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Re: 3rd World Austerity: Coming Soon To a City Near You
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John Perkins
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Nov 04, 2003 03:41 PST
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At 11:45 03/11/03 +1000, Doug Everingham wrote:
| | I hope John P has it right, but I think one report I saw claimed that
the lion's share of farm subsidies (UK and US) goes to transnational
agribusiness, not to small farmers going bankrupt in all continents.
-- Doug Everingham
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A large part of the US$350 billion of annual subsidies paid by US and EU
governments probably does go to large agribusiness. That is another reason
why they should be pressured to get rid of the subsidies. Poor countries do
not pay their farmers any subsidies because they cannot afford it.
The problem with the subsidies and the associated trade restrictions. is
that they deprive 100 million people of employment and force 400 million
people into dire poverty. This happens because they are excluded from rich
country markets and thereby deprived of export income. It also happes
because of depressed prices and dumping of agricultural products in third
countries.
This is not just preventable poverty but deliberately caused poverty, which
I thik could be described as a crime against humanity. The only solution is
for the WTO rules to be changed to allow free trade. All the agenda
regarding investment rights and foreign ownership rights, pushed at the WTO
by the US and EU is simply a diversion to avoid the real issue.
John
| | On Tuesday, October 21, 2003, at 06:10 PM, John Perkins wrote:
| | | | Small farmers, having lost their subsidies and
import protections, are driven off their land into overcrowded cities.
|
No, they have not lost their subsidies, they still have US$350 billion
worth of annual subsidies, and that is the problem. This policy costs
100
million jobs in poor countries and causes 400 million people to live in
poverty of less that $2/day.
Whatever the shortcomings of IMF/WB policies, the solution is not for
them
to had over billions of loans without any prudential requirements,
which is
the only implication of these criticisms.
Why is it that the less people seem to know about economics, the more
confident they seem to be that the know all the right answers to
economic
questions?
John
At 10:29 21/10/03 +1000, you wrote:
| | Relayed by Doug Everingham
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Attachment Converted: "c:\eudora\attach\image12.tif"
Economic Reform Australia
ERA Information Network
Date: Sunday, 12 October, 2003
Relayed by: Jonathan Larson <elte-@clear.lakes.com>
Subject: 3rd World Austerity Policies: Coming Soon To a City Near You
Source: MAI-NOT network <owner-m-@flora.org>
3rd World Austerity Policies:
Coming Soon To a City Near You
http://www.projectcensored.org/publications/2004/index.html
Evaluators: Eric McGuckin PhD, Linda Nowak PhD
Researched by: Tony Cullen, Scott Frazier
Policies traditionally carried out overseas by "international lending
institutions" such as the World Bank or International Monetary Fund
(IMF)
are quickly becoming part of the U.S. domestic economy.
Privatization, loss
of social services, bifurcation of the economy and an overall decline
in
the lives of working people are an ongoing reality in the U.S.
Officially, IMF and World Bank measures were imposed to curb
inflation,
increase exports and strengthen the fiscal condition of debtor
nations,
allowing them to pay back their loans. In actuality, however, the
common
result of structural adjustments has been depressed wages, reduced
consumer
purchase-power, and environmental degradation, while boosting profit
rates
for multinational investors. Small farmers, having lost their
subsidies and
import protections, are driven off their land into overcrowded cities.
According to a number of economists, including the former chief
economist
for the World Bank, as western investment in the Third World increased
throughout the '90s, so did poverty and social instability.
The World Bank and IMF have a four-step "reform" formula for each
country.
The formula includes Capital-market liberalization, privatization,
market-based pricing, and, finally, the introduction of "free trade."
In
step one, capital is freed up to flow in and out across the borders.
Generally the result is the increased flow of capital out to external
businesses with no guarantee that the money will flow in through
foreign
investment.
Privatization is step two. This refers to the transfer of
traditionally
state-run services and utilities like gas, oil, roads, water, post
offices,
and banks to private companies. The problem, say critics, is that
private
ownership of a country's framework leaves it unable to protect its
citizens
or natural resources from abuses of power.
Step three of the program, market-based pricing, is the point at which
consumer purchase-power drops and the local economy really begins to
suffer. The country's political leaders no longer have the ability to
place
local controls on economic trends and the country and its citizens
become
vulnerable to the whims of the global market.
The final step in the formula, step four, is free trade. But "free"
is a
relative term when referring to import/export values and global trade
agreements. Third World nations are not on the same economic footing
as
their industrialized trade partners. Industrialized countries,
influenced
by their corporate backers, usually override attempts at import
protections
by Third World countries in order to procure local industries, cheap
labor,
and natural resources.
Many of these policies had been established slowly in the United
States
over a number of years, but the intensity and speed with which they
are now
emerging is unprecedented. After 9-11, with much of the public
distracted
by terrorism and the desire for national defense, business litigators
and
anti-labor politicians stepped up the process of rolling back laws
enacted
over the last 100 years to protect workers, the public, and the
environment
from the excesses of industry. Just as with World Bank/IMF policies in
other countries, the goal is to privatize profits and socialize
losses. The
vast majority of profits made by a company will be concentrated in a
few
private hands, while economic losses will be borne by the taxpayers
through
increased taxation and denial of social benefits. This is a trend that
represents a huge shift in social and economic policy in the United
States,
with long lasting implications.
Updated By Gabriella Bocagrande
The appearance of Joseph Stiglitz' book Globalization and Its
Discontents,
in 2002 was widely greeted as a radical departure by a World Bank
insider
from the neoliberal policies of the international financial
institutions in
Washington. While it was gratifying to see Mr. Stiglitz lambaste the
International Monetary Fund for promoting indigence, unemployment, and
organized crime every time it gained control over a distressed
economy in
the developing world, an alternative interpretation of Mr. Stiglitz'
observations suggests that he recommended no fundamental changes in
the
neo-liberal approach to 'development'. He suggested milder forms of
fiscal
intervention in economies in crisis and more generous 'social safety
nets',
but this is rather like recommending the distribution of pith helmets
to
protect people from nuclear combat.
Nor has the IMF changed its ways. Throughout '02 and '03, it
continues to
strangle the economy of Argentina by exacting continuing budget cuts
in
repayment of the external debt. Most recently, the IMF has threatened
the
new Argentine government with another credit cutoff for not allowing
private banks holding household mortgages to foreclose more rapidly on
delinquent homeowners, 50 percent of whom are now impoverished,
thanks to
the IMF itself. Stiglitz' response to this position would most likely
be to
argue that it is not sound economic policy to create more homeless
people,
since it weakens consumer demand. After all, homeless people are only
a
market for canned goods, plastic sheeting and pots and pans to bang,
while
people who own residences buy appliances and cookware, not to mention
Play
Stations, Next-Day-Blinds, and DVDs.
There is something fundamentally wrong with the IMF and the World
Bank, but
Joseph Stiglitz did not finger it: these institutions represent the
interests of First World finance capital, but they are never charged
with
this. Not by Mr. Stiglitz and not by the mainstream press. They
represent
themselves publicly as charitable institutions sincerely seeking to
promote
job growth and prosperity around the world, and Mr. Stiglitz let them
get
away with it. Coverage of them by Stiglitz and the press attributes
increasing world misery to well-intentioned 'mistakes' on their part,
rather than the systematic operation of the structural machinery of
greed.
Organizations which genuinely oppose the policies of the IMF and the
World
Bank are Public Services International, which advocates on behalf of
public
sector trade unions (www.world-psi.org), the Bank Information Center,
which
promotes transparency at the Banks (www.bicusa.org), and the Citizens'
Network for Essential Services (www.challenge globalization.org).
Sources:
1. HARPER'S MAGAZINE, March 2003
Title: "Resolved to Ruin"
Author: Greg Palast
2. COVERT ACTION QUARTERLY, Spring 2002
Title: "Global Rollback"
Author: Michael Parenti
3. THE TEXAS OBSERVER, 1/17/03
Title: "Mistakes Were Made" (a book review of Globalization and Its
Discontents by Joseph Stiglitz)
Author: Gabriella Bocagrande
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