Globalisation Documents; PART 3.
Contents:
10. GATS; GENERAL AGREEMENT ON TRADE IN SERVICES.
11. GLOBALISATION AS TAKEOVER
12. HOW DO THEY GET THE NEW RULES ESTABLISHED.
13. INCENTIVES FROM THE STATE TO GET CORPORATIONS TO INVEST.
14. MERGERS AND ACQUISITIONS; ACCELERATING.
15. PRIVATISATION.
16. RURAL DECLINE
17. SOCIAL DAMAGE BEING CAUSED.
18. STATE SPENDING BEING CUT.
19. TAKEOVER OF YOUR RESOURCES.
10. GATS; GENERAL AGREEMENT ON TRADE IN SERVICES.
Note that the aim of GATS, the transfer of service rovision by public institutions
to private corporations, has been achieved in the Third World by Structural
Adjustment Packages. These include the demand that public services be privatised.
M. Barlow, ,A GATS Primer, 20th March, 2001, Era Email Newsletter, "In
secret governments are negotiating the end to all not-for-profit public services.
In less than two years, 130 plus governments expect to quietly sign an
agreement called GATS."E. Elliott and M. Barlow, GATS, Privatising all
Services!, wwwcommunitycauldron.co
Not so long ago things like health, education and water were regarded as rights,
which governments were to extend to all citizens. Now they have been transformed
into commodities private corporations sell to the highest bidder, and if some
cant afford them thats too bad.
"The philosophy of GATS is the auctioning of vital resources and essential
services and transforming them from fundamental rights of citizens to markets
for global corporations."
"The promise is that services would be provided more efficiently and prices
of essential services would reduce. But the experience of water privatisation
in Bolivia, Puerto Rico and Argentina and energy privatisation in California
and Maharashtra state in India shows that this is totally false."
"
water, health and education cannot be guaranteed to all members
of society because theyare no longer rights provided through public services,
but are commodities to be bought in the market place."
"The; US and European Union pressure to commercialise essential services
through GATS so that their corporations can make money out of the survival needs
of the poor is a new wave of the genocide unleashed through WTO."
"Trade liberalisation of agriculture is killing thousands of farmers, the
TRIPS agreement is denying cures to millions suffering from Malaria, TB, HIV/AIDS."
V. Shiva, "An accord to auction vital resources", The Hindu, 3 rd
April, 2001.
Commerce moving into education:
The Youth News Network provides Canadian schools with television etc equipment
in
exchange for the right to broadcast 2.5 minutes of advertisements into all classrooms
each day.
"The meaning of education has changed from being a right that is an inherent
part of a civilized and democratic society to being a product or service to
be purchased by a consumer."
Why Corporate Globalization Destroys Public Education, J. McMurtry. Sustainable
Economics, 49, March, 2001, p. 48.
One undesirable effect of
the increasing commercialisation of education is the reluctance of academics
to jeopardise their institutions capacity to earn money from the corporate
world.
The Australia Institute found "
that more than half the academics
in a nation-wide poll, believe that growing dependence on private sector money
prevents them from criticising the oganisations on which their university depends.
One in three said they could not shard knowledge because of "commercial
in confidence" arrangements.
17% said they had not been allowed to publish contentious results. Academics
tend to focus on safe research topics.
Note that academics now have to solicit more of their research funding from
business, again meaning they will be reluctant to study or say things that are
critical of the corporate
world. Because universities must attract fee paying students they will be increasingly
inclined to offer vocational courses. Problems will only be studied if they
promise profitable conclusions. Problems suffered by poor people will be ignored.
Academia muzzled by commerce, 20 March 2001, ERA EMAIL NETWORK.
McMurtry refers to "...a plan for systematic takeover of public education
and higher research, a bigger prize in net monetary value than past colonial
occupations. The ...domestic public sector has replaced the external colony
as the target for private capital occupation and growth."
J. McMurtry, "At the edge of a new dark age", Committee on Monetary
and Economic Reform,, 12, 1, Jan, 2000.
Extracts from THE LAST FRONTIER: M. Barlow, The Ecologist, 31, 1, Feb., 2001,
pp 38-
A global agreement currently being negotiated will allow corporations to take
over the world's public
services - whether people want it or not. If implemented, it will spell the
end of the public sector. Maude
Barlow explains why it must be stopped.
You probably haven't heard of GATS - few people have
But you should know
what it will mean for you. ..negotiations are still, quietly, going on. Their
purpose is, simply, to prise open the whole world's public services to corporate
takeover; to make the very concept of public services not only unlikely, but
probably illegal.
GATS is paving the way for the privatisation of public services all across the
world. Nothing will be exempt - education, health care, social services, postal
services, museums and libraries, public transport; all will be opened up to
corporate interests. Every and any service currently provided by governments
in the name of the public good will be opened up to private corporations, and
run for profit. GATS could, quite simply, be globalisation's last frontier:
the end of the very concept of not-for-profit public services.
GATS will come into force in over 130 countries, quietly and with little fuss,
in less than two years. If nothing is done.
WHAT IS GATS?
The General Agreement
on Trade in Services is one of more than twenty trade agreements administered
and enforced by the World Trade Organisation.
The mandate of GATS is
the liberalisation of trade in plain English, this means the dismantling of
government barriers to the privatisation of public services. Its aim is to make
it impossible for governments to run public services on a not-for-profit basis,
without the participation of private companies. GATS will allow the WTO to restrict
government actions relating to public services through a set of legally binding
constraints. Any government disobeying the rulings of the WTO will face sanctions.
So what will happen if GATS is implemented?
Between them, the corporations
identified the following priority areas for trade liberalisation: health care;
hospital care; home care; dental care; child care; elder care; education primary
secondary and post-secondary; museums; libraries; law; social assistance; architecture;
energy; water services; environmental protection services; real estate; insurance;
tourism; postal services; transportation; publishing; broadcasting and many
others.
The implications of this are chilling. It means that 137 countries of the WTO
are about to agree to open up public
services, lock stock and barrel, to free trade laws which have allowed the WTO
to strike down health, food safety and environmental
laws in dozens of countries. The corporate wolves being allowed into the last
remaining fold. And once will be too late to ever get them out.
Unlike any other global institution, the WTO has and the lelgislative and judicial
power to challenge the laws, practices and policies of individual countries
and strike them down if they are 'trade restrictive'. The WTO contains no minimum
standards to protect labour, human rights, social or environmental standards;
every single time (but one) that the WTO has been used domestic health, food
safety, fair trade or environment the WTO has won. Over the past six years,
the operation show that it has become the most powerful, secretive, and ant-democratic
body on Earth, rapidly assuming the mantle of government and actively seeking
to broaden its powers and reach.
CARVING UP THE SERVICES
Public services are
next in line for the WTO's corporate battering ram. Global corporations have
been so successful in persuading governments everywhere that their agendas are
the same that the pursuit of corporate profit and the good of society
are one and the same that their access to many areas of public life has
already been improved. Now they want to go the whole hog. Services is the fastest-growing
sector in international trade, and offer rich pickings for canny corporations.
And of all public services, health, education and water are shaping up to be
the most potentially lucrative. Global expenditures on water now exceed $1 trillion
every year; on education, they exceed $2 trillion, and on health care, they
exceed $3.5 trillion.
In many parts of the world, what GATS will accelerate has already begun. The
USA might suggest a model for the dismantling of public services which GATS
will unleash all over the world. In America health care has already become a
huge business, with giant health-care corporations registered on the New York
Stock Exchange.
Many parts of the 'Third World' have been forced to dismantle their public infrastructures
in recent decades under Intern Monetary Fund-imposed structural adjustment programs.
I to be eligible for debt relief, for example, dozens of 'developing' tries
have been forced to abandon public social programs over the last 20 years, allowing
foreign
corporations to come in and sell health and education products' to 'consumers
who can afford them and leaving millions without basic social services. Latin
American countries are currently experiencing an invasion of US health corporations
and Asian countries allow branch plants of foreign university and health care
chains. Recently, the World Bank has been forcing the same countries to privatise
their water services openly working with corporate water giants like Vivendi
a Lyonnaise des Eaux, to establish their 'rights' to profiteer in the World.
Now, through the GATS negotiations, these corporations want binding, global
and irreversible rules guaranteeing them access to government service contracts
everywhere in the world. And they are succeeding. Already, over 40 countries,
including all of Europe, have listed education within the realm of the GATS,
opening up their public education sectors to foreign based corporate competition.
Almost 100 countries have done the same with health care. As the new talks progress,
it will be very hard for any country to swim against the tide - even if any
are brave enough to try.
WHATS IN THE GATS?
The existing GATS agreement - which is by no means finalised, and could get
even worse - covers all service sectors and most government
measures, including laws, practices, regulations and guidelines, written and
unwritten. No government measure that affects trade in services, whatever its
aim, even for environmental or consumer protection, universal coverage or to
enforce labour standards, is beyond the reach of GATS. Nothing public is safe.
WHATS PROPOSED FOR THE GATS?
On top of this, the powerful Western countries will be pr essing for more
binding Market Access provisions, pressing 'developing countries
for guaranteed, irreversible access to their markets, and diminishing democratic
government authority. Secondly, GATS officials are seeking to place severe restraints
on domestic regulations, thereby limiting governments' ability to enact environmental,
health and other standards that hinder free trade. Article Vl:4 calls for the
development of any necessary disciplines to ensure that 'measures
relating to qualifications requirements and procedures, technical standards
and licensing requirements do not constitute unnecessary barriers to trade'.
Translation: don't let your pesky national standards get in the way of foreign
corporate interests.
Together, these proposals will hugely expand the authority of the WTO day-to-day
business of governments. They will make the exercise of democratic control over
the future of basic public services ! al impossibility.
HOW GATS WILL AFFECT YOU.
Every single aspect of public life will be affected by GATS. Already as a result
of economic globalisation, every country in the world is undergoing a fundamental
transformation. Wealth is gushing to the top as a growing economic chasm separates
those who are benefiting from the system from an ever-expanding underclass.
To ensure what American education writer Jonathan Kozol calls 'survival of the
children of the fittest,' a tiered system of education and social security becoming
the norm all over the world as we collectively abandon earlier dream of universal
rights. We are creating top schools and health care systems for the elite of
the world and a tiered system no system at all for those who don't count.
The GATS serves this corporate, profit-driven vision of society. Its important
to understand, in no-nonsense terms,
what is at stake. Under the proposed GATS regime, foreign health and education
corporations will have the right to establish themselves in any WTO country.
They will have the right to compete for public money with public institutions
like hospitals and schools. Standards for health and education professionals
will be subject to WTO rules to ensure they are not an 'impediment to trade'.
Degree-granting authority will be given to foreign-based education corporations.
countries wontybe able to stop the trans-border competition of
low-cost health and education professionals.
Already, the WTO Services Division has hired a private company called the Global
Alliance for Transnational Education to document worldwide policies that 'discriminate
against foreign education providers'. The results of this 'study' will be used
to pressure those countries that still retain a public education sector to relinquish
it to the global market.
Disturbingly, GATS also includes authority over 'environmental services' and
natural resource protection. Our parks, wildlife, river systems, and forests
could all become contested areas as global transnational 'environmental service'
corporations demand the competitive model for their 'management'. Profit-hungry
child care chains would invade every country, as would prison chains like Wackenhut
its reputation for violence and abuse against both prisoners and staff.
Virtually unlimited access to foreign suppliers would have to be given to municipal
contracts in construction, sewage, garbage disposal, sanitation, tourism and
water services.
Simply put, the 'commons'- or what's left of it - will come under full assault
if GATS is enacted. What used to be areas of common heritage, like seeds and
genes, air and water, culture and heritage, health care and education, will
be slated to be commodified, privatised and sold to the highest bidder on the
open market countries like Canada and France, which have (and cherish) national
universal health care and education systems will lose them.
Prying open the Souths government business. The World Trade Organisation
will soon set up a new working group to study 'transparency in government procurement
practices' and develop elements for 'an appropriate agreement'. Whilst the study
and the agreement only cover transparency (and not the practices themselves),
the major countries pushing this issue have made clear their ultimate goal:
to fully integrate the lucrative multi-billion-dollar government procurement
market into the WTO rules and system.
This will have serious implications. For, if the North gets its way, governments
in developing countries in future will not be allowed to give preference to
local companies to supply goods and services or to carry out development projects.
. .
But the prime mover of this initiative, the United States, has made it clear
that in its scenario, this is only a first step
towards a full-scale opening up of the 'market' for government procurement for
foreign companies.
What the major countries especially want to see eradicated in developing countries
are the types of government
procurement policies and practices that currently favour local enterprises and
peoplepractices that the major
industrialised countries had followed not too long ago within their countries
and which had benefited some of their giant corporations.
Corporate takeover of health.
"Powerful transnational groupings like the Coalition of Service industries in the US have long protested that the public ownership of health care in many countries has been an impediment to the ambitions of American private sector interests - with the pharmaceutical and insurance industries at the forefront."
The WTO argues that in health systems in which there is a combination of public
and private funding, health service provision "...should be wide open to
foreign corporations. In other words, in much of the developing and developed
word everything from hospitals and outpatient clinics to home care facilities
will be up for grabs. Income and health inequalities will continue to widen."
W. Brittenden, New Zealand Doctor, 15th March, 2000.
The corporations are out to control water supply. "Instead of letting countries
treat it as a commonly held resource allocated for the general good, they want
it considered as a commodity traded by private investors for profit." The
claim is that "...water, ...is merely one form of goods, subject to the
new rules of global trade. We're talking about ...whole lakes and acquifiers
bought and mined, rivers siphoned off, the Great Lakes themselves on the market.
...multinationals are ready to use supertankers, pipelines, canals, river re-routing,
and their mammoth schemes to shift the product from the water-rich to those
willing to pay top dollar."
"Global Water Corporation...has cut a deal with Sitka, Alaska, to haul
18 billion gallons of water per year from nearby Blue Lake toChina."
"The great Recycling and Northern Development Canal involves building a
dike across James Bays to capture water from 20 rivers that fed it, converting
the bay into a giant reservoir, then building a network of canals, dams, and
locks to move the water 400 miles south to Georgian Bay, where it would be "flushed
through" the Great Lakes into pipelines that would take it to America's
Sun Belt for lawn watering, golf course sprinkling and other essentials."
"The McCurdy Group hopes to 'harvest' some 13 billion gallons of water
a year from one of that province's lakes, pipe it to the coast, pump it into
old oil tankers, and ship it to the Middle East for a hefty profit."
The pressure is intense to let the market decide who gets water. "Sun Belt
Water Inc, based in Santa Barbara, California, has filed the first NAFTA water
case. It had an agreement with a British Colombia (Canada) company to ship water
in tankers from British Colombia to Southern California. But such an outcry
ensued when the scheme became public the provincial government enacted a moratorium
on all water exports. The corporation sued Canada in 1998...under NAFTA's Chapter11,
and claimed that Canada owed it $468 million."
The corporations "...will deliver the water to whoever will pay the most"
"Blue Gold: The Fight for Canada's Water Has Only Begun", Utne Reader,http://www..utne.com/magazine/freeissue.htm
In 1998, the World Bank, which has endorsed water privatization schemes in many
parts of the world, linked the renewal of a $25-million loan to the privatization
of water services in Cochabamba. Only one bid was considered, and the water
system was turned over to Aguas del Tunari, a subsidiary of a conglomerate led
by Bechtel and several other construction companies.
Prompted by the World Bank, the Bolivian government granted absolute monopolies
to private water concessionaires, announced its support for full cost water
pricing, pegged the cost of water to the American dollar, and declared that
none of the World Bank loan could be used to subsidize water services for the
poor. Then in December 1999, the private water company announced increases in
water prices ranging from 35 percent to 300 percent. For most Bolivians, this
meant that water cost more than food for those on minimum wage or unemployed,
water bills suddenly accounted for close to half their monthly budgets. Permits
were required for all access to water, even from community wells Peasants and
small farmers even had to buy permits to gather
rainwater on their property.
polls showed that 90 percent of the people wanted Bechtel kicked out of
their country. Debate turned to protest, and one of the world's first water
wars began.
Hundreds of thousands of Bolivians marched I to Cochabamba in a showdown
with the government, and a general strike and transportation stoppage brought
the city to a standstill.
Finally, on April 10, the directors of Aguas del Tunari and Bechtel fled
Bolivia, taking with them key personnel files, documents, and computers, and
leaving behind a broken company with substantial debts. Under popular pressure,
the government revoked its hated water privatization legislation. In response,
Bechtel is suing the government of Bolivia for close to $40 million in the World
Bank's Inter- national Court for the Settlement of Investment Disputes, claiming
NAFTA-like investor-state rights.
M. Barlow, Thirst for justice, Yes, Summer, 2001, p. 24.
Simply put, the 'commons' - or what's left of it - will come under full assault
if GATS is enacted. What used to be areas of common heritage, like seeds and
genes, air and water, culture and heritage, health care and education, will
be slated to be commodified, privatised and sold to the highest bidder on the
open market. Countries like Canada and France, which have (and cherish) national,
universal health care and education systems will lose them.
M. Barlow, The last frontier, The Ecologist, 30.1., Feb., 2001, p. 40-
If you were Bolivian, you'd
know why the world should be worried about GATS. Take a trip back in time to
spring 2000, to the city of Cochabamba in the South American nation. Under pressure
from the World Bank, the Bolivian government had just sold off the city's public
water system to a US water corporation. This was all part of the World Bank's
programme to 'streamline' the Bolivian economy - in other words, to open it
up to Western-based
corporations. It was, the Bolivians were assured, all in the name of economic
efficiency.The people of Cochabamba soon found out what that efficiency amounted
to. Just weeks after the corporate flag had been raised over what had been a
public utility, water rates were hiked up massively. Many of the peasant families
of Cochabamba were required to pay up to a third of their wages for their water
- more than they spent on food. The charges were crippling, and there was no
alternative even collecting rainwater to drink was made illegal.
Complaints had no effect on the water company whose aim was now profit rather than public provision of a basic need. So Cochabambans took to the streets. In April, hundreds, then thousands, joined in demonstrations against the privatisation of this most basic resource. Four days of strikes brought the city to a standstill. The government gave in and promised to lower water rates. Then they changed their mind. The protests began again, and got bigger. Tear gas was used, and martial law was declared. Cochabamba descended into chaos. Still the government, and the company, refused to give way Protest leaders were rounded up at night.
Dissenting media outlets were shut down. The profits of a foreign corporation
took priority over the everyday needs of the Bolivian people. But those people
did not give up. l:he protests grew still further. Eventually after the military
shot a 17-year-old boy in the face for protesting, even the government realised
the game was up. Two days later, they signed an accord agreeing to return the
city's water supplies to public control. Their purpose is, simply and
starkIy, to prise open the whole world's public services to corporate takeover;
to make the very concept of public services not only unlikeIy, but probably
illegal.
That's what GATS is about. If it had been in force last April, it would, quite
simply have been illegal for the Bolivian government to renationalise the Cochabamba
water company Good news for corporate profits. Bad news for people. GATS is
paving the way for the privatisation of public services across the world.
Nothing will be exempt - education, health care, social services, postal services,
museums and libraries, public transport; all will be opened up to corporate
interests. Every and any service currently provided by governments in the name
of the public good will be opened up to private corporations, and run for profit.
GATS could, quite simply, be globalisation's last frontier: the end of the very
concept of not-for profit public services. GATS will come into force in over
130 countries, quietly, and with little fuss, in less than two years. If nothing
is done. The mandate of GATS is the 'liberalisation of trade in services'. In
plain English, this means the dismantling of government barriers to the privatisation
of public services. Its aim is to make it impossible for governments to run
public services on a not-for-profit basis, without the participation of private
companies. GATS will allow the WTO to restrict government actions
relating to public services through a set of legally binding constraints. Any
government disobeying the rulings of the WTO will face sanctions. Unlike any
other global institution, the WTO has the legislative and judicial power to
challenge the laws, practices and policies of individual countries and strike
them down if they are seen to be to 'trade restrictive'. The WTO contains no
minimum standards to protect labour, human rights, social or environmental standards;
every. single time (but one) that the WTO has been used to challenge a domestic
health, food safety fair trade or environmental law, the WTO has won. Over the
past six years, the operations of the WTO show that it has become the most powerful,
secretive, and anti-democratic body on Earth, rapidly gaining the mantle of
a global government and actively seeking to broaden its powers and reach.
CARVING UP THE SERVICES
Public services are next in line for the WTO's corporate battering ram. Under
the proposed GATS regime, foreign health and education if corporations will
have the right to establish themselves in any WTO Country. They will have the
right to compete for public money with public institutions like hospitals and
rules to ensure if they are not an 'impediment to trade'. Degree-granting authority
will be given to foreign-based education corporations. Foreign-based telemedicine
services will become legal. And countries won't be able to stop the trans-border
competition of low-cost health and education professionals. Already the WTO
Services Division has hired a private company called the Global Alliance for
Transnational Education to document worldwide policies that idiscriminate against
foreign education providers'. The results of this 'study' will be used to pressure
those countries that still retain a public education sector to relinquish it
to the global market. Disturbingly, GATS also includes authorityover 'environmental
services'and natural resource protection. Our parks, wildlife, river systems,
and forests could all become contested areas as global transnational 'environmental
service' corporations demand the competitive model.
(Source not recorded.)
The
(proposed GATS)
treaty does not allow a country to discriminate
in favour of its own community values and systems for delivering aged care,
communications, transport, child care, health, education, environmental services,
etc. Profits will have to be made from services, not just community need determining
delivery. Overseas, water and education are two services already badlydistributed
by privatisation. The rich usually end up with lots more services than the poor.
Even the environment will be labelled asa service to be privately administered!
Under GATS, Australia will not be able to " subsidise" (= give taxpayers
money) to hospitals, schools, universities, aged care, childcare, the arts or
any other without giving equal amounts to similar private, usually foreign-based,
corporations that have won a contract to operate a service in Australia. Health
and education corporations will ship in cadres of cheaper workers.
If you ask your local pollie, he will parrot the WTO line that countries can
protect areas they wish, but deep in these thick legal documents there are clause
saying we can only protect services with no private element. All services do
and should have some private element, so none can be protected.
Economic Reform Dr Liz
Elliott Kingscliff About G.A.T.S. Australia
ERA Information Network
Date: Thursday, 30 May, 2002
The all-inclusive nature of GATS threatens to seriously constrain the ability
of national governments to undertake actions or policies to advance social,
developmental of environmental priorities. Moreover, any commitment to liberalize
services that a government makes in response to a request by another country
will apply to all WTO members, under the Most Favored Nation rule.Even more
troubling than the scope of GATS is its virtual irreversibility.
Although it is true that in principle a country may undo its GATS commitment
in a given service sector, -- in practice it can only do so by compensating
affected trading partners or facing retaliation in the form of trade sanctions
.NB;
You can't preserve a sector if another nation decides not to!But wherever there
are serious ideological divisions on contentious issues, country specific limitations
that protect [certain domestic services] are likely to endure on until a single
government committed to a market-oriented approach eliminates them, binding
all future governments.
The IMF is promoting the G-7 agenda when, among other things, it insists that
governments cut off domestic credit or support for public services. In general,
the donor and creditor communities are promoting the G-7 agenda when they agree
to starve public sector services of external support. The EU and the US have
expressed their unwillingness to support the improvement of public services
in developing countries. World Bank officials have stated that, without a private
component, support for water services in Africa is "out of the question."
The World Bank and the regional development banks have adopted Private Sector
Development (PSD) Strategies that introduce a third generation of structural
adjustment programs (SAPs) to promote liberalization
of investment regimes and the privatization of basic services.
The U.S. is withholding $300 million in contributions to the World Bank's soft
loan arm (the International Development Association, or IDA) until IDA makes
progress in implementing the PSD agenda.The U.S. government is a prime mover
behind the multilateral initiatives. In addition, it is launching a new
bilateral aid program, the Millennium Challenge Account (MCA). On June 5, which
was 55 years to the day from the launch of the Marshall Plan, US Treasury
Secretary O'Neill announced the MCA as a new paradigm for development assistance.
The US's MCA is seen by the Administration as the third great initiative in
this century after the Marshall Plan and the Alliance for Progress. The MCA
will involve private providers in delivery of essential services - water, health
and education.GATS negotiations are conducted in secret.
Governments in WTO negotiations have routinely made deals without input or even
awareness of elected parliamentarians, to say nothing of citizens. InApril the
European Union sent confidential requests for opening a wide array of service
sectors to 29 developing countries. Only because the documents were leaked to
the press was the public informed of the critical details of the negotiations.
J Rbebello, "Public Services At Risk:GATS And The Privatization Agenda
Of The IFIs" Economic Reform Australia, Information Network
It seems to me that GATS is one of the current major fronts in an undeclared
civil war that has been ongoing for centuries. The personification of corporations
seems to have been an important step along the way; but it goes back further.
The closure and privatization of "the commons" was part of the same
war. But it obviously goes way back further still, probably beyond history.
It is a war of private interest against the public interest. It is a war of
privilege against the public good, against the common good. It is a war of selfishness
against benevolence.That is what privatization is all about transferring
as much wealth and power as possible into the possession of privileged minorities
who care little for the social and biological worlds of which they
are a dependent part.Both our Government and Opposition fully support privilege
in its war against the common good.
D. Keanes, ERA Net, 10th Oct, 2002.
____________
11. GLOBALISATION AS TAKEOVER
See also GATS; the move underway for takeover of government services.
"Liberalisation, in short, is a mechanism...(whereby)...metropolitan capital
gets control over Third World resources and enterprises...atthrowaway prices."
P. , "Capitalism in Asia at the end of the millennium", Monthly Review,
July-August, 1999, p. 58.
The application of conventional economic policies in Eastern Europe is a deliberate
strategy to cause immense destruction and then take over these economies:
There are clear political objectives; to dismantle the production structures
of the countries of Eastern Europe and the former USSR in order to reincorporate
them into world capitalism as subordinate peripheries
to demoralise working
classes, and to reinforce the new comprador bourgeoisie
" 21
S. Amin, Capitalism in the Age of Globalisation, Zed Books, 1997.
The collapse of the USSR has been an enormous boom for capitalism; huge opportunities
for takeover and investment.
G. Teeple, Globalisation and the Decline of Social Reform, Toronto, Humanities Press, 1995.
GLOBALISATION AS RECOLONISATION; TAKE-OVER BY THE CORPORATIONS OF MUCH MORE
OF THE WORLD'SWEALTH; THE TRIUMPH OF THE RICH.
Globalization Is Nothing but a Modern Form of Colonization.
According to Martin Khor of the Third World Network in Malaysia, "What
is called globalization today has been called colonization the Third World for
the past 500 years, ever since the Indians discovered that Columbus had landed
on their shore." What globalization means to the South is that an already
bad situation will get worse.
What they want is the right to enter any country they want, establish operations
in any country they want, buy whatever they want, repat ate as much profit as
they want and demand the "harmonization" environrnental and labour
laws to any extent they want. This would strip governments of their ability
to regulate corporations and investment.
S. Hunt, "On the costs of economic globalisation, Schroyer, Ed., Towards
a World That Works, 1998, p. 42.
It should come as no surprise why the industrialised countries are piling on
the pressure on this issue. They would like their companies to be able to operate
much more freely in developing countries, and thus are asking that current restrictions
and regulations be removed. Gaining access to the resources and markets of the
South, and to the right to invest and operate in the developing countries, has
been a major strategic objective of the governments and companies of the North.
M. Khor, "Globalisation; Implications for development policy", Third
World Resurgence, 74, 1996, p. 26.
World Bank funded projects
often "...displace the poor so that the lands and waters on which they
depend for their
livelihoods can be converted to uses that generate economic returns, meaning
converted to use by people who can pay more than those who are displaced."
D. Korten, The truth about global competition", Development and Change,
March, 1996, pp. 4-6.
The World Bank is perhaps the most important instrument of the developed capitalist
countries for prying state control of its Third World member countries out of
the hands of nationalists and socialists who would regulate international capitals
inroads, and turning that power to the service of international capital.
J. Devine, "Capitalism is church universal", Monthly Review, (date
not recorded.)
Colonies provided the means by which the European powers could secure access
to cheap food, cheap raw materials and cheap labour, plus new markets for manufactured
goods and new investment opportunities. It was as simple as that. Where economic
penetration could be achieved through trade, was no need to annex countries
outright. Where this could not be achieved the West sought to impose its will
by gunboat diplomacy, eg the opium forced on China, or through direct political
rule, as in India. 1944 saw the Bretton Woods agreement. Its main objective
was to reduce the possibility of another 1929 depression. The best means of
doing so , it
was decided, was to bring the colonies further into the orbit of the Western
industrial system so as to provide a continuously expanding market for w manufactures,
whilst maintaining the supply of cheap food and raw materials.
Three key institutions were set up to implement the policy: The International
Monetary Fund, the World Bank, and in 1948 the General Agreement on tariffs
and Trade. Together these agencies formed a single integrated structure, dominated
by US interests, and effectively in control of the worlds economy. The
original role or the IMF was to make sure that member nations pegged their currencies
to the US dollar or to gold, of which the US held 72% of the world supplies.
This made it difficult for debtor countries to get out of their financial obligations
to the Western Banking System by manipulating their currencies. The World Bank,
after the reconstruction of Europe, turned its attention to the Third World,
its main aim being to prevent Third World countries from making goods locally
which could be bought from western countries.
The IMF complements the work of GATT. Loans either from the IMF or World Bank
have only been provided by
governments that have undertaken to observe IMF conditions. These are Scrap
import quotas and reduce import tariffs thereby preventing Third World countries
from protecting their fledgeling industries Devalue their currency to make their
exports cheaper to the larger nations - and which means that the Third world
has to pay more for imports;
Cut expenditure on Social Welfare, especially on subsidies to the poor; Undertake
to mechanize agriculture, thus providing an important market for Western agricultural
machinery and agro chemicals.
Those nations which have resisted these policies have quickly discovered that
the gunboat mentality of the colonial era is far from dead!
But despite all the measures taken over the past forty years to open up markets
in the Third World, multinational
corporations, despite the fact they already control 80% to 90% of the trade
in tea, coffee, cocoa, cotton, forest
products, tobacco, jute, copper, iron ore, and bauxite, still insist that they
do not have sufficient access to world
markets and are seeking further concessions. In particular, they want to extend
GATT so that it encompasses services such as advertising, stockbroking, and
banking. They want the few remaining restrictions on investment to be removed
so that they have total freedom to invest how they want and where they want.
If the new rules are implemented, it would be "GATT-illegal"
To re-regulate the investments and operations of foreign companies if the regulations
can be deemed a barrier to
trade. Logging companies, toxic waste companies, mining companies, etc would
have a free hand to act as they
liked within World countries;
To restrict in any way,
the importation of cheap agricultural produce. This would drastically undermine
the livelihoods of local farmers who cannot compete with foreign imports;
To take vulnerable eroding land out of use.
To take measures to protect scarce resources if such measures are judged to
be in restraint of trade;
For one country to impose stricter pollution controls than those in force elsewhere,
if those controls interfere
with trade.
The recently signed Canada - US Free Trade Agreement provides a foretaste of
what is in store. The Canadians have been forced to abandon measures to protect
threatened Pacific salmon. Canada is prevented from restricting the sale of
its water resources to the USA even in times of drought. Canadians have been
forced to bring their pesticide regulations into line with the far laxer US
standards. Canada's ban on the sale of irradiated food has been judged illegal,
as have Canadian proposals to reduce emissions from lead, zinc, and copper smelters.
The Economic Reformer, 729 April, 1990, 3.4.
Operating in conjunction with transnationalist interests in the South, northern
capital has skilfully exploited the weak bargaining position of indebted Southern
countries to force through programmes that further open up the South to northern
commercial interests. State enterprises have been privatised; whole sectors
of the economy deregulated; tariffs and other trade barriers removed; and controls
on the movement of capital "liberalised"
The Editors, The Ecologist, 26.4. July/Aug, 1996, p. 123.
Norths intention to open up markets.
The expressed intention of major countries was primarily to open up all remaining
national economic spaces in developing countries by removing their present legitimate
barriers and safeguards that were now in place, so that the big corporations
of the North could have greater and greater 'market access' in the South.
WTO rewards the strong and ruthless and punishes the weak and poor. In
fact it defines the criteria for success and failure, for survival and collapse.
Its paradigm places profits and greed above all else, and its unregulated operation
will continue to downgrade development, social and environmental concerns at
both national and international levels.
It is the antithesis to sustainable development and to global partnership.
M. Khor, "Globalisation is undermining sustainable development", Third
World Resurgence, Jan, 1997, p. 24.
"The goal everywhere is the same; free all resources to serve the needs
of corporations, not people or the environment.''
J. Mander, "Facing the rising tide", In J. mander and E. Goldsmith,
Eds., The Case Against the Global Ecohnomy, 1997.p.12.
"...almost every politician in the US and Australia must become or has
become, in some degree, an advocate for
business. ..."...governments reactively and continually place business
interests before public interests."
N. Chomsky, Foreword in A. Carey, Taking the Risk Out of Democracy, UNSW Press,
1995, p. 3.
"Globalization is not about trade. It is about power and control. It is
the reshaping of the by world into one without
borders ruled a dictatorship of the world's most powerful central banks, commercial
banks and multinational companies.
Editorial, Monetary Reform Magazine, Winter, 1997-8, p. 4.
''...globalisation is increasing income inequality all around the world."
M. Tanzer, 'Globalising the economy, Monthly Review, Sept., 1995, p. 12.
with capital mobile and labour relatively immobile, all of the advantages
labour has gained in the last two hundred years of organizing, including wages
above subsistence, social security, unemployment insurance, child labour laws,
health insurance, paid vacations, the right to organize and strike - will disappear.
All of these advantages enjoyed due to hard bargaining by American Labor, will
be wiped out if we have to compete with Mexican labour in the maquiladores,
with free trade zones in the rest of the Third World, with the limitless labour
supplies of China and India, all at the subsistence level. Capital has learned
to move in the last few decades, and the results are already seen in a 10% lower
standard of living in the USA. This is only the beginning of the "advantages"
of free trade, which will indeed convert us into a "global village".
And who are the winners in our drive to free trade? The owners of capital.
Robert Schutz. 7899 St Helena Road, Santa Rosa, U.S.A.. CA 95404.
"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."
M. Chossudovsky, "Financial warfare", http://ww.corpwatch.org/trac/globalization/financial/warfare/html
"The so-called "free trade" treaties are not about trade, but
about opening up the worlds economies, resources, and labour pools to
unregulated exploitation by the multinationals."
R. Moore, "Human rights and the new world order", New Dawn, Jan-Feb
1996, p. 13-14.
_______________________________________
12. HOW DO THEY GET THE NEW RULES ESTABLISHED.
"In secret governments are negotiating the end to all not-for-profit public
services. In less than two years, 130 plus governments expect to quietly sign
an agreement called GATS."
E. Elliott and M. Barlow, GATS, Privatising all Services!, wwwcommunitycauldron.com
Governments including Australia, the US and the EU which made detailed requests
in the WTO Trade in Services negotiations last week have refused to make public
the full details of those requests.
AFTINET Bulletin 40, 8 July, 2002.
Access to those sessions, known as 'green rooms', was limited to members invited
or endorsed by Barshefsky and Moore. The meetings were held at undisclosed locations
and delegates from poor countries complained that it remained unclear which
members had been consulted on what.
A. Aslam, "Developing countries assail WTO "dictatorship", Third
World Resurgence, 112/113, 2000, p. 23.
US bullying tactics at Seattle, which helped to lead to breakdown of the trade
talks.
US trade Representative
Charlene Barshefsky presided over a totally undemocratic process. She announced
on the second day her 'right' as chairman of the conference to use procedures
of her own choosing to get a Declaration out of the meeting, a statement that
infuriated the developing country delegations.
Barshefsky and the WTO Director-General Mike Moore set up several 'green room'
meetings, some running
simultaneously, on key issues of disagreement. Only 10 or 20 countries (the
major powers plus a few selected developing countries) were invited to a typical
such meeting.
The plan of the organisers was to get the major powers (mainly the US and the
EU) to agree among themselves, then apply pressure in the green rooms on a few
influential developing countries to go along, and then pull together a Declaration
to launch a new round which all members would be coerced to accept in a special
meeting on the last day.
The vast majority of developing countries were shut out of the whole green-room
process. They were not even informed which meetings were going on or what was
being discussed. Ministers and senior officials of most developing countries
were left hanging around in the corridors or the canteen, trying to catch snippets
of news or negotiating texts.
Their anger at the insult of being at the receiving end of such shabby treatment
boiled over on the third day of the
conference. The African Ministers issued a strong statement that there was 'no
transparency' in the meeting, that
African countries were generally excluded on issues vital to their future. What
has been going on in Seattle is a scandal. Developing countries that form more
than two thirds of the members of the WTO are being coerced and stampeded by
the major powers, especially by the host country the US, to agree to a Declaration
which they were given very little opportunity to draft or to consider.
Most of the important negotiations have taken place in "green room"
meetings where only a few countries are invited. ost of he developing-country
members of the WTO have not been able to participate. Even if a country is invited
to meeting on a particular
issue, it may not be a participant in other issues. Many developing countries
were not invited to any meeting on any issue at all.
As a result most Ministers have been insulted by their not being able to take
part in decisions that seriously affect their countries and people. Worse, they
have had little chance to even know what is being discussed, by whom or where.
THIRD WORLD RESURGENCE NO 112/~113, 2000., 12.
The basic procedure for establishing the new rules is that the rich countries
work out between themselves what suits them, then invite the Third World nations
to join in. Poor countries cant trade freely with rich countries if they
dont.
J. Madeley, Big Business, Poor People, Zed Books, 1999.
Eventually, Guyana was invited ' to a Green Room meeting, but 'it turned out
to be a joke,' said Rohee. ( 'After we made our voice heard, I received an invitation
to a Green Room meeting on agriculture. To my amusement, when I turned up at
the meeting, the chairman of the meeting, presented this 'non-paper' to us.
We were informed no changes could be made. I created a stink. I asked what is
the status of this document, and why are we called
here. When I was told we were only invited here to be informed, I felt it wasn't
a serious meeting at all. It was only a joke.
The chairman and a senior WTO Secretariat official were trying to bamboozle
us to accept their draft on agriculture. I told the official, you are from the
Secretariat, you should shut up, I am a Minister, it is for me to discuss this
issue. All the Ministers in the room packed up our files and walked out.
'We found out that this so-called Green Room meeting, which was held on the
second floor, was only a diversion. Since we had asked to take part in a Green
Room meeting, they gave one to us. They were only paying lip service to transparency
and inclusiveness. The reality was opposite. If there had been a draft Declaration
placed before us (on the last day) there would have been a total revolt. The
African, Caribbean and Latin American countries had issued statements protesting
the process.
In reality, however, in the past five years the WTO has contributed tothe concentration
of wealth in the hands of the rich few; increasing poverty for the majority
of the world's population and unsustainable patterns of production and
consumption.
"NGOs voice their views
at Seattle," Third World Resurgence, 11.2.2001, p. 35.
Barlow says of the current GATS meetings, "
our governments are meeting
behind closed doors once again to carve up our rights for the benefit of their
corporate friends."
M. Barlow, ,A GATS Primer, 20th March, 2001, Era Email Newsletter, 22/3/2001-03-30
Prime minister Howard sent 8 representatives to oversee Australias interests
at the Seattle WTO talks; all were from corporations.
Social Alternatives
The officials of many developing countries were not really aware of what they
had signed in the many complicated Uruguay Round agreements. .
M. Khor, The new frontier", . Third World Resurgence, 2000, p. c 45.
"Agreements are supposedly reached by consensus but in reality the United
States, Canada, Europe and Japan reach agreements which are then presented to
smaller and developing countries."
Delegations are not representative.
"The Australian Seattle
delegation included eight business representatives and no other
community organisations."
"WTO complaint processes, conducted behind closed doors, have consistently
defined environmental regulation and food labelling egulation as barriers to
trade."
In the last year the Australian government moved to change the law protecting
the Australian salmon industry from imported salmon(which might contain diseases),
without any attempt to resist.
P. Ranald, "What's wrong with the WTO and Australia's policy towards it?"
Aidwatch, 20, Aug., 2000.
"In the United States the original idea of NAFTA was to ram it through
in secret...The NAFTA agreement was signed in August of 1992 right in the middle
of the presidential campaign. All eyes were focused on the election. It was
barely even reported."
"There is a US law which says the labour movement has to be consulted on
trade agreements. This was ignored; they were not even told about the agreement
until a month after it was signed, then were given one day to submit their response!
N. Chomsky, "Whose world order?" Sustainable Economics, 8, 3, M ay
2000. p. 56.
In the United States public opinion polls showed the general public against
NAFTA even after incessant propaganda, but the mass media supported and it was
passed. In country after country social democratic parties have accepted neo-liberalism,
despite the contrary preferences of great majorities of their voting
constituencies.
E. S Herman, "The Threat of Globalisation", Economic Reform Australia
Newsletter, 2nd Dec., 1999. p. 3, 5.
"The WTO was put in place following the signing of a 'technical agreement'
negotiated behind closed doors by bureaucrats. Even the heads of country level
delegations to Marrakesh in 1994 were not informed regarding the statutes of
the World Trade Organisation which were drafted in separate closed sessions
by technocrats."
"...the process of actual creation of the WTO...is blatantly illegal'...a
'totalitarian' intergovernmental body has been casually installed in Geneva,
empowered under international law with the mandate to 'police' country level
economic and social policies, derogating the soverign rights of national governments."
"...the articles of the WTO are not only in contradiction with pre-existing national and international laws, they are also at variance with The Universal Declaration of Human Rights."
M. Chossudowsky, "Seattle and Beyond; Disarming the New World Order."
Economic Reform Australia Newsletter, 25th Nov., 1999.
"The public hasnt the foggiest idea whats going on. In fact,
they cant know. One reason is that NAFTA is a secret. Its an executive
agreement which is not publicly available."
N. Chomsky, Keeping the Rabble in Line, 1994, p. 45-46. The Australian delegation
to Seattle had eight business representatives but no other community representatives.
The peoples bank; the privatisation of the commonwealth bank.
J. Quiggin, Australian Options, May 2001. Australian government's frustration
of efforts to have GATS proposals discussed:
As part of our campaign on GATS, AFTINET wrote to the Minister asking that the
government make public all such requests and its responses to them. This would
enable public debate about such proposals before the government signs a legally
binding agreement. This request for transparency and accountability is being
made by fair trade activists to their governments around the world. The response
from Trade Minister Vaile was very qualified:
"With regard to the detail of our negotiating proposals, the government
will release as much general information as practicable, including on the sectoral
and country coverage and the nature of the commitments sought, where this would
be consistent with any commercial confidentiality and oes not compromise our
negotiating interests"
AFTINET Bulletin No. 38.June 13, 2002.
__From start to finish, all elements of the negotiation, adoption, and implementation
of the recent globalized "free trade" agreements were designed to
foreclose citizen participation.
R. Nader and L. Wallach,
GATT, NAFTA and the subversion of the democratic process, in J. Mander and J.
Goldsmith, The Case Against the Global Economv, 1996, p. 97.
Preventing public understanding of trade rules: Meetings of the advisory groups
are closed to the public, with representatives required to obtain a security
clearance from the government after a background check. All documents are considered
confidential... Once a trade agreement is completed, any person who wants to
figure out what the agreement says faces a herculean task. The first difficulty
is to obtain a copy of the actual text. When then President Bush announced that
he had come to a final NAFTA deal with Mexico and Canada in August I992, he
gave an optimistic spin to the agreement. But the actual text was not made available
to the American people at his news conference or any other time.
An unofficial text appeared a month later, but the official 752-page text, priced
at $4I, was not available until after Bush left office in I993. The second difficulty
is that the agreements are unnecessarily complex. Only those with an expansive
knowledge of GATT-ese or NAFTA-ese can comprehend what the texts mean for their
jobs, food, or environment. Third, in many countries, the GATT text was simply
not available at all. Although the Uruguay Round negotiations were completed
in December I993, by October I994 (months after the agreement was to have been
approved in most countries) it still had not been translated into Japanese for
the Japanese Diet or for the public. Translations of the text became available
only a few days before it was approvedunreadby the
Diet. Many governments around the world failed to translate the agreement into
their languages at all but approved it anyway.This difficulty in obtaining and
understanding the actual agreements was no accident; it reflected a purposeful
effort by globalization proponents to conceal the agreements' terms and effects
from the public, the news media, and even the parliamentary bodies that approved
it.
R. Nader and L. Wallach, GATT, NAFTA and the subversion of the democratic process,
in J. Mander and J.
Goldsmith, The Case Against the Global Economv, 1996, p
100
._______________________________________
13. INCENTIVES FROM THE STATE TO GET CORPORATIONS
TO INVEST.
US government subsidies to business, $75 billion in cash subsidies, plus $60
billion in tax breaks. Hawken estimates that corporations get more subsidies
from the government than they pay in tax.
Estes (Tyranny of the Bottom Line) estimates that corporations cost the economy
$2,400 billion p.a., due to things like unsafe vehicles.
D. Korten, The Post-Corporate World, Kumarian, 1999. 47.
In the 1950s corporations paid 39% of US tax, and individuals paid 61% of US
federal tax. In the year 1990-5 corporations paid 19% and individuals paid 81%.
The corporate share of local taxes fell from 45% in 1957 to 16% in 1987.
D. Korten, The Post-Corporate World, Kumarian, 1999, p. 47.
Examples of Corporate Deals in NSW:
. $15.5 million in payroll tax concessions etc. To induce Optus to make NSW
its centre of operations.
$5.5 million in subsidies to American Express to set up headquarters
in Sydney.
$5.2 million to Motorola to set up a wireless communication centre in
NSW.
. $48 million to pay television operator Australis Media, to set up its production
centre in Sydney.
$0.5 million to Cathay Pacific to set up a data processing centre at
Baulkham Hills.
S. Turnbull, ""The system does not need labouR" ERA Email Network,
2, 15, Nov-Dec, 2000. (and Sydney
Morning Herald, 7. 12.1999.
In 1977, for example, the state of Ohio in the US 'induced Honda to build its
auto plant there by promising $22 million in subsidies and tax breaks: by1986
it took a $100 m. package from Kentucky for Toyota to create about the same
number of jobs there' (Reich, 1992, p. 296). When in 1985 Mitsubishi announced
that it would begin assembling automobiles in America, four states competed
for the plant. The 'winner' was Illinois, with a ten-year package of $276 m.
in incentives and direct aid costing about $25 000 a year for each new job to
be created. 45.
R. Mishra, Globalisation and the Welfare State, Elgar, 1999.
_______________________________________
14. MERGERS AND ACQUISITIONS TAKING PLACE AT AN ACCELERATING
RATE.
Corporate mergers and acquisitions grew at a rate of almost 50 percent per year
in every year but one between 1992 and 1998. Globally, more than two trillion
dollars worth of mergers were announced in the first three quarters of 1999.15
the greatest merger wave in capitalist history Increasingly we are faced with
a world economy governed by financial speculation and the attempt to create
global monopoly (or oligopoly) power
J. Bellamy Foster, Monopoly Capital and the Turn of the Millennium, Monthly
Review, April, 2000, pp. 10-12.
two-thirds to three-quarters of all the money labelled "Foreign Direct
Investment" is not devoted to
new, job-creating investment but to Mergers and Acquisitions which almost invariably
result in job
losses.
S. George, A short History of Neo-liberalism, ERA Email Netowork, 17.7.1999.
"Over 80% of this foreign investment is takeover of domestic firms."
60.
J.McMurtry, The Cancer Stage of Capitalism, London, Pluto, 1999.
80% of foreign investment is to buy existing Australian owned business. . .
The level of foreign ownership has
doubled in the last decade to 21% of gross domestic product, and the money leaving
Australia for foreign owners also doubled, reaching $12 billion.
Frank Walker, The Sun-Herald [17.9.00]
Mergers and Acquisitions at Record Levels, especially in Australia. In the first
half of this year global mergers and
acquisitions showed a 54% rise in activity, reaching $44 billion. Five of the
top six global deals were in
telecommunications and technology, but nearly 30% of local deals were in financial
services. Australia continues to have one of the highest levels of cross border
M & A activity in the world, half of it involving foreign bidders.
Anthony Hughes, Sydney Morning Herald, 19.7.00]
The number of mergers has increased at 50% p.a. in the 1990s!
D. Korten, The Post-Corporate World, Kumarian, 1999. P. 42.
Corporate mergers and acquisitions grew at a rate of almost 50 percent per year
in every year but one between 1992 and 1998. Globally, more than two trillion
dollars worth of mergers were announced in the first three quarters of 1999.15
the greatest merger wave in capitalist history Increasingly we are faced with
a world economy governed by financial speculation and the attempt to create
global monopoly (or oligopoly) power
J. Bellamy Foster, Monopoly Capital and the Turn of the Millennium, Monthly
Review, April, 2000, pp. 10-12.
80% of all foreign investment goes into mergers and acquisitions. 14.
C. Hines, Localisation; A Global Manifesto, London, Earthscan, 2000.
Pivatisation of the Commonwealth Bank was a financial disaster for the Australian
public, although investors in the float did very well indeed.
The total proceeds from the three stages of the sale amounted to about $7.8
billion in 1995-96 dollars.
Average real annual profits over the period 198893 (which covers a complete
business cycle) were around $560 million. Computing the present value of this
stream of profits at a discount rate of 5 per cent yields a value of $ 11.2
billion for the Bank as a whole. Therefore, even if profits had not increased
after 1993, the public would have incurred a loss of around $3.5 billion from
the privatisation. In fact, primarily because of the removal of restrictions
on the monopoly power of the banks, profits have soared. Profits for the three
years from 1998 to 2000 totalled $5.4 billion, or more than half the total sale
proceeds received by the Australian public.
Financial deregulation has been similarly disastrous. Since the advent of financial
deregulation, banks have raised fees and charges, cut services and exploited
their collective monopoly power whenever possible.
The worst case of privatisation for fire-sale prices was the sale of the State
Bank of NSW for $214m in 1994 when its sale price should have been around $1.5b.
The second worst case is the privatisation of Telstra. J. Quiggin,The peoples
bank; the privatisation of the commonwealth bank.Australian Options, May 2001.
"
depending on the year, two-thirds to three-quarters of all the money
labelled "Foreign Direct Investment" is not devoted to new, job-creating
investment but to Mergers and Acquisitions which almost invariably result in
job losses. The managers of the newly privatised enterprises, often exactly
the same people as before, doubled or tripled their own salaries. The government
used taxpayer money to wipe out debts and recapitalise firms before putting
them on the market--for example, the water authority got 5 billion pounds of
debt relief plus 1.6 billion pounds called the "green _ dowry" to
make the bride more attractive to prospective buyers. A lot of people submit
that we should stop talking about privatisation and use words that tell the
truth: we are talking about alienation and surrender of the product of decades
of work by thousands of people to a tiny minority of large investors. This is
one of the greatest hold-ups of ours or any generation.
S. George, A short history
of neo-liberalism, ERA Email Network, 2..8;2000.
________________________________________
15. PRIVATISATION.
The campaign in the US to privatise the pension scheme. The Social Security
fund constitutes a huge sum of money now under the control of the government
that the business world is itching to get its hands on "The prospect of
140 million new investment accounts, from which financial interests can extract
fees and commissions, is a potential gravy train that capital simply cant
resist." "The Bush campaign received its largest contributions from
the investment (securities) industry, which has made privatization of Social
Security
The editors, "Social security, the stock market and the elections", Monthly Review, 52, 5, Oct. 2000, p. 9.
The privatisation of health services clearly raises costs and reduces the number
covered. The US spends 11% of DGDP on health, but the UK with a more public
system spends 6%, and the effects are not better in the US. 92.
P. Self, Rolling Back the Market, New York, St. Martins, 2000.
In 1996 alone privatisations to the value of $100 billion took place. 187 "In
a number of countries increased malnutrition and other diseaseshave appeared
in the wake of privatisation." 19.
J. Madeley, Big Business, Poor People, Zed Books, 1999.
The privatization of municipal water services has a terrible record that is
well documented. Customer rates are doubled or tripled; corporate profits rise
as much as 700 per cent; corruption and bribery are rampant; water quality standardsdramatically;
overuse is promoted to makemoney; customers who can't pay are cut off. In France,
both
water giants Vivendi and Suez-Lyonnaise des Eaux have been repeatedly cited
for corruption. When water was privatized in Great Britain, water meters were
installed in homes and company employees shut off service tomany thousands of
customers who could not pay their full water bills. When privatization hits
the Third World, those who can't pay will die.
The Bolivia story has a happy ending (for now). By the hundreds of thousands,
Bolivians marched to Cochabamba in a showdown with the government. On April
10, they won. The Bolivian government kicked Bechtel out of the country and
revoked its water-privatization legislation. Oscar Olivera, the humble Bolivian
shoe maker who led the fight, brought his message to a Washington rally during
the recent IMF/World Bank meetings. He said if water is privatized and commodified
for profit, it will never reach the people who need it but serve only to make
a handful of water corporations very rich. There is no way to overstate the
crisis of fresh water facing the world today. No piecemeal solution will prevent
the collapse of whole societies and ecosystems. A radical rethinking of our
values, priorities and political systems is urgent and still possible. Water
belongs to the Earth and all species; no one must be allowed to expropriate
it for profit.
from M. Barlow.
"
the state
once defended social values against adverse market
impacts, but is now generally supportive of global capitalism and is left with
much of the blame for its ill effects." Xi
P. Self, Rolling Back the Market, New York, St. Martins, 2000
.In Argentina and Bolivia
following privatisation of water supplies,
Charges have increased enormously
while the service has worsened. The two French giants and their subsidiaries
have been signing highly remunerative privatisation contracts on the water market
for 15 years. he market is dominated by two big French multinationals, Vivendi-Générale
des eaux and Suez-Lyonnaise des eaux. They now control nearly 40% of the
world market, eachserving, and billing, more than 110m people, Vivendi in 100
countries, Lyonnaise in 130.
In Tucuman, Argentina, in 1997 the population started a civil disobedience campaign
against a Vivendi subsidiary, refusing to pay their bills in protest at deteriorating
water quality and doubled charges. Générale des eaux had acquired
the province's privatised water and sewerage concessions in 1993. But its immediate
increase in the price of those services (averaging 104%) brought protests from
the consumers.
(You can't stop them using your resources
) The WTO's Qatar meeting in
November saw more privatisation. Under the heading "trade and environment",
article 31 of the
final agreement calls for "the reduction or, as appropriate, elimination
of tariff and non-tariff barriers to environmental goods and services,"
including water. This makes any attempt to control commercial exports of water
illegal.
"Water is now a luxury in Alto Lima," according to a worker sacked
by Aguas del Illimani. A luxury he can no longer afford.
Cochabamba in Bolivia is the only town where the local people, together with
peasants from the surrounding area, have found the strength and resources to
respond and reverse the privatisation of the water supply (7).
"Global Market in Water; Commodifying rain." Franck Poupeau.
On history of privatisation...Historically the first Privatisation was the enclosure
of the Commons, that destroyed the self-reliant communities of the early modern
period, and with the destruction of these communities drove the workers into
the industrial slums to work in the factors and mines of the early Industrial
era. 1850s: Since then we have seen further privatisations of mineral rights
beneath the surface of
the ground (1850s) which enabled miners to peg claims on land owned by other
1850s: Since then we have seen further privatisations of mineral rights
beneath the surface of the ground (1850s) which enabled miners to peg claims
on land owned by others. This led to the Californian and Australian Gold Rushes,
and the destruction of Aboriginal and Indian culture and land ownership by what
are today "ghost towns" once the minerals have run out. Ghost towns
continue to develop. Anyone travelled to Koolyanobbing, Rum Jungle or Whitenoom
lately?1950s: Privatisation of broadcast rights to media companies which have
grown into some of the largest multinational corporations. Such privatisation
continues with the granting of broad-band and narrow cast spectrums to private
interests for a fraction of their worth.
1980s: Privatisations in the UK of public transport, public utilities of all
kinds, saw profitable enterprises owned by governments being sold to private
businesses at knock-down prices. In every case the service has offered higher
costs, reduced service and less access to the needy than before privatisation
occurred. But competition always creates "winners" and "losers"
and in a free market, winners take all
. What happens, for instance, to
the losers from a process of competition is not considered by the globalisers.Re
the Irish potato famine...it was argued that Britain should not purchase corn
for the relief of poverty in Ireland as it would interfere with the "Law
of Supply and Demand".
As a result 6 million Irish were left in a famine that killed 2 million people
within 6 years, and which forced a further 2 million to emigrate.the British
East India Company, which transferred wealth from India to Britain. When
the British East India Company started, 60% of Indians were peasants, 35% were
artisans and craftsmen and 5% were "upper class" landowners and nobility.
After two centuries of British Rule, 90% were peasants, 7% were artisans, workers
and craftsmen, and 3% were "upper class". The Lancashire Cotton Industry
only developed once the East India Company had destroyed the Indian Cotton Industry,
forcing them to export their raw
materials and import the finished products.
3. the Hudson Bay Company, which transferred the wealth from the North American
Indians to Britain, eventually leading to the slaughter of their buffalo herds,
and xpropriation of their lands as well. Before the coming of Europeans to North
America there were 100 million Indians. Today less than 1 million survive.
But trans-nationals did not arise only in Western European history.
A. In the Roman Empire huge privately owned "latifundia" or
grain farms, worked by slaves, produced grain to feed the cities of ancient
Rome. Today the North African farms that were the "bread-basket" of
the Roman World form part of the Sahara Desert. Every case in which privatisation
of community assets has occurred within a "free market" system has
led, historically to exceeding the limits of the natural environment.
John Croft, "Globalisation",
Gaia Foundation, Western Australia, http://www.gaia.iinet.net.au/GLOBALISATION.htm
Quiggin and Spoehr estimated that the sale of ETSA (South Australian electricity
generator) was for $1.5 to 2 billion too cheap.
"Californias deregulation scheme is a colossal and dangerous failure.
It has not lowered consumer prices. And it has not increased supply. In fact
it has resulted in skyrocketing prices, price gouging and unreliable supply
"
"Thousands of state owned enterprises around the world have been sold well
below their real value. One study of the privatisation of 21 public enterprises
in Britain revealed that the total undevaluation of assets was around 13 billion
pounds
. J. Spoehr, Power Politics,
Australian Options, May 2001.
___________________________________________________________________
16. RURAL DECLINE
In 1960 there were 3000,000 farms in Australia. In 2001 there are only 100,000.
They employ 30% fewer workers.
E. Fayner, Globalisation and the Australian economy", ERA Newsletter, 12,
17, March-April, 2001, p. 4.
_________________________________________
17. SOCIAL DAMAGE CAUSED.
See also the section "Nature and effects of globalisation".
"
in Britain it was recently revealed that many hospitals have reduced
the age limit for treatment of several diseases to 65! (p. 456).
T. Fotopoulos, "Welfare state or economic democracy", Democracy and
Nature, 5. 3. 1999, 433-468.
"Since multinationals pay little tax, these services are becoming increasingly
hard for governments to provide."
E. Elliott and M. Barlow, GATS, Privatising all Services!, wwwcommunitycauldron.com
Between 1981 and 1992,federal spending for subsidised housing fell by 82%; job training and employment programs were cut by 63%, and the budget for community development and social service block grants was trimmed by 40%. Between 1972 and 1992, welfare and food-stamp benefits for single mothers declined by an average of 27% nationwide no state in the early 1990s provided grants and subsidiesequal to 100 percent of the poverty level."
G. Winslow, Capital crimes; The political economy of crime in America, Monthly
Review, Nov., 2000, p. 45.
To sum up: the 'Fordist' labour market typical of the post-WW2 welfarestate
is giving way to a more 'flexible' and fragmented labour market where average
wages, benefits and job security are lower than was typical of the Fordist era.
Much of our evidence has been drawn from the US but similar trends can be seen
at least in most of the English-speaking countries. If the evidence from the
US is an indicator of the logic of lobalization at work, it is clear that employers
can no longer be relied upon to provide workers with good wages and benefits
such as health insurance and pensions. Increasingly workers and their families
are being left to fend for themselves, which they are less able to do in a situation
of job insecurity and declining wages. 2
R. Mishra, Globalisation and the Welfare State, Elgar, 1999.
___________________________________________
18. STATE SPENDING BEING CUT.
"
in Britain it was recently revealed that many hospitals have reduced
the age limit for treatment of several diseasesto 65! (p. 456).
T. Fotopoulos, "Welfare state or economic democracy", Democracy and
Nature, 5. 3. 1999, 433-468.
"Since multinationals pay little tax, these services are becoming increasingly
hard for governments to provide."
E. Elliott and M. Barlow, GATS, Privatising all Services!, wwwcommunitycauldron.com
Between 1981 and 1992,federal spending for subsidised housing fell by 82%; job
training and employment programs were cut by 63%, and the budget for community
development and social service block grants was trimmed by 40%. Between 1972
and 1992, welfare and food-stamp benefits for single mothers declined by an
average of 27% nationwide
no state in the early 1990s
provided grants
and subsidiesequal to 100 percent of the poverty level."
G. Winslow, Capital crimes; The political economy of crime in America, Monthly
Review, Nov., 2000, p. 45.
To sum up: the 'Fordist' labour market typical of the post-WW2 welfare state
is giving way to a more 'flexible' and fragmented labour market where average
wages, benefits and job security are lower than was typical of the Fordist era.
Much of our evidence has been drawn from the US but similar trends can be seen
at least in most of the English-speaking countries. If the evidence from the
US is an indicator of the logic of globalization at work, it is clear that employers
can no longer be relied upon to provide workers with good wages and benefits
such as health insurance and pensions. Increasingly workers and their families
are being left to fend for themselves, which they are less able to do in a situation
of job insecurity and declining wages. 28
R. Mishra, Globalisation and the Welfare State, Elgar, 1999.
________________________________________
19. TAKEOVER OF YOUR NATIONAL RESOURCES.
Note how GATS (above) involves the right of foreign corporations to take control
of water and electricity supply; this is another area in which globalisation
will lead to national resources moving out of national control.
"We're in a huge battle over water that we've got to begin to pay attention
to. Maude Barlow out of Canada has a
wonderful report ... called "Blue Gold'' about Canadian water. We've got
a huge water shortage developing around the world. You think, well, 70 percent
of the globe is covered with water; well, yes, but only one half of 1 percent
of that is fresh water and drinkable water. And 20 percent of that is in Canada,
so corporations have very strong designs on Canadian water, and I'm not talking
about Perrier. I'm not talking about bottling the water.
I'm talking about massive wholesale moving of that water out of Canada to the
highest bidders around the world, which is mostly going to go to the agribusiness
corporations, suburban developments and the golf courses."
(Source not recorded.)
North American Free Trade Agreement (NAFTA) and institutions such as the World
Trade Organization (WTO). ..
agreements effectively give transnational corporations the unprecedented right
to the water of signatory countries.
Already, corporations have started to sue governments in order to gain access
to domestic water sources. For example, Sun Belt, a California company, is suing
the government of Canada under NAFTA because British Columbia (B.C.) banned
water exports several years ago. The company claims that B.C.'s law violates
several NAFTA-based investor rights and therefore is claiming $220 million in
compensation for lost profits.
With the protection of these international trade agreements, companies are setting
their sights on the mass transport of bulk water by diversion and by super-tanker.
The International Forum on Globalization (IFG) has issued a 46 page report,
June 1999, titled: Blue Gold: The Global Water Crisis and the Commodification
of the World's Water Supply, Author: Maude Barlow
How globalisation enables resources to be taken
the world is running
out of fresh water sources at an alarming rate and that conflict over what remains
will be inevitable. To respond to the crisis,-the World Bank has recently adopted
a policy of water privatization and full-cost water pricing. This policy is
causing great distress in many Third World countries, which fear that their
citizens will not be able to afford for-profit water. Ironically, this policy
has also created the first of the "water wars" Mr. Serageldin predicted,
the bloody civil unrest that plagued Bolivia in recent weeks.
Two years ago, the World Bank (whose official attends Bolivian government cabinet
meetings as a full participant)
refused to guarantee a $25-million (U.S.) loan to refinance water services in
Cochabamba, Bolivia's third-largest city, unless the government sold the public
water system to the private sector and passed the costs on to consumers. Only
one bid was considered, and the utility was turned over to a subsidiary of a
conglomerate led by Bechtel, the giant engineering company implicated in the
infamous Three Gorges Dam in China, which has caused the forced relocation of
1.3 million people.
In January, 1999, before the company had even hung up its shingle, it announced
the doubling of water prices. For most Bolivians, this meant that water would
now cost more than food; for those on minimum wage or unemployed, water bills
suddenly accounted for close to half their monthly budgets. To add insult, the
World Bank granted absolute monopolies to private water concessionaires, announced
its support for full-cost water pricing, pegged the cost of water to the American
dollar and declared that none of its loan could be used to subsidize the poor
for water services. All water, even from community wells, required permits to
access, and peasants and small farmers even had to buy permits to gather rainwater
on their property.
M. Barlow, "The World Bank must realise water is a basic human right",
9th May, 2000, ERA Email Network,
13.5.2000.
The "discipline imposed under SAPs "
has just one true mandate:
to engineer a neoliberal world order so that first world countries can seize
third world resources.
Extract from "The World Bank's practices allow the rich to steal from the
poor". G. Monbiot, The Guardian, Thurs, April 13, 2000.
"The more global the economy the easier is their (corporations and banks)
access to whatever of the worlds wealth remains." 82
D. Korten, The Post-Corporate World, Kumarian, 1999.
The goal is to run down public institutions so they can be taken by corporations:
McMurtry refers to a strategy "
to defund all social sectors across
the world which provide non-profit, life serving goods so that they can be commodified
by for profit service corporations." This is an "
unseen program
of corporate privatisation of the civil commons
"
J. McMurtry, "Understanding the agenda of tax cuts", 8, July, 2000,
p. 80.
"
liberalising their economies
means making them more open to
corporations." Xi.
J. Madeley, Big Business, Poor People, Zed Books, 1999.
Former U.S. Trade Representative Mickey Kantor later explained that "the
troubles of the tiger economies offered a
golden opportunity for the West to reassert its commercial interests. When countries
seek help from the IMF, Europe and America should use the IMF as a battering
ram to gain advantage."
M. Weisbrot, :"Hoodwinked", ERA Email Network, 19.3.20.
According to M. Kantor, former US trade official, "The IMF is being used
as a battering ram to open up the doors of the Asian economies so that our companies
can have market access."
M .Khor, "The Asian tiger economic meltdown", Monetary Reform, Fall/Winter,
1998-1999, p. 27.
McMurtry refers to "...a plan for systematic takeover of public education
and higher research, a bigger prize in net monetary value than past colonial
occupations. The ...domestic public sector has replaced the external colony
as the target for private capital occupation and growth."
J. McMurtry, "At the edge of a new dark age", Committee on Monetary
and Economic Reform,, 12, 1, Jan, 2000.
_____________________________________________________