|
|
franke's page anthropology department webpage Your comments and criticisms are welcomed: send me an email Richard W. Franke, Department of Anthropology 1. It doesnt promote economic growth. What today we call globalization results from a two-stage process. Phase 1. 1970 to 1992: From Debt Trap to Structural Adjustment During the 1970s many developing countries fell prey to an avalanche of unregulated lending by first world banks flush with petrodollars. As the bills came due in the 1980s, the World Bank and International Monetary Fund (IMF) took on the role of enforcers, demanding what came to be called "Structural Adjustment," a package of policies that undermined national autonomy and assaulted wages and public sector investment by third world central governments. From 1978 to 1992, more than 70 third world countries were subjected to 566 "stabilization" and structural adjustment programs (SAPs) imposed by the IMF and World Bank (McMichael 2000:134; Bello et al. 1994:31 and 132). SAPs radically reduce government spending, including education and health spending, liberalize imports, remove restrictions on foreign investment, privatize state enterprises, devalue currency, and freeze or cut wages (Bello 2000:12- 13). SAPs are "designed quite explicitly to bring a recession" (MacEwan 1999:145). SAP recessions throughout the 1980s effectively reversed much of the development that had taken place up to that decade. Between 1984 and 1990, third world countries transferred $178 billion to first world commercial banks (Bello et al. 1994:68). Simultaneously per capita incomes in Africa decreased by 12.5%. In Latin America they dropped 9.1% (Pinstrup-Anderson 1993:87). Poverty levels in Latin America rose from 25% in 1980 to 30% by the end of the decade. In Ghana, often presented as an SAP showcase, a long-term trend of falling infant mortality rates was reversed by a 20% increase from the mid-1970s to the mid-1980s (Pinstrup-Anderson 1993:105). Between 1980 and 1990 the percentage of underweight African children increased from 22 million to 38 million (Gardner and Halweil 2000:62). In Brazil, another SAP showcase, 60,000 "extra" child deaths are attributed to the 1980s SAP-induced recessions. In the same decade, the third world generally absorbed more than 500,000 recession-related deaths, not including war deaths (Grant 1989:1; The New York Times, 20 December 1988). Structural adjustment can reasonably be called a first world attack on the development potential of third world nations. Phase 2. Free Trade and the Undemocratic Shrinking Third World State The first world attack on third world development continued into the 1990s and expanded to include the former second world nations of Eastern Europe and the Soviet Union. In 1999, "More than 80 countries still have per capita incomes lower than they were a decade or more ago," while "55 countries mostly in Sub-Saharan Africa and Eastern Europe and the Commonwealth of Independent States [CIS, former republics of the Soviet Union] have had declining per capita incomes since 1990" (UNDP 1999:23). Between 1970 and 1997, 13 countries experienced declining life expectancy (computed from UNDP 1999:16871). In Zambia, per capita incomes fell 10% between 1980 and 1986 and school enrollments declined. "In effect, all the development indicators, including infant mortality, took a downturn under the impact of adjustment policies" (McMichael 2000:132). The impact continued after the 1980s: infant mortality went from 76 in 1989 to 113 in 1997 (World Bank 1991:159; World Bank 1999:243). These grim statistics are effects of the second stage of the first world project to reassert domination over the former colonies and now many of the former socialist nations. As early as 1989, the World Bank began to assert that "evaluating governance within debtor countries is within its jurisdiction" (McMichael 2000:145). Through the SAPs, third world states are being ordered to diminish their protections of their poorest citizens. Richard Falk (1999:3) notes, that "predatory globalization has eroded, if not altogether broken, the former social contract that was forged between state and society during the last century or so." Since 1995, shrinking the third world state has been furthered by the creation of the World Trade Organization (WTO), a body of "global managers [who] assume extraordinary powers to manage the web of global economic relations lying across nation-states, often at the expense of national and/or democratic process. . . . Their proceedings are secret, denying citizen participation." (McMichael 2000:176). WTO bureaucrats can overrule national attempts to use tariffs, taxes, or other government devices to protect workers or businesses. The WTO rules in the name of "free trade," despite the recognition by academic economists that "Virtually all of our experience with economic development suggests that extensive regulation of foreign commerce by a countrys government has been an essential foundation for successful economic growth" (MacEwan 1999:36). Free trade, argues MacEwan (1999:3165), is a "Neo-liberal myth." MacEwans claim is reinforced by a recent study showing that per capita output grew 83% during the pre-globalization period of 196080, but declined to 33% in the SAP-WTO free trade era of 19802000. The 33% growth was accounted for mostly by China, other East Asian countries, and South Asia, while Middle Eastern States and Subsaharan Africa registered economic decline with the onset of free trade. Latin America and The Caribbean dropped from 75% growth to just above 6% (Weisbrot, Naiman, and Kim 2000; Weisbrot, Baker, Naiman, and Neta 2001:3). Of 116 countries, 89 experienced growth rate declines in the 19802000 period of increased free trade. A further study shows that the declines in the rates of growth have been paralleled by declines in the rates of improvement in life expectancy, infant mortality, and literacy rates in almost all cases. In the second poorest group of countries, adult female mortality actually worsened in the period 19802000 (Weisbrot, Baker, Kraev, and Chen 2001:11). SAPs and free trade rules from the WTO essentially take over from the third world state at the top. International agencies centralize and dominate at the global level what had been at least partially the independent prerogatives of nation-states. This centralization of international economic power in the hands of first world-appointed bureaucrats is the essence of what today is referred to as "globalization." At the same time, decentralization, now the buzzword in first world development agencies, weakens third world states by erosion from the bottom. One element of this erosion is privatization, viewed by decentralization theorists (such as Rondinelli, Nellis, and Cheema 1984:10, 2326) as a particular component of the delegation form of decentralization. In Mexico, a World Bank/IMF model, more than 80% of the 1,555 government-owned companies were sold or dissolved during 1980s SAPs. Tens of thousands of jobs were eliminated (McMichael 2000:180). Throughout the third world, governments have been ordered to sell off thousands of state-owned or operated companies, often at rock-bottom prices for which they are scooped up by the rich. Decentralization plays a role in the SAP/WTO scenario by transferring state responsibilities to lower levels of government. This is supposed to reduce government expenses, a key element of SAPs. It may also be intended to deflect some of the dangers to the central government by making lower administrative levels the targets of popular protest and thereby weakening the ability of opposition movements to forge national campaigns. How well this has worked is not clear because SAPs have led to widespread, often violent, resistance. The "states of unrest" website (States of Unrest 2000) for the year 2000 lists major and extended protests against SAPs in Argentina, Bolivia, Brazil, Colombia, Costa Rica, Ecuador, Honduras, Kenya, Malawi, Nigeria, Paraguay, South Africa, and Zambia. Some of the protests involved thousands of people and some led to general strikes. In Argentina a court found the IMF directly responsible for "a damaging economic policy." In Bolivia, hundreds of thousands demonstrated and organised a strike in Cochabamba, the countrys third largest city, to protest a 200% increase in the price of water following a World Bank attempt to impose a foreign-owned privatized supply company, Bechtel. Police killed eight protesters in the engagements. Nonetheless, the people of Cochabamba won at least a temporary victory when the Bolivian government revoked the water concession it had earlier awarded to Bechtel (Barlow 2000). franke's page anthropology department webpage Whats the Alternative?Community-Sustainable Devlopment and Fair Trade Where do we go after protesting? In my view, the developing countries today need to achieve two breakthroughs: 1.First, they should squeeze as much quality of life improvement as possible out of the existing growth rates, no matter how apparently inadequate. In other words, they should try to break the correlation between GDP and quality of life to the greatest extent possible. If the entire world requires a US level GDP to get a US infant mortality rate, the strain on the earths natural resources might be too great. Instead, developing countries should increase the efficiency of their growth to the greatest possible levels in terms of the quality of life output. Redistribution of wealth as exemplified in the Kerala model of development can dramatically improve the quality of life and does not require foreign aid or high-growth strategies. 2. Secondly, they should design growth strategies that are community-oriented and community-sustainable. Community-sustainable growth means that the resources for job-creation and wealth creation remain available to the community over long periods of time. Here are some examples. Porto Alegre, Brazil, where more than 50,000 people attended the counter WEF (World Economic Forum) meeting under the theme "Another world is possible." Following the 1989 election victory of the Workers Party, a peoples budgeting experiment was devised. The city of 1.3 million is divided into sixteen regions in which local assemblies are held and delegates elected for higher level assemblies that eventually make budget allocation proposals generally accepted by the urban and state-level representative bodies (Santos 1998:47173). Overall allocations reflect both regional size and need and priorities are assigned through a system of weights and degree of representation (Santos 1998:47475). In 1996, it was estimated that around 100,000 persons participated in assemblies of the various levels, equal to about 8% of the population (Santos 1998:48586). Assuming that 70% of the population is of voting age, the percent of voters would come to about 11%. The peoples budgeting experiment seems to have stimulated the development of smaller-scale neighborhood associations which increased in number from 300 in 1988 to 540 by 1998 (Baiocchi 1999:16). In Porto Alegre in 1989, just prior to Peoples Budgeting, 49% of the people had access to safe drinking water and proper sewage. In 1996, drinking water access rose to 98% while for sewage the figure was 85%. Road paving needs were reduced by 50%. There was a doubling of students in elementary schools (Santos 1998:485). The increase in school access was achieved by increasing the number of municipal schools from twenty-nine to eighty-six from 198688 to 199295. The number of families receiving housing assistance in that period rose from 1,714 to 28,862 (Baiocchi 1999:12). From 1987 to 1993, the north Brazilian state of Cear registered an annual growth rate of 3.4%. The Brazilian national rate was 0.87%, and the Northeast region of Brazil, long one of the countrys poorest, experienced a 0.04% decline. In Cear polio and measles vaccination rates went from 25% to 90%, the infant mortality rate declined from 102 to sixty-five per thousand, the percent of municipalities with nurses increased from 30% to almost 100%, and 65% of the population began receiving monthly visits from health assistants (Tendler 1997:12 and 22). In a detailed study Judith Tendler concluded massive changes for the better were effected by dedication and creative energy of two state governors and the antagonistic forces they set in motion were reinforced by policies encouraging worker dedication at lower levels through a strong state-created sense of "calling," the ability of workers to carry out varied and satisfying tasks, pressures in the community for better accountability, and government recognition for the 7,300 rural women health activists who were adequately trained (1997:14 and 42). In Kerala State, India, from 1996 to 2001, a remarkable experiment in participatory democracy was carried out. Three million people, ten percent of the population, took part in local assemblies where they planned their own development with little bureaucratic interference. The results were also remarkable. During its first three years, for which the data have been compiled, the campaign has yielded striking physical achievements. Local communities like Panjal, together:
Universal preschool, improvement in the quality of education and in healthcare centers, and completion of rural electrification are also on the immediate agenda. Such targets would have appeared preposterous a few years ago. Total housing programs were taken up in all of Keralas fourteen districts in the 200001 annual plans. Keralas critics often cite the states lack of agricultural and industrial growth. The Peoples Campaign managed in its first three years
Further Achievements Alongside these remarkable material accomplishments, the campaign has introduced an array of new elements into Keralas economic, social, and political life. Among them are the following:
The first three years of the campaign accomplished much. The fourth and fifth years saw additional accomplishments that we will describe in later chapters. The pieces are now in place for a long march towards more sustainable, equality-oriented, and democratic communities in Kerala. Is it utopian to imagine such a possibility? Can Americans create institutions to fuel growth in a community-sustainable way? In their 1991 survey of what they call Reclaiming Capital, Christopher and Hazel Gunns found an array of local community initiatives to generate or manage economic growth. These included workers cooperatives, community and alternative credit unions, community land trusts, and community self-help and development corporations in Santa Cruz, California, Durham North Carolina, Tupelo Mississippi, Cleveland Ohio, and many other US communities. Michael Shuman's book Going Local: Creating Self-Reliant Communities in a Global Age, has additional and more recent examples along with 67 pages of web links and mailing addresses for organizations worldwide that promote community-sustainable growth in one form or another. Fair trade is a small but growing movement in Europe, Japan, and North America, to guarantee third world producers a better share from the sale of their goods than in the open, or so-called "free trade" markets. Fair trade is most developed in Western Europe where in some countries even supermarket chains now carry coffee, tea, bananas, sugar, cocoa, honey, and orange juice that meet fair trade criteria. In some countries, as much as 10% of sales are now claimed by the fair trade organizations to be in their quarter. For 1998-99, the New Internationalist magazine (322:19) reported 1,414 cooperatives and approved plantations accounting for $138 million in fair trade sales. In the USA, Starbucks has now joined the fair trade movement. See the web site for the US branch of the fair trade movement. Initiated by the Max Havelaar Foundation in The Netherlands, the fair trade movement has evolved into an international Fairtrade Labelling Organization that has established the following general criteria for its products:
Fair production conditions include: for small farmers co-operatives a democratic, participative structure for plantations/factories the workers should have: franke's page anthropology department webpage
Certain specific conditions are added as appropriate for particular products. (The name "Max Havelaar" comes from a 19th century Dutch novel by Eduard Douwes Dekker called Max Havelaar, or the Coffee Auctions of the Dutch Trading Company (1860), considered by many the greatest prose writing in the Dutch language. Max Havelaar is the name of the hero, a promising young Dutch colonial official who objects to the exploitation of the Indonesians and ends up on an Amsterdam street spattered with mud from the passing king's carriage. The book was inspired in part by Uncle Tom's Cabin and influenced D. H. Lawrence.) You can find out more about fair trade at http://www.fairtrade.net. Why does fair trade work? We first world consumers, it turns out, are a lot less selfish than our self-stereotypes. A European Commission survey found that 75% of respondents would buy fair trade bananas if they were available alongside ordinary ones, and 37% would pay 10% more for them (Lamb 2000:11). This sounds a lot like the consumers of KDB products in Kerala who value not only the high quality of the products but also the ethical conditions under which they are produced. US surveys produce similar results. Although the responses differ according to what's in the news and how the questions are phrased, Americans frequently support the idea of ethical purchasing. The National Labor Committee that organizes against sweatshops reported a 1995 Marymount University poll in which 78% of respondents said they would avoid retailers selling sweatshop-made products. Seventy-five percent of families earning only $15,000 said they would pay $1.00 more for a $20 garment if it was not made in a sweatshop. In another poll, more than 2/3 of Canadian consumers stated they would go out of their way to purchase ethically made goods. These attitudes constitute a basis for fueling a new kind of economic growth. If you want to read more about these polls, go to http://www.nlcnet.org/Haiti11.htm. So far fair trade has involved mostly primary agricultural goods such as coffee, tea and hemp coffee filters reusable and more environmentally correct than paper ones and some outlets internationally carry basket goods, t-shirts, and a few other light industrial items. But why couldn't the fair trade movement go on to develop processed foods and computer hardware manufacture, software design, and data entry? And, thinking about the community sustainability aspect of economic growth what is the potential for the sister city movement in the United States to expand beyond educational events and rituals of friendship to some type of connected community development? What if the computer training plans in Kerala or Porto Alegre could be integrated with the local medical association of an American town or county in some way so that a fair trade guarantee of long-term community-sustainable employment was built into a design for lower-cost medical services in, say, Montclair? We have only begun to think of the possibilities. franke's page anthropology department webpage Your comments and criticisms are welcomed: send me an email ReferencesAbers, R. 1998. From clientelism to cooperation:
local government, participatory policy, and civic organizing in Porto Alegre, Brazil. Politics
and Society 26(4): 51137. Richard W. Franke, Department of Anthropology 1. It doesnt promote economic growth. See the following readings for information supporting the seven points above:
franke's page anthropology department webpage Richard W. Franke, Department of Anthropology 1. Community-owned businesses promote better growth through the multiplier effect of
the local circulation of money. See the following readings for information supporting the seven points above: Gunn, Christopher, and Hazel Dayton Gunn. 1991. Reclaiming
Capital: Democratic Initiatives and Community Development. Ithaca: Cornell University
Press. Substantial numbers of European, Canadian, and US citizens are prepared to pay up to 10% more for products made by workers who receive fair wages in circumstances that protect the environment. http://www.newint.org/streets/brazil/index.html gives info from the Porto Alegre conference of Feb 2002 on the them that "Another World is Possible." Perrucci, Robert. 2000. Inventing Social Justice: SSSP and the Twenty-First Century. Social
Problems 48(2):159-67. Shuman, Michael H. 1998. Going Local: Creating Self-Reliant Communities in a Global
Age. New York: The Free Press. Sen, Amartya. 1999. Development as Freedom. New York: Alfred A. Knopf. Wright, Erik Olin.
2001. The Real Utopias Project. http://www.ssc.wisc.edu/~wright/RealUtopias.htm franke's page anthropology department webpage Your comments and criticisms are welcomed: send me an email |