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BAILOUT OR RANSOM ?
Averthanus L. D'Souza.
It is not surprising that the global economic meltdown is accompanied by a
resurgence of marine piracy (more recently off the Coast of Somalia). The
incidents of piracy increased to such an extent that the United Nations
Security
Council had to include on its Agenda a discussion of piracy as a major threat
to
peace and stability in the world. Strange as it may seem, piracy operates on
the
same principle as the economic bailout packages. In short, this means that in
the
bailouts, just as in piracy, the world's inhabitants are forced to subsidize
crime and corporate irresponsibility. Let us take a closer look at the
similarities between the two phenomena.
Piracy involves the seizure of a commercial vessel in international waters and
the
holding of the ship and it's crew until a very large ransom is paid to the
pirates either by the company which owns the ship or by the government in
whose
territory the ship is registered. It appears that the first few cargo
vessels which were 'captured' by the pirates were released only after large
amounts of ransom money were paid to the pirates. The amounts of these
ransoms
have not been disclosed to the public either by the Companies or their
respective
Governments. When the acts of piracy increased and the number of vessels
captured
began to grow, the nations affected began to get upset about the safety of
their
citizens and of their marine trade.
Since there is no international law (or, at best ineffective antediluvian
laws)
governing acts of piracy on the High Seas, and also since there is no
international marine force to police the normal commercial routes, the
countries
concerned were at a loss as to how they should react to this growing menace
which
had reared its ugly head in modern times. The countries which were affected
by the
seizure of their vessels and the demands for ransom actually deployed their
Navies
to protect their own marine commerce routes. The Indian Navy was the first to
actually use fire-power to destroy one of the ships which was involved in an
act of
piracy in the Gulf of Aden. This action was soon followed by similar
deployment of the Navies of China and other affected countries. However, this
did
not appear to be a viable solution to the problem of piracy. Moreover, it was
not
clear whether the pirates who obviously operated from within the territorial
limits of Somalia had any backing from their own government or not. There
were
other complications. Was it alright for an affected country to pursue the
pirates
into their own homeland and take action against them? The question of
national
sovereignty was obviously involved.
These ticklish questions about how best to protect international marine trade
from
pirates, and how best to constitute a marine protection force which did not
involve
the Navies of the trading countries are still being discussed among the
countries
and within the United Nations. One expectation is that the discussions will
result
in the formulation of a common international law against marine piracy and the
setting up of policing institutions to implement the law.
The recent acts of piracy have opened up a new area of concern and have also
highlighted the need for international cooperation at a level which is more
than
exhortatory. Globalization requires more than international agreement on
issues.
It requires agreed mechanisms to implement the agreed policies.
How, then, is international piracy on the High Seas comparable with the
economic
meltdown which we are in the throes of? The profligacy of the economic
policies
of the "advanced" countries has resulted in a growing disparity in the income
levels of people is different parts of the world. It has also resulted in a
grave
disparity in the levels of productivity. In the Sixties and the Seventies the
differences were expressed in terms of North and South, Developed and
Underdeveloped; Technological and Agrarian etc. While the differences were
sought
to be described, no efforts were made to remove these disparities. The
pattern
was simply to blame the so-called "Third World" countries for the huge gap in
incomes and products. The arguments used were that the citizens of the
"Underdeveloped" countries consumed more than their share of the earth's
resources -
never mind that this was totally untrue. The populations of the Third World
countries were blamed for the poverty which prevailed in over two-thirds of the
world. The economically "advanced" countries attempted to impose "population
control" measures on the people of the Third World. They blamed the poor for
the
condition of their poverty; whereas, in fact, it was the exploitative
neocolonialist policies of the industrialized countries which had, in fact,
been
responsible for the poverty of the Third World. Primary products such as
coffee,
tea, cotton, silk, rubber, tobacco and such others were acquired at grossly
exploitative prices from the already overburdened producers in the Third World
and
were then sold at unreasonably huge profits in the First World. The margins
of
profit had no relationship whatsoever to the actual cost of processing. The
multinational corporations (sometimes described as trans-nationals) thrived in
the
economy which was contrived to serve their avaricious purposes. There were,
of
course, a few courageous economists who had warned that such a system was not
sustainable in the long run. President John F. Kennedy expressed this anomaly
most
dramatically when he declared that "the existence of poverty anywhere was a
threat
to peace everywhere." He pleaded for a transfer of technology together with a
transfer of knowledge. However, these efforts were thwarted by the vested
transnational corporations who were not prepared to sacrifice their margins of
profit for a more equitable distribution of the earth's resources.
A hundred years (or even a couple of centuries) is only a second's tic in the
scale of human history. The years have shown, very dramatically, indeed, that
a
global economy which is constructed to safeguard the selfish interests of a
few at
the expense of the vast majority cannot be sustained in the long term. Such a
skewered economy is bound to collapse - as, in fact, it has done! An economy
built on greed is destined to collapse from the weight of its own internal
inconsistencies. Recent events have amply proved that the world is in need of
a
complete economic overhaul. It is not enough to "infuse" more liquidity into
the
system - a system which has conclusively been proven to be unsustainable -
because
it is like transfusing blood into a cadaver. What is needed is that an
alternative
be found to the existing economic system which incorporates the principles of
social
justice and equity into its institutional structures. Philanthropy and more
charitable trusts are not an answer to a flawed economic system. The collapse
of
Enron, and, more recently, the exposure of the Satyam scandal are graphic
reminders of the larger collapse of the global economy which is to come, if an
alternative system is not put into place with the utmost urgency.
The comparison between piracy and the financial meltdown begins to appear more
apparent when we see that the industries which represent the real face of a
defective economy are not allowed to pay the penalty for their inept policies
and
criminal practices, but are, instead, sought to be kept alive by huge infusions
of
public money. What is actually needed is a huge dose of ethical inputs
instead of
the financial inputs which are envisaged. The proposals which are touted are
simply a way of throwing good money after bad. They violate all the norms, not
only
of good economics, but also of good morality.
Averthanus L. D'Souza
D-13, La Marvel Colony,
Dona Paula, Goa 403 004.
Tel: 2453628
