The Globalization of Poverty and the N W Order / Edition 2

The best account of globalisation's effects

Michel Chossudovsky, Professor of Economics at the University of Ottawa, has written a brilliant book on globalisation's effects. He shows how the International Monetary Fund used the debt crisis of early 1980s to impose deadly policies, causing the present global depression. What are these policies? They devalue the currency and 'dollarise' prices, making all basic goods dearer. They deregulate banks and liberalise flows of capital, labour and goods. Capital flight then cuts tax revenues, drives up budget deficits, paralyses social programmes, and spurs ever-increasing public debts. They attack wages, working conditions and trade unions. The free movement of labour aids this attack, as Chossudovsky notes, "Manpower exports, . from both Mexico and the Caribbean, serve the purpose of depressing the wages paid to American and Canadian workers, as well as undermining the role of trade unions." They destroy health, education and welfare services. They privatise public services and utilities. They dump US and EU food surpluses on poor countries, wrecking local farmers. They make central banks independent of their countries and peoples, and dependent on the IMF. The IMF stops these banks funding public spending and providing credit through money creation, which stifles development. Chossudovsky writes, "Incapable of using domestic monetary policy to mobilize its internal resources, the country becomes increasingly dependent on international sources of funding which has the added consequence of increasing the level of external indebtedness." They cut public spending and wages, and raise taxes, to release money to service external and internal debts. Development loans, Structural Adjustment Programs and bailouts divert revenue from social programmes to the military and the banks. IMF bailouts don't rescue countries; they aid speculators, ensuring that they can collect their debts. A senior IMF official admitted, "On the basis of existing studies, one certainly cannot say whether the adoption of programs supported by the Fund led to an improvement in inflation and growth performance. In fact it is often found that programs are associated with a rise in inflation and a fall in the growth rate." It failed to hit these claimed goals of lower inflation and more growth, but hit its real goal, increasing US company profits. As Chossudovsky says, the IMF's policies amount to economic genocide. Worldwide there are one billion people unemployed, nearly a third of the world's workers. In Latin America and the Caribbean 60 per cent go hungry. Chossudovsky sums up, "we must democratize the economic system and its management and ownership structures, resolutely challenge the blatant concentration of ownership and private wealth, disarm financial markets, freeze speculative trade, arrest the laundering of dirty money, dismantle the system of offshore banking, redistribute income and wealth, restore the rights of direct producers and rebuild the Welfare State." We need to dismantle "the military-industrial complex, NATO and the defense establishment including its intelligence, security and police apparatus. . We must restore the truth, disarm the controlled corporate media, reinstate sovereignty to our countries and the people of our countries and disarm and abolish global capitalism."