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Hadiza Wada, DBA
Dateline: August 7, 2009
The current economic order globally is unsustainable. For continued co-existence, every nation has to be a participant, whether a major producer or a consumer. This demands at the bare
minimum adequate ability to be either. Though the industrialized nations continue to hold the financial key to the realization of most developmental projects, and also the production of goods, the consuming nations have to be strong enough to continue to afford buying products or services from them
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Everything around us is however failing at a fast rate, be it the physical condition of the earth itself, where we face problems of global warming, ice cap melting at the poles, devastating tsunami not seen in a very long time and highly devastating hurricanes. Then there is the increasing greed of the
industrialized nations which has become so much of a problem even before the current financial market crisis.
The cause for global poverty, disease, and deaths according to various sources, lies with the IMF and World Bank’s strangling policies on the one hand, and unfair global trade policies on the other. The arrangement benefits the industrialized at the expense of the developing nations. Both sides are now sure that the result of continuing along the same path is suicidal. The approach to what to do is what differentiates the victim of the current order, as against its perpetrators
G8 Initiates actions in panic
The consuming nations have been so much strangled that the industrialized nations began to panic a few years ago. If history is something we can learn from, the panic does not appear to be out of moral sound judgment, but primarily because those burdened nations are crashing under the weight of debt, and may not have a healthy market for their industrialized goods. Many nations at that time, and even now, have been choosing between basic health care and food for their citizens, dying daily from poverty and basic curable diseases. There was then a rush for the first time, at a meeting of the G8 in Gleneagles to consider debt relief and write-offs. The ripple effect of such realization and ensuing panic did not stop however, until today even the industrialized nations are beginning to exhibit the same global problems of the developing nations.
Debt relief and write-offs are just a band-aid procedure on a wound that needs proper medication, attention and care to heal. The relief may have also came too late to do much good. Serious transformation is necessary. Many concerned NGOs and movements across the globe have decried the policies and practices that led the world into such dilemma. They advocated a different approach to policies that clearly indicate the way global economic and trade policies are running headlong into a devastating crash to everyone’s detriment.
In his book which he dedicated to those committed to creating a stable, sustainable, and peaceful world, John Perkins (2007), who was an official agent of corporations involved in corporate scams, exposed many tactics, usually ruthless, engaged in by multinational corporations, financial institutions and world’s powerful governments to create and sustain an
imbalanced system of global trade, financing, and ultimately domination.
Perkins believes that effective reform ideas should be generated and discussed, studied, analyzed and implemented directly at corporate level. Also urgently needed are an active population in the United States especially, and other countries across the globe, pushing their
government for trade policy changes, including scrutiny of their tax dollars used in those “multi billion dollar scams.” He goes on to say that modern corporations have all the rights of individuals “under current laws of the United States, but none of the responsibilities. In fact, they are licensed to steal.”
It is important here to differentiate from the people in the West, ordinary hard working individuals who are the tax payers whose taxes fund governmental programs. These average people sometimes further donate for private charitable works, from their already taxed income. They however are not aware of the counter productive policies and practices that those they entrust with their money engage in.
The Crux of the matter
The World Bank and International Monetary Fund, IMF, according to various researches, collaborate with corporations to entrap poor nations endowed with resources the corporations need, by generating loans they know the poor countries could not afford the repayment terms. It was one of the causes that saw massive demonstrations by populations of activists and NGOs in industrialized countries
beginning about a decade ago, including one that forced the closure of a WTO meeting in Seattle in December of 1999. Since 1999 to date, demonstrators from different countries continue to disrupt WTO meetings wherever they are held, decrying among other things IMF, World Bank, trade and industrial policies. How bad are those “scams” that Perkins is talking about:
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The World Bank Building
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“we channeled funds from the bank and its sister organizations into schemes that appeared to serve the poor, while primarily benefiting a few wealthy people. Under the most common of these, we would identify a developing country that possessed resources our corporations coveted (such as oil), arrange a huge loan for that country, and then direct most of the money to our own engineering and construction companies – and a few collaborators in the developing country.”
Giles Bolton (2008), a foreign aid agent, however initiated his position by describing the failures in three areas of African development that he would rather hold Africa or its governments responsible. They are corruption, conflict, and lack of democracy. All three, he says, are primarily internal problems. He only holds foreign governments and corporations as complicit. To sum his arguments, the donors and aid packaging experts spend money on badly conceived and targeted projects, with no real impact on the receiving nations’ population. Areas he stressed are low interest loans and grants (aid) where he enumerated some of the problems as; having little or no honest public debate about the quality of aid, thereby keeping foreign public in the dark about persistent bad aid. The result is more money spent badly.
However, as commonly misunderstood by most people around the globe about the use of aid funds in African countries, Bolton says corruption or misappropriation of foreign aid from tax payers is an insignificant percentage, if at all. Why? Aid is carefully planned and targeted to specific programs. The money released is tied to continuous monitoring of the funds, and regular audits are conducted thereafter. If doubts exists, aid is interrupted at will by donor.
Bolton also supports Perkins premise that one of the most devastating policies and practices that resulted in the current African economic crisis was created and nourished by the World Bank and IMF. Skyrocketing interest rates and bad economic policies, loans with little regard for ability to pay back etc consequently led to defaulting in repayment. He goes on to give a vivid description of the exploitation that resulted from it:
“Many African countries continued to default, and saw their debt rise and rise. Nigeria, for example, originally borrowed $5 billion from foreign governments and institutions; although it had since paid back $16 billion, in early 2006 it still owed $32 billion more.”Then there is the question of the structures through which global trade occurs, whether they give an equal (or fair) chance to the world’s poor countries. Apart from subsidies to local farmers in the US and those to cattle farmers in the EU, which continues to devastate African farmers, there is another enduring problem. A carefully crafted game of defrauding the producers at developing countries was an ancient art that others find acceptable to follow.
Bolton explains that an unfair and morally unjust practice which began long ago during colonial times, a typical example, saw Britain banning cotton processing in India, a century old practice by Indians. The same cotton from India was then exported cheaply to Industries built in England to receive, process the cotton, weave them into clothes, and then sell them internally within Britain and abroad to other countries including India.
Solutions to the problems
Perkins sees no option but to transform all these problem areas, using genuine policies and practices that ensure an enduring relationship as common citizens of a single planet. This makes a lot of sense. Globalization has presently led to constant around the clock mass movement of people, goods, ideas etc across nations. Long gone are the days of policies of greed and selfishness in such matters; choosing to protect only one’s people, their health and ideas to the detriment of, or at the expense of others on the same planet. This has been ampfully demonstrated today by issues such as the pattern of the spread of Swine Flu, proliferation of the use of world-wide-web to retrieve information on almost anything, and corporate outsourcing of manufacturing and services globally, etc.
How does one confront the problems, and where will one start to implement solutions? Perkins advocated transforming the trend and creating a world the upcoming generation will be proud to inherit. This we do through “transformation of the power-base of the corporatocracy, the corporations – the way they define themselves, set their goals, develop methods for governance, and establish criteria for selecting their top executives.” Possible? Yes, he says. He goes on to provide examples of times when people rose to change past practices and succeeded in making changes to corporate practices, e.g. movement against environmental pollution, ozone layer depletion etc.
The power base for forcing those changes lies with the people. The fact that the people in general make and bring down governments through the ballot, provide the manpower into manufacturing, and also are the consumers of corporate products, is the key to success. It essentially means people are the power behind corporate endeavors. The general population, therefore hold the critical tools for corporate survival, and can use it with enough campaign and awareness to enforce changes.Reference:
- Giles Bolton (2008). Africa Doesn’t Matter: How the West Has Failed the Poorest Continent and What We can Do About It.
New York: Arcade Publishing
- John Perkins (2007). The Secret History of the American Empire: Economic Hit Men, Jackals, and the Truth about Global Corruption. New York: Penguin Group
