From: CIEPAC <[EMAIL PROTECTED]> Date: Mon, 15 Oct 2001 16:18:58 -0500 To: [EMAIL PROTECTED] Subject: [Ciepac-i] English Chiapas al Dia 249 I BOLETIN �CHIAPAS AL DIA� No. 249 CIEPAC; CHIAPAS, MEXICO June 27, 2001 THE G-8 AND THE NEOLIBERAL GLOBALIZATION CIRCUIT On July 20th, the annual reunion of the Group of Eight (G-8), before there were seven, will take place in Genoa, Italy. More than 100,000 people will protest the selective club of the richest and most industrialized nations in the world, who in turn represent the most powerful transnational corporations on the globe. This remains the principal driving force and contributor to the globalization of the Neoliberal economic model, which could possibly be in its final stage. Economic liberalism, which demanded nations to forbid restrictions on investment or on the flow of raw materials, ended with the worldwide Great Depression of 1929. This moment of economic crisis and grave unemployment culminated with the Second World War in 1945. When the war ended, transnational corporations involved in areas such as agricultural exportation, petroleum, energy, the railroad industry, etc., were in ruins. Europes strategic infrastructure was destroyed. The need arose for these nations to reestablish and reconstruct their states, purchase corporations, subsidize capital, and provide services necessary to their populations. Governments placed controls, taxes, rules guaranteeing economic growth, and the primer that subsequently allowed them to shift to another economic model: becoming financially indebted to the World Bank and the International Monetary Fund. Vital to the reactivation of the U.S. economy was the stimulation of the military industry. The United States sold arms to friends and foes alike during the Second World War. At the end of these 15 years of violent transition towards a different economic model, three institutions were established that have, to this date, played a fundamental role. The International Monetary Fund (IMF) was created in a luxury hotel in Breton Woods, New Hampshire. This institution allowed the United States to achieve hegemony in the world economy by defining the gold standard, imposing the dollar as the international trade currency and other mechanisms designated for global financial control. The second institution created was the World Bank (WB), whose initial mission was the reconstruction of Europe. The third institution created was the United Nations (UN) alongside with, and of particular interest today, the Universal Declaration of Human Rights, where governments made a commitment to uphold and protect the human rights of their civil populations, having been violated during the Second World War. In all three of these institutions, U.S. interests prevail. Almost 30 years later, in 1971, the United States abandons the gold standard, generating a crisis in the international monetary system. Oil-producing countries provoke a price increase of hydrocarbon, the United States suffer from stagnation and Third World countries find themselves overwhelmed with external debts to the WB and the IMF. In 1973, the finance ministers of the United States, Japan, Great Britain, West Germany, and France met at the White House in the United States, yards away from the main buildings of the WB and the IMF, to discuss the worlds economic problems. By 1975, this process culminated with the configuration of the Group of Seven (G-7), to which Canada and Italy were added. In 1980, the World Bank granted its first debt to Turkey for 200 million dollars under severe conditions known as a Structural Adjustment Program. In this manner, other countries ensued. The 70s marked a decade of the beginning of the end of the welfare state, import substitution, and Keynesianism. This allowed the way towards another economic model - neoliberalism. Once again, world governments disturbed the flow of capital. This globalizing neoliberalism functions as a circuit: the motor or principal subjects that group together forming alliances; the tools to impose the model on a global scale; the mechanisms; and their negotiation settings imposition. In this manner, the struggle against globalization takes place at different levels of the globalization circuit of the neoliberal economic model. Lets take a look at each one. The motor or principal subject of neoliberal globalization is productive capital and transnational speculation. This same productive capital makes various camouflaged alliances under the interests of respective governments. Among these are the Organization for Economic and Cooperative Development (OECD) which consists of 29 of the worlds richest countries, from which has emerged the design for the Multilateral Investment Agreement, and subsequently to different locales of the World Trade Organization. There are also other alliances such as G-15, G-77, and other groupings of nations that integrate certain regions or interests. However, the most important alliance is the G-8, comprised by the richest industrialized nations of the world. This exclusive club consists of the United States, Germany, France, England, Japan, Canada, Italy, and recently Russia. These are the countries representing the worlds most richest men and transnational corporations who dominate the neoliberalism globalization circuit. For example, in 1999 a report by the United Nations confirmed that the combined assets of the 100 main transnational corporations are equivalent to more than 28.7% of the exports that were produced in 1998 by all the countries in the world. This figure was calculated by the World Trade Organization at 5 billion, 442 million dollars. In the year 2000, 10 transnational corporations received revenues of 1 billion, 482.3 million dollars, which represents three times the gross domestic product (GDP) of Mexico. Observing the branches of the global economic model, a few firms control the telephone services of the planet, petroleum reserves, automobile production, the sell of assets chemical agricultural products, the production and sell of seeds, the production of electric energy, the computer industry, etc. Their annual million dollar earnings supersede the budgets of African and Central American countries. These planetary octopuses are everywhere: Coca-Cola, Microsoft, Monsanto, Novartis, General Motors, Shell, General Electric, Sony, Motorola, etcetera. They all reside within the G-8. The most powerful tool utilized by the principal subjects of globalization are the institutions created by them: the WB and the IMF. In that manner, any country requesting loans from the WB has to be a member of the IMF, which in turn structures their economy. The G-8 has economic and political power over both. They represent a little more over 4% of the member states and control the majority of the votes and resources. They occupy 20% of the World Banks Directorate, which is composed of 24 seats. The United States, Japan, France, United Kingdom, and Germany occupy one post each and the remaining 179 nations make up the rest. The principal mechanism utilized by the globalization circuit are the Structural Adjustment Programs that are imposed by the IMF and the WB. When the external debt of poor nations was overwhelming in the 1970s, these two organizations imposed conditions to debtors that obligated governments to relinquish control of their economy. This transition period of the 70s and mid-80s was characterized by coups and military dictatorships supported and trained by the Central Intelligence Agency (CIA) and the United States army, assassinations of Heads of States, and by negative consequences to those countries refusing to implement Structural Adjustment Programs. These Structural Adjustment Programs entailed trade liberalization, border openings, the privatization of firms and state services, the elimination of subsidies and import-export tariffs, constitutional modifications to adapt to newly created trade rules controlled by large transnationals, elimination of labor rights, etcetera. This signifies the severance of nations commitment to the Universal Declaration of Human Rights. The ability to guarantee the right to life, health, education, employment, living wages, nutrition and housing is compromised. Governments began to repress social discontent with the use of force and guerrillas began to flourish. Throughout the world, organisms proliferated for the defense of human rights in search of missing persons, and displaced, tortured and dead people in Guatemala, Chile, Argentina, Bolivia, Uruguay, El Salvador and many other countries. Bit by bit, poverty conditions generated struggles for womens rights, salaries, unemployment, etc. The circuit closes itself in its negotiation setting imposition. When the interests of the G-8 are imposed, many have been created among those the structure of the UN, Davos Economic Forum, the WTO, regional integration under free trade agreements such as the European Union, Mercosur, o the Free Trade Area of the Americas (FTAA), among many. The G-8 crosses through the global circuit where manifestations against globalization at diverse levels take place. For example, against transnational petroleum firms, seed and food manufacturers, auto-part makers, and among others, those that have been realized against Coca-Cola, Nike, Texaco, General Motors, McDonalds, Monsanto, etc. They also manifest against the WTO, OECD, IMF, WB, the UN, and the FTAA. The neoliberal model will come to an end and we are in a transition stage that for some began in Chiapas in 1994 with the Zapatista uprising and the inception of the first free trade agreement of great magnitude. For others, it began in Seattle in 1999 with the first large-scale global manifestation against the most powerful negotiation setting imposition in the world: the WTO, which combines a majority of 135 countries. This transition could last 10 to 20 years. We do not know. The signs of this transition are becoming more acute. The protest movements against globalization are not the only sign. It is also marked by the oncoming economic crisis faced by the G-8 and the most powerful �nation-firms� within the three economic blocks on the planet. In the American Continent, Canada is in a crisis and the United States is facing an economic recession alongside a democratic crisis questioning the legitimacy of an electoral process and a new pro - armament president. In Asia, Japan has not been able to recuperate from its 1998 marked crisis. In the European Union, Germany is experiencing reduced growth, England is living through an agricultural and fishing crisis, and the President of France is facing major social discontent. President Putin of Russia is dragging along an ever-intensifying political crisis. The head of state of Italy and host of the G-8 in Genoa, Silvio Berlusconi, headed the G-7 Summit in 1994 as president. In the face of this new crisis, the signs of war are ringing throughout the world. President George Bush lauched another military race in the world and an offensive in Latin America with the Columbia Plan that infests all of Latin America with militaries. The G-8 will now reunite to mitigate their differences on the environment, labor rights, free trade agreements, the stage of the neoliberal circuit, petroleum, energy, water, trade, and world territories. But in the midst of all this, hope emerges from the south. Indigenous and peasants are resisting, surviving, and addressing the global society. How many years will have to pass before indigenous rights and culture in Chiapas and Mexico are recognized after the Mexican Congress approved a constitutional reform negating any possibilities for peace? Does the government pretend to generate or justify violence? The setting for indigenous struggle will then become fortified in the field, in towns, in regions, in their lands, in their territories. The next bulletin of �Chiapas al Dia� will be about the Neoliberal chronology and resistance. Gustavo Castro Soto Center for Economic and Political Investigations of Community Action, A.C. 1fFlipH0fFlipV0fillColor8421504fFilled1fLine0pctHR850alignHR1dxHeightHR15dxW idthHR7344fStandardHR1fNoshadeHR1fHorizRule1fLayoutInCell1 Translated by Cristina Padilla for CIEPAC, A. C. Note: If you use this information, cite the source and our email address. We are grateful to the persons and institutions who have given us their comments on these Bulletins. CIEPAC, A.C. is a non-government and non-profit organization, and your support is necessary for us to be able to continue offering you this news and analysis service. If you would like to contribute, in any amount, we would infinitely appreciate your remittance to the bank account in the name of: CIEPAC, A.C. 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