Sunday, October 30, 2005

The Terror of Corporate Globalization
Aziz Choudry, GATT Watchdog, Aotearoa (New Zealand)
Presentation for Asian Peoples’ Solidarity Forum, Hong Kong

“The corporate caterpillars come into our backyards and turn the world to pocket change… They preach from the pulpit of the bottom line. Their minds rustle with million dollar bills”.


In her song, The Priests of the Golden Bull, Cree* Singer-songwriter Buffy Sainte Marie captures the essence of the corporate globalization agenda.

Last month, Founder and President of the World Economic Forum (WEF), Professor Klaus Schwab said “Globalization… may be accelerating in our lifetime but it has been around since Marco Polo and it will not end because anti-globalization protesters find it objectionable.”

Indeed globalization and the values underpinning the neoliberal agenda are nothing new. They are as old as the MAI (Multilateral Agreement on Investment), APEC (Asia Pacific Economic Cooperation) and the WTO (World Trade Organization), and as new as Marco Polo, Columbus and Magellan. The injustices and terror suffered by colonized peoples as a result of successive waves of globalization the world over has a long history as does the determined resistance to the brutal clenched fist of market forces which has destroyed local economies, livelihoods, cultures, societies and the environment. Resistance did not start at Seattle or on the Internet and it will not stop after next month’s WTO meeting.

Modern transnational corporations are the heirs to the East India Company, the Hudson’s Bay Company, the New Zealand Company – major players in earlier waves of colonization, dispossession and the commodification of peoples, lands and nature. The drive to reduce everything and everyone to a commodity to be bought and sold in the market place has been a defining characteristic of the colonization process the world over.

We need to very clearly and consciously align our struggles for alternatives to the neoliberal model with the older struggles for self-determination, against imperialism and colonialism if we are to succeed. We must delegitimize transnational corporations and international institutions like the WTO, World Bank and the IMF – the Bretton Woods toxic trio, the Asian Development Bank, and the other institutions and processes which advance corporate globalization globally, regionally and nationally. We must clearly and deliberately reject them as fundamentally flawed. And we must act with urgency.

Professor Schwab’s World Economic Forum has an overblown view of its own self-importance. It sees itself as “an unbiased and neutral platform for debate…the foremost international network for private and public participation for enterprize in the global interest.” The motto of this elite forum, which brings together some 1000 heads of state, government officials and business leaders for its East Asia Summit in a few days here in Hong Kong is “Committed to Improving the State of the World”. It cherishes global competitiveness and private profit.

Famous for its annual summits in Davos, Switzerland, the WEF is a high profile venue for interaction between the private sector and government leaders and a platform for the world’s most powerful transnational corporations. A WEF public affairs officer called it a “giant dating agency” for transnational corporations and governments. To join, a company must have a minimum turnover of US $1 billion, a global outlook and “strong management”. Its main funding comes from ‘institutional partners’ like Nestle, Coca-Cola, Hewlett Packard, Volkswagen, Audi, Price Waterhouse, Booz-Allen and Hamilton, Deloitte Touche Tohmatsu, and DHL.

But the very policies which the WEF promotes – and the corporations that fund it and attend its meetings - have helped to put the world in the state that it is in. It is a talk shop for the world’s political and economic elites to share their latest sales pitches to sell corporate greed, corporate welfare and laissez-faire policies to a public grown increasingly wary of the promises of trickledown economics. It is hard to tell exactly how much influence the WEF has on global and national economic policy and decision making. But it is a potent symbol of the obscene economic and political power of the handful of corporations which dominate the world’s economy.


Schwab says that the WEF is a “true platform for dialogue”. Selected “civil society” representatives are sometimes invited to “dialogue” with the WEF. But we should remember that dialogue is the most important PR tactic that companies – and the institutions and agencies which promote corporate globalization - are using to overcome the growing opposition to their operations. It is a typical divide and rule tactic. One PR guru has outlined a three step divide and conquer strategy on how corporations can defeat public interest activists who apparently fall into four distinct categories: “radicals”, “opportunists”, “idealists” and “realists”. The goal is to isolate the radicals, “cultivate” the idealists and “educate” them into becoming realists, then co-opt the realists into agreeing with industry.

Transnational corporations account for two-thirds of world trade in goods and services. Free trade is a euphemism for freedom from governmental restrictions for transnational corporations. Of the world’s top 100 economies, based on a comparison of annual corporate sales and a nation’s GDP, 51 were companies, 49 were countries. According to the Institute for Policy Studies report, The Top 200: The Rise of Global Corporate Power, by 1999, Nissan was bigger than New Zealand, Siemens was bigger than Malaysia, IBM was bigger than Singapore, Daimler Chrysler was bigger than Thailand, and Volkswagen was bigger than the Philippines.

Between 1983 and 1999 the profits of the Top 200 corporations grew by 362.4 % while the number of workers they employed rose only 14.4%. By 1999 the top 200 companies accounted for over a quarter of the world’s total economic activity but provided jobs for only 0.75% of the world’s workforce. Their combined sales were 18 times the size of the combined annual income of 1.2 billion people – 24% of the world’s population, living in what the World Bank defines as “severe” poverty – on less than US $1 a day.

TNCs have used their formidable lobbying power to shape national economic policies and international trade and investment agreements. They have privileged access to high level decision makers on trade and investment issues, while the public has little or no input. They used the OECD Business and Industry Advisory committee to lobby for the OECD MAI. Director of the WTO’s services division, David Hartridge said: “without the enormous pressure generated by the American financial sector, particularly companies like American Express and CitiCorp, there would have been no services agreement and therefore perhaps…no WTO”.

In agriculture alone, by the early 1990s, 77% of world trade in cereals was controlled by 5 transnational corporations; in bananas, 80% was controlled by 3 corporations, in tobacco, 87% by 4 corporations. Percy Barnevik of the ABB Industrial Group said: “[Globalization is] the freedom for my group of companies to invest where it wants when it wants, to produce what it wants, to buy and sell where it wants, and support the fewest restrictions possible coming from labour laws and social conventions”.

In the name of development, economic growth, and progress, the Bretton Woods toxic trio and other vehicles which promote global free market ideology aim to set a single economic policy for the world, one which advances the needs of transnational capital and the major economic powers who protect capital and benefit from these activities.

These agencies promote a package of reforms which includes: minimal controls on big business; unrestricted foreign investment; unlimited export of profits; privatization of state assets, utilities and services; full exposure of domestic markets to cheap imports; privately-funded and owned infrastructure operating through deregulated markets; market-driven service sectors, including social services like education and healthcare; competitive (i.e. low cost, deunionized) and flexible (temporary, part-time and contract-based) labour markets; free movement for business immigrants (while retaining strict controls for foreign workers and refugees).

One WTO briefing paper says: “Under WTO rules, once a commitment has been made to liberalize a sector of trade, it is difficult to reverse. The rules also discourage a range of unwise policies. For businesses, that means greater certainty about trading conditions. For government it can often mean good discipline.”

The ILO World Labour Report 2000 showed that increasing trade liberalization and the effects of globalization have resulted in job losses and less secure employment in both industrialized and Third World countries. According to a report commissioned by the WTO itself, the number of people living in absolute poverty in many parts of the world will nearly double by 2008.

Since September 11 the world’s peoples are being asked to take sides in a bipolar world dreamed up by the Bush administration. In reality if we examine economic and political power we live in a unipolar world with few real checks and balances. Now the war on terrorism is being cynically linked to the struggle to forge consensus and rally domestic support for economic liberalization and open up the world’s economies further and faster to global capital. This month’s APEC Summit in Shanghai, besides being a platform to build support for a new round of global trade talks at the WTO, was used in a brazenly political way to shore up support for Bush’s war against terrorism.

For so long APEC has claimed to be a community of economies, in order to avoid any consideration of the impacts of the economic liberalization which it promotes on Indigenous Peoples, workers, small businesses, local communities and the environment, unless they can be defined in narrow “trade-related” terms. How times change.

Meanwhile opponents of the neoliberal model and peoples struggling for self-determination face renewed moves to criminalize dissent by governments which seek to use the September 11 attacks to shore up economic and political agendas which have often been engulfed in a global crisis of credibility and legitimacy over the past few years. With the Qatar WTO Ministerial only days away, they no doubt hope this is the miracle cure for the post-Seattle Traumatic Stress Syndrome which has dogged attempts to get a new round of global negotiations underway.

As Michel Chossudovsky points out, war is good for business. US Trade Representative Bob Zoellick stated very clearly last month in the Washington Post: “America’s light and might emanate from our political, military and economic vitality. Our counteroffensive must advance US leadership across all these fronts.” (Countering Trade With Terror, 20/09/2001) A massive redirection of the USA’s resources towards its military industrial complex looks set to enable defence contractors like Boeing and Lockheed Martin to quite literally make a killing as they line their coffers with billions of dollars of surplus profits, no doubt at the expense of social expenditure.

For the globalizers crises always seem to bring new opportunities. The 1997/8 financial crisis which wrought so much human suffering across South East Asia provided a way to quickly open up Asian currency and finance markets to foreign – especially US – capital, through the prescribed tough IMF medicine.

We live in a world of double standards. Hot money zaps in and out of economies at the touch of a computer key, transforming countries into casino economies, triggering financial collapses in their wake. Transnational corporations can use investment agreements to sue governments whose policies they claim interfere with their right to make a profit or reduce the value of an investment. Under the North American Free Trade Agreement’s Investment Chapter, US-based Ethyl Corporation successfully forced the Canadian government to remove a ban on its product, a fuel additive called MMT a suspected neurotoxin and environmental hazard. Rather than face a possible US $250 million penalty, Canada paid US$13 million to Ethyl Corp and issued an apology.

The failed Multilateral Agreement on Investment which some countries want to resurrect at the WTO, and many new bilateral investment agreements like those which New Zealand has signed with Hong Kong and Singapore, Chile and Argentina contain provisions which would allow investors from one signatory country to take actions against the other government for compensation.

Meanwhile countless people forced to flee their homes and seek a better life elsewhere are still dubbed “illegal immigrants” by governments which demonize and dehumanize them, go to extraordinary lengths to keep them out, like the Australian government as it continues the colonial tradition of using the Pacific Islands as a dumping ground - this time for the desperate refugees that have escaped Afghanistan, Iraq and other countries and been denied entry into Australia. The same Australian government which is one of the Asia-Pacific’s most ardent advocates of the free flow of goods and services through trade liberalization.

At a time when transnational corporations are demanding greater rights to wander and plunder at will, striving to maximize profits by driving down the costs of labour and natural resources, encouraging countries to compete in a race to the bottom to lower wages, environmental, health and safety standards to attract foreign investment, constrain current and future government abilities to set policies and define their own course of development, no person, anywhere in the world, in the 21st century, should be called “illegal”.

Azra Sayeed, a Pakistani activist, says: “From the projection of pain and grief by media one can assume that intensity of feeling pain is measured based on one’s place in the power systems of the world. Otherwise, the many devastations faced by have-nots would have generated the same kind of frenzy as being televised these days. That classes amongst nations exist has been starkly demonstrated: the US $ 40 billion aid approved by the US Congress for the New York catastrophe makes a statement. Pakistan’s entire debt is just short of this huge sum. The population of this country is 140 million with nearly half below the poverty line, living through the agony of hunger, disease and many indignities of poverty, much delivered through the brutal hand of market forces.”

In the North, using the pretext of the attacks, privatized industries like the airline sector are getting massive bailouts from the very governments which dictate to other nations the terms of trade, and preach a market gospel, while the daily agony of the majority of the world’s population under structural adjustment, trade and investment liberalization imperialism, and militarization continues.

Someone once said that when injustice becomes law, resistance becomes a duty. The political climate in many countries has changed for the worse since September 11, but we have no choice but to resist the renewed onslaught of global capital and continue to fight for peoples’ rights to self-determination and build alternatives to corporate globalization. We must not become paralysed into inaction by the current overtly hostile climate towards political dissent.

The free market gurus, the Bretton Woods institutions and the US-led war machine will never deliver “enduring freedom” to the world’s peoples. What will? I hope we can come up with some concrete steps towards addressing that question at this forum. Thank You.


(Translator’s note *Cree – an Indigenous Nation in Canada)

Aziz Choudry
Presentation for Asian Peoples’ Solidarity Forum, Hong Kong
28 October 2001

1 comment :

Locke said...

'Greed is not good'

In Australia, we have had many privatisations and demutualisations in the last twenty years. The changes in corporate structure were made for good reasons. The problem was that the sleepy government organizations and mutuals were too ineffecient. Workers could be lazy, because their jobs were secure, and there was no great incentive to work hard. The workers weren't serving others, but serving themselves - by being lazy.

So the corporate structures were changed, and these changes worked. Corporations now work for the profit of owners, and this profit is shared with workers. This potential for profit has driven managers to squeeze out inefficiencies with a view to their own gain. So the problem of laziness is no longer the problem in corporate Australia. We have a different problem.

You see, what has not changed is the inclination of the workers and managers to serve themselves rather than others. The difference is that workers are now driven by greed. Rather than laziness, the Australian form of self-service is the chase after the dollar. More and more, the work-practice of our labour force expresses their belief that greed is good. This is a problem, because work is not meant to be about greed, it is meant to be for service.

If we agree that greed is not good, can we cure this plague? We can't cure the heart of greed by adding more rules - but can we do something at a structural level? Socialism and communism manifestly fail, partly because communism involves reverting to the old government owned and run corporate structures. If we reverted to these, laziness would again triumph as the expression of workers' self-interest. So what can we do to tame our current spiral into materialism? One answer is that our hearts need changing, so that we want to serve others. That is the primary answer. But our hearts will never be changed completely - there will always be the tendency for people to serve themselves rather than others. So what structural change might we make to help us defeat the greed-is-good brigade?

I want to make a suggestion. It is a little detailed, so strap in. But it is a test for you, the reader. The test is this: If you reject my suggestion as bad, do you reject it because you really think that greed is good? If that is your reason, then in my opinion, you have failed this test.

So why not structure society so that more work must is others-centred: The maximum take home pay in any year is set at about $50000 per person (adjusted for family size, marital status etc.). Any extra that you earn is set aside into a 'superannuation-style' account (owned by you, but not accessible until a later date). This account may be used in certain circumstances: It can be used by the owner whenever their earnings drop below $50000 that year. The owner may use the account to top up that year's earnings to the maximum $50000 figure. The account may also be used as a deposit on a house (up to say $150000 can be used in this way over a lifetime). It may be used to donate funds to causes deemed not in the direct interest of the owner. The owner chooses where these donations go. These donations would be vetted by a randomly selected person from the community (with recourse to a second person if the first says no). These 'checkers' will confirm that the donation is indeed others-centred.

This system works against both the evils I have mentioned above. We retain the capitalism where corporate structures allow people to push hard for personal profit. This leaves the incentive for people to work hard: If someone wants to earn their lifetime of wage income in five years, they can try. So those looking to provide for themselves will still be motivated to work hard. The same goes for those aiming to make money for the benefit of others - they can make bundles and give it all away. So the 'left-wing' evils of sleepy mutuals and government organizations are avoided.

On the other hand, citizens can no longer work to spend millions on their own pleasures. This will not be possible. So those at the top of our corporations will have severely restricted ability to sacrifice others for their own benefit. The 'right-wing' evils of money-hungry stop-at-nothing tyrant bosses will be avoided. And so the problems of today will be mitigated (although not removed)

The details need to be worked out, but the point is simple: our work would become biased towards others-centred service.

Note that it would still be possible to be paid a million dollars a year. Those who want to earn such large sums and give the money away will stay in our country. Those who want to spend it all on themselves will leave. I think we'll do better without them.

Note that this is not rejection of capitalism. We would still have private ownership, free markets, and laissez faireism - the defining features of capitalism.

I'd love readers to post problems with this political structure, and to make it better. However, I finish with my original challenge: do you reject this system because you believe greed is good? If you do, you fail my test. For greed is not good, it is killing our country (and it's killing yours too.)