As early as two months after the September 11 attacks in New York and Washington, speculation abounded over whether the true cause of terrorism was predicated on the mantle of poverty and globalisation. Two articles, of different political hues, sought to address this very issue in October's Financing for Development focus.
The first was entitled "Globalisation as a Force for Good". It was written by Edward Graham, a senior fellow at the Institute for International Economics in Washington DC. Featured in London's "Guardian" newspaper, the title spoke volumes of the author's intention. For it to have appeared when it did, told a very different story about how much thought is being given to such structural issues - even if the conclusions arrived at are dissimilar to those many an NGO working on development issues, might have expected.
Graham tried to provide a level of interest by questioning whether "by promoting globalisation, the US itself was partly to blame for the terrorist attacks." (WTOIL 12 October). His summary conclusion is that the message "has been widely rejected and rightly so."
With regard to international trade, he argued that "a number of credible analyses have concluded that there is a positive relationship between international trade and growth and also between international investment and growth". He continues that "Bolstering the positive result are consistent findings that, in developing nations, multinational corporations tend to pay higher than average wages." His ultimate conclusion is that the region of Afghanistan is not "destitute…because of globalisation but, because lack of it."
Continuing this thread of the neo-classicist theory on trade, which says that trade is the ultimate panacea for poverty, Guardian journalist Larry Elliot would find Graham's ideas somewhat unpalatable.
Elliot's article, entitled "Free Market Tide Has Turned", featured in WTOIL 5 October. In this article, the economics correspondent attempted to put September 11 in the context of free trade, by arguing that - hence the eponymous title - the tide of the free market had turned.
With regard to the so-called war on terrorism, Elliot maintains that "this is not war we are talking about, but economics, where the desire to avoid global recession has led to a rethink of the orthodoxy that has gripped policy for nigh on 30 years." This re-think has spawned a new wave of changes, including the renaissance of activism.
This activism can be seen in terms of what Elliot calls "expansionary policies". Of these, the most trenchant are "curbs on the freedom of markets", plus the trumpeting for the attack of the new enemies of the governments - "speculators trying to destabilise financial markets, the tax havens that facilitate the movement of funds to finance terrorism, and a deflationary economic climate that will put at risk jobs and growth." (WTOIL 5 October). Elliot believes that this situation has led him to conclude that it is now "back to the future with a vengeance." The priority now, he continues, is on multilateralism, or perhaps what many, including the US, would like to call "international co-operation" but, in this case, one that would help to boost growth.
The best place, ostensibly, to start would be with financial markets. Markets, Elliot maintains, are now establishing mechanisms, such as paying "hefty premiums" to the bank to prevent incurring any potential losses from potentially dodgy speculators. This Elliot call a "wise move" but maintains would only warrant that tag had it not been for the fact that the rubbished Tobin Tax aims to propose this very same idea. He wonders whether the "penny has finally dropped." If so, "welcome to a New World."
The second issue to make news in October's focus on FfDEV was the Tobin Tax; two articles made reference to it.
The first, entitled "Protesters Ask Right Questions yet Lack Right Answers", appeared on the allafrica.com website. It was a letter written by Belgiam Prime Minister Guy Verhofstad. In an attempt to mollify protesters following the debacle at Genoa, he argued, rather cleverly, that "the most effective way of combating…speculation is through the creation of larger monetary zones." He continues that "the prospect of coming up against the dollar or the Euro will scare off speculators more than any tax." Implicitly, he was also rubbishing the Tobin Tax.
Rather patronisingly, he contends that the concerns of "anti-globalists" are valid, "but to find the right solutions to these valid questions we need more globalisation, not less." This, he maintains, "was exactly the point of James Tobin. That is the paradox of globalisation," he stressed. As to why it is paradoxical, Verhofstad's argument is that "it can serve the cause of good just as much as it can serve the cause of evil."
The final article dealing with the Tobin Tax featured in WTOIL 5 October. Written by a reporter from the Zambian newspaper, "Business Day", the title was straight to the point: "0Implement Currency Tax, State Urged".
The article could actually be seen as serving to presage the serious concerns of Civil Society in Africa regarding the Tobin Tax. Zambia sees it as "a means of checking the dangers brought to the financial sector by liberalisation of the financial and capital markets." If the story of George Soros, the individual with considerable private money, and allegedly responsible to an extent for the 1997 Asian crisis, is anything to go by, there is no denying that a country like Zambia has to be careful about speculators. Zambia, according to the article, has "no exchange controls at the moment while the Zambian capital market develops." To boot, there are no regulations to manage currency speculation.
The Currency Transaction Tax (CTT), alternatively known as the Tobin Tax, would "other than being a revenue source for the government", would serve as a control "against currency speculation and unchecked foreign transfers in the economy."(WTOIL 5 October).
The Much-Maligned MNC
Finally, the third most important issue to grace the pages of the WTOIL in October was the issue of multinationals. There were, in fact, two articles that featured in WTOIL 12 October covering this.
The first was entitled "Don't Be Fooled By Debt Relief". Written by well-known journalist and broadcaster John Pilger, the article sought to expose what he saw as the real reason behind all the apparent hype on debt relief.
Pilger charges both the IMF and the World Bank for not acting in the best interests of the world's poor. Once they land in a country, and promise to reform it using "macro-economic, structural reform", one will find that it is in fact a code word for "laissez-faire capitalism" as imposed by these two institutions that they are talking about. These so-called SAP's have, in fact, "destroyed jobs and public services, while shaping local economies to the demand of transnational capital."
As if that were not bad enough, Pilger accuses the British government of doing the bidding of TNCS, when they talk about these SAPs. There is, Pilger contends, "a related hidden agenda." It comes in the form of the ostensibly-defunct Multilateral Agreement on Investment. Pilger argues that had it "been for an international campaign against the MAI, the 'Paris Club' [OECD] of rich governments, notably the Blair regime, would have signed away…the sovereignty and independence of developing countries to transnational capital."
As for Overseas Development Assistance (ODA), there is, according to Pilger, another reason why there have been concerted efforts to untie the aid. The principal reason is to enable "British and other rich-world transnational corporations eventually to secure contracts in domestic markets previously barred to them." (WTOIL 12 October)
Finally, in the last article to deal with multinationals, Corporate Watch UK provided its input in an article dating from autumn 2000. Entitled "The OECD's Crocodile Tears", the article charged that if multilateral institutions such as the World Bank and the IMF are "the body of globalisation's dark side…the OECD is its head." Sharp stuff? Not when you look at their record and considering that it was this organisation that mooted the idea of the MAI.
It tells the sinister tale of the exponential rise of the OECD, "an organisation premised on the economic repudiation of Communism", and how, today, in an attempt to maintain "stability", has fallen flat on radical alternatives to address the global economy other than employing free market principles with messianic zeal. Perhaps Corporate Watch UK says it more incisively: "…we find ourselves now in the topsy-turvy world of capitalist ideology as the OECD issues its updated guidelines on best practice governing the operations of transnational corporations in a global 'free' market."(WTOIL 12 October)
At the heart of the debate, Corporate Watch unravels a complex ideology predicated on free marked ideology, as practised by TNCs, and as praised by the OECD. Yet, what they cannot quite understand is how everyone is expected to benefit from the "free" market utilising the "one-size-fits-all" approach. To boot, it beggars belief that codes of conduct - guidelines - have to be drawn up in order to ensure that TNCs comply with their proclamations to respect human rights and the environment. Corporate Watch maintains "a classic ideologically-inspired confusion between ends and means thus lies at the heart of the modern world order, the heart of humanity relegated to the status of a vestigial appendix."
Tracing the history of GATT, IMF and World Bank, the authors argue rather eloquently that "we need to know the nature of the beast". They imply that it is by studying their history and reviewing their historical inclinations that people can best know how to mobilise themselves against their strange bedfellows, the multinationals.
In the final analysis, in an age where TNCs are becoming more powerful than states, it is worth remembering the following about the average multinational:
TNCs really do abuse human rights
TNCs handle two-thirds of world trade
TNCs suffer from "corporate malevolence"
TNCs exploit poor countries where there are insufficient mechanisms to regulate them
Corporate Watch UK is arguing that "it doesn't have to be the case that all businesses commit crimes, only that some of them do - and that is bad enough".
Murder is murder, wherever you are.
© E.K.Bensah, 2002