earnings from floriculture.

Vandana Shiva, "The real reasons for hunger", Observer (London), Sunday June 23, 2002

______________________________________________________________________________________________________

Schneider refers to a case where tied aid for purchase of railway equipment meant that the cost was three times as much as it would have been had the aid recipients been free to purchase from other sources. (P.  27.)

               B. Schneider, The Scandal and the Shame, New Delhi, Vikas,  1995.

Much of Australia’s government aid goes into EFIC, which "…aims to help (Australian) companies compete overseas for contracts and trade…by providing low-cost finance, credit insurance and poloitical risk insurance directly to exporters, and by providing loans to overseas buyers of Australian dxports, including weapons."  In 1997-8 the exports covered by this scheme were valued at $7.5 billion

Under the scheme the Indonesian government was lent $8 million to buy weapons systems from Australia, $US242 million for the Ok Tedi mine in PNG., guaranteed commercial bank finance for the Bougainville copper mine, which precipitated a ten  year war on Bougainville.

The scheme is in effect a system of corporate welfare…"11

The same thing is happening globally on a much bigger scale.  Such loans totalled $US105 billion  in 1996,  which is twice the volume of lending from the World Bank.

"Globally, export credit and investment insurance agencies are paying an increasingly important role in financing and insuring infrastructure and resource extraction projects internationally.

Note how these agencies can influence development.  Even the World Bank refused to fund the Three Gorges dam project in China, but EFIC agencies have provided assistance.

The Australian guarantees all loans by EFIC.  For instance if importers of goods from Australia fail to pay, the government will cover the loss.  It serves Australian companies by providing credit insurance to exporters, political risk insurance to exporters, and commercial loans to buyers of Australian exports.

 Aidwatch and Mineral Policy Institute, Putting the Ethic into EFIC, Sydney, 1999.
 

Since the early 1 980s, the 'macro economic stabilisation' and 'structural adjustment' programmes imposed by the IMF and the World Bank on developing countries have led to the impoverishment of hundreds of millions of people.  The commercial criterion of Australian aid was emphasised in 1993 by Gordon Bilney, then Minister of Development Cooperation and Pacific Island Affairs, who said I make no ' apology for the fact that nearly 90 per cent of Australia's aid is spent on goods and services which are sourced in Australia'.  At the end of the 1990s, Australian corporations and institutions continue to benefit at the expense of people in low income countries. The bulk of Australian education aid to PNG in 1996-97, for example, was spent in Australian universities and private  secondary schools and not in PNG where the literacy rate for men is around 65% and for women only 38%.

In general terms, the primary purpose of Australia's aid budget is not to alleviate poverty, but to promote Australian commercial interests. This is done directly through various forms of tied aid, and indirectly through the promotion of good governance, to open up markets for Australian exporters.

             Simon Feeny,  AIDING GLOBALISATION, Aidwatch 19, March, 2000.

There is increasing use of World Bank resources to support corporate projects, i.e., to underwrite the developments of private corporations in the Third  World (as distinct from to lend to Third World governments)  Corporations want development of dams, hotels…people don’t.)

                        Extracts from B. Rich, "Still waiting  ';   Globalising Poverty, The Ecologist Report, 2000, p. 8-

" The growing focus on the private sector is little more than corporate welfare with little direct connection to improving the lot of the poor.

The Bank's private sector financial services do principally help larger corporations, many of them with headquarters in rich donor countries, including some of the /largest multinationals on earth. In 1996, 1997 and 1998~-MIGA  (…the Multilateral Uinvestment Guarantee Agency of the World Bank) and the IFC approved loans and insurance for Coca-Cola bottling plants in Kyrgyzstan and Azerbaijan, respectively. Since 1997
the Bank has been preparing a huge IBRD/IFC project to assist Exxon-Mobil, Chevron and Petronas in oil field development and pipeline construction in Chad and Cameroon.  MIGA guarantees have helped to support huge gold mining operations in Indonesian Irian Jaya and Papua New Guinea run by giant multinational mining operations with execrable
environmental records: Freeport McMoran and Rio Tinto Zinc. In Mexico, a Wall Street Journal article in September 1997 noted, "over the past 18 months the recipients of IFC money have been a who's who of the country's publicly listed blue  chips.   Another area of dubious developmental benefits for the poor that has attracted IFC (and MIGA) investment is four and five star luxury hotels of well-known international chains such as Inter-Continental, Westin and Marriott. ' MIGA's 1998 Annual Report includes guarantees of about $29 million each for a Dutch beer company to build breweries in Moscow and near Bucharest, and guarantees totalling $34.3 million to construct a Marriott hotel in Miraflores, Lima, one of the richest, most expensive residential districts in all of Latin America. In 1998 MIGA issued four guarantees totalling $75 million to expand Citibank operations in Turkey and the Dominican Republic; four guarantees totalling $64 million to expand operations of the two biggest banks in the Netherlands the ING and ABN Amro groups, in Turkey and Ecuador; and a $90 million guarantee to expand the branch bank of the Banque Nationale de Paris in St Petersburg. Banco Santander, one of the; biggest banks in Spain, was the beneficiary of three guarantees totalling $64.1 million to expand its operations in Uruguay and Peru, and Lloyds Bank of London also received a guarantee of $13.9 million to expand lending in its Argentinian branch office. These operations accounted for nearly half (48 per cent) of MIGA's 1998 commitments.

How indeed were projects like these helping the poor or  protecting the environment?

There a widely noted disconnect between claiming to use public funds and guarantees to help the poor and the rapid growth of the IFC and MIGA with a preponderance of clients among large multinational corporations and international money centre banks. Their activities, moreover, provide little direct economic benefit - and too often a negative environmental and social impact - on poor populations in developing countries

45 per cent of World Bank lending goes directly to international companies through so-called international competitive Bidding, most
of whom are based in G7 countries. The us and Germany each get six per cent of contracts and the UK three. US Treasury Department
officials even calculate that for every $1 the United States contributes to international development banks, us exporters win more than $2 in  bank-financed contracts.

B. Rich, "Still waiting; Globalising poverty", The Ecologist Report, Sept., 2000, pp 10, 11, 16.
___________________________________________________________________________________________________

"…another UNESCO report estimated that in Africa about half-a-million children die every year simply from debt service."

                            N. Chomsky, Keeping the Rabble in Line, 1994, p.
 

If real solutions are to be implemented it will be necessary to lift the veil of secrecy that is hiding the truth concerning Third World debt: the debt is really a mechanism for transferring wealth from the South to the North. The latest figures from the World Bank show that in 1998 the 41 HIPC , transferred $1,680 million more to the North than they received (cf  WorldBank: .'Global Development Finance, Net flows and transfers on debt'' table,   April 2000). That's massive. The reality is that the HIPC are making the  richest countries even richer.

If we widen the debate to cover all the developing countries then the scandal takes on outrageous proportions. In 1999 these countries transferred a net sum of $114.6 million to the creditor nations in the North (op. cit. p. 188)! That’s at least equivalent to the Marshall Plan but transferred in a single year.

Another indicator: in total the developing countries reimbursed (in capital and interest) $350 billion in 1999 (op. cit. Tables p.24), i.e. seven times more than the total for Public Development Aid which amounted to $50 billion that year!

…each year sub-Saharan Africa reimburses almost $15 billion, i.e. four times more than it spends on health and education.

                     Economnic Reform Australia, Email .Newsletter, 8. 9. 2000
 

The United Nations Children's Emergency Fund estimates that 500,000 children die in the Third World each year because of the debt crisis and the cruel and counter-productive policies imposed by the lMF. Its bankers and economists have much blood on their hands.

                                 Hotson on Hixon, Sustainable Economics, 7.6, Nov., 1999, p., 125.

The annual repayment of debt total by the Third World is $245 billion per year.  In 1997 total aid from the rich countries came to $47.5 billion.  The United Nations Human Development Report, 1997 (p. 93.) estimates that the payment of this debt sum each year cause 7 million deaths p.a. in Africa alone.  21.21

                            J. Madeley, Big Business, Poor People, Zed Books, 1999.

Dagupta describes the effort banks made to push loans of petro dollars to the Third World.   "...the international banks were now flush with funds and were willing to lend to anybody Between 1970 and 1980 the amount borrowed mutiplied by nine."   The banks were cmpeting against ach other to lend, so "...they threw the usual conservative b anking norms to the wind".  Many Third World countries borrowed more than was wise.

B. Dasgupta, (1998), Structural Adjustment, Global Trade and the   New Politcal Economy of Development, London, Zed Books, p. 80.

African governments alone now have $350 billion of foreign debt and they have to spend two-fifths of their revenues to service it. As a result, governments have been forced to divert scarce resources away from spending on health, education, environmental protection and other vital social services and instead dedicate them to pay what are essentially unpayable debts. Because of this process, Jubilee 2000 says 13 children die every minute in the 40 poorest nations.  We thus now have a situation in which many poor countries pay more money to the World Bank and IMF each year than they receive in loans: the IMF extracted a net US $1 billion from Africa in 1997 and 1998 - more than they loaned to the entire continent.

The Bank and the Fund have been responsible for tremendous economic and social damage wrought on Third World economies for over two decades.

C. Welch, "A world in chains",  The Ecologist Report, Globalising Poverty, Sept., 2000,

"The weapon of debt obligations have been weilded skillfully to keep them tied to the global economic system."  147.

                             P. Self, Rolling Back the Market, New York, St. Martins, 2000.

Third World debt repayment, 2000, was $343 billion.

                                 F. Clairmont, USA; The making of the crash, THIRD WORLD RESURGENCE, 125-126, 2001, P. 45.

______________________________________________________________________________________________________

In general Free Trade Zones have not worked even in terms of conventional development goals.  They do not result in much increase in pay, jobs, transfer of technology.  UNCTAD finds that they do not contribute to modernisation.

G. Teeple, Globalization and the Decline of Social Reform, New Jersey, Humanities, 1995., p. 84.
 

According to Naomi Klein in No Logo, which became the bible for the demonstrators against the WTO at Seattle, there are now almost 1000 export processing zones, spread through 70 Third World countries, employing 27 million workers in which the "management is military style, the supervisors often abusive, the wages below subsistence and the work low-skill and tedious".

LET THEM DRINK PEPSI The Globe and Mail, August 5, 2000
You can see our site at www internationalscope com

                            G. Teeple, Globalisation and the Decline of Social Reform, Toronto, Humanities Press, 1995.
__________________________________________________________________________________________________

The success of the NICS has been shown by many studies "...was based on massive state intervention...and heavy protectionism..."

J. Rapley, Understanding Development Theory and Practice in the Third  World, London, Riener, 1996. p 115.

___________________________________________________________________________________________________

 We are not talking about letting workers move in search of higher wages, but only of companies moving in search of higher profits.

                         T. Bern, "Free us from trade", Ecologist, 30.6. S ept. 2000.

There have been the great pressures of the rich countries to get the poorer countries to liberalise their economies, but the North practises protectionism when they insist on patenting their technologies, when they practise bio-piracy, when they do not open their doors to labour coming from the South.

                           Third World Resurgence, 118/119, 2000, p. 44M.

Annan pointed out that in the last great round of liberalisation - the Uruguay Round - the developing countries cut their tariffs, as they were told to do so. 'Even so, they found that rich countries had cut their tariffs less than poor ones. Not surprisingly, many of them feel they were taken for a ride.'  As a result, their average tariffs on the manufactured products they import from developing countries are now four times higher than the ones they impose on products that come mainly from  other industrialised countries.

Ever more elaborate ways have been found to exclude Third World Imports, the UN Secretary-General said, 'and these protectionist measures bite deepest in areas where developing countries are most competitive… In reality, stated Annan, 'it is the industrialised countries who are dumping their surplus food on world markets - a surplus generated by subsidies worth $250 billion every year and thereby threatening the livelihood of millions of poor farmers in the developing world, who cannot compete with subsidised imports.'

S. Singh, "UN great expectations from big business on human rights", Third World Resurgence, 114/115, 2000, p. 14.

…the level of overall subsidisation of agriculture in the OECD countries rose from $182 billion in 1995 when the WTO was created, to $280 billion in 1997 to $362 billion in 1998! …

 "…while liberalisation is propagated for the Third World to accept, monopolistic devices and protectionist  barriers will continue to be indulged in by the dominant countries."

R.Kothari,   Poverty: Human Consciousness and the Amnesia of Development,  1995.

It is clear that the WTO systematically protects the trade and economic advantage of the rich countries, particularly the US.  Economic globalisation, as promoted by the World Organisation, is a planned project of exclusion that siphons the resources and knowledge of the poor South into the global marketplace and strips people of their support systems, livelihoods, and lifestyles. Global trad as enshrined in the WTO's Agreement on Agriculture and in the Trade Related Intellectual Property Rights ( agreement, are primarily rules of robbery, camouflaged by arithmetic and legalese. In this economic hijack corporations gain, and people and nature lose.

V. Shira, "The threat to Third World farmers", Third World Resurgence, 2000, p. 39.

In trade, here are "...massive subsidies and protection  given by the rich countries to their own production and exports." (387)

In the years when the west has been demanding increased freedom of trade, rich world protection has increased since 1980. (130).

B. Dasgupta, (1998), Structural Adjustment, Global Trade and the   New Politcal Economy of Development, London, Zed Books, p. 130.
 

"The US  government champions free-market economics all over the world, but at the same time it intervenes whenever it becomes necessary to ensure the survival of its economic system."

S. Champion, "The global casino meets the millennium bug", ERA  Newsletter, 1999, p. 12.

"...despite our preaching of the free trade mantra, we violate these principles when it suits our needs; we have the power to get away with bending the rules.  For example the US insisted that Mexico remove subsidies which protect their small farmers from cheap imports of US maize.  The result was  unemployment for 2 million peasant farmers who could not compete.  At the same time American farmers receive subsidies averaging $29,000 a year and the EU defends its right to subsidise its farmers..."

D. Richads and S. Jones, "The road to Marakech; the story of the global  supermarket", Clean Slate, 14, Autumn, 1999, p.  12-13.
 

Protection of industries, especially agriculture, by rich countries has increased since 1980.   (p. 139.)

In the years when the west has been demanding increased freedom of trade, rich world protection has increased since 1980.

B. Dasgupta, (1998), Structural Adjustment, Global Trade and the   New Politcal Economy of Development, London, Zed Books, p. 130.
 

Mahathier,  Prime  Minister of Malaysia, said at the 2000 South Summit, if globalisation implies economic integration of all countries, why should it mean only  the free flow of capital but not workers?  Their workers should be allowed to migrate to rich countries to compete for jobs there, just as the powerful corporations of the rich are allowed to compete with their tiny counterparts in poorer countries.

"If it is right for big corporations of the rich to displace small weak corporations of the poor, why is it so wrong for poor workers to displace rich workers in the rich countries?"

M. Khor, "Let the south in on globalisation", Third World Resurgence,  117, 2000.

Hertel of Purdue University and Will Martin of the World Bank have shown that rich countries' average tariffs on manufacturing imports from poor countries are four times higher than those on imports from other rich countries. Rather than receiving favoured treatment, the developing countries are treated far more harshly…

W. K. Tabb, Understanding the Politics of Globalisation, Monthly Review, March, 2000, pp. 10, 1-19, 31.
 

Geneva: Major developing economies of Asia and Latin America are the targe of coordinated effort by the United States and the European Union to 'pry open' their markets in banking, insurance and securities services.

Both the US and EC now want the developing countries to fully liberalise their financial services markets, at the most phasing in their liberalisation over a one-to-three year period. 'Five years is too long,' declared Beseler at his press briefing.

This is in contrast to the US and EC getting 10 years from 1995 to phase out their discriminatory quotas on textiles and clothing imports from developing countries, and setting no target even now for full liberalisation of their agricultural sectors.   (…in which subsidies are huge.)

C. Raghavan, "US-ED move to open up developing country markets", Third World Network Features, 1629, 1997.

An example of rich countries pushing through what they want while ignoring changes the Third World wants.

A major consequence of the globalisation process has been the penetration of US food sales into previously closed and protected markets overseas. These barriers have been removed in order to comply with the call for free trade. However the US food exporters can take these sales only because US food production is heavily subsidised; i.e., produced under protected conditions that are contrary to the free trade system.

The US, and the World Bank etc. tell poor countries that they must remove protection to improve their economies. They then move in and secure sales to these markets, putting local suppliers out of business...but they themselves do this via heavily protected and subsidised commodities.

The subsidies are huge:

"...for every $1 worth of wheat imports purchased by the Philippines. the US ,government provided subsidies equivalent to slightly under $1.40."  …The average farmer in the US, the main source of cereals imports for the Philippines, receives over $16,000 in subsidies each year… The US government provides around $5 billion annually in subsidies to its maize producers, enabling them to export at prices which are far lower than those most staple food producers in countries such as the Philippines can compete with."

                T. Mitchell, "The uses of an image",  The Ecologist, 26, 1996, pp. 19-26.

SAPs are supposed to be applied when countries have fallen into debt and are tempted to solve the problem by trade actions which harms other countries, e.g. devaluing their currencies. The imposition of these packages on Third World countries has been merciless and devastating, resulting in massive social and economic destruction and many deaths.

The world’s most indebted country now is the US. But there , no question that it would ever accept the action that World Bank insists that poor countries take. The second example is the recent widely publicised decline of the dollar in terms of the yen and the mark. Japan and Germany have openly stated that the US should deal with its 'dollar' problem ?which they see as caused by  the huge US dollar and trade deficits ? by the traditional IMF methods imposed on Third World countries; namely, the US should reduce these deficits by raising taxes and cutting social expenditures, even if this  throws the country into recession.  The continuing currency devaluation taking place in the US dollar is not acceptable to these rivals both because it hurts their competitive position vis-a vis the US in trade, and because as holders of large amounts of US debt obligations, they are hurt by the decline in value of these debts.

According to standard IMF prescription, such currency devaluations are unacceptable, and the country should take internal steps to solve these problems. But the US, as the world's leading economic power, is unwilling to impose upon itself the same restriction that it has imposed on Third World countries through the I IMF. So the IMF finds itself hoist on its own petard, and all the world can ' see that its ideology of free markets and financial discipline are fine for the weak, but not for the powerful.

         M. Tanzer, "Globalising the economy", Third World Resurgence, 74, 1996, p. 24.
 

Hypocrisy:   The West took violent action against genocide in Kosova…but at the same time continued sanctions against Iraq which are causing large numbers of deaths of civilians.

Britain has been the main arms supplir to Indonesia, when it is generally known that Indonesia uses these weapons to suppress its people, and the East Timorese.

Britain and the US sell arms to Turkey, where they are used to kill Kurds.   "…the Turkish government…has ethnically clensed Kurds on a large scale for many years."

"The greatest single case of ethnic cleansing in Yhougoslavia in the 1990s occurred at Kajina in Croatia in 1995, wchere several hundred thousand Serbs were put to flight and many killed.  This action was done with US and NATO aid and was not objected to in any way by NATO.  In short US and NATO policy toward Kosovo has been riddled with contradictions and hypocrisies…"

                    PROUT Newsletter, www.prout.org, 17th June, 1999

The tariffs on products poor countries export are high in the US; e.g., orange juice, 31%, fruit juice 10%, tea products 91%, peanut butter 132%, raw cotton 70%, footwear 10-58% glassware 38%…

Peoples’ Global Action Network  protests against WTO, Third World  Resurgence, 95. p. 31.

In the US direct subsidies by the government to farmers constitute 20% of their total income.  The situation is now "…nothing short of scandalous."  Instead of decreasing as the WTO is supposed to ensure, "…overall subsidisation has increased tremendously, from around $182 billion in 1995 to $362 billion in 1998!"

M. Khor, "Should the WTO be abolished?", Ecologist,, 30, 9, Dec.Jan 200-2001, p.  9.

(The rich countries) … do not have to undertake structural adjustments themselves and can escape the decisions of UN organisations by different tricks.

The United States has simply refused to accept a number of adverse decisions by the International Court of justice, e.g. that it should pay $3 billion in compensation to Nicaragua because of the undeclared war it waged on that country. When UNESCO wanted to adopt a New International Information Order the US stopped paying its dues until a new director-general was installed and the plan was dropped.

                            U. Duchrow, Alternatives to Global Capitalism, 1995, p. 290.

Hypocrisy: In addition to selective perception, there is more than a little self-serving hypocrisy in the policy recommendations that the Northern industrial countries are pressing on Southern governments …

LICs must reduce wasteful, market distorting subsidies.  (But the 1980 datsa sh ow that industrialised countries spend about 18 percent of their gross domestic product (GDP) on subsidies while Lerss Industrialised countries spend 6 percent.

LICs must reduce public expenditures, including those on bloated public bureaucracies. Central government expenditures represent
29 percent of GDP in ICs and 22 percent in LICs (1987 data).

LICs must direct a higher proportion of their budgets to capital spending in contrast to recurrent expenditure. UCs devote 16
percent of their budgets to capital spending in contrast to 6 percent for ICs. Unfortunately, much of LIC capital spending is swallowed up by loan principal repayments.

LICs must accept cuts in social services in order to encourage greater investment and saving. LIC governments spend 8 percent
of their budget on the social sectors, compared with 56 percent for the ICs  LICs have a higher proportion of GDP directed to investments and savings than do ICs.

                        D. Korten, Getting to the Twenty-First Century, Kumarian Press, 1990, p. 56-7.

 

  In the US direct subsidies by the government to farmers constitute 20% of their total income.  The situation is now "…nothing short of scandalous."  Instead of decreasing as the WTO is supposed to ensure, "…overall subsidisation has increased tremendously, from around $182 billion in 1995 to $362 billion in 1998!"
 

M, Khor,"Should the WTO be abolished?",  Ecologist,, 30, 9,     Dec.Jan 200-2001, p.  9.

On the 6th of Oct 2001 the US Senate passed a $150 billion increase in subsidies to farmers, an 80% increase.

ABC News, late 2001.
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