Globalization & Economic Disparities

Submitted by Guest (not verified) on Tue, 03/04/2008 - 11:44

DR. SUSAN George of Greenpeace says: “Acting globally has become a practical necessity in a world where we are acted upon globally, where decisions affecting our lives are taken at levels, far remote from ordinary democratic practices that no citizen has a hope of influencing them”.

Since the early 70s, major changes have taken place in the global economy. The direction of power has been moving towards regional and global supra-national institutions and out of reach of the democratic controls at the local levels. Among the threads which have come together to form an unmistakable pattern, few developments in the early 70s were the key.

Since its founding by David Rockefeller (Chairman Chase Manhattan Bank) and Zbigniew Brzezinski (Jimmy Carter’s National Security Advisor) in the early 70s, the “Trilateral Commission” has been moving quietly to establish a “borderless” world in which the transnational corporations would be free of interference from the local states, so they could compete effectively in the “new world order”.

The Trilateral Commission brings together the corporate and political leaders in an organization designed to serve transnational corporate interests and tie them to the ambitions of the powerful politicians. George Bush Senior, still the member of the commission, Bill Clinton and eight members of his cabinet were members of the commission until they came into high-profile government positions, so was the George W. Bush and company. The commission has a smart policy which does not allow members to remain on the commission while holding high-profile positions. That helps these politicians advance commission policy without being defined as part of the commission.

In the 70s, as per recommended plan of the commission, the USA and its G-7 trading partners (main promoters of the WTO plans now), mainly through the World Bank (WB) and the IMF began lending large sums to the 3rd world nations, whose corrupt political leaders and business community often profited while the general population suffered. Those nations have had a struggle at their hands trying to pay off these debts ever since. That’s where the exploitation comes into play to force these indebted nations to facilitate the “bonded economic world order” to be implemented. Dr. Susan George of Greenpeace has called the 3rd world debt the perfect instrument to force integration of these nations into the world economy. Debtor nations are told the way out of debt is to export more.

Evidence shows this cannot be done. The main problems have been the burden of debt-servicing and the flight of capital by the corrupt ruling elite to the rich countries. Both play significant role in causing big deficit to the balance of payments of these poor nations. Annual financing required to bridge this huge gap makes them more and more dependent on the World Bank and the IMF like supra-national institutions.

According to an IMF report, the total external debt of the developing countries at the end of 1999 was estimated at $2,083.2 billion which was 163.2 per cent of their estimated receipts from exports of goods and services. The ratio of the developing countries external debt to their Gross Domestic Product (GDP) in 1999 was 38.3 per cent while external debt servicing in the same year was estimated at 27.8 per cent of their exports of goods and services.

The total external debt of these poor countries has grown rapidly in the last three decades. It was $75 billion in 1970; by 1980 it had reached $639 billion, far more than eight times of the 1970 figure. By 1990 it had more than doubled to $1,341 billion. By the end of 2000 it was estimated at $2,038 billion. Thus in three decades, the developing countries’ external debt has grown a staggering 27 times than its size in 1970. The funny side of this exploitative plan is that in 1980, these poor countries of the South owed the North $639 billion. Ten years later, having paid about $1280 billion in debt servicing, they still owed $1,341 billion by 1990.

According to the data released by the Jubilee 2000 shows that in order to meet the debt obligations, the poor countries in the South received from the richer countries in the North, new loans worth $292 billion in the year 2000. While the amount poor southern countries paid to the North for debt servicing stood at $269 billion. Well these transfers were exclusive of the heavy transfers of about same worth made by MNCs and the corrupt ruling elite of these poor countries. How in this gloomy scenario, these poor nations can achieve a sustainable growth to bridge the ever growing gulf of their foreign receipts and transfers.

Same is the case with Pakistan. In 1991 Pakistan’s total foreign debt was $17.295 billion which has risen to $39.5 billion till now in 2001. Today Pakistan is bound to pay about $4 billion per annum as debt servicing which is the major reason behind our $2 to $2.5 billion of annual current account deficit causing a fiscal deficit of $3.2 billion (as in FY 2001-02). And we as an independent nation has no other option left with us but to go for more easy money with “certain” conditionalities attached to it, constantly growing burden on our shoulders which helps us to bend more!

It is due to these unjust policies of G-7 and our blind faith in their recipes that today the world is divided into North and South regions. And the prevailing class-culture clearly depicts the economic disparities as a major threat to the world peace today. And it is due to this so-called capitalist globalization that the global resources are constantly expanding but the resourceful hands are constantly shrinking in numbers.

According to the UN figures, out of total 6 billion global inhabitants, about 1.5 billion are struggling to survive below the extreme poverty line while half of the global population’s average daily income is below than $2 per head per day.

In the richest free market economy, the United States, the number of people living below the extreme poverty line are more than 55 million and 23 per cent of the total US population are making less than the official poverty line. Furthermore, according to the US congress budget office, during the 80’s decade only one per cent Americans took care of the 70 per cent of the Gross National Production and today only one per cent Americans capture more than 40 per cent share of the total US resources. According to another report, on the list of the ten wealthiest personalities of the world, there are seven Americans while only a few years back there were only two Americans who made to the list. It is quite evident now, how the international capital is shrinking into a very few western and specially the American hands through these transnational corporations.

Today the world’s 80 per cent resources are captured by only 10 per cent richest persons. According to the ILO, currently the global unemployment ratio is 33 per cent of the total employable population. The world population at the current pace will get doubled in the next 50 years which will mean nothing else but more than doubled poors worldwide. Because by that time, the world’s 80 per cent resources would be captured by only 5 per cent rich. Today world’s 80 per cent production is reliant on 1000 big corporations. It is due to this so-called capitalist globalization that the rich is getting richer while the poor is getting poorer with the every passing day. And due to this unjust, exploitative economic system, the world is splitting into North and South factions while at the same time the global societies are splitting into the rich and poor classes resultantly almost vanishing the middle class from the scenes.

If I am wrong in my perception and the G-7 claims to be sincere in its approach then let me suggest three very basic amendments as a mutual confidence building measure in the WTO’s globalization plan 2005 for promoting international peace and harmony.

Firstly, ban the exports of conventional as well as non-conventional arms internationally because its not only contradictory to the international peace advocacy but also takes a big tole of the poor countries’ foreign exchange. Secondly, gradually write off all the debts of the poor South or at least freeze them by making them interest-free. And thirdly, announce to make this world visa-free along with declaring it tariff-free for a real globalization.

Globalization & Economic Disparities
By: Farrukh A. Raja
Email: farrukh.a.raja@gmail.com

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