The greatest weapon of mass destruction is corporate economic globalization. - Kenny AusubelOh, what a wicked web we weave when we practice deception. The world’s rich and influential economic policy makers, also known as the G-20, met in London this past week to discuss and amend their global practices and ways to combat the current downturn in the markets. Albeit, these types of meetings and international bureaucracies are given some media coverage; however, their general purposes, influence and results, are not.
To briefly summarize, the
G-20 is an organization which is comprised of nations who represent varying levels of economic development and industrialized success; typically the top 20 economies of the world. The basic agenda of this group is to bring together developing economies and industrialized nations in order to promote discussions about key global economic issues which can further strengthen international financial institutions and stability.
The
International Monetary Fund is an organization with the purpose to stabilize economies of member nations through fiscal policy adjustments and last resort loans to nations in dire need. In order to receive these emergency loans, a nation is forced to take on a “structural adjustment plan” which alters the national policies and economic decisions.
The
World Bank is an organization with the purpose of providing financial and technical assistance to developing or poor nations with the goal of reducing poverty. Assistance and guidance for building roads, bridges, schools and other industrial improvements are many of the plans they employ.
On the surface, the IMF and WB may seem like credible sources to help promote global financial stability and prosperity; however, upon inspection the results say otherwise. A brief look at their history and present encounters properly shows their current purpose and role in the global economic order.
The IMF and WB were both created in 1944 at the “Bretton Woods Conference”. After World War II, with most of the European powers in shambles, many nations met in order to help setup institutions, guidelines, and policies on how to properly monitor nations and financial issues throughout the world. It is important to note that both the WB and IMF were originally setup to be accountable and under the guidance of the United Nations (which is no longer the case). Also, out of these meetings, the origins of the World Trade Organization and the General Treaty on Tariffs and Trade were created. Nowadays, these institutions are the cornerstones of free-market capitalism and
neo-conservative policy which are the foundation of the American Empire.
Many of the main problems with these institutions are that once a nation follows the guidelines of programs and policies, the institution incorporates their national economy and well-being in the hands of foreign entities, corporations and investors. Privatization is heavily promoted and foreign corporations are like kids in a candy shop. Many of these programs may be successful economically but wreak havoc on the citizens of the nation. It is also important to note that the programs and policies implemented by the IMF and WB are not the same in which most industrialized or stabilized nations employ or have ever employed to gain their own status; a clear instance of “do as we say, not as we do”.
For example, let’s say a nation is in dire economic need and turns to the IMF for a loan. In order to receive this loan, they must comply with economic policy changes, agree to a stringent repayment plan and also sell off many of their assets to foreigners, all of which are common practices of the IMF.
Foreign investment and loosing up of trade restrictions open the nation up to foreign goods which weakens the nation’s chance of rebuilding for their own future. These two actions make the poor nation reliant on outsiders. Monetarily, the local currency becomes a mere percentage of the dollar because your new repayment plan forces you to borrow and repay in US Dollars which trickles down to the society and inflation sets in. Unemployment rises and tax rates sky-rocket as a result of the necessary repayment plan and new policies. Many times, it has been shown that it opens up the opportunity for foreign corporations to setup shop for low-wage factories because of the dire need of employment and easily available natural resources.
The overall social policies and welfare of the nation are lowered in order to incorporate them into the industrialized world, yet the risks the citizens take on are merely an afterthought. These are the results of IMF programs and policies throughout the 3rd World and it is not by accident as it has occurred time and time again.
Never has any nation in need come to the IMF for a loan and been able to successfully borrow money, restructure policy, repay the loan and been financially better off after the fact. Typically, the nation falls deeper into debt and defaults on the original loan, while the nation is now worse off socially (education, environment, medicine, etc). The common benefactors of this exchange are the rich, industrialized nations, who now have a grasp on a debtor while they have opened its doors to foreign investments, business opportunities and have tighter command and relations because of this new relationship.
The WB also plays a part in this exchange. As the IMF is attempting to adjust the economics of the nation, the WB sometimes tries bringing about projects which will enhance the betterment of the society. Building of schools, roads, bridges, and power plants are just some of the projects. Now this may sound like a wonderful idea and process, but in the international game of free market capitalism, this process turns into corporate exploitation through privatization.
Many times in this process, foreign corporations plunder natural resources, exploit the citizens for cheap labor and suck the nation dry of money through bad contracts. Privatization is employed by the government as a portion of the IMF’s economic plan and the citizens pay the price. It is important to recognize how these international institutions all play a vital role in the struggling nations’ “adjustment” and the relationship between their policies and how they are intertwined.
For example, many people in the US think Enron pulled off its biggest corruption in America, but in reality, in India, Enron robbed the citizens through a laundry list of scandal and greed. Once Enron declared bankruptcy, the investors through the WB and US corporations were able to recover over $200 million from India while the local citizens got nothing. The shift of sovereignty not only results in loss of power, but the process to protect your own citizens from corruption and ambiguous control.
All over the globe, forced privatization and programs from the IMF and WB have led to ongoing human rights problems, the generic undermining of democratic processes, environmental damage, loosing of laws protecting citizens regarding working conditions and the general welfare of people. Even now it has become common for theses institutions to promote the privatization of a nation’s most basic necessity and resource, water, so that industry can exploit citizens for private profit and gain. With a long detailed history of corruption, privatized greed and failed policies for the 3rd World, there is no other realistic conclusion to draw than the fact that the rich and powerful have setup a system to incorporate their own profit and success on the misery of the poor and needy.
Various observers remark in the style and manner in which each of these institutions is connected and thus is more impregnable to restriction and containment. Once such barriers and policies are put in place, difficulty dismantling them or changing such processes is extremely tough. Unless you search for such encounters in the world, most people are unaware they occur because the corporate owned media does not report on them unless it is such a catastrophe it cannot ignore it (like Enron).
Now that we understand the basis for how these international institutions operate, let us discuss the intensions and purposes of the G-20 in practice. The IMF and WB are funded and controlled by the top few economic world powers. Quite often the economic decisions regarding the IMF and WB are based off the political intensions of specific nations own agenda rather than the well-being of a nation in need or generic global stability.
This past week the G-20 met with varying purposes and intensions. In the US media, these results were applauded with open arms but as we look deeper, we will see the current state of global affairs at work. The US’s primary purpose was to raise capital and funds to combat the current economic crisis.
Albeit, many nations are facing problems, the US is asking foreign nations to shell out some of their own needed funds to combat the US created crisis which has now spread globally. In response, many nations actually have agreed to some funding for a global stimulus plan, yet the US would still not listen or agree to any type of global financial oversight rules or committee to combat these problems and issues from reappearing in the future. In case any of this sounds familiar, it is the same exact type of hypocritical policy the US is routinely spouting – give up your sovereignty but we will never adjust ours for the greater good.
One of the other primary issues which were highly praised was the notion of increased funds to developing or nations in need. To fully understand this matter, one has to acknowledge the idea of incorporation in a global sense. One of the primary goals of globalization and the economic world order through all of these institutions is to incorporate all nations into the same type of arena. If everyone is on the same page and playing by one generic set of rules (even if they are not fair and do not work as hyped), it better helps the system to remain the same and the leaders of the top economies to stay in power and continue their dominance.
The idea of development in global economics does not correlate to equality, balance or stability; it refers to incorporation in a financial system which promotes inequality, exploitation and imbalance. The weak remain weak and the strong remain strong, but all on the same page, playing by the same policies and guidelines.
In practice and after years of failed results, this is what the IMF, WB, WTO and agreements like GATT, NAFTA and CAFTA do in the world. The deeper these institutions and policies have become ingrained, the greater the separation between the rich and the poor nations of the world. If you think this is some type of conspiracy theory or far fetched explanation of the facts, I beg you, research about all of the effects these institutions and policies in places all over the globe.
These global institutions more closely represent a system of new age colonialism compared to development. As a result of the most recent G-20 meeting, roughly 1 trillion dollars was pledged to bailout global economies as they will be funneled through the IMF and WB. Shortly after this was announced, global trading markets, Wall Street and the Dow rallied by hundreds of points and significant gains – what a shocker. Taxpayer funds (from rich nations) lent or handed to foreign nations (poor and developing nations) with stipulations and contracts so they can in return buy goods, services and improvements from the rich nations while adjusting their economies and policies which favor the rich nations. This is the basis and spider web of the global economic order.
Empires no longer need standing soldiers in foreign lands to control the conquered. The failure of the 20th Century (unified governing bodies to oversee peace and equality) has turned in the creation of a new order. If you are a disobedience to the global order, you can suffer under the barrel of a gun or a mighty pen of the banking and financial industry. The fate of these poor or developing nations is to choose national sovereignty, build large scale weaponry for defense and suffer your own fate while being outcasts of the industrialized world or to join in the global economic order and become subservient to the rich.
The famous American revolutionary Patrick Henry once said, “It is natural for man to indulge in the illusions of hope. We are apt to shut our eyes against a painful truth, and listen to the song of that siren till she transforms us into beasts... For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth, to know the worst, and to provide for it.” If you wish to ignore the direct connection between Wall Street, the corporate agenda and governments’ economic policies and institutions on a global scale, you are not looking at the big picture.
If we are to live in a world full of peace and equality, we must address these problems. Pushing the envelope to further the rich and poor of the world only leads to more disorder, instability and danger. We can choose to fix the problem now in hopes it is not too late or we can continue to line our pockets and reap the fate for which we have sown.