THIRD WORLD DOCUMENTS;
28.7.10
Contents:
1. THE SITUATION AND CONDITIONS
2. CRITICISMS OF HOW CONVENTIONAL
DEVELOPMENT WORKS
3. TRICKLE DOWN
4. THE INJUSTICE OF THE GLOBAL ECONOMIC SYSTEM.
5. STRUCTURAL ADJUSTMENT PACKAGES
6. STRUCTURAL ADJUSTMENT PACKAGES DO NOT
WORK EVEN IN CONVENTIONAL TERMS
7. DEVELOPMENT AS PLUNDER
8. EXPORT CROPPING
9. AID
10. DEBT
11. EXPORT PROCESSING ZONES.
12. THE HYPOCRISY OF THE RICH COUNTRIES
___________________________________
1.
THE SITUATION AND CONDITIONS.
In General the Third World has
experienced large increases in GDP per capita and improvements in social
conditions in recent decades.
However a major criticism of the conventional free-market driven
approach to development is that it heaps benefits mostly on the rich. The evidence in this section indicates
that the living conditions of the poorest half of the world’s people have not
benefited much, and that those of the poorest one billion have probably been
reduced as neoliberal policies enable richer people to take their resources,
markets and livelihoods.
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.
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.
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.”
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.
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.
. . . . 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. . . ."
D. Keane, “Preparing for the global economic crisis”, ERA
Email Network, 23.2.2000.
"The world economic
order works for 20% of the population but it leaves out, demeans and degrades
the remaining 80 percent."
Fidel
Castro, Address to the South Summit, Monthly Reviw, July-August, 2000, p. 159.
"...everywhere the
situation is worsening dramatically..."(236)
G.
Rist, The History of Development, London, Zed, 1999.
"...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 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.
“…absolute
poverty in places like sub-Saharan Africa is rising very fast – up 41% over the
last two decades…” p. 82.
D. Boyle and A. Simms, The New Economics,
Earthscan, 2009.
"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)
G.
Rist, The History of Development, London, Zed, 1999.
"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, 1999.
“…the
average Indian family of five in 2005 was consuming a staggering 110 kg ,less
grain per year compared with 1991…”
There was also “ … a steep
decline in protein intake or our-fifths
of the rural population over the period 1993-4 to 2004-5…”
D. B.
Bryceson, “Sub Saharan Africa’s vanishing peasantries and the spectre of
a global food crisis’, Monthly, Review, July-August, 2009, p. 69.
Re
the ridiculous definitions of poverty used;…one which makes the incidence
seem much smaller than it is..
“…absurdly low current official poverty
lines, for rural India 365 rupees a month for a 2005.” This is the equivalent
of 12 cents a day US, “…which would not have even bought I kg of open market rice.”
“Similarly
in China the official rural “poverty line” for 2007 is 1067 yuan per year, or
2.92 yuan per day, while the cost of the cheapest rice variety is 4 yuan/KG.”
U. Patnaik, “Origins of the food crisis in India and
developing countries, Monthly
Review, July-August, 2009, p. 70.
‘Mass peasant suicides owing to debt
were unknown in India before 1991.
Falling
prices and World Bank neo-liberal policies which removed protection for small
farmers, have resulted in 160,000 suicides in the past decade.
“…per
capita hunger is rising and the number of desperately hungry people on the
planet has grown steadily from 700 million in 1986 to 800 million in 1998. Today the number stands over 1 billion….the
Southern food deficit has ballooned to $11 billion a year. ( …due to neo-liberal shift to food exporting and
importing.)
E. Holt-Giminez, (2009), From food crisis to food
sovereignty, Monthly Review, July-Aug, p. 144.
From
981 to 2001 the numbers under $1/day income fell from 1481 million to 1092
million., i.e., from 40.4% to 20/1%.
But
most of this happened in India and China.
Outside these two countries the number extremely poor rose from 840 to
890- million.
The
number of poor people didn’t change in Latin America, Eastern Europe and
Central Asia.
W.
Sachs and T. Santarius, 2005, Fair Future, Zed. p. 16.
“The
increasing levels of global poverty resulting from macro-economic reform are
casually denied by G7 governments and international institutions including the
IMF and World Bank.”
The
World Bank takes $1 a day income as the poverty level, and declares all who are
above that as non poor. ”The one
dollar a day procedure is absurd.”
Everybody
quotes WB conclusions on poverty levels and reduction, without questioning its
definitions etc.
He
argues that observation of the situation in poor countries flatly contradicts
these estimates of poverty based on the WB and UNDP approach, which for
instance puts poverty in Mexico at 11%.
A
measure of poverty level in the US, based on the cost of a minimum adequate
diet multiplied by three, came to $16, 036 p.a., or $11 a day.
Very
important; it is not the case that the cost of living in a Third World country
can always be regarded as much lower than in the rich countries. ‘…retail prices of essential consumer
goods are not appreciably lower than in the US or Western Europe. The cost of living in many Third World
cities is higher than in the United States.” P. 3.
“Household
budget surveys for several Latin American countries suggest that at least sixty
percent of the population of the region does not meet minimum calorie and
protein requirements.” A study of
Peru (1990) found 83% of people in this situation, and for sub-Saharan Africa and South Asia
the situation is worse.
“The
poverty indicators blatantly misrepresent … the seriousness of global poverty.”
M. Chossudowsky, “Global falsehoods; How the World
Bank and the UNDP distort the figures on global poverty’, The Transnational
Foundation for Peace and Future Research, October, 2000. http://transnational.org/featrures/chossu_eworldbank.html
“Even
by the World Bank’s own analysis, China’s poor have been growing poorer as the
country’s economy booms. The real
income of the poorest 10% of China’s 1.3
billion people fell by 2.4
percent in the two years to 2003.
During this time the economy was growing by nearly 10% a year.”
“…studies of China’s health indicators
show a slowdown or even reversal…”
H. McRae, C., Creative destruction; The madness o the
global economy, Part 2, Feb., 2008 (From The Independent.)
“…most
African countries have lower per capita incomes now than they had in 1980 or, in some cases , in 1960.”
M. Meredith, (2005), The Fate of Africa, Public
Affairs, New York.
Outside
India and China poverty has increased in the decade to 2006.
C. Tan, 2010, “NGOs criticise outcome of iMF and
World Bank meeting’, Third World Resurgence, 192/3, p. 11.
More
than 50 poor countries have per capita income lower today than ten years
ago. Those most integrated into the world economy
have done worst.
Wodin and Lucas, p. 55.
India and China poverty has increased in
the decade to 2006.
C. Tan, 2010, “NGOs criticise outcome of iMF and
World Bank meeting’, Third World Resurgence, 192/3, p. 11.
More
than 50 poor countries have per capita income lower today than ten years
ago. Those most integrated into
the world economy have done worst.
Wodin and Lucas, p. 55.
'Forty thousand children die every day from malnutrition and diseases resulting from starvation. We help kill them . . . (through economic development policies which) . . . have this predictable consequence.'
N. Chomsky, Turning The Tide, London, Pluto, 1986, p. 42.
“Many countries are
poorer than 10, 20 and in some cases 30 years ago.”
UN Development Programme, Sakiko Fukuda-Parr, Human Development Report 2002, 2002.
The spreading
of the growth economy in the
countries of the South has been a dismal failure. 111
T.
Fotopoulos, Towards An Inclusive Democracy, Cassell, 1997.
…the evidence
of the past two decades indicates that very little trickle-down has ever taken
place. 113
T.
Fotopoulos, Towards An Inclusive Democracy, Cassell, 1997.
2.
CRITICISMS OF HOW CONVENTIONAL DEVELOPMENT WORKS.
“…in
country after country in the developing world there has been a diversion of land under the neoliberal of free trade,
from food grain production to export crops.”
“…tropical
lands are increasingly required to produce the relatively exotic requirements
of advanced country
populations…The resulting food grain deficits of developing countries, as they
divert more land to export crops and specialised crops for internal consumption
by the wealthy, are supposed to be
met by accessing the global market
for grains.” 71
In
other words rich world corporations benefit two ways, firstly by being able to
use Third World land to produce luxury foods for the rich world, and secondly
by then importing into the Third World the lower grade foods poor countries
need.
U. Patnaik, “Origins of the food crisis in India and
developing countries, Monthly
Review, July-August, 2009, p. 70.
Progress
achieved in the neoliberal era “…has been made to the detriment of people
losing out somewhere in the global economy.”
“…China’s
alleged success is …at the expense of economic problems elsewhere.”
“As
India’s new billionaires snap up palatial homes and luxury yachts, desperate
conditions for the nation’s farmers have led to an epidemic of suicides.” Vandana Shiva says there have been
40,000 since 1997.
These
suicides are the result of the deliberate policy of the World Trade
Organisation and implemented by the government “…designed to destroy ls mall
farmers and transform Indian agriculture into large-scale corporate industrial
farming.”
H.McRae, C., Creative destruction; The madness of the
global economy, Part 2, Feb., 2008 (From The Independent.)
‘In most developing
countries there is little evidence that tourism has helped development.” 138.
J. Madeley, Big Business, Poor People, Zed
Books, 1999.
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.
___________________________________________
3.
TRICKLE DOWN
The
fundamental justification/rationale for conventional development is that
although it greatly benefits the rich in time, wealth will trickle down to the
poor. This does tend to happen but
a) verry little trickles down, b) the process is inexcusably slow, c) trickle
down benefits are least likely to go to the poorest, i.e., to where the need is
greatest, d) the conditions of the
poorest typically deteriorate.
"...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.htm
"...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
Brazil's per capita of basic
foods fell 13% between 1977 and 1984, while output of exportable products rose
15%. (133)
M.
Rowbotham, The Grip of Death, London, Carpenter, 1998.
________________________________________________________________________
4.
THE INJUSTICE OF THE GLOBAL
ECONOMIC SYSTEM.
"The modern world is
built on the suffering and brutalisation of millions." (213)
A.
Escobar, Encountering Development, Princeton, Princeton University Press, 1995.
"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.
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.
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.
________________________________________________________________________
4.
THE “STRUCTURAL
ADJUSTMENT PACKAGES”
In
the last few decades these have been the most powerful devices used by the rich countries to force the
Third World into policies that benefit the rich countries. When a country gets into impossible
level of debt it has to go to the World Bank and IMF for assistance, which is
given …on condition that the country implements free market economic policies.
And cut government spending etc.
The rationale is that this is necessary to reduce the debt and get the economy
going, but a) frequently this is not the outcome, and ) always the outcome is a bonanza for the corporations and
shoppers in rich countries as the country’s productive capacity is geared to
their interests and is not put into meeting local need. The consequences for the welfare of the
poor are often catastrophic.
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[z1] .
It appears that
any stimulus SAPs have been able to impart to the supply side has been confined
to the export sectors of a few countries; however, the deflationary blow
suffered by the remainder of their economies has more than offset this (Mosley
et al. 1991: 229). SAPs seem to have had a negative or, at best, neutral effect
on already low rates of Third World economic growth, while they have aggravated
problems of capital flight and slumping investment (Eshag 1989; Faini et al.
1991; Greenaway and Morrissey 1993; Helleiner 1992; Kreye and Schubert 1988;
Mosely et al. 1991; Pastor 1989; Rodrik 1990; Stein 1992). This situation
augurs particularly poorly for future economic growth in the South. The
prospect of continuing, and perhaps catastrophic, economic decline appears only
too real for many countries. As Taylor (1988: 168) notes: 'The risk of economic
collapse under liberalization seems to be non-trivial, if the recent history
[of countries undergoing SAPs] provides a guide.'
…
At the same time
that SAPs have generally failed to increase growth and investment in the South,
they have also had a profoundly regressive effect on income distribution in
many countries (Bourguignon et al. 1991; Eshag 1989; Minocha 1991; PREALC 1988;
Senses 1991). According to Pastor (1987: 258), 'The single most consistent
effect [of SAPs] . . . is the redistribution of income away from workers.'In a
1985 study of Latin American development, the Inter-American Development Bank
(the regional branch of the World Bank) concludes that there is evidence that a
disproportionate part of losses in real incomes has 'been concentrated in the
lower income strata' (in Pinstrup-Andersen 1988: 39-40).
…Studies of
urban labor markets in Africa (Ghai and Hewitt de Alcantara 1990; Stein and
Nafziger 1991) and in Latin America (PREALC 1988; Riveros 1990), for example,
show a significant deterioration in real wages under the impact of SAPs. Third,
prices for food and other basic goods have risen dramatically as liberalization
measures have cut state subsidies designed to hold down prices for the urban
poor and other popular sectors.
… Fourth, access
by the popular sectors to many basic social services has been reduced following
cutbacks and/or privatization. In many cases, higher user fees accompanying
privatization have significantly :
affected the
ability of poorer groups to utilize
basic services such as health care and education.
…As the brunt of
the social costs of adjustment has fallen on labor and the popular sectors,
SAPs have systematically redistributed income toward the more affluent and
propertied classes (Barkin 1990; Kreye and Schubert 1988; Pastor 1987). This
has had a profoundly regressive effect on the already polarized structures of
many Third World societies. While new opportunities for accumulation and
enrichment have been offered to the privileged few, the popular majority has
suffered and many have slipped into deeper impoverishment. The central thrust
of SAPs on increasing profitability and surplus generation in order to attract
investment necessarily favors certain classes and social groups over others,
especially capital over labor. Indeed, research consistently concludes that
SAPs have increased the capital share of income at the expense of the labor
share (e.g., Bernstein 1990; Black 1991; Ghai and Hewitt de Alcantara 1990;
Pastor 1987; Ruccio 1991). In the ten largest countries of Latin America, for
example, Ghai and Hewitt de Alcantara (1990: table 6) find that during the
1980-85 period per capita consumption by business (owners of capital) increased
by 15.8 percent, while that of labor decreased by 25.7 percent.
SAPs have played
a key role in the neo-liberal strategy to impose new economic conditions on the
South which both create new accumulation opportunities for capital and roll
back gains achieved by labor through previous struggles.
Brokman,
Popular Development, 1996, pp 162-163.
In every case,
the result has been the same: each economy
In 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
"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.
…
… adherence to
the policy package of structural
| adjustment,
which essentially integrates national economies into
| the global
market, enabling multinational corporations to access ,~ ~;
| cheaper labour
markets and natural resources,
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
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:
• selling state
enterprises to the private sector in order to make governments more efficient
• raising
producer prices for agricultural goods so farmers will have the incentive to
grow and market more food
• devaluing
local currencies (in line with their world market value) to make exports more
competitive in foreign markets
• reducing
government budget deficits by cutting consumer subsidies and charging user fees
for social services such as health care and education
• encouraging
free trade by dropping protectienist measures and by reducing regulation of the
private sector
• creating
incentives to attract foreign capital
K.
Danker, Fifty Years is Enough, Boston, South End., 1994.
Stiglitz
was Chief Economist of the World Bank but resigned and exposed its operations and outlook:
From
an article by Greg Palast
in The Observer, London, October 10, 2001
"It (the World Bank)
has condemned people to death," the former apparatchik told me. This was
like a scene out of Le Carre. The brilliant old agent comes in from
the cold, crosses to our
side, and in hours of debriefing, empties his memory of horrors committed in
the name of a political ideology he now realizes has gone rotten.
And here before me was a far
bigger catch than some used Cold War spy.
Joseph Stiglitz was Chief
Economist of the World Bank. To a great extent, the new world economic order
was his theory come to life.
I "debriefed"
Stigltiz over several days, at Cambridge University, in a London hotel and
finally in Washington in April 2001 during the big confab of the World Bank and
the International Monetary Fund. But instead of chairing the meetings of
ministers and central bankers, Stiglitz was kept exiled safely behind the blue
police cordons, the same
as the nuns carrying a large
wooden cross, the Bolivian union leaders, the parents of AIDS victims and the
other 'anti-globalization' protesters. The ultimate insider was now on the
outside.
In 1999 the World Bank fired
Stiglitz. He was not allowed quiet retirement; US Treasury Secretary Larry
Summers, I'm told, demanded a public excommunication for Stiglitz' having
expressed his first mild dissent from globalization World Bank style.
Here in Washington we
completed the last of several hours of exclusive
interviews for The Observer
and BBC TV's Newsnight about the real, often
hidden, workings of the IMF,
World Bank, and the bank's 51% owner, the
US Treasury.
And here, from sources
unnamable (not Stiglitz), we obtained a cache of
documents marked,
"confidential," "restricted," and "not otherwise (to
be) disclosed without World Bank authorization."
Stiglitz helped translate
one from bureaucratise, a "Country Assistance
Strategy." There's an
Assistance Strategy for every poorer nation, designed, says the World Bank,
after careful in-country investigation. But according to insider Stiglitz, the
Bank's staff 'investigation' consists of close inspection of a nation's 5-star
hotels. It concludes with the Bank staff meeting some begging, busted finance
minister who is
handed a 'restructuring
agreement' pre-drafted for his 'voluntary' signature (I have a selection of
these).
Each nation's economy is
individually analyzed, then, says Stiglitz, the
Bank hands every minister
the same exact four-step program.
Step One is Privatization -
which Stiglitz said could more accurately be
called, 'Briberization.'
Rather than object to the sell-offs of state
industries, he said national
leaders - using the World Bank's demands to
silence local critics -
happily flogged their electricity and water
companies. "You could
see their eyes widen" at the prospect of 10%
commissions paid to Swiss
bank accounts for simply shaving a few billion
off the sale price of
national assets.
And the US government knew
it, charges Stiglitz, at least in the case of
the biggest 'briberization'
of all, the 1995 Russian sell-off. "The US
Treasury view was this was
great as we wanted Yeltsin re-elected. We
don't care if it's a corrupt
election. We want the money to go to Yeltzin" via kick-backs for his
campaign.
Stiglitz is no conspiracy
nutter ranting about Black Helicopters. The
man was inside the game, a
member of Bill Clinton's cabinet as Chairman
of the President's council
of economic advisors.
Most ill-making for Stiglitz
is that the US-backed oligarchs stripped
Russia's industrial assets,
with the effect that the corruption scheme
cut national output nearly
in half causing depression and starvation.
After briberization, Step
Two of the IMF/World Bank one-size-fits-all
rescue-your-economy plan is
'Capital Market Liberalization.' In theory,
capital market deregulation
allows investment capital to flow in and
out. Unfortunately, as in
Indonesia and Brazil, the money simply flowed
out and out. Stiglitz calls
this the "Hot Money" cycle. Cash comes in
for speculation in real
estate and currency, then flees at the first
whiff of trouble. A nation's
reserves can drain in days, hours. And when
that happens, to seduce
speculators into returning a nation's own
capital funds, the IMF
demands these nations raise interest rates to
30%, 50% and 80%.
"The result was
predictable," said Stiglitz of the Hot Money tidal waves
in Asia and Latin America.
Higher interest rates demolished property
values, savaged industrial
production and drained national treasuries.
At this point, the IMF drags
the gasping nation to Step Three:
Market-Based Pricing, a
fancy term for raising prices on food, water and
cooking gas. This leads,
predictably, to Step-Three-and-a-Half: what
Stiglitz calls, 'The IMF
riot.'
The IMF riot is painfully
predictable. When a nation is, "down and out,
[the IMF] takes advantage
and squeezes the last pound of blood out of
them. They turn up the heat
until, finally, the whole cauldron blows
up," as when the IMF
eliminated food and fuel subsidies for the poor in
Indonesia in 1998. Indonesia
exploded into riots, but there are other
examples - the Bolivian
riots over water prices last year and this
February, the riots in
Ecuador over the rise in cooking gas prices
imposed by the World Bank.
You'd almost get the impression that the riot
is written into the plan.
And it is. What Stiglitz did
not know is that, while in the States, BBC
and The Observer obtained
several documents from inside the World Bank,
stamped over with those
pesky warnings, "confidential," "restricted,"
"not to be
disclosed." Let's get back to one: the "Interim Country
Assistance Strategy"
for Ecuador, in it the Bank several times states -
with cold
accuracy - that they
expected their plans to spark, "social unrest," to
use their bureaucratic term
for a nation in flames.
That's not surprising. The
secret report notes that the plan to make the
US dollar Ecuador's currency
has pushed 51% of the population below the
poverty line. The World Bank
"Assistance" plan simply calls for facing
down civil strife and suffering
with, "political resolve" - and still
higher prices.
The IMF riots (and by riots
I mean peaceful demonstrations dispersed by
bullets, tanks and teargas)
cause new panicked flights of capital and
government bankruptcies.
This economic arson has it's bright side - for
foreign corporations, who
can then pick off remaining assets, such as
the odd mining concession or
port, at fire sale prices.
Stiglitz notes that the IMF
and World Bank are not heartless adherents
to market economics. At the
same time the IMF stopped Indonesia
'subsidizing' food
purchases, "when the banks need a bail-out,
intervention (in the market)
is welcome." The IMF scrounged up tens of
billions of dollars to save
Indonesia's financiers and, by extension,
the US and European banks
from which they had borrowed.
A pattern emerges. There are
lots of losers in this system but one clear
winner: the Western banks
and US Treasury, making the big bucks off this
crazy new international
capital churn. Stiglitz told me about his
unhappy meeting, early in
his World Bank tenure, with Ethopia's new
president in the nation's
first democratic election. The World Bank and
IMF had ordered
Ethiopia to divert aid money
to its reserve account at the US Treasury,
which pays a pitiful 4%
return, while the nation borrowed US dollars at
12% to feed its population.
The new president begged Stiglitz to let him
use the aid money to rebuild
the nation. But no, the loot went straight
off to the US Treasury's
vault in Washington.
Now we arrive at Step Four
of what the IMF and World Bank call their
"poverty reduction
strategy": Free Trade. This is free trade by the
rules of the World Trade
Organization and World Bank, Stiglitz the
insider likens free trade
WTO-style to the Opium Wars. "That too was
about opening markets,"
he said. As in the 19th century, Europeans and
Americans today are kicking
down the barriers to sales in Asia, Latin
American and Africa, while
barricading our own markets against Third
World agriculture.
In the Opium Wars, the West
used military blockades to force open
markets for their unbalanced
trade. Today, the World Bank can order a
financial blockade just as
effective - and sometimes just as deadly.
Stiglitz is particularly
emotional over the WTO's intellectual property
rights treaty (it goes by
the acronym TRIPS, more on that in the next
chapters). It is here, says
the economist, that the new global order has
"condemned people to
death" by imposing impossible tariffs and tributes
to pay to pharmaceutical
companies for branded medicines. "They don't
care," said the
professor of the corporations and bank loans he worked
with, "if people live
or die."
By the way, don't be
confused by the mix in this discussion of the IMF,
World Bank and WTO. They are
interchangeable masks of a single
governance system. They have
locked themselves together by what are
unpleasantly called,
"triggers." Taking a World Bank loan for a school
'triggers' a requirement to
accept every 'conditionality' - they average
111 per nation- laid down by
both the World Bank and IMF. In fact, said Stiglitz the
IMF requires nations to
accept trade policies more punitive than the
official WTO rules.
Stiglitz greatest concern is
that World Bank plans, devised in secrecy
and driven by an absolutist
ideology, are never open for discourse or
dissent. Despite the West's
push for elections throughout the developing
world, the so-called Poverty
Reduction Programs "undermine democracy."
And they don't work. Black
Africa's productivity under the guiding hand
of IMF structural
"assistance" has gone to hell in a handbag. Did any
nation avoid this fate? Yes,
said Stiglitz, identifying Botswana. Their
trick? "They told the
IMF to go packing."
So then I turned on
Stiglitz. OK, Mr Smart-Guy Professor, how would you
help developing nations?
Stiglitz proposed radical land reform, an
attack at the heart of
"landlordism," on the usurious rents charged by
the propertied oligarchies
worldwide, typically 50% of a tenant's crops.
So I had to ask the
professor: as you were top economist at the World
Bank, why didn't the Bank
follow your advice?
"If you challenge [land
ownership], that would be a change in the power
of the elites. That's not
high on their agenda." Apparently not.
Ultimately, what drove him
to put his job on the line was the failure of
the banks and US Treasury to
change course when confronted with the
crises - failures and
suffering perpetrated by their four-step
monetarist mambo. Every time
their free market solutions failed, the IMF
simply demanded more free
market policies.
"It's a little like the
Middle Ages," the insider told me, "When the
patient died they would say,
'well, he stopped the bloodletting too
soon, he still had a little
blood in him.'"
I took away from my talks
with the professor that the solution to world
poverty and crisis is
simple: remove the bloodsuckers.
---
A version of this was first
published as "The IMF's Four Steps to
Damnation" in The
Observer (London) in April and another version in The
Big Issue - that's the
magazine that the homeless flog on platforms in
the London Underground. Big
Issue offered equal space to the IMF, whose
"deputy chief media
officer" wrote:
"... I find it
impossible to respond given the depth and breadth of
hearsay and misinformation
in [Palast's] report."
Of course it was difficult
for the Deputy Chief to respond. The
information (and documents)
came from the unhappy lot inside his agency
and the World Bank.
THE
World Bank said Africa’s decline was due to too much state involvement in their
economies. “Structural
adjustment programs had the two
pronged agenda of reducing the
role of the state in the economy and cutting back on state provisioned
infrastructures and services.”
‘SAPS
spelled the end of attempts to raise peasant’s staple food yields. Fertilizer and seed subsidy packages
were retracted.”
D. B.
Bryceson, “Sub Saharan Africa’s vanishing peasantries and the spectre of
a global food crisis’, Monthly, Review, July-August, 2009, p. 50.
____________________________________________________________________
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 effectiveness 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)
B,
Dasgupta, Structural Adjustment, Global Trade, and the New political Economy of Development, London,
Zed, 1998.
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.
There 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 worst, becoming significantly poorer after several rounds of structural
adjustment 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 Political 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 multiplied 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.
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 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.
A trade tribunal has begin
to consider a claim that the US must pay a foreign investor almost $1 billion
because California attempted to prevent water contamination from one of it
products. The Canadian corporation
Methanex says the plan to remove the toxic chemical MTBE from California
petroleum violates the North American Free Trade Agreement. The corporation claims it will lose
$970 million in profits if California bans the substance.
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 behind closed doors, with no public participation.
Environment
News Service, Sept 11 ,2000.
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.
"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.
Privatisation means transfer of the ownership of
Third World government enterprises to foreign corporations. 295
70% of SAPs in the 1980s had a privatisation
element. 296
F.
Ackerman, et al, Eds., The Political Economy of Inequality, Island
Press, 2000
For how much
longer should we give those who run the global
economy the
benefit of the doubt? The International Monetary Fund has made the same ''mistake' so many times
that only one explanation appears to remain -- it is engineering disaster.
The crises over
which it has presided in Thailand, South Korea, Russia and Argentina are well
documented, by Joseph Stiglitz, the former chief economist of the World Bank,
among others.
But we have,
until now, lacked a comprehensive description of the way it worked in eastern
Europe. A new book by the economist Pongrac Nagy shows for the first time how
the IMF smashed Hungary.
It has just one
set of policies. Governments must impose restraints upon the supply of money and
credit, open the door to foreign capital, privatise state assets and cut public
spending...
So between 1990 and 1996, the central
bank ensured that the credit made available to businesses halved. The immediate
and predictable result was that interest rates soared (to 50%), and businesses
all over Hungary collapsed. As workers were sacked and wages were cut, consumer
demand crashed. The IMF, Nagy writes, had "artificially plunged the
Hungarian economy into the greatest ever depression in peacetime". Between
1990 and 1993, Hungary's gross domestic product fell by 18%. Far from curing inflation, this
treatment caused it. Between 1993 and 1996, prices rose by 130%. This was not
because demand was rising, but simply because it wasn't filling as fast as supply.
But the IMF,
once more, treated this new problem as if it was caused by runaway demand. It
insisted on further economic restriction,
which, predictably enough, pushed Hungary further into depression.
To ensure that
Hungary serviced its debt, the Fund demanded that it cut every possible public
service, and privatise every possible state asset. Entire economic sectors were
flogged swiftly and cheaply, with the result that foreign corporations acquired
complete market control. To ensure, in the government's words, "the desirable reallocation of income ... towards
the business sector".
Hungary was
then obliged to introduce one of the most regressive tax policies in the world:
43% of government revenue came from taxes on consumption, but just 20% from income
tax and 14% from business taxes.
All this was
carried out, as all IMF programs are, in conditions of total secrecy and
institutional deceit. …30% … lost their Jobs. The incomes of those who stayed in work declined by 24%
pensions fell by 31%. Several other adverse effects listed.
Those nations
which refused to take the (IMF) medicine, even though they were confronting
almost identical conditions Malaysia, Poland) prospered while their neighbours
collapsed.
As a result, as
Stiglitz says, its programmes reflect the interests and ideology of the Western
financial (elites).
Notes from "Stealing Nations: The International Monetary Fund
does not make its "mistakes" by accident." George Monbiot, The Guardian,
19th Aug., 2003.
Argentina
after the Kirchner regime repudiated the IMF’s toxic package of debt
repayment. In 2001 the country
defied its creditors and refused to pay the debt.
It
took only three years to be on the path to recovery, despite a record $100
billion debt…without getting loans.
A
study from the Centre for Economic
and Policy Research, Oct. 2009, of 41 IMF debtor countries, found that IMF
policies were more likely to damage than help those economies.
A
study by Yonca Uzdemir from the Middle East Technical University in Ankara compared
the experience of Argentina and Turkey, which had both gone through crises in
2001, came to a similar situation.
Turkey followed IMF dictates, and remained in crisis.
Argentina
got itself out of crisis in 2001 partly be issuing its own money, as distinct
from accepting credit organized by the IMF.
Ellen
Brown, “Greece, Ireland, Latvia may lead the way”, Global Research, 22nd Dec., 2009.
__________________________________________
7.
DEVELOPMENT AS PLUNDER
See also takeover sections in Globalisation Documents.
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.
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…”
S. Amin, Capitalism in the Age of Globalisation,
Zed Books, 1997.
“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
The National
Agriculture Policy, tabled in Parliament by the Indian Agriculture Minister, Nitish
Kumar, is certainly a dream come true for the American Agriculture Secretary.
For over a decade now, the American government, either through its deft
manipulation of the World Trade Organisation (WTO) or simply through its
arm-twisting diplomacy, had wanted the world's second biggest agriculture
economy to forgo its unwritten but inherently applicable policy of
self-reliance in agriculture It had all along wanted the Indian government to
shift the emphasis from food self-sufficiency to food dependency, from
sustainable agriculture to corporate agriculture, from the famine-avoidance
strategy so assiduously built over the ages to head towards a market-oriented
agriculture thereby exacerbating the process of marginalisation of the farming
community.
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.
___________________________________________
8.
EXPORT CROPPING
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.
___________________________________________
9.
AID
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.
B. Rich, “Still waiting; Globalising poverty”, The Ecologist
Report, Sept., 2000, pp 10, 11, 16.
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.
___________________________________________
10.
DEBT
"…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 muLtiplied by nine." The banks were competing 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
Political 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.
“…net
capital inflows to countries like Malawi are more than outweighed by interest payments on deft and profit
remittances from foreign owned companies.”
D. Boyle and A. Simms, The New Economics,
Earthscan, 2009, p.137.
In
2005 the poorest 149 countries had a debt of $2.6 trillion, and paid $43
billion to the ricd countries in that year as debt service. P.139
D. Boyle and A. Simms, The New Economics,
Earthscan, 2009.
__________________________________________
11. EXPORT PROCESSING ZONES.
There are 850 Export
Processing Zones. 112
J. Madeley, Big Business, Poor People, Zed
Books, 1999.
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
Teeple concludes that Export Processing Zones have not earned much, do
not employ many workers, yield little or no technology transfer, and cost the
host state a lot (e.g., to provide infrastructure.)
G.
Teeple, Globalisation and the Decline of Social Reform, Toronto,
Humanities Press, 1995.
___________________________________________
12.
THE HYPOCRISY OF THE RICH COUNTRIES
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 dump
ing 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.)
B.
Dasgupta, (1998), Structural Adjustment, Global Trade and the New
Politcal Economy of Development, London, Zed Books.
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.
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 supplier 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.
US aid
to Africa, 2002, $1.3 billion.
US aid
to US farmers, $4 billion, i,.e., subsidies.
D. Boyle and A. Simms, The New Economics,
Earthscan, 2009,
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.
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.
Consider the
tragedy of Algeria, ruled by a one-party military dictatorship since 1962, and
where 80,000 people have been -slaughtered since 1991. The massacre of
innocents has become a commonplace, with armed attackers descending on unarmed
villages at night to cut the throats of women and children. The violence has
been characterized by psychotic frenzy, including the dismemberment of tiny
infants. But why? By whom? What is the world doing about it? John Sweeney of
the Observer reports:
The weight of
evidence indicts the state of Algeria. Around 80,000 people have been killed
since the generals cheated the people by scrapping the elections in 1991. The
government … is corrupt, hated and stays in power by a reign of terror.
Can this be
unknown to Western governments and their intelligence services? A Western
analyst observes sardonically:
Western
governments know what goes on in Algeria but have remained silent. You might
think it is because of Algeria's oil billions.4
Perish the
thought. Sweeney is quick to resurrect it:
Let us not
underestimate the power of the state of Algeria. It squats on huge oil and gas
deposits worth billions. It supplies the gas that warms Madrid and Rome. It has
a ,(;1.8 billion contract with British Petroleum. No Western government wants
to make trouble -with the state of Algeria. Its wealth buys silence, buys
complicity. Since the military junta overthrew the country's democracy, 80,000
have been killed: Europe's gas bill.
Britain's
Foreign Secretary Robin Cook, famous for declaring that 'New' Labour would
"put human rights at the heart of our foreign policy" 6 quickly
revealed the truth of what is merely an Orwellian deception. Of the massacres
in Algeria, Cook has recently said:
We have seen no
evidence to support allegations of involvement by the Algerian security
authorities.'
A failure which
presumably means that the European Union will continue to supply the Algerian
generals with 80 million in aid for restructuring and 'democratisation'. `…
We might think
that this systematic barbarism built into the very nature of our political and
economic systems would be headline news, the subject of outrage and vigorous
debate. Instead it is invisible, unknown, unmentioned. Silence, it turns out,
is not only golden—it is blood-red too.
Since September
11 the "war on terrorism" has provided a pretext for the rich
countries, led by the United States, to further their dominance over world affairs…"
"Little is said these days about
the "trickle down" that "creates wealth" for the
poor, because it is transparently
false. Even the World Bank, of
which….had
admitted that the poorest countries are
worse off, under its tutelage, than ten
years ago; that the number of poor had
increased, that people are dying younger.
And these are countries with
"structural adjustment programs " that are meant to
"create wealth"...for the
majority. It was all a lie."
Edwards,
The Compassionate Revolution, p., 14.
________________________________________
13. ALTLERNATIVE/APPROPRIATE DEVELOPMENT
The Zapatistas are a massive
inspiration to people all over the world.
There are now over 1000
communities in resistance in more than 30 Autonomous Municipalities throughout
eastern Chiapas. In the face of great odds, they are Dveloping self-managed
schools, health care, agriculture and community decision-making, independent of
state and government control. There are also some exciting new projects
developing such as the Mother Seeds of Resistance in the Land of Chiapas which
will save unique and diverse seeds as well as recipes, stories, legends, and
songs from the elders of their
communities.
www.chiapaslink.ukgateway.net Feb, 2002.
"People are simply
giving vent to a long-stifled ability to organise themselves, and returning to
an old historical tradition of "collective efficiency and grassroots R and
D."
R.
Biel, The New Imperialism, Zed., 2000. P. 294.
“It is quite possible for
poor countries to develop by relying mainly on their own national resources,
and there is no real alternative to this.”
B.
Onimode, The IMF, the World Bank and African Debt, Zed, 1989. H.. Singer and S. Sharma, Economic
Development and World Debt, 1994, say this too.