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Corporate Globalization and the Poor


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.

*

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.

*

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.

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).

 

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