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Foreign
Aid or Trap?
G-8 Proposal in Scotland Doubly Enforces Policies that Erode Human Capabilities in Poor Nations by Sophia Barkat On July 2, 2005 a quarter of a million protestors gathered in Edinburgh to protest the G-8 countries economic policies on the rest of the world, via the World Bank, IMF, WTO, Inter-American Development Bank and other organizations, on the occasion of the G-8 leaders summit, that was held the following 7th and 8th of the month at Gleneagles. (see link ) "People of all ages and backgrounds began gathering in The Meadows in Edinburgh from early morning. Some had traveled hundreds of miles to make their voices heard, bringing banners, placards and white bands bearing messages from their communities to the G8: 'Drop the Debt', 'Trade Justice not Free Trade', 'People before Profit', 'Stop this Shame' and everything else that people wanted to express. Many had cycled, and one group had walked over 400 miles from Birmingham to join the protest. The atmosphere was moving and also full of hope, as the biggest crowd ever to gather to demand action on trade, debt and aid came together, reports the Jubilee Debt campaign" (see link)..."a team of dedicated debt campaigners has walked all the way from Birmingham to the G8 summit in Gleneagles, via the Edinburgh rally on 2 July". (see link) So what’s the Deal? "The deal essentially offers full cancellation of outstanding debts to the IMF, World Bank and African Development Bank for 18 poor countries, of which 14 are in Africa. Other countries can qualify in future by completing the Heavily Indebted Poor Countries initiative," reports Jubilee Debt Campaign, stating that it was "inadequate" as a policy initiative, however. The move helps only 14 nations in Africa, and fails to address the large problem in South America – the looming debt from the Inter-American Development Bank, in which the US and Canada are the main parties involved. Jubilee, however, stated it was happy that some countries' debts to some multilateral institutions have been cancelled in full for the first time, stating that the inclusion of the IMF in the deal was also a nice welcome. Harmful Policies pushed under the Heavily Indebted Poor Countries Initiative The package of full-cancellation of G-8 institutional debts to 18 nations is excellent, but there is a problem with the G-8 Heavily Indebted Poor Countries Initiative program that allows other nations to become part of this great deal. According to the Jubilee Debt Campaign:
If the original goal of Jubilee and other protestors was to demand debt cancellation, trade justice, and more and better aid, then this goal has not come to fruition this year. Forcing countries to privatize public utilities – or allowing mammoth multinational corporations to buy them up -- is one of the IMF, World Bank and WTO demands that protestors were against, to begin with. The Campaign, thus, criticizes the HIPC Initiative: The Heavily Indebted Poor Countries (HIPC) initiative was set up in 1996 by the World Bank and the IMF, to reduce poor countries' debts. Although it was reformed in 1999, it is still failing the world's poor. It is time to abandon HIPC, and ensure that there is 100% cancellation of unpayable debts for every country that needs it. G-8 Proposals in light of Contemporary Development Theory Nobel Prize winning Economics, Amartya Sen, in his CapabilityTheory 1 , and leading feminist economist Martha Nussbaum 2 in her discussion of Capability Theory in light of gender justice, both say that 'a person’s economic well-being is measured in terms of human capabilities -- factors that affect a person's claims on means of production'. This is in stark contrast to the Classical economics Utilitarian Theory 3, which states that 'economic well-being can be measured in utility from consumption'. As it turns out, much of the debate concerning economic development, and thus debt, trade and aid policies have been about these two theories -- namely about which measures best economiic development in poor nations. The G-8 organizations use the Utilitarian approach to justify their proposals as economic development programs, while activists and development economists like Andre Gunder Frank argue from the other side. The WTO, World Bank and IMF and the G-8 HIPC keep pushing for more multinational corporation takeover of the poor nations’ markets by citing that this will increase market competition and improve consumer satisfaction, thus, bettering the human condition. This has been the push for opening up India and other poor nations to Coke, Pepsi and McDonalds, not to mention Phillips, CNN and General Motors, and for driving out less competitive national products in the process. But, is this progress? If the well-being of poor people were measured in their ability to consume these expensive imports in the national markets, they would see a decline in well-being too not more, because the capabilities of India or China's masses is being made worse by such policies. The Utility Theory cannot show progress in predominantly poor nations, where people do not have the capability to consume and are more concerned with survival. Thus, a discussion of economic development must be in terms of Human Capabilities and not Utilitarian Theory. The WTO, IMF and World Bank policies and the HIPC initiative since 1996 all prove that the G-8 has no serious intention ever to eliminate the causes of poverty, as it continues to erode on human capabilities by forcing poor nations to sell-out much needed low priced public-utilities to corporations. And by doubly-enforcing the WTO, IMF and World Bank policies onto poor nations in this HIPC initiative at this years Summit, the G-8 are hoping to push poor nations further into poverty, while bettering their own pockets. Chasing Modernity & Western Notions of Development? While meant for the leaders of 8 nations, a total of 13 nations were present at the Summit including India, Mexico and Israel, begging the question of why. One reason: trade. The other: regional security issues and the fight against the convenient evil -- Islam. (Has the American Coalition of the Willing finally found some friends?) A rising concern with the inclusion of these poorer nations in the G-8 – India, China and Mexico – however, is more serious. It appears as an attempt to alienate these nations from other poor nations, by posing them as separate from other poor nations – mainly to portray them as role-models of success in development using the age-old Utilitarian Theory approach. The illusion is marketable. There is the economic boom from outsourcing and computer-related industries in India’s Bombay and Bangalore, in China’s capitalist and glittery Shanghai and it's promise for more state-capitalism, and in Mexico Cities rising urban structures that make you think that opening borders to free-trade is the way to progress. In India and China, modern malls are shooting up in places where ethnic bazaars were the norm. Wallmarts in China and India give the impression that people are moving up in life -- finally becoming Western. It would seem to the West and people in the East who look up to the West that this must be the face of progress. There is a term for this kind of development. It is parasitic-- the shunning of one's own culture for the imported culture -- a problem that leads to declining national industries in the long-run, as multinational labels of Coca Cola and McDonalds replace what is Indian or Mexican. Latin American History is Proof According to historians, Latin America in the early to mid 19th Century, namely the newly liberated Peruvians, Chileans, Argentinians and Brazilians, suffered this fate. After reaping some benefits from the enslavement of the colored people and the looting of natural resources and selling these to Europe, the Latin American whites fell back into poverty by spending their wealth on imports from Europe, hoping to appear European instead of what they were, which was Latin American -- a culture of Mestizo, Mullato, Indian, Black and Whites fighting for freedom from Spain, Portugal, France or Britain, if not for other things. This selling out to Europe was possible because of preconcieved ideas in the Latin American White community of racial superiority. The Peninsular, who had just arrived from Europe, were "superior" to the Creole, the white man whose family had lived in Latin America for centuries, who inturn thought himself superior to the Mestizo, Mullato, Indians and certainly the Black slaves. This method of indoctrination of Europe being better than Latin America helped Europe's Industrial Revolution, which needed growing consumption in the world to maintain it's own economic growth. The ideology was so useful, it had been used as a model for replication whereever European and Western civilization has claimed stake. Asia, Africa and now Eastern Europe all learnt to be Western -- it's not enough that most can think in English and snub their own languages, but now it it's time to apply the indoctrination -- eat, sleep and breath CNN and McDonalds, shop at Walmart, but no more talk of things Asian or Ethnic -- our open bazaars or New Markets are just not fit for economically progressive times! How we wish we were American or if not White and if we were American, how our lives would be perfect! In the East, West is the in-thing, and the East is dying! The presence of India, China and Mexico in the G-8 symbolizes this very thing: more and more we, the poor of the world, will aspire for the lusterless walls of Wallmart, the use of over-priced Microsoft software and IBM machines, and according to the meaningless Utilitarian Theory which has begun to define our lives, see the WTO, IMF, World Bank as necessary to our existence. Just as American journalists say on CNN or FOX. "It's for our national interest. It is who we are," we will become machinated fools and learn to mouth it like parrots, even though it hurts our pockets, just like the poor people in America are apt to do today. But, the illusion of progress is thin, when one looks closely. In the alleyways of India, China and Mexico, millions of poor still beg for food or shoe-shine on street corners for a living. Indeed, historian on South Asia, Sanjay Joshi 4, says in his book, "Fractured Modernity", that India’s rising middle-class is not at all the same kind of middle-class, as say, in America, but more of a base for intellectualism. Indeed, our societies are still far less machinated to think only in terms of profit-maximization and utilitarianism, and we should abandon hope of reaching American prosperity in all parts of the 'third world' before this time is gone. India's progress into an American style middle-class, or that of China's is an illusion, that the West hopes will inspire more privatization in the rest of the world. But, our politicians need not attend the G-8 with the Sahibs and the Memsahibs from Europe and America! The Litmus Test The illusion of progress under G-8 HIPC is easy to shatter if one thinks of direct consequences of the HIPC, or the WTO, World Bank and IMF policies it reiterates. Let's use India as an example of an economy that has passed HIPCs. Let's now look at if it has developed. Now ask -- how can a middle-class in India grow out of harsh impositions of WTO on biodiversity? TRIPS, or the Trade-Related Aspects on Intellectual Property Rights, protects US and European bioengineering of food, medicine as well as software, allows US corporations to patent rice, wheat, neem and other indigenous Indian products -- using software piracy as their excuse to enact the law. TRIPS bars Indian farmers from growing basmati rice, wheat and until recently, neem, unless the farmers buy the patented seeds from these corporations in the US -- as pointed out by Mushita and Thompson 5. And how can Indian peasants grow their crops when the World Bank forcibly dictates Water policies and diverts water away from Indian agricultural land, leaving Indian green pastures dry? 6 And how can India compete with US or European corporations if the IMF imposes restrictions on India's ability to consume it's own rice or wheat or need, by forcing imports to gain access to the markets? 7 It might seem like a small difference to technocrats in poor nations like India that the Indian farmers are disappearing due to harsh conditions imposed by WTO, World Bank and IMF and agreed to by the greedy Indian legislature. But it makes a big difference to the people who are not in this class of up and coming Indians, who wonder whether they will have a livelihood in modernizing India. What Modernity? What Progress? The images of progress that we talk about -- that we might search for in India or China, are all based on large historical falsities. The lusterless square buildings of malls and tall skyscrapers of America that we are indoctrinated to call progress lie about history -- America's economic history -- the history of progress that poor nations are trying to emulate. "There is no way to tell one's place in time from looking at America's architecture," a friend of mine often says. "It's not like going to Mexico or Italy or any place else. You cannot tell what made this nation. If you didn't have books that tell the truth, and if schools don't teach these books, there's no way of understanding history." People in the US have nothing more than books to rely on for truth, and when schools decide not to teach real history, the masses are lost. But there is a deliberate attempt to hide America's history from it's people, and more and more as time passes we see false history being taught by way of censorship. There is no museum of slavery to explain how America got rich in the days before the steam engine, no line in the Star Spangled Banner, and no stone on the National monument, no Memorial and no national holiday to remember the countless slaves who landed in America in shackles and worked day and night without their own consent. Everywhere, Americans talk as though the Founding Fathers really sat around and built the nation from ground up. Why this deception? There is only a fake history : where progress was made at the attempts of the White Man, who is Weberian and therefore, rational -- the Lewis and Clarkes -- the Great people who killed the wild Indians and made it their own land. Of Inventors who created the light bulb and lit up America. America the epitomy of Max Weber's efficient Protestant capitalist bureaucracy, where it's possible to say things inane, like "you can make it if you try," and be taken seriously, even by a poor white boy in Alabama. Ideology keeps people alive and kicking in America. They would die of horror if they realized there is no real progress in a market system that fails to provide sound health-care or public education, no decent living in a culture that does not protect the disabled or the poor or the aging. This is the face of economic progress America hides from its beguiled generations, and this is what students of poor nations studying Economics are not taught, who then fail to teach their own when they return to their developing nations. We were taught falsities and we are ready to to destroy you with our Weberian nonsense! Is this the progress poor nations want to see in their part of the world, if not now then someday? Rising skyscrapers built over graves of people like those in Manhattan? People driving around in SUVs and hummers burning gas all day? So-called "Developing nations" should think hard about this as they comprise their national intergrity and economic development chasing ideologies of American progress. It would take slavery, occupation, murder and piracy to recreate an American capitalism. Is it really worth it? References: 1. Amartya Sen, "Commodities and Capabilities" (India: Oxford University Press, 1999) 2. Martha Nussbaum, " Women and Human Development: The Capabilities Approach" (UK : Cambridge University Press, 2000). 3. Amartya Sen, "Equality of What?" in Tanner Lectures on Human Values, ed. S. McMurrin (Cambridge U. Press, 1980) 4. Sanjay Joshi, "Fractured Modernity: Making of a Middle Class in Colonial North India by Sanjay Joshi. Oxford University Press, Delhi, 2001. 5. Mushita, T. Andrew and Carol B. Thompson. "Patenting Biodiversity? Rejecting WTO/TRIPs in southern Africa," Global Environmental Politics 2, no. 1 (February 2002): 65-832. 6. Vanadana Shiva, "Ganga is not for Sale" http://www.inmotionmagazine.com/global/vshiva2.html 7. S. Barkat, Will new World Bank CEO, Paul Wolfowitz, continue the Rape and Pillage of Poor Nations?
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