Global poverty and global wealth

(Source: http://www.geezmagazine.org/affluence/think/9/global-poverty-and-global-wealth)

Global poverty and global wealth

by Pablo Leal

On September 19, 2006, the global civil society coalition, Social Watch, launched its annual Report “Impossible Architecture” in the city-state of Singapore . This report was launched in the same location and at the same time that the World Bank-IMF held their Board of Governors annual meeting. However, the conclusions of the Social Watch report were dramatically different from those being reached within the WB-IMF conference halls.

As was to be expected, the WB-IMF insisted that important headway was being made in the fight against poverty to such an extent that Paul Wolfowitz in his opening speech, entitled “The Path to Prosperity” declared that “history was being made in the fight against poverty”. In that very speech, and in reference to the wealth that was so evident in Singapore , and, in particular in the “splendid convention centre”, Wolfowitz commented the following:

“But the wealth we see around us today is an inspiring reminder that there is a road out of grinding poverty to prosperity.”
(The complete speech can be found at: http://web.worldbank.org)

The new WB anti-poverty rhetoric, speaks of “path to prosperity”, “the path out of poverty”, with repeated references to the global poor’s “road to opportunity”, all illustrating the “landmark commitments” being made towards reaching the Millennium Development Goals.

The path from poverty to prosperity, exemplified in Wolfowitz’s speech by Singapore ’s successful entry into capitalist modernity, is no more than a refried version of the modernization proposal made popular during the 1950s and 1960s. Progress is, specifically, the Western capitalist road to progress as it has been for centuries, only now with the indispensable neoliberal ingredients: private sector growth, access to commercial credit, good governance, and all the structural reforms which make possible the above.

These WB-IMF conclusions were openly defied by the Social Watch report, which explicitly and empirically demonstrates how wealth has systematically flowed from poor nations to rich since nations since 1991; and how the World Bank itself has been instrumental to this modern day sacking.

What this report unmasks is the internal machinery of what can be called an international tributary system, whereby the high living standards (read: mass consumption) of industrialized nations is subsidized by the very low (and lowering) living standards of underdeveloped nations.

Social Watch’s conclusions are by no means new. In fact, the 2004 UNCTAD Annual Report showed how a net transfer of financial capital takes place to the tune of f $200 billion USD a year from poor to rich nations.

All of this places the reaching of the Millennium Development Goals (MDG) – the much touted acronym of development pundits everywhere – into perspective. Especially now that every nation, institution and NGO seems to be into the “poverty reduction” business.

Curiously, the reflections on poverty are rarely, if ever, related to the reflections on wealth. Yet wealth and poverty are intrinsically linked, as if they were two sides of the same coin. As Adam Smith, the father of capitalist economics himself stated Book V of his famous Wealth of Nations:

“Wherever there is great property, there is great inequality. For one very rich man, there must be at least five hundred of the poor, and the affluence of the few supposes the indigence of the many. [. . .] It is only under the shelter of the civil magistrate [read, the police] that the owner of that valuable property, which is acquired by the labor of many years, or perhaps of many successive generations, can sleep a single night in security.”

This, according to Smith himself, is an inherent trait of capitalism. As the capitalist mode of production globalized so to did the tendency to globalize the “rich-poor” dichotomy, only at the level of nation states and entire regions, creating what we have come to know as the underdeveloped or “Third” world.

Thus, we come to understand how proposing to reduce global poverty without touching the structures of global wealth is quickly becomes a meaningless task. To pose one simple example, the United States of America , with approximately 5% of the world’s population consumes over 24% of its petroleum and coal based energy, energy which fuels their levels of production and consumption. How could the remaining 95% of the world aspire to imitating living standards of the “American Dream” under such conditions?

What also becomes readily evident from studies such as Social Watch’s is how there are global political, economic and cultural structures in place that insure that the global tributary system keeps on transferring wealth from the poor to the rich.

What the Social Watch report does not mention is how there are also military structures in place to safeguard the system from acts of defiance or resistance to this modern-day, post-colonial pillage. The bombing of Afghanistan , the invasion of Iraq , the assault on Lebanon , the militarization of the Andean region of South America through Plan Colombia , the militarization of the Triple frontier between Paraguay , Brazil and Argentina are all examples of this.

Global military spending in 2005 surpassed the highest point of military spending during all the years of the Cold War, reaching 1.2 trillion dollars.

The question that nags at the back of humanity’s consciousness is: Can we develop our way out of poverty? Personally, I believe that the answer is a resounding “no”. Poverty can only be abolished by way of transforming the very political, economic, cultural and military structures in place to perpetuate it.

The abolition of human misery will not result from acts of benevolence from wealthy, industrialized nations, but from organized social and popular struggle aimed at social transformation; it will result from human emancipation and not the reproduction of the Western model of “the good life”. The Millennium Development Goals will not reduce poverty in any foreseeable future, but perhaps the Millennium Liberation Goals might.

What follows are some pearls from the Social Watch Report 2006.

World Bank: Taking from the poor…
In every year since 1991, net transfers (disbursements minus repayments minus interest payments) to developing countries from the International Bank for Reconstruction and Development (IBRD, the loan-making branch of the World Bank) have been negative. Since 2002 net disbursements have also become negative. In effect, taken as a whole, the IBRD is not making any contribution to development finance other than providing finance to service its outstanding claims. The situation is much the same for regional development banks. The problem here is that, for reasons related to conditionality and bureaucracy, countries which are eligible for IBRD loans are generally unwilling to borrow as long as they have access to private markets, even when this means paying higher rates. On the other hand, many poorer countries which need external financing are not eligible for IBRD loans.

Short of money… but keeping tanks filled of it
Due to the instability of world finances, developing countries have to keep huge reserves of unused money just to defend their currencies from speculation. To build up those reserves, poor countries are borrowing hard currency from the US at interest rates as high as 18%, and lending this back to the US (in the form of interest on US Treasury bonds) at 3%. Most countries invest their foreign-exchange reserves in relatively safe, short-term assets, such as US Treasury bills. The yields on such instruments are currently very low – well below the interest rates that developing countries pay on their debt.

Debt slavery
Low-income countries received grants of about USD 27 billion in 2003 and paid almost USD 35 billion as debt service. Sub-Saharan Africa has seen its debt stock rise by USD 220 billion despite having paid off USD 296 billion of the USD 320 billion it has borrowed since 1970.

In fact, since 1984, net transfers to developing countries through the debt channel (the net result of inflows as new borrowing and outflows in the form of debt service) have been negative in all but three years. So debt, instead of providing a source of funding for development, has become a major source of leakage of scarce resources from developing countries.

The hidden cost of unfair trade
Trade restrictions in rich countries cost developing countries around USD 100 billion a year. Sub-Saharan Africa, the world’s poorest region, loses some USD 2 billion a year, India and China in excess of USD 3 billion. These are only the immediate costs. The longer-term costs associated with lost opportunities for investment and the loss of economic dynamism are much greater.

Investment flows the other way around
Foreign direct investment (FDI) can contribute significantly to development and it is increasingly seen as the most important link in the development process by many policy makers. Since 1992 FDI has been the largest source of inflows into developing countries, but it has been highly concentrated within a small group of countries such as China , India , Brazil and Mexico . Countries in sub-Saharan Africa , the most in need of capital, get very little FDI. Moreover, increasing amounts of FDI are used for mergers and acquisitions where a foreign firm acquires an ongoing domestic operation, therefore not adding to productive capacity or bringing about technology transfer.

FDI inflows are accompanied by large outflows in the form of profit repatriation. In sub-Saharan Africa , for example, the average rate of return on FDI is between 24% and 30% and the inflow of funds through new FDI is currently exceeded or matched by an outflow of funds as profit remittances on existing FDI.

Robert Fisk on Racism in Canada

How racism has invaded Canada

What is the term 'brown-skinned' doing on the front page of a major Canadian daily?

By Robert Fisk - 10 June 2006

http://news.independent.co.uk/world/fisk/article754394.ece

http://www.informationclearinghouse.info/article13575.htm

This has been a good week to be in Canada — or an awful week, depending on your point of view - to understand just how irretrievably biased and potentially racist the Canadian press has become. For, after the arrest of 17 Canadian Muslims on “terrorism” charges, the Toronto Globe and Mail and, to a slightly lesser extent, the National Post, have indulged in an orgy of finger-pointing that must reduce the chances of any fair trial and, at the same time, sow fear in the hearts of the country’s more than 700,000 Muslims. In fact, if I were a Canadian Muslim right now, I’d already be checking the airline timetables for a flight out of town. Or is that the purpose of this press campaign?

First, the charges. Even a lawyer for one of the accused has talked of a plot to storm the Parliament in Ottawa, hold MPs hostage and chop off the head of Prime Minister Stephen Harper. Without challenging the “facts” or casting any doubt on their sources — primarily the Royal Canadian Mounted Police or Canada’s leak-dripping Canadian Security Intelligence Service (CSIS) — reporters have told their readers that the 17 were variously planning to blow up Parliament, CSIS’s headquarters, the Canadian Broadcasting Corporation and sundry other targets. Every veiled and chadored Muslim woman relative of the accused has been photographed and their pictures printed, often on front pages. “Home-grown terrorists” has become theme of the month — even though the “terrorists” have yet to stand trial.

They were in receipt of “fertilizers”, we were told, which could be turned into explosives. When it emerged that Canadian police officers had already switched the “fertilizers” for a less harmful substance, nobody followed up the implications of this apparent “sting”. A Buffalo radio station down in the US even announced that the accused had actually received “explosives”. Bingo: Guilty before trial.

Of course, the Muslim-bashers have laced this nonsense with the usual pious concern for the rights of the accused. “Before I go on, one disclaimer,” purred the Globe and Mail’s Margaret Wente. “Nothing has been proved and nobody should rush to judgment.” Which, needless to say, Wente then went on to do in the same paragraph. “The exposure of our very own home-grown terrorists, if that’s what the men aspired to be, was both predictably shocking and shockingly predictable.” And just in case we missed the point of this hypocrisy, Wente ended her column by announcing that “Canada is not exempt from home-grown terrorism”. Angry young men are the tinderbox and Islamism is the match.

The country will probably have better luck than most at “putting out the fire”, she adds. But who, I wonder, is really lighting the match? For a very unpleasant — albeit initially innocuous — phrase has now found its way into the papers. The accused 17 — and, indeed their families and sometimes the country’s entire Muslim community — are now referred to as “Canadian-born”. Well, yes, they are Canadian-born. But there’s a subtle difference between this and being described as a “Canadian” — as other citizens of this vast country are in every other context. And the implications are obvious; there are now two types of Canadian citizen: The Canadian-born variety (Muslims) and Canadians (the rest).

If this seems finicky, try the following sentence from the Globe and Mail’s front page on Tuesday, supposedly an eyewitness account of the police arrest operation: “Parked directly outside his ... office was a large, gray, cube-shaped truck and, on the ground nearby, he recognized one of the two brown-skinned young men who had taken possession of the next door rented unit...” Come again? Brown-skinned? What in God’s name is this outrageous piece of racism doing on the front page of a major Canadian daily? What is “brown-skinned” supposed to mean — if it is not just a revolting attempt to isolate Muslims as the “other” in Canada’s highly multicultural society? I notice, for example, that when the paper obsequiously refers to Toronto’s police chief and his reportedly brilliant cops, he is not referred to as “white-skinned” (which he most assuredly is). Amid this swamp, Canada’s journalists are managing to soften the realities of their country’s new military involvement in Afghanistan.

More than 2,000 troops are deployed around Kandahar in active military operations against Taleban insurgents. They are taking the place of US troops, who will be transferred to fight even more Muslims insurgents in Iraq.

Canada is thus now involved in the Afghan war — those who doubt this should note the country has already shelled out $1.8bn in “defense spending” in Afghanistan and only $500m in “additional expenditures”, including humanitarian assistance and democratic renewal (sic) — and, by extension, in Iraq. In other words, Canada has gone to war in the Middle East.

None of this, according to the Canadian foreign minister, could be the cause of Muslim anger at home, although Jack Hooper — the CSIS chief who has a lot to learn about the Middle East but talks far too much — said a few days ago that “we had a high threat profile (in Canada) before Afghanistan. In any event, the presence of Canadians and Canadian forces there has elevated that threat somewhat.” I read all this on a flight from Calgary to Ottawa this week, sitting just a row behind Tim Goddard, his wife Sally and daughter Victoria, who were chatting gently and smiling bravely to the crew and fellow passengers. In the cargo hold of our aircraft lay the coffin of Goddard’s other daughter, Nichola, the first Canadian woman soldier to be killed in action in Afghanistan.

The next day, he scattered sand on Nichola’s coffin at Canada’s national military cemetery. A heartrending photograph of him appeared in the Post — but buried away on Page 6. And on the front page? A picture of British policemen standing outside the Bradford home of a Muslim “who may have links to Canada”. Allegedly, of course.

From Michael Moore's TV Nation: The Health Care Olympics

Before there was 'SiCKO' there was 'TV Nation.'

Check out The Health Care Olympics with color commentators Bob Costas and Ahmad Rashad as the U.S. competes with Canada and Cuba in the sport of health care.

Bolivia tense as province votes on autonomy

Bolivia tense as province votes on autonomy

By McClatchy Newspapers and The Associated Press
(source: http://seattletimes.nwsource.com/html/nationworld/2004391156_bolivia04.html)

SANTA CRUZ DE LA SIERRA, Bolivia — This divided country faces a constitutional crisis today when its richest and second-most-populous province votes whether to declare itself autonomous from President Evo Morales' national government, a referendum the president has called illegal.

If the referendum passes, as polls show it overwhelmingly will, leaders of Santa Cruz province say they'll elect a state legislature, organize local police and otherwise set up a government equivalent to that of a U.S. state.

Morales has called the referendum a move to split up this nation of 9.1 million and to thwart his government's efforts to rewrite Bolivia's constitution so that its indigenous majority wins more political power.

Bolivia has a centralized government, where police, taxation and other government functions are controlled by federal officials.

Morales, a leftist critic of U.S. policies in the region, has received the support of Venezuela, Cuba, Ecuador and Nicaragua in the provincial-autonomy fight.

The Bolivian president also has accused the United States of backing the autonomy move, a charge U.S. officials have rejected.

Autonomy advocates, including Santa Cruz business leaders, denied that they wanted to secede and insisted that their goal is modernizing an overly centralized government.

Three other eastern Bolivian provinces, Beni, Pando and Tarija, also are planning to hold autonomy votes in coming weeks, and leaders in two others, Cochabamba and Chuquisaca, are also advocating autonomy. Only three provinces have resisted the idea.

Many white and mixed-race middle-class Bolivians here feel Morales, the nation's first Indian president, doesn't represent them.

"They accuse us of not wanting to be Bolivian," Gov. Ruben Costas growled during a rally last week. "The power belongs to the people, to the forgotten, to the provinces and to the states, where this new Bolivia is born."

Santa Cruz province, which sprawls over the country's eastern flatlands and produces natural gas, soybeans and other exports, is responsible for about 30 percent of Bolivia's gross domestic product while making up about a quarter of the country's population. The province's population is also less indigenous than that of the country's mountainous west.

Since Morales became the country's first indigenous president in 2006, Santa Cruz leaders have slammed government plans to redistribute farmland and seize more state control over natural gas and other industries.

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Morales counters that he needs a strong central government to spread Santa Cruz's wealth to the rest of South America's poorest country. Only by reversing the effects of centuries of racism, he argues, can Bolivia resolve a national identity crisis dating back to the Spanish conquest.

"We were, and continue to be, a profoundly colonial society, where our differences, our jobs, our opportunities are all a function of skin color," said Vice President Alvaro Garcia Linera. "Undoing this requires making the problem visible. And sometimes we don't like to look at ourselves in the mirror."

For centuries, Bolivia enforced boundaries between indigenous, mestizo and white through strict laws and customs. Until a 1952 revolution, Indians couldn't even set foot in the plaza in front of the presidential palace Morales now occupies, let alone vote.

His landslide election in 2005 turned the old order on its head.

But Morales' civil-rights crusade came bundled with visions of class struggle and socialist reform — a hard sell for his whiter and wealthier opposition.

A 2001 census found that 62 percent of Bolivians older than 15 identify themselves as indigenous — but mestizo wasn't included as an option. Other polls have found most Bolivians acknowledge a mix of Indian and European heritage.

As Indians abandon the countryside for cities, they build new lives amid the same cheap Chinese electronics, fried-chicken stands and pirated U.S. movies as their mixed-blood neighbors. Some wear traditional bowler hats, others hoodie sweat shirts. Some switch back and forth.

Both Morales and autonomy advocates have called for calm today and canceled potentially incendiary actions by autonomy supporters and the president's indigenous activists. Last week, the government prohibited civilians from carrying arms, and Morales has pledged not to send troops to Santa Cruz to block the referendum vote.

On Wednesday, the Organization of American States sent Political Affairs Secretary Dante Caputo to Bolivia to initiate last-minute dialogue between the two sides, but he left with only pledges to keep the public peace. The OAS held its second meeting in less than a week on Friday to discuss the crisis in Bolivia.

At the heart of the conflict is a July 2006 referendum in which Bolivians nationwide rejected allowing provincial autonomies, while voters in the four provinces now pushing referendums approved the proposal.

Those provincial leaders have said that the vote lets them pursue their separate paths despite the national rejection, while federal officials insist that only a national approval allows for provincial autonomy.

Political scientist Fernando Mayorga said that despite the tensions, both sides would have to negotiate after the referendum because "they can't maintain this political tension for much longer."

The goal, Mayorga said, would be fitting regional autonomies into a draft constitution that Morales allies hurriedly approved in December, without the presence of most opposition representatives.

That constitution would allow Morales to be re-elected once, claim more state control over natural resources and grant autonomy to indigenous communities and cities, among other actions.

Morales' congressional allies had originally scheduled a national referendum, also for today, on the draft constitution, but canceled it after the country's top electoral court said the vote couldn't be adequately organized in time. The president's activist allies had surrounded the national legislature in February and blocked opposition legislators from voting on the referendum date.

The electoral court also has declared the Santa Cruz referendum illegal, saying only the national legislature could schedule such votes, and announced it won't certify today's results.



Video in Spanish regarding the possible role of the American ambassador in the Bolivian conflict.

Bolivia, Phillip Goldberg "Limpieza Etnica" Santa Cruz.