Beseiged by 9000 protesters, 14,000 of the world's financial elite met this
September in Prague at the 55th annual summit of the International Monetary Fund
(IMF) and the World Bank to propose schemes for furthering corporate
globalization--a globalization that threatens the poor and middle class of both
the developing and developed world say the protestors.
The demonstrations in Prague this September were the latest in a series of
protests, which have targeted summits of the World Trade Organisation (WTO) in
Seattle last December, and the IMF and World Bank in Washington in April.
Labelled anti-capitalist or anti-globalist, the protests are ultimately
about free markets, democracy, and societal values. The protesters see
themselves as a global movement for living democracy. Evidence and experts lend
credibility to the protestors' arguments.
The divergence of views regarding the global economy has much to do with how
success is measured by the IMF and World Bank, i.e. increases in Gross National
Product (GNP)--the market value within a nation for a year of all goods and
services produced as measured by final sales of goods and services to
individuals, corporations, and governments plus the excess of exports over
GNP falls short as the sole measure of successful development because it does not
properly reflect the living conditions of the majority of the poor and middle
class--the way in which it is computed sometimes leads to absurd results. For
example, the costs of cleaning up the Exon Valdez oil spill counted as a plus to the
GNP according to David C.
Korten, a graduate of the Stanford Business School, faculty member at Harvard
University Graduate School of Business, with stints at the Ford Foundation, and the
U.S. Agency for International Development.
Created in 1990 by Pakistani economist Mahbub ul Haq, and advocated by Nobel
laureate Amartya Sen,
the Human Development Index (HDI) measures a country's achievements in terms of life
expectancy, educational attainment, and adjusted real income. The HDI is a
recognized tool of development evaluation at the United Nations Development Program
Of the 174 countries ranked, 46 belong in the "high" human development
group. These include Canada, Norway, and the U.S. ranked 1, 2 and 3, and five
Muslim countries: Brunei Darussalam--32, Kuwait--36, Bahrain ranked 41,
Qatar--42, and United Arab Emirates--45.
The "medium" human development group includes 93 countries including
Cuba--56, Malaysia--61, Libya--72, Kazakhstan--73, Saudi Arabia ranked 75,
Lebanon--82, Oman--86, Jordan--92, Albania--94, and Iran--97, Indonesia--109,
Egypt--119, India--128, Pakistan--135.
The "low" human development group includes 35 countries including Sudan
ranked 143, Bangladesh--146, Yemen--148, Tanzania--156, and Sierra Leone--174.
Saudi Arabia stands out as an example of the shortcomings of GNP as a
measure of successful development. Despite an average annual growth rate of 5.6
percent from 1965 to 1997, on human development Saudi Arabia ranks behind Libya
which has suffered under a U.S.-backed, UN embargo since 1992, and
Cuba--virtually isolated for 40 years!
As any competent manager knows, you get what you measure. The IMF/World Bank
use GNP as the primary measure of success, whereas HDI measures real
improvement in the lives of human beings.
Their achievements, according to Mr. Korten, bring the real functions of the
IMF, the World Bank, and the WTO--established by the General Agreement on
Tariffs and Trade (GATT), and which plays a crucial role in the further
liberalization of the world economy--into sharp focus.
Mr. Korten, says Archbishop Desmond M. Tutu, provides "a searing indictment"
of the unjust international economic order in his widely-acclaimed book "When
Corporations Rule the World." Klaus Schwab, President, World Economic Forum says
Mr. Korten's book creates "an intellectual framework for the entry of humankind
into the 21st century."
Mr. Korten writes: "The World Bank has served as an export-financing
facility for large Northern-based corporations. The IMF has served as the debt
collector for Northern-based financial institutions. GATT has served to create a
corporate bill of rights protecting the rights of the world's largest
corporations against the intrusions of people, communities, and democratically
When developing countries are unable to repay their debts, the World Bank
and IMF impose "economic reforms" on the country. Under the label of "structural
adjustment" even more of the country's resources are channeled to debt
repayment, and laws are rewritten to open national economies to the global
economy in which the developing country cannot compete. Such programs are
declared succesful when GNP growth rates increase. Yet country trade deficits,
and debts are seldom reduced, and social conditions usually worsen.
Veteran British journalist Graham Hancock, author of the "Lords of Poverty:
The Power, Prestige, and Corruption of the International Aid Business," says
that "official" development organizations administer the West's aid and deliver
it to the poor of the Third World in a process that has been described as "a
perversion of the act of human kindness." His book gives many examples of failed
projects, and their impact on the people and the environment. In country after
country economic growth has been accompanied with decreases in the quality of life
for the poor and middle class.
When the World Bank was created to facilitate capital investments in
"backward and underdeveloped" regions of the world, "little note was taken of
the evident contradiction," writes Mr. Korten, "that if maintaining the
U.S.-style economy required access to most of the world's resources and markets,
it would be impossible for other countries to replicate that experience. Nor is
it evident that much thought was given to the contradiction of financing
industrial exports to low-income countries with international development loans
that could be repaid by these countries only if they developed export surpluses
with the countries that had initially extended the loans."
Indeed, every $1 contributed to the World Bank, claims the U.S.
Treasury Department, returns $2 to the U.S. economy. Meanwhile, the gap between
the rich and the poor continues to grow--not only in the developing countries,
but also in the U.S.
A new survey by the U.S. Federal Reserve found that the nation's poor are
not just falling further behind the more fortunate--they were worse off, in
absolute terms, in 1998 than in 1995.
Mr. Korten writes: "In 1950--about the time the commitment was made to
globalize the development process--the average income of the 20 percent of
people living in the wealthiest countries was about thirty times that of the 20
percent living in the poorest countries. By 1989, this ratio had doubled to
sixty times.... "The argument that globalization increases competition is simply
false. To the contrary, it strengthens tendencies toward global-scale
According to James K. Galbraith, professor at the LBJ School of Public
Affairs, the University of Texas at Austin: "The success stories of the
developing world in the years since 1979--China, Taiwan, and India above
all--have in common insulation from the global capital markets and freedom from
major private debt."
The true purpose of foreign aid was revealed by George Ball.
In his memoirs, "The Past Has Another Pattern," published in 1982, Mr. Ball,
undersecretary of State in the Johnson and Kennedy administrations, wrote: "Our
foreign aid, small as it is, has become largely a selective instrument of
Unlike the protestors gathered in Prague, much of the world has yet to wake
up to the dangers of corporate globalization--an erosion of national sovereignty
and democracy, and the promotion of consumerism at the expense of traditional
and/or family values and social justice.
Unchecked, the juggernaut of corporate globalization will lead to ever more
repressive societies as corporations rewrite laws to protect their priveleges,
and governments increase budgets to enforce those laws at home and abroad.
The U.S. military, whose $288 billion annual budget dwarfs that of the rest
of the world, has called for additional spending of more than $50 billion a year
through most of this decade to better serve its corporate masters.
[Enver Masud is an engineering management consultant, author of "The War on
Islam," and founder of The Wisdom Fund--www.twf.org. This article was published
in England in Impact
International, November 2000.]
[". . . and above all to see the lowering of the British flag which was
raised there in 1842, following the defeat of China. Acting in the name of
'free trade,' the British decided to punish China for outlawing the
lucrative dope traffic, instigated by British and American merchants. (China
seized the British opium and burned it, much like the patriots dumped the
imported tea into Boston harbor).
"Cheering the British, John Quincy Adams accused China of being
'anti-commercial,' unneighborly, and violating the Christian precept 'to
love your neighbor as yourself' -- meaning free trade among equals. The
Treaty of Nanking set the pattern for a series of unequal treaties which
effectively reduced China to a semi-colony until 1949. While Western powers
exploited China's resources, the average life span of Chinese hovered around
30."--L. Ling-Chi Wang, "The Closing Chapter of the Opium War," Jinn, June
[In the 1980s capitalism triumphed over communism. In the 1990s it triumphed over
democracy and the market economy.--David C. Korten, "The
Post-Corporate World," Kumarian Press, 1999]
["As people in Seattle were saying, the international institutions go around
the world preaching liberalization, and the developing countries see that
means open up your markets to our commodities, but we aren't going to open
our markets to your commodities. In the nineteenth century, they used
gunboats. Now they use economic weapons and arm-twisting."--Interview with Joseph
Stiglitz (Nobel Prize-winner, Chairman, President's Council of Economic
Advisers, Chief Economist, World Bank), The Progressive, June 2000]
["There's an Assistance Strategy for every poorer nation, designed, says the
World Bank, after careful in-country investigation. But according to insider
Stiglitz, the Bank's staff 'investigation' consists of close inspection of a
nation's 5-star hotels. It concludes with the Bank staff meeting a begging,
busted finance minister who is handed a 'restructuring agreement'
pre-drafted for his 'voluntary' signature.
Each nation's economy is individually analyzed, then, says Stiglitz, the
Bank hands every minister the same exact four-step program."--Gregory
Palast, "The Globalizer Who Came In
From The Cold," The Wisdom Fund, September 3, 2001]
["James D. Wolfensohn, president of the World Bank, accused
wealthy countries of 'squandering' $
1 billion a day on farm subsidies that often have devastating
effects on farmers in Latin America and Africa."--"Rich Nations Are
Criticized for Enforcing Trade Barriers," New York Times, September
["For the last twenty years the United States has been promoting throughout
the non-Western world raw, laissez-faire capitalism--a form of markets that
the West abandoned long ago. . . . It is striking to note that at no point
in history did any Western nation ever implement laissez-faire capitalism
and overnight universal suffrage at the same time--the precise formuala of
free market democracy currently being pressed on developing countries around
the world."--Amy Chua, World
on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global
Instability, Doubleday, 2002]
["Former Secretary of State George Shultz is on the board of directors of
the Bechtel Group, the largest contractor in the U.S. and one of the
finalists in the competition to land a fat contract to help in the
rebuilding of Iraq."--"Spoils of War," New
York Times, April 10, 2003]
["Rather than rebuilding, the country is being treated as a blank slate on
which the most ideological Washington neo-liberals can design their dream
economy: fully privatised,
foreign-owned and open for business."--Naomi Klein, "Bomb Before You
Buy," Guardian, April 14, 2003]
["Taking advantage of the debt crisis, the World Bank and the IMF began to
dismantle the developmental states in the Periphery. In 1994, shortly after
the collapse of Soviet Union, Core capital created the World Trade
Organization in order to deepen and police the neoliberal, open-door
regimes it had imposed on the Periphery. After a hiatus of some three
decades, power was once again centralized in the Core states."--M. Shahid
the Periphery," CounterPunch, June 7, 2003]
[There is no evidence that Islam restricts economic growth, according to new
research that casts doubt on the widely-held belief that Muslim societies
are intrinsically less conducive to capitalism than those dominated by other
religions.--Alan Beattie, "ISLAM NO BAR TO ECONOMIC GROWTH:
U.S. STUDY," Financial Times, December 7, 2003]
[Over the past 10 years, the number of people under the dollar-a-day line has fallen
by about 100 million, from 1.2 billion to 1.1 billion.--Editorial: "Good News
on Development," Washington Post, April 23, 2004]
[We loaned it billions of dollars so it could hire our engineering and construction
firms to build projects that would help its richest families. As a result, in those
three decades, the official poverty level increased from 50 to 70 percent, under- or
unemployment increased from 15 to 70 percent, public debt increased from $240
million to $6 billion, and the share of national resources allocated to the poorest
citizens declined from 20 percent to 6 percent. Today, Ecuador must devote nearly 50
percent of its national budget simply to paying off its debts --John Perkins, "Confessions
of an Economic Hit Man: How the U.S. Uses Globalization to Cheat Poor Countries
Out of Trillions," Berrett-Koehler Publishers (November 9, 2004), p. 203]
[It found that 61% of aid flows were "phantom" rather than "real" - rising to almost
90% in the case of France and the United States.--Larry Elliott, "Scandal of
'phantom' aid money," Guardian, May 27, 2005]
[Will the 830 million people living on Rs.20 a day really benefit from the
strengthening of a set of policies that is impoverishing them and driving this
country to civil war?--Arundhati Roy, "I'd rather not be
Anna," thehindu.com, August 21, 2011]
[Gross domestic product - the sum of the goods and services produced by a nation - is an
insufficient measure of national economic performance, according to a new report from
the World Economic Forum (WEF), which is hosting its annual gathering of the global
elite in Davos this week. . . .
The WEF proposes a measure of its own, dubbed the "inclusive development index." While
it takes into account growth, as measured using GDP per capita, employment, and
productivity, it also incorporates several other metrics, including gauges of poverty,
life expectancy, public debt, median income, wealth inequality and carbon intensity. The
index also considers investments in human capital, the depletion of natural resources,
and damage caused by pollution.--Eshe Nelson, "An alternative measure to GDP is proof that the
global economy isn't what it seemss," qz.com, January 22, 2018