-Caveat Lector-
Corporate Globalization and the Poor
By Russell Mokhiber and Robert Weissman
George Bush has thrown down the gauntlet, issuing a public challenge to
the anti-corporate globalization movement. When hundreds of thousands last
month demonstrated against the G-8 meeting of rich country leaders in
Genoa, Italy, George Bush decried the activists, saying it was the
advocates of corporate globalization who genuinely are seeking to advance
the interests of the world's poor.
It's not enough to mock Bush's pretension of being a defender of the poor
by pointing out that, through his giant tax cut, the president has
overseen one of the history's great transfers of wealth to the rich in
U.S. history. Critics must respond to his claims.
Unfortunately, that turns out to be a remarkably easy challenge to meet.
The last 20 years of corporate globalization, even measured by the
preferred indicators of the International Monetary Fund (IMF) and World
Bank, have been a disaster for the world's poor.
Over the last two decades, Latin America has experienced stagnant growth,
and African countries have seen incomes plummet. The only developing
countries that have done well in the last two decades are those Asian
countries that ignored the standard prescriptions of the IMF and World
Bank.
The Washington, D.C.-based Center for Economic and Policy Research (CEPR)
has published compelling data comparing growth rates from 1980 to 2000
(during the period of ascending IMF/World Bank power, when countries
throughout the developing world adhered to the IMF/Bank structural
adjustment policy package of slashing government spending, privatizating
government-owned enterprises, liberalizing trade, orienting economies to
exports and opening up countries to exploitative foreign investment) with
the previous 20 year period (when many poor countries focused more on
developing their own productive capacity and meeting local needs).
The results: "89 countries -- 77 percent, or more than three-fourths --
saw their per capita rate of growth fall by at least five percentage
points from the period (1960-1980) to the period (1980-2000). Only 14
countries -- 13 percent -- saw their per capita rate of growth rise by
that much from (1960-1980) to (1980-2000)."
CEPR found that the growth slowdown has been so severe that "18 countries
-- including several in Africa -- would have more than twice as much
income per person as they have today, if they had maintained the rate of
growth in the last two decades that they had in the previous two decades.
The average Mexican would have nearly twice as much income today, and the
average Brazilian much more than twice as much, if not for the slowdown of
economic growth over the last two decades."
A follow-up CEPR study used a similar methodology to look at social
indicators. CEPR found that progress in reducing infant mortality,
reducing child mortality, increasing literacy and increasing access to
education has all slowed during the period of corporate globalization,
especially in developing countries.
The CEPR global comparisons across time show the bottomline, combined
effect of the specific policy components of corporate-friendly policies
imposed by the IMF and World Bank and enforced by free trade agreements.
These include the following:
* Trade Liberalization -- The elimination of tariff protections for
agriculture and industries in developing countries often leads to mass
layoffs and displacement of the rural poor. In Mexico, for example,
opening to U.S. agriculture imports has forced millions of poor farmers,
who find themselves unable to compete with Cargill and Archer Daniels
Midland, off the land.
* Privatization -- IMF and World Bank structural adjustment policies
typically call for the sell off of government-owned enterprises to private
owners, often foreign investors. Privatization is regularly associated
with layoffs and pay cuts for workers in the privatized enterprises.
* Cuts in government spending -- Reductions in government spending
frequently reduce the ability of the government to provide services to the
poor, exacerbating the social pain from rural displacement and industrial
layoffs.
(Note; These cuts only apply to services to people -- corporate welfare will
still exists in all of its wonderfull
varieties.)
* Imposition of user fees -- Many IMF and World Bank loans and programs
call for the imposition of "user fees" -- charges for the use of
government-provided services like schools, health clinics and clean
drinking water. For very poor people, even modest charges may result in
the denial of access to services.
(Note; This may be comming to your community soon. The mayor here in SLC
proposed that citizens start
paying for calls to police and fire. Fortunately he stopped saying this before
he was lyniched. Why do we pay
taxes Rocky?)
* Export promotion -- Under structural adjustment programs,
countries undertake a variety of measures to promote exports, at the
expense of production for domestic needs. In the rural sector, the export
orientation is often associated with the displacement of poor people who
grow food for their own consumption, as their land is taken over by large
plantations growing crops for foreign markets.
* Higher interest rates -- Attractive to foreign investors, higher
interest rates exert a recessionary effect on national economies, leading
to higher rates of joblessness. Small businesses, often operated by women,
find it more difficult to gain access to affordable credit, and often are
unable to survive.
Advancing the interests of the poor has nothing to do with the corporate
globalization agenda. This agenda is driven first by profit-seeking, and
second by ideology.
(It's about profits and control. When did a bunch of rich international
bankers start giving a damn about the
poor?)
But the corporate globalizers are nothing if not ambitious. They are
seeking now to push fast-track negotiating authority through the U.S.
Congress, to force all of Latin America into a NAFTA-style trade and
investment agreement, launch a new World Trade Organization negotiating
round, and intensify the IMF and World Bank's ability to impose structural
adjustment through a sham debt relief process.
To lessen preventable human suffering, it is imperative that the
protesters continue to build the movement against corporate globalization,
with everything from street protests to citizen lobbying of Congress.
Another world is indeed possible, as the protesters are asserting. But for
now the immediate challenge is to stop the corporate globalizers from
making the existing one worse.
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor. They are co-authors of Corporate Predators: The
Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common
Courage Press, 1999).
(c) Russell Mokhiber and Robert Weissman
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