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Our Secret War |
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"There is an unspoken understanding throughout the business world that any attempt to redistribute the wealth is a form of socialism that will destroy freedom."
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War is human devastation, with bombings and destruction, and confrontation and death. Much of it can be hidden from the public with a little help from the media. But as we're now experiencing in our country, it is difficult for the architects of war to sustain their efforts when the sights and sounds of other people's suffering become too obvious to ignore. It would be so much easier if war profits could be achieved without all the physical destruction. Economic policy can be a tedious subject. But beneath the perplexing language of trade liberalization and government deregulation lies an insidious form of warfare against the developing world. It is a slowly conducted war with many of the same deadly effects as a physical war. People lose their homes and livelihoods, governments collapse, and the ravages of poverty and malnutrition and disease gradually overcome entire families. People are victimized by our trade policies, and by our subsidies and tariffs. Free trade, as defined by IMF and World Bank ‘Poverty Reduction Strategies,’ often means privatization and less government in developing countries. These policies have forced poor countries to shift from agriculture to commodity exports such as precious metals, coffee, and chocolate, which are largely consumed by western countries. Empowered corporations view labor rules and environmental laws as unprofitable trade barriers. The removal of government services means that people are charged more for schools, health clinics, and drinking water. Indebted countries often cannot pay back their loans, and they are forced to part with valuable natural resources, or to allow military installations on their land. [1] Subsidies have been called a form of ‘corporate welfare.’ [2] The United States gives more economic aid to large agribusiness companies than foreign aid to poor countries. [3] Subsidies also increase the amount of cheap food dumped on the world market. [4] In non-agricultural markets, subsidies allow wealthy countries to sell finished goods more cheaply, so that developing countries, who are not allowed their own subsidies, are forced to export raw materials. Worse yet, poor nations compete with each other, forcing down the prices of their exports. [5] The U.S. also imposes high export tariffs on selected foreign countries. U.S. tariffs on countries like Viet Nam and Bangladesh are 10 times higher than on European Union countries. Viet Nam pays $470 million in taxes on exports worth $4.7 billion. The U.K. pays only $47 million for the same amount of exports. The Human Development Report 2005 calls this a ‘perverse tax’ on the poor. [6] In 2004, the U.S. demanded nearly as much in fees from Bangladesh ($314 million) as from France ($350 million), despite importing 14 times as much from France. [7] Sometimes people in developing countries are victimized by the “Curse of Gold.” Countries like Nigeria and Chad and the Congo are dubiously blessed with great supplies of oil, diamonds, and other commodities needed by the rich world, and their corrupt governments effectively rent their nations out to the highest bidders. The immense profits enrich the governments and the corporate elite. The inflow of dollars artificially inflates the local currency, and as a result local agricultural and manufactured products cost more and imports cost less. There is less motivation to continue traditional businesses. Many farmers and merchants and trades people look for jobs with the multinational companies, many of them American, who have taken control of their nations’ resources. With windfall incomes and less of a tax base, governments of developing countries have less need to collect taxes. They spend their money on military protection against the very people who used to support the government. [8] But wait, say the economists. African GNPs are growing at a 5% rate, and vast amounts of foreign investment are bolstering their economies. Free trade, say the neo-liberal macroeconomic planners, will eventually even things out for people everywhere. The world is getting flat. [9] Throughout the world the income gap is growing at an unprecedented pace. The lower half of the world’s adult population today owns just 1% of global wealth. [10] The income gap WITHIN countries is also growing. In almost two-thirds of the countries for which data is available Gini coefficients (a measure of inequality) have been rising since the 1980s. Workers’ share of national income in rich countries is at its lowest level in 30 years. [11] Outside of China, poverty has actually increased in developing countries over the past 20 years, and the number of people living in extreme poverty has nearly doubled to over 300 million. [12] According to the World Commission on the Social Dimensions of Globalization, the unemployment rate has increased in every part of the world except for the U.S., Europe, and South Asia. A 2003 IMF review found no evidence that globalization encouraged growth in developing countries. A World Bank study in December 2006 reported that 14 of the world’s 25 poorest countries experienced increases in poverty over the past ten years. According to the United Nations Report on the World Social Situation 2005, the OECD countries that have most vigorously implemented economic policies have experienced the greatest increases in inequality within their countries. The money doesn't reach the people most in need. The New Economics Foundation reports that only 60 cents out of every $100.00 of world income goes to those in extreme poverty, much less than in the 1980s before the growth of structural adjustment policies. [13] The results of intrusive economic policies can be seen around the world. In Mexico, the liberation of trade through NAFTA led to a tripling of corn exports from the United States. [14] The growth in exports caused prices to tumble. Corn that was priced 2.00 pesos per kilogram in 1994 dropped to .50 pesos in 2001. [15] A typical farmer in the Puebla region earned $400 for his crop in 2002, but the cost of production was $500. When NAFTA began, it had been anticipated that corn producers in Mexico would switch to higher-priced export goods like fruit and vegetables to compete on the global markets. [16] But as explained by a Chiapas farmer, “corn is the only work that we know how to do.” It might be reasoned that plummeting corn prices would at least help the consumer. But this is not the case. Maseca (with links to Archer Daniels) and Minsa (with links to Cargill) control the tortilla flour industry in Mexico. From the mid-1990s to 2001 tortilla prices rose as corn prices dropped, from .50 pesos per kilogram to 2.00 pesos per kilogram. [17] Mexican corn production became concentrated in the hands of a few wealthy landowners. Over 1.3 million jobs have been lost in agriculture since 1994, while 500,000 manufacturing jobs were gained. The minimum wage dropped from $5/day to $4/day, although this may have been partly due to the 1994-5 peso crisis. [18] The surging population around maquila factories at the U.S. border has overburdened existing water and sewage systems, leading to a startling rise in hepatitis, tuberculosis, cancer, intestinal diseases, and birth defects. New water treatment facilities have failed to materialize, partly because the poverty-stricken communities cannot raise the necessary financing and user fees. [19] In Nigeria, a once-dominant agricultural industry has collapsed as the government's emphasis has turned to oil. People who used to grow food for a living are ignored as their ‘production state’ becomes an ‘allocation state’ in which only a few local businessmen prosper, and most of the profits go to foreign oil companies. Militants in the Niger Delta attack oil company rigs and threaten workers to steal the ‘black gold,’ and if we hear anything about it we label them ‘terrorists’ and wonder why anyone would oppose development in their own country. But these are people who cannot find jobs when billions of dollars in oil revenue is being taken from their homeland. People who are living with pipelines on their farms and in front of their houses, where 24-hour gas flaring leaves toxic chemicals in the air and burns the forest that used to cool their villages. There is no electricity, no medicine, no way to learn a skill to make money. Angry young men with guns roam the areas where children used to attend school. Acid rain and oil spills have killed the fishing industry. Children drink polluted water, suffer from diarrhoea, and die. The western world knows this is happening, but we have little incentive to stop it because we need the oil. [20] In India, a 1991 government study found that before trade liberalization no child was known to have died from a lack of food. Since that time 8,000 children had died from malnutrition. [21] In 2002 47% of children's deaths were caused by a lack of food, even though food supplies overall had been plentiful. [22] “On the morning of February 2, 2005, in the Indian state of Andhra Pradesh, 32-year-old Lachi Reddy and his wife Bujjamma faced another day of mounting debts on their three acres of potatoes. His seed potatoes required constant watering and fertilizer to grow in the dry, red soil on his property, and farming supplies had gone up in price each year. Lachi had borrowed money frequently, from banks and private lenders, but he was not able to turn a profit. He considered switching from potatoes to sugar cane, but he didn't have the money for the materials and labor that would be required for the change. The situation had started to deteriorate two years earlier when the area of Andhra Pradesh fell victim to drought. Lachi was forced to make a loan – at 36% interest – to dig a well for water for his crops. He did find water. But meanwhile the price of potatoes at market had fallen so low that he could not repay the interest on his loan. “So on that February morning, Lachi took one more look at his potatoes waiting to be harvested, and then went back to an empty hut and swallowed a bottle of pesticide.” Over 2000 farmers committed suicide in Andhra Pradesh in 2004. The number of such deaths had risen sharply since the mid-1990s. Christian Aid argues that the increase is due to an agricultural crisis caused by programs of trade liberalization and privatization promoted by the World Bank and the International Monetary Fund. These policies led to cheap imports and less government assistance. Christian Aid's opinion is shared by the Indian government's Commission on Farmers’ Welfare. Academic research concluded that severe personal debt led to depression in many farmers. [23] In Mexico, Nigeria, India, and many other countries economies have been strengthened because of globalization and free trade. But the benefits have accrued to a privileged few. Workers’ share of national income in rich countries is at its lowest level in 30 years. [24] The western world’s agricultural subsidies enrich a few people while making it impossible for farmers in the developing world to sell their crops in their own countries. The wealthy, the educated, the well-positioned consider this good business. There is an unspoken understanding throughout the business world that any attempt to redistribute the wealth is a form of socialism that will destroy freedom. Globalization benefits developing countries if it is managed in an ethical and equitable manner. Countries with open trade policies have generally grown faster than those who shut off trade to the outside. But in order to be equitable, globalization must be accompanied by government-led policies to address the needs of the poor and the environment. [25] Otherwise it amounts to a silent, drawn-out war against the people who don't have the weapons to fight on the economic battleground. Paul Buchheit is a professor with the Chicago City Colleges, co-founder of Global Initiative Chicago (GIChicago.org), and the founder of fightingpoverty.org.
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