Last Updated: Friday - 09/24/2010
March 1, 1999
How to destroy a developing nation's economy
It has been part of the popular wisdom that money, sometimes described as filthy lucre, is the root of all evil. At the same time it is well known that throughout history from Babylon to Bretton Woods that people have been prepared to kill in order to get their hands on some of it.
Over the years our methods of acquisition have become more sophisticated, almost sanitized. Men in pinstriped suits or red suspenders are able to shift vast amounts of money from the poor to the rich without so much as a drop of blood being shed. Still, as a result, people are suffering to the point of death at an alarming rate. This has to stop.
Let me try and explain how the accumulation of money in the hands of fewer and fewer people is slowly killing the majority of people. The instruments of death are not knives or guns but transnational financial institutions. The IMF, the World Bank and the World Trade Organization are regulatory bodies operating within the capitalist system on behalf of economic and financial interests.
These administrative structures are big-time loan sharks and collection agencies with considerable clout who lend money to indebted nations under certain conditions to ensure the loan will be paid back with compound interest.
The structural adjustment program (SAP) is the condition. Among other things it insists on the expansion of exports through the minimization of labour costs. The consequent impoverishment of large sectors of the world population through this macro-economic reform results in a dramatic contraction of domestic purchasing power.
Over-production combined with reduced consumption has meant that local small and medium-sized enterprises, and independent agricultural producers, are pushed into bankruptcy. The domestic market of developing countries is in effect destroyed.
The global economy of the last 20 years depends on a large pool of cheap labour and a frantic search for consumer markets. While labour is restricted in its movements, barriers to the mobility of goods and money are removed, credit is deregulated, and land and state property are taken over by international capital.
Burdened by debt to foreign creditors, local governments are rendered impotent to care for the well-being of their own people.
The financial institutions have gained such political leverage to dictate government and social economic policy because of the large public debts accumulated in Western countries where the institutions are located.
The OECD countries owed over US$13 trillion in 1995 and the U.S., the largest debtor nation, owed US$5 trillion in 1996. As one reader suggests, international finance has become the de facto global government.
There is a world-wide popular ecumenical movement emerging which demands a reform of this unjust monetary system which has exacerbated the suffering of poor people. Debt burdens which are shouldered by the very poorest amongst us are ethically intolerable.
In Edmonton, a coalition of over 25 NGOs, churches and Third World support groups is staging a 24-hour vigil at the Strathcona Orange Hall at 10335-84 Ave., from noon on Friday March 5 till Saturday March 6 at noon in support of the international campaign for Third World debt relief.
All people of good will are invited to join the organizers as a sign of solidarity with the world's outcasts.
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