CapitalismThe following is based on a talk given in February 2012 to the International Communist Forum, a series which takes place several times a year in London and is sponsored by Workers Fight, a Marxist organisation in Britain.  The talk was by a member of WF.

Introduction

The past four years of world economic crisis have been only the latest illustration of the bankruptcy of capitalism as an economic system and as a form of social organisation. But the damage which capitalism causes goes back a long way – and is certainly not confined to the consequences of its periodic somersaults.

InidaCapitalism itself was borne out of the brutal plundering of many of today’s poorest countries. Without the slave trade which decimated Africa’s population for over two centuries, the industrial revolution would never have developed in Britain and British capital would never have seen the light. Subsequently, since the capitalist market took on its present form, the world economy has been dominated by the small, but very wealthy capitalist classes, which ruled the few very rich, imperialist powers. And these capitalist classes have been drawing their enormous incomes partly from the exploitation of their domestic working classes, but also, to a large extent, from the looting of the human and material resources of the poor countries.

Whether under colonial rule or not, the poor countries included, and still include, the majority of the planet’s population. But despite having contributed so much to the accumulation of wealth of the imperialist capitalist classes, they got nothing in return. During the wave of decolonisation which followed WWII, the hope that was expressed in the former colonies that they would be able, one day, to extricate themselves from their under-development has proven to be an illusion. In fact the overall wealth gap between the rich and the poor countries has never ceased to grow over the past century.

Even in the few poor countries where some economic development did take place, due to exceptional historical and/or geographical circumstances, it did not alter their subjection to the rich countries’ economies. More importantly, it did not bring any significant benefit to their populations. The spectacular, modern skyscrapers towering over the largest Indian and Chinese cities barely conceal the abysmal poverty of the vast majority struggling to scrape a living.

In any case, under-development in the poor countries was never written in stone, but man-made. And while it is the product of factors which are all intertwined, its persistence stems from one single cause: the ever-increasing cost extorted from the whole planet, by a capitalist system which has long become obsolete. It is this idea which we intend to develop in today’s forum.

The world market, born out of “Indian” blood

But first we need to retrace the origin of the world capitalist market when, in the late 17th century, European traders finally established sea routes linking all continents.

Before that, the rivalry between the two main powers of the time – Spain and Portugal – had paved the way for the “Great Discovery” era. While Portuguese traders explored Africa and found the eastern sea route to Asia via the Cape of Good Hope, Spanish traders pushed westwards to find a shorter route. This race for Asia’s wealth finally led Columbus to set foot by chance in the Carribean Bahamas islands, in 1492, and to discover America.

The Spaniards had found an indigenous population, but no developed civilisation on the Caribbean islands. Thinking they had reached the eastern seaboard of India, they called the locals Indians, and proceeded to turn the islands upside down to find gold. The “Indians” were enslaved en masse to mine and purify gold, in atrocious conditions. So much so, that within only a few decades, both the gold resources and the Indian population had disappeared from the Carribean.

When the Spaniards reached Latin America in their search for gold, in the first decades of the 16th century, they faced a very different situation. In both cases sophisticated civilisations had been in existence for centuries. In Mexico and Central America, the Aztecs’ capital was built according to a long-term plan and its population was twice as large as that of Seville, Spain’s largest city. The Mayas had developed calculation in astronomy to a level of precision which was only to be equalled in Europe more than three centuries later. In Peru and South America, the Incas had built a complex system of administration which allowed them to rule over a territory larger than any European country.

Despite their very small numbers, the Spanish invaders managed to impose their rule without much of a fight, because, by contrast to the European long-standing military tradition, these civilisations had never felt the need to use their knowledge to improve their military prowess. They had elaborate metal-working skills, but neither swords, nor metal armour. Nor did they have anything comparable to the Spaniards’ cavalry, since there were no wild horses in this part of the world. Moreover, the viruses and bacteria brought from Europe by the invaders, claimed many victims among the native population.

Having established its rule, the Spanish crown subcontracted the plunder of the new world to northern European bankers. The German Welsers were awarded a monopoly over most of today’s Venezuela, while the Fuggers were granted the right to loot the land south of Peru. Through these bankers and others, the flow of south America’s natural wealth fed the primitive accumulation of capital on which the bourgeoisie of northern Europe was to build its future domination.

The cost for the Indian population of Latin America was unbearable. In addition to the diseases brought by the invaders, any attempt by the Indians to resist evangelisation was met with massacres. Once they had submitted to the invaders’ god, the fate awaiting them was at best forced labour and at worst slavery.

In 1542, a Spanish Catholic bishop, Bartholome de Las Casas, denounced the bloody slaughter carried out by the invaders as follows: “12 millions souls, men, women and children, have died unjustly because of the Christians’ tyranny and devilish enterprises. In truth, I believe this number to be over 15 millions. If the Christians killed so many precious souls it was only for the sake of gold, to increase their own wealth in a very short time and to lift themselves to high positions which they would have been unable to reach otherwise. Because of their cupidity and insatiable ambition (..), they treated [the Indians] not even like cattle (..), but worse than cattle and even worse than manure”. In fact, fifty years later, it was estimated that the Indian population had been reduced to a quarter of its original size.

By that time, Britain, France and Holland, had successfully broken the Iberian monarchies’ monopoly over American trade, by resorting to systematic piracy. A world market finally emerged out of these rivalries, but it was born primarily out of the native Americans’ blood.

Europe’s industry built on Africa’s decimation and India’s ruin

This was only the beginning of the ravages perpetrated by the emerging capitalist market. When the European plunderers of Latin America switched to sugar production – and later to cotton – they did not have the labour required for their plantations, neither in the Caribbean, nor in America where the already decimated population proved resistant to their whip. This need for manpower led western Europe’s rising bourgeoisies to invent the most profitable and gruesome form of trade so far – the “triangular trade” or slave trade. Glass beads, cloth and firearms were loaded in European ports and traded for slaves in West Africa. They were then exchanged in the Caribbean and America for sugar and other produce, which was brought back to Europe.

The profits were enormous. Major harbours, like Liverpool and Bristol in Britain, Bordeaux and Nantes in France, Amsterdam in Holland, owed their development to the slave trade – and not only the harbours themselves, but the regions surrounding them. By 1750, it was estimated that sugar and, therefore, the slave trade, supported half of Lancashire’s economy and a quarter of British shipping.

But for Africa, the cost of the slave trade was unimaginable. The most frequently quoted estimate of the number of slaves sold in America is 12 million. But a quarter died before even reaching America and many others even before embarking. Probably the most striking measure of the real cost to Africa is provided by estimates of population changes between 1650 and 1850: while Europe’s population is thought to have increased by 270%, Africa’s population remained at the same level. Besides, by arming local strong men to round up slaves, the slave traders created a whole number of artificial kingdoms based on slavery. Their rivalries and parasitism destroyed what remained of the old African empires of Ghana, Mali and Songhai, which had been built during the previous centuries on agriculture, mining and metallurgy over large areas of central Africa.

The benefits of the slave trade for the European bourgeoisies were such that the total capital invested in industry in western Europe by 1800, was more or less equivalent to the profits of this trade over the previous two centuries. In other words, the slave trade had funded the emergence of the European industrialised powers, while destroying much of the technological progress achieved by Africa and laying the foundations of deeply unequal, racially divided societies in America.

Africa and South America were not the only victims of the rise of capitalism. Asia took its share of the devastation as well – and India in particular. India’s population was already over 200 million. Not only did it have rich natural resources, but it had a large craft-based textile industry, providing British traders with a huge source of cheap finished products that could be sold in Europe at a considerable profit. By the mid 18th century, British traders were flooding European markets with Indian cotton cloth. This flood of cheap cloth ruined cotton craftsmen in Britain, paving the way for the development of the textile industry which was to become the main pillar of the industrial revolution.

In turn, the rise of the British textile industry reversed the direction of the cotton trade. British traders now flooded the Indian market with the much cheaper cloth produced in the new factories of Lancashire. Between 1780 and 1850, Britain’s exports to India quadrupled. By 1850, the cotton industry employed one out of every eight British workers and sold a quarter of its production to India. But in India, these changes spelt the destruction of the traditional cloth industry, together with the whole social fabric which depended upon it. And, of course, the British capitalists had not bothered to find any substitute which could replace what they had destroyed for the sake of boosting their profits.

Tightening the colonial screw

By the beginning of the 19th century, Britain began to champion the abolition of slavery across the world, the end of trade monopolies and the rule of “free trade”. There was nothing philanthropic about this shift in policy, which, if necessary, was enforced at gunpoint. It was simply that industrial production was promising much larger profits than the slave trade. And, having achieved a dominant position on the world market, Britain intended to be the main beneficiary of this “freedom”.

By then, the new industries born out of the industrial revolution desperately needed a large supply of raw materials – meaning that much more systematic exploitation of the non-European world was required. But further plunder the colonies’ resources also increased the risk of rebellion among the populations.

In this respect, the 14 months of bitter fighting of the 1857 Indian mutiny marked a turning point. After that, the administration of India was centralised under British government control. The order of the day was “divide and rule”, fuelling divisions based on religion, caste and ethnic origin. India became an explosive patchwork of contradictions, kept together by the iron hand of the colonial administration.

Thereafter, European settlers were encouraged – or coerced – to move to the colonies. Where settlers proved unable to protect colonial interests against the population, the colonial powers built repressive machineries to do the job. Very often those who manned these colonial mini-states were, to use the words of a then British diplomat, “low adventurers (..) who are in a chronic state of excitement caused by continual indulgence in alcoholic drinks”. The greed, sadism and entrenched racism of such individuals, who had a de facto power of life and death over the local population, only fuelled bitter resentment.

So far, with only few exceptions, the colonies’ borders had been ill-defined. But with the race for raw materials intensifying international rivalries, it became vital for the colonial powers to establish their control on a more solid basis against their rivals. They embarked on the so-called “Scramble for Africa”, during the last two decades of the 19th century, which completed its colonisation, with the sole exception of Ethiopia. It was also during this period that Afghanistan’s present borders were formalised, with obvious implications.

When the 20th century began, most of the world had been divided up between the main imperialist countries. Each had a well-defined colonial empire and a sphere of influence made of countries over which it had some form of political and economic control. The borders between the colonial empires had been carefully negotiated between the imperialist governments, as a function of their own interests. It did not matter for them that these borders might split ethnic and language groups, cut off entire populations from their traditional sources of food or water, or access to the sea. And it is this poisonous heritage that many poor countries have been paying for ever since, with these artificial borders feeding countless ethnic conflicts and wars.

The blood, sweat and hunger of the colonial people

In every colony, the colonial powers sought to get the peasantry to give up its traditional subsistence agriculture so that they could be made to work in the new plantations or mines, or to grow cash-crops for export. But the method used everywhere pushed an already impoverished, but usually self-sufficient, peasantry into extreme destitution.

One example of this is what happened in today’s Zambia – then, a sparsely populated British colony almost three times as large as Britain. When it came under British rule, in 1888, its fertile land provided more than enough food for its small population. However, Cecil Rhodes’ British South Africa Company needed manpower. To force reluctant African peasants to volunteer, Rhodes instituted a tax of 3 shillings per hut, equivalent to the annual wage an African worker could earn. Having no way of earning this money except by selling their labour, Zambia’s male adults had to leave their villages and take a job. Among other things, this transformed Zambia’s traditional agriculture. The main staple food so far had been millet, a protein-rich cereal. But it required the strength of the men from the whole village for its successful cultivation. So millet was replaced with manioc, which was easier to grow, but a much poorer source of protein. As a result, malnutrition appeared within a generation.

By the end of the 19th century, cash-crops and mining were the mainstay of colonial exploitation. In Africa, the main players were large companies which made such a fortune out of their colonial plunder that they developed into some of today’s largest multinational companies. One of these, for instance, is Unilever, whose forerunner in the 1880s had been a soap business, before becoming the United African Company which controlled 2/3 of Nigeria’s imports and exports, among other things. Another is Pinault-Printemps-Redoute, a French industrial and service group whose main component is still the French Company of West Africa, which had a virtual monopoly over industrial exports from France to Africa. Another still, is the Bolloré group, also a French multinational, which built its fortune on sea transport to and from Africa and on agricultural plantations. It still controls huge assets in the former French colonies.

In West Africa, lucrative crops like cocoa, palm trees, and later rubber, were rarely farmed given that they could be gathered in the wild. Others, like peanuts, needed to be cultivated. Either way, African farmers were expected to attend to the colonists’ cash-crops in addition, and of course at the expense of, their own subsistence crops. No effort was ever made to provide these farmers with appropriate cultivation techniques or tools which would have increased their productivity. So once again, malnutrition developed in areas where it had never existed before. In some areas, like today’s Mali, the particularly intensive cultivation of cash-crops like cotton and peanuts exhausted the soil and was partly responsible for increased desertification.

The Belgian colony of Congo offered one of the most elaborate “models”, so to speak, of colonial exploitation – a “model” nevertheless quite comparable to what was going on in the rest of Sub-Saharan Africa. The Congo was turned into a huge labour camp ruled by terror. A common practice when farmers failed to collect enough rubber from wild rubber trees, was to take their families hostage, or to kill them and put their severed hands on display in the village as a warning. It was estimated that over the 4 decades until 1920, ten million Africans died in the Belgian Congo – half of the initial population. Over the same period, companies exploiting concessions which often covered tens of thousands of square miles, multiplied their original investments 20-fold!

Another common practice which claimed many victims across Africa, was to have goods carried by Africans on their heads in loads of 30 to 40 kilos, often over 200 miles or more. Human caravans were escorted by armed guards, using whips to “wake up” those who showed signs of exhaustion. Rebellion against such inhuman treatment was met with torture, jail or death. In fact, this was just one of the many forms of forced labour which prevailed in Africa during the colonial period.

Unlike the practice of slavery which has been well documented, few estimates have been made of the decimation caused by colonisation through the exploitation of African workers. It is thought that, between 1880 and 1914, between one third and a quarter of the initial population of Western and Central Africa fell victim to this exploitation. And there was probably comparable decimation of the rural populations of India, Malaysia and Vietnam, which were subjected to similar exploitation. No-one will ever know the precise figures. But the short-term and long-term human and social cost to these populations was certainly enormous and, in fact, even higher than that of slavery itself.

Imperialist parasitism

The imperialist powers found many other ways of exploiting the rest of the world. From the end of the 19th century, banking became a source of growing profits, in the imperialist countries’ spheres of influence first, and then even in their poorest colonies.

Some of today’s poor countries were never colonies, but this did not protect them from the exploitation of the imperialist powers. This is the case, in particular, for most of the Middle-East which, until World War I was entirely under the domination of the Ottoman empire. Instead, it was the Ottoman empire itself which became indebted to Britain and France, to the point of coming entirely under their financial control. And much the same happened with Egypt, around the repayment of the debts resulting from the building of the Suez Canal.

In most colonies, hardly any investment was ever made in infrastructure, except the very minimum required by colonial exploitation – railway lines between the coast and mining areas, or deep sea harbour facilities, for instance. Even in that case, the level of under-investment for these projects could only be described as criminal. For instance, between 1921 and 1934 a 300-mile railway line was build in the French Congo, between the capital Brazzaville and the Atlantic Ocean. Tens of thousands of Africans were forcibly brought, on foot, to work on the line. In total, an estimated 17,000 died of disease and exhaustion. There was neither machinery nor any kind of tools except the most basic to do the job. Africans were to call this train the “man-eater”, which probably says it all!

India may have been more fortunate in that, from the 1860s, railway lines started to be built and, by the turn of the century, there were 37,000 miles of railway lines and 136,000 miles of roads. However, this transport infrastructure was not designed to meet the needs of the population. It had two main purposes. One was to ensure that army reinforcements could be quickly brought in where needed. And the other was to provide big profits to British manufacturers. As to the cost of this infrastructure, it was to be paid out of the Indian population’s future taxes. In addition, since British banks had lent the funds, the Indian population was also to pay the fat interest required by the banks!

Britain’s financial parasitism on India developed rapidly. By the eve of World War I, the sum total of dividends and interest paid by India to British capital was worth 60% more than the commercial and industrial income from India. Over the next two decades, this commercial and industrial income remained more or less at the same level, but the share of British capital invested abroad that went to India more than doubled, increasing from 11% to 25% – resulting in a considerable rise in financial profits extracted from India and a sharp increase in the colony’s exploitation.

The case of India was not an isolated one, among the colonial countries and it should come as no surprise that some of today’s largest banks built their colossal wealth on colonial finance – like HSBC and Standard Chartered in Britain, or BNP-Paribas and Banque de Suez in France.

The US and the postwar explosion

After the end of World War I, the US took over from Britain as the world’s leading power. And just as Britain had done in its heyday, during the early 19th century, the US started championing “free” trade and the end of colonial monopolies. However, the colonial empires remained and, after the 1929 crash, gave a major advantage to the old colonial capitalist classes, who made their colonies sweat even more, to maintain their profits despite the crisis.

So, when the US came out of WWII in an even stronger position, it was determined to see the end of these empires. However, the nationalist explosion which broke out in colonial countries from 1945 onwards did not make this easy. Indonesia first won its independence from Holland and then Vietnam threatened to shake French domination, while Mao’s nationalist army was rapidly gaining ground in China.

Then came a potentially even more serious social and nationalist explosion in India. Risking a social explosion in a country of that size, or even social unrest on a large-scale, was simply out of the question for the imperialist powers. On the other hand, allowing a population almost as large as that of China to impose its independence was also too risky – partly due to the risk of contagion among the poor countries and partly because an independent country born under such conditions would be quite hard for imperialism to keep under control.

Whether it was premeditated or opportunistic, the partition of India that took place in 1947 resolved the imperialist powers’ problems. The hundreds of thousands killed in communal riots and the tens of millions displaced as a result, defused India’s social powder keg. The partition of British India into three, artificial territories meant that the new India would be paralysed by internal contradictions, rather than being the regional giant it could have been. Finally, imperialist interests would be safe in the hands of tested bourgeois parties like the Indian Congress and Muslim League. That the Indian population had been made to pay such a bloody price did not matter, of course!

Meanwhile another significant explosion had begun in Malaysia. A strong communist party and its armed wing were bidding for power with the support of the working class and poor. This led to an armed uprising and this time, having no “safe hands” to hand over power to, Britain held on to its colony with US approval. This “Malaysian Emergency”, as it was known, lasted for nine years, while the state of emergency went on for another 16 years, until well after independence.

For the US, India and Malaysia had raised problems which were, in some ways, similar to those raised by China. The US wanted the end of the colonial empires in order to get access to the colonies’ resources, but not at any cost. It wanted the colonies to be taken over by regimes capable of maintaining political stability, but not strong enough to resist imperialist diktats – in other words, regimes which did not come to power riding a wave of popular mobilisation, but which came into office with the approval of imperialism. In short, US imperialism wanted to have its cake and eat it.

The sinister farce of “decolonisation”

By the late 1950s, the postwar nationalist explosion had receded. Britain had narrowly saved its control over Kenya after a 7-year civil war. France was proving unable to crush a nationalist uprising in Algeria. And both had already been kicked out of the Middle East. So, both governments finally reconciled themselves, albeit reluctantly, to the idea of granting independence to their colonies. But they made sure that this would change very little, neither for the populations, nor, above all, for the profits of imperialist companies.

Most of the remaining colonies were in Africa and both governments intended to parcel out their colonial empires into smaller countries which could be played against one another, and to select pliable politicians to run them. Of course, so-called “advisers” would remain, to shape the institutions and the repressive forces of the new states, while the former colonial powers would retain a permanent military presence.

In some cases, things did not go quite according to plan. In Cameroon, for instance, the Union of the People of Cameroon (UPC), which was close to the French Communist Party and to the local trade-unions, was a major force. In 1960, the murder of the UPC’s two main leaders by French agents sparked off a popular uprising. It took three years for the French army to crush it, paving the way for Ahidjo’s regime, which was to be one of Africa’s most bloody dictatorships.

Another case was the Belgian Congo, which involved high stakes for a host of big mining companies, due to the colossal mineral wealth of its south-eastern Katanga region. In the 1950s, Belgium proposed a “gradual”, 30-year process towards independence, by 1986! It had made plans to break up the entity of the Congo, and retain control over mineral-rich Katanga. However, the rise of the radical pan-Africanist movement, led by the popular figure of Patrice Lumumba, arguing for a united Congo, controlling all of its natural resources, derailed these plans. Belgium hastily handed over power to Lumumba in June 1960, while plotting to overthrow him by arming separatist movements in Katanga. But the US did not want Belgium to retain control over Katanga. So it got the UN to interve, offering its assistance to the ambitious general Mobutu. Lumumba was murdered by Katanga separatists, with the help of Belgian intelligence. A five-year war ensued. With the help of UN, US, Belgian and French forces, Mobutu restored order and the country’s unity. Thus came into being another one of Africa’s bloody dictators, set in place to defend the interests of western mining companies.

In the other French and British colonies the radical nationalist movements of the postwar period had been either decimated by repression or co-opted into the colonial institutions. As a result, the independence process which took place between 1957 and 1968, was more or less seamless, if only because the new handpicked leaders of these countries had been groomed by the political and military institutions of the colonial powers.

For instance, the new head of the French colony of Ivory Coast, Houphouet-Boigny, who achieved fame later, for using IMF loans to build a gigantic cathedral in his native village and stashing the rest away in foreign bank accounts, had been a minister in 4 French governments. In many of the new countries, like Burkina, Benin, the Central African Republic or Togo, the new heads of state came straight out of the French army and had fought for French imperialist interests in Indochina or Algeria, or both. In Uganda, one of the top figures in the new army was Idi Amin Dada, an ex-lieutenant, who had won his stripes during the Kenyan emergency. At the time he was accused of torture, but never disciplined. Less than ten years later, having syphoned off millions of dollars from army funds, he was to institute one of Africa’s most gruesome dictatorships.

By the end of the 1960s, there were only two colonies left in Africa and each was the scene of an armed struggle by nationalist movements to achieve independence. The two Portuguese colonies of Angola and Mozambique won independence in 1974, following the overthrow of the Portuguese dictator. But civil war broke out immediately, with forces armed mainly by the US, South Africa, Britain and later by China. This lasted until 1996 in Mozambique and 2002 in Angola.

Economic plunder carries on

Not only were the political regimes of the independent ex-colonies selected and shaped by their former colonial masters, but their economies remained just as dependent on their former colonial rulers.

The colonial currency systems, for instance, remained in place throughout Africa, but in a perfected, more opaque form. True, in the former French colonies, the meaning of CFA – the name of the former common colonial currency – did change from “French African community” to “financial African community”. But that was about it. Meanwhile, in ex-British colonies, the pound retained its past, more discreet role, as a compulsory component of central banks’ currency reserves for any Commonwealth member state. The two systems had the same function: to allow companies from the former colonial powers to avoid currency uncertainties in their business with ex-colonies and to help the former colonial powers to pass on part of the burden of their monetary policies and inflation to their ex-colonies.

But even if these monetary handcuffs had been removed with independence, there still would have been no way for the former colonies to recover from their chronic poverty. They were in a state of utter dereliction. Some were partly destroyed by civil war. They had no urban infrastructure, except in the districts allocated to Europeans and to the tiny African bourgeoisie. Education and health facilities, which had always been totally inadequate, had all but disappeared. Housing, transport, energy, etc., were virtually nonexistent because the colonisers had never seen the need to make the investments.

Moreover, borders which did not exist before, had suddenly been erected, blocking traditional supply routes and forcing the ex-colonies to rely even more on goods brought in by the old colonial shipping companies. Because, by a sinister irony, the very same European shipping companies which already had a monopoly over foreign trade in the colonial days now reinforced it and took over the trade between African countries as well!

More generally, whatever the efforts of the ex-colonies to mend their derelict infrastructure, build some basic industries or increase their production, they were caught in the trap of unequal exchange – a trap laid for them, and in fact for all the poor countries, by the very operation of the world capitalist market. This is due to the fact that their economic development was entirely dependent on the goodwill of imperialist companies which bought their production – mostly raw materials – and sold them the manufacturing products, machinery and know-how they needed. Given the trade monopoly exercised by imperialist companies, they set the prices. So the ex-colonies paid huge prices for their imports, and received a pittance for their exports. As to those countries which managed to develop some form of industrial production for local consumption, they soon discovered that similar goods were flooding their markets, produced by European manufacturers which, owing to their superior technology, were able to undercut the prices of any local factory and force it to the wall.

Some ex-colonies tried to overcome this catch-22 situation by asking the Soviet Union for economic aid. But quite apart from the fact that the Soviet Union had only limited resources to offer compared to the rich imperialist countries, the Kremlin leaders were much more interested in recruiting pawns for their great power game against the US, than helping poor countries with their economic development. What’s more, gaining the Soviet Union’s help came at significant cost, including various forms of retaliation from the West, such as boycotts which left the poor countries with mountains of unsold raw materials and currency reserves which rapidly dried up.

The “Third World debt” explodes

With the return of the world crisis, in the first half of the 1970s, world production slumped and the demand for raw materials of all kinds collapsed. So did prices on the world market. The poor countries found themselves suddenly deprived of their main source of income.

At the same time, the absence of new investment by companies and governments was pushing interest rates down in the rich countries. Bankers were looking for new customers who would agree to pay higher interest rates. This was the signal for a rush by the big western banks to lend to the states of the poor countries, at extortionate rates, of course – after all, as they said, wasn’t that legitimate payment for the huge “risks” they were taking? The bankers’ tune never changes!

The politicians of the poor countries did not prove too difficult to convince. They represented, and were usually themselves part of, the tiny local bourgeoisie. This meant that the ruling spheres of the state machinery were in the hands of a few rich families which considered the state and the country to be their personal property. And they were certainly keen to grab hold of the funds which were offered to them so graciously. Needless to say, hardly any of that money ever translated into investment of benefit to the poor populations. Indeed, they were to be subjected to an even worse level poverty than before, in order to pay back these loans and the high interest attached to them.

Once it was initiated, the mechanism of indebtedness became a deadly spiral. In order to pay interest on loans which had been used up already, the poor countries contracted new loans and the outstanding amount just carried on increasing. So much so, that over the decade up to 1982, the total outstanding debt of the poor countries increased ten fold! In 1982, however, lightning struck in the bankers’ heaven: the Mexican government declared that it would not meet the interest payments on its debt. To avoid a banking panic, the IMF was given $3 billion by the central banks of the imperialist countries to pay back the smaller banks affected. For the bigger banks it proceeded to negotiate a rescheduling of the debts owed by the poor countries in return for an even higher interest rate. For the banking giants this was a very profitable operation. It was estimated that they earned an additional $450m in profit out of the so-called “rescue” of Mexico alone!

Up to 1982, it was the World Bank which had sole responsibility for helping with the development of the poor countries, using a very limited budget. Its brief, however, was anything but philanthropic. As the Bank’s head, Robert McNamara pointed out: “Too little, too late, is history’s most fitting epitaph for regimes that have fallen in the face of the cries of the landless, unemployed, marginalised and oppressed, pushed to despair. As such, there must be policies designed specifically to reduce the poverty of the poorest 40% of the population in developing countries. This is not just the principled thing to do, it is also the prudent thing to do”. The fear of social explosion was certainly an important driver of policy.

But being also driven by western business interests, these policies had the exact opposite effect to their supposed aim of poverty reduction. For instance, one of these policies advocated the industrialisation of agriculture in the poor countries in order to increase productivity. This was the so-called “Green Revolution”. In India, for instance, it resulted in millions of sharecroppers becoming landless, as landowners rushed to reclaim the lands they worked on, in order to benefit from World Bank subsidies. In some areas, there was a drastic reduction in subsistence agriculture and the re-emergence of famine. However, those for whom the “Green Revolution” had been really tailor-made – the large pesticide and fertiliser manufacturers – made a killing out of this policy. As a Belgian manufacturer explained in 1986, for every dollar paid by the imperialist countries to the World Bank, western companies got $7 worth of orders in equipment and services from the poor countries, in 1980, and over $10 four years later. Those who paid the difference were, of course, the populations of the poor countries!

Lessons in “governance” and “democracy”

By the end of the 1980s, as the spiral of indebtedness was strangling the poor countries even more, the IMF came up with a new policy, whose aim was supposedly to “moralise” economic governance in the poor countries. This was all the more ironical as it took off the ground in 1987 – that is the very same year in which an international wave of speculation-driven stock market crashes demonstrated once again the irresponsibility of finance capital in terms of governance! In any case, the official aim of this policy was to increase the share of the state budget used to repay debt – which was all the more cynical as, due to the high interest rates charged, the outstanding debt had usually already been repaid several times over, just through the interest!

This new policy was based on “structural adjustment plans”, which involved cuts in social expenditure (but not in military expenditure) and the privatisation of everything but the kitchen sink. This, in countries where the only infrastructure available to the population was what little the state had managed to build and maintain. Among the cuts demanded by the IMF was the end to all food subsidies. In Venezuela, the resulting 200% increase in the price of bread led to hunger riots in which a thousand protesters died. Five years later, the usually over-optimistic figures published by the UN organisation for trade and development showed that, already, the level of participation in primary school education was falling rapidly in Sub-Saharan Africa.

In a way, the ex-colonies were now back at square one. The imperialist countries were again imposing every one of their diktats on the poor countries’ populations, just like in the colonial days. Except that instead of using “gunboat diplomacy”, they were using the mechanisms of the world capitalist market.

It was also around that same period, in the early 1990s, that the imperialist powers started giving lessons in “democracy” to the poor countries. Of course, it was so much more convenient to claim that the poor countries had only themselves to blame for their poverty! Besides, that sort of language sounded all the more credible because of the many dictators ruling poor countries at the time. Never mind that, in most cases, they had been brought into power by the former colonial powers in the first place, or at least maintained there by their money, weapons and, in some cases, their troops.

Nevertheless, another prerequisite was added to IMF “debt relief” – the introduction of multi-partyism, which was duly presented as the summit of “democracy”. However, there were other reasons behind this new policy than just pure propaganda. The imperialist leaders, like McNamara earlier, knew that rising poverty in the Third World was a recipe for political instability, if not social unrest. The corrupted regimes created by decolonisation had long been discredited, but they were desperately holding onto power, thereby blocking the way for a new generation of aspiring politicians – and creating the risk of rebellions within the ranks of the ruling classes themselves. Moreover, in Africa in particular, most of the regimes in place were still closely linked to the former colonial powers and their companies, and the US leaders were determined to break these links, so as to have easier access to resources. So, advocating multi-partyism became a means to complete the dismantling of the old colonial ties, for the benefit of US imperialism, which proceeded to promote its own candidates – individuals whose only merit was to have been trained in fancy US universities and military academies or groomed in international financial institutions.

The bloody cost of imperialist rivalries

Since decolonisation, the interference of the imperialist powers in Africa alone, partly through direct military intervention but mainly through proxy wars, has probably already claimed more victims than the whole of World War II. By the same token, it has been, in addition to all other factors, one of the main reasons for Africa’s increasing poverty.

It began with the 18-month Biafra war, in Nigeria, in 1966-67. Behind the warring camps, this was really a war over oil, between the US and Britain on one side, and France and a few other partners on the other. But 3 million Nigerians paid for these rivalries with their lives.

We already mentioned the decades of civil war in Angola and Mozambique, which would never have happened without US involvement. But there were other more or less protracted and bloody proxy wars, involving one or several imperialist countries – from Liberia and Sierra Leone, to Uganda, the Sudan, Ethiopia, Eritrea, Somalia, and so many others. We will not even try to give an account of the criminal military activities of imperialism in Africa. This would be far too lengthy. We will only take one particularly shocking example, that of the series of wars which spread from Rwanda to today’s DRC (Democratic Republic of Congo) in the 1990s and which are still not over.

But before this, one point should be made. One of the features of most of the proxy wars of the past decades in Africa has been their ethnic dimension. Yet ethnic groups had lived together peaceably for a long time, as they were mixed together by urbanisation and economic changes. The main factor in the resurgence of ethnicity has been the competition for power of rival political cliques which, having nothing positive to offer the population, sought to build their influence on fear – the fear of another ethnic group, usually described as “foreigners”, because the artificial borders left by decolonisation have split this group between two or more countries. In this respect as well, the imperialist leaders are largely responsible. Because, whether it is through the drive for “multi-partyism” or other initiatives, they keep pushing forward and funding politicians whose function will be to cow the poor into obedience – and what better way is there to do this than through terrorising them?

Going back to our example, it should be said first that Rwanda is at the interface of the French and British spheres of influence in Africa and it should be added that while the DRC has been attracting every imperialist power since independence, due to its huge mineral reserves, France had taken the lead against its rivals, thanks to its good relationship with the DRC’s former dictator, Mobutu.

In fact, the present series of wars started in the early 1990s with the “Rwanda crisis”, which saw a confrontation between two ethnic-based politicians: on the one hand, Rwanda’s Hutu-based dictator who was supported by France; and, on the other, the Tutsi-based RPF (Rwanda Patriotic Front) whose leader was a US-trained intelligence officer, Paul Kagame, enjoying the support of Uganda’s US- and British-backed regime. This confrontation led, in 1994, to three months of pogroms staged by a Hutu right-wing militia against Tutsis and Hutus opposed to the regime, claiming an estimated one million dead – while the French intervention force stood by. When the RPF took control of Rwanda, a flood of Hutus fled across the DRC border.

With the refugees however, was also the Hutu right-wing militia, which established its rule over the refugee camps in the DRC and consolidated its forces there, under the joint protection of Mobutu and France. Soon this militia organised raids into Rwanda, while the new Rwandan regime retaliated with raids into the DRC.

In 1996, an armed uprising against Mobutu took place in the mineral-rich eastern province of Kivu, among a population ethnically close to the Rwandan Tutsis. The US seems to have jumped on this opportunity to abandon Mobutu, whom they considered useless for their purposes and too close to France. They shifted support to the leader of this new uprising – Laurent-Désiré Kabila. In May 1997, with the help of Rwandan and Ugandan forces, Kabila entered the capital, taking over from Mobutu, who went into exile. US, Canadian and British mining companies started queueing for mining contracts, while their French rivals were sidelined.

Two years later, when Kabila requested that Rwanda and Uganda troops withdraw their troops, instead of leaving, the commanding officers of both forces established their own respective “fiefdoms” in the north of the DRC and launched their own political parties aiming to replace Kabila’s regime. Finally, the armed wings of their parties, backed by Ugandan and Rwandan forces, attacked the DRC forces, launching a civil war in which Zimbabwe, Angola and Namibia’s armies got involved on the side of Kabila.

In 2001, Laurent Kabila was murdered and replaced by his son, Joseph. The same year, the UN sent a peacekeeping force to the DRC, but clashes restarted in the north the following year. Eventually, in 2006, elections took place and Joseph Kabila was elected president. But the civil war never stopped in Kivu and northern Katanga.

At this stage of the war, it has become hard to see where the interests of the imperialist powers really are, who they support and who they don’t. What is certain is that their interference – going back to the many interventions in the Congo at the time of independence when they put Mobutu in power, and more recently those in Rwanda, has fed today’s seemingly endless war in the DRC – a war which, by 2006, was estimated to have claimed 5.4 million victims, by far the most murderous since World War II.

The vicious circle of war

The on-going wars which have plagued Africa for over two decades have been further fuelled by the fact that each time imperialism tries to intervene, directly or indirectly, in order to try to resolve one problem, it ends up creating a whole series of new imbalances and new problems which, in turn, require a new intervention and fuel new wars.

This is not specific to Africa, since it was just as much the main factor leading to the war in Iraq and the reason for the continuation of the occupation of Afghanistan for so many years. Rather, it is a feature of imperialism itself, because imperialism is nothing but a system of world domination against the world’s populations. In order to maintain its rule, it needs regimes which will serve its needs – and whose personnel is therefore made up by characters willing to be bribed by positions, status and money. It needs to provide them with heavy weaponry so that they can control their deprived populations. So not only are such regimes utterly parasitic, but they are potentially dangerous, even for imperialism, in that they can fit requirements at one point, but get too big for their boots at a later point, as did the Pakistani army at various times in history, Saddam Hussein when he invaded Kuwait and the erratic Gaddafi, who proved so unreliable – to name just a few.

Of course, since the disastrous intervention of US troops in Somalia in 1992, western troops are less often sent to intervene directly to “solve problems” for imperialism. Now they tend to get African Union troops and UN troops to do the job, as in Darfur in the Sudan. There were exceptions in the period though – when the British sent crack troops to Sierra Leone in 2002 to restore the pliable Kabbah to power or when the French intervened in Ivory Coast, several times in the past few years, to defend their own corporate interests.

The Middle East is, on the other hand, a special case because of the strategic importance of oil – which explains the many direct western interventions in the past. But given the disaster that the wars in Iraq and Afghanistan have turned into, it was maybe a little surprising that France, Britain and the US intervened in Libya last year to help insurgents oust Gadaffi. Then again, the states of the imperialist countries are not prepared to leave the interests of their respective bourgeoisies to the tender mercies of an oppressed population which has had enough and taken up weapons.

Of course they have just created more problems as a result. Libya is unlikely to reach any kind of political equilibrium in the short to medium term – the Pandora’s box has been opened – who knows when or how it will be shut. In the meantime all manner of gremlins are on the loose – including those of the religious reactionaries who threaten women’s rights. This all goes to show how blindly reactive the imperialist system is – and how incapable it is of long term strategy – if only because of the fragmented and short-term political structures it has erected to defend its interests. And which are now rusted and no longer even operating properly, even for their own purposes.

Anyway, many indirect interventions continue around the world – as with the Somalia conference hosted just this week by Cameron and Hilary Clinton. Despite the strategic importance of Somalia at the entrance to the Red Sea, opposite Yemen, the fact that there had not been a stable government in place in Somalia (or Somaliland and Puntland) since the early 1990s was of little concern to the imperialists. Not until the shipping routes started to be seriously threatened by the on-going and highly successful piracy conducted by ex-fisherman whose livelihoods had been confiscated by Thai and Taiwanese factory fishing ships. And not until the so-called Al Shabaab Islamic insurgents began to make gains – their recruitment helped by US-backed Ethiopian incursions into Somali territory! Almost 20 years of war across the territory has made for an on-going human disaster.

The independence of South Sudan which was recognised last July – is hardly installed and war already threatens to break out again between Khartoum and Juba (the new Southern capital), over the division of oil revenue and production. Juba has now shut down its main oil pipeline to Port Sudan in the north. But even though it has plans to build another through Kenya, this means oil cannot flow for the time being.

The Lords Resistance Army which began to massacre, amputate and rape in Uganda in the 1990s now operates in the border area of South Sudan (and the east Congo) and is another source of death and destruction for the local populations. The origin of the LRA seems to be such profound and chronic deprivation of everything, that it has reduced people to the brutal madness of killing and maiming and inducing others, including the children it kidnaps, to do the same. But of course this practice isn’t new – such horrors were carried out by the RUF in Sierra Leone as well, even if they at least had the immediate objective of political power at the time.

Sierra Leone may no longer be the poorest country in Africa, but it is still near the bottom of the league tables with 60% of the population in severe poverty following 30 years of civil war. It has not recovered an economy to speak of, since the installation of a western-friendly regime in 2002. 49% of the population relies on subsistence farming. Corruption is rife despite all kinds of decrees to try to stop it, more recently under Ernest Koroma, president since 2008. The legacy of the war is still evident in the thousands of surviving amputees who are still without prosthetic limbs and have little hope of getting them. The literacy rate today remains abysmal, at 41.4%, and only 30% of kids are immunized against disease. Life expectancy (even in the context of a low HIV infection rate for Africa of 1.6%) is just 48 years. But never mind, because the diamond industry, and the rutile-titanium mines are proving very lucrative for foreign interests – the latter being owned by a consortium of US and European investors. And now offshore oil has been discovered by another consortium involving a British, Australian, US and Spanish consortium. In 2010 an SEZ was opened in Freetown operated by the US company “First Step” and a plant has been completed which will process fruit for export. The 60% of the population suffering hunger will, of course, have to wait for the trickle-down effect…

Nigeria is another case altogether, but one which also is utterly perverse. Here, a national mobilisation of the population just caused President Goodluck Jonathan to back down on the removal of fuel subsidies which would have doubled the price of petrol. Yes, this oil rich country has a population which lives in fuel poverty, its oil being more or less “for export only”! Much of domestic supply comes from illegal smuggled oil sold in of jerry cans along the main roads.

And while Nigeria’s own oil production doesn’t fuel its economy, it certainly is fuelling a worsening guerilla war in the oil-producing Delta region where not only is the environment probably irreparably destroyed by the oil exploitation of the US’s Exxon and Britain’s Shell and BP, but the local population is being driven to desperation.

Despite having large reserves of natural gas that can fire thermal plants, the country’s electricity supply and service is among the world’s worst, with half of the 160m population lacking access to the grid. Peak output is little over 4,000MW, with per capita consumption just 3% that of South Africa, Nigeria’s rival for the continent’s biggest economy. Frequent blackouts mean that most of Nigeria’s power comes from privately owned petrol and diesel generators, as in many other African countries – but most of those don’t produce oil. Now Goodluck Jonathan wants to make the population pay for modernising Nigeria’s electricity through privatisation – and to attract buyers, intends to increase electricity prices by 88% – if he can get away with it. But that seems very unlikely, judging from the mood of the population shown over the last months during strikes and demos.

In the meantime, poverty and desperation has driven some Nigerians in the north to join fanatical religious groups – both Christian and Islamic – the latest being Boko Haram which is beginning to stage systematic terrorist attacks throughout the country. In an attack on Kano, Nigeria’s second-biggest city, on January 20, more than 180 people were killed when militants co-ordinated a strike on 8 separate targets. It looks as if things can only get worse unless the recent mobilisation of the population and the working class finds the kind of political programme and unity that would be able to provide the poor masses with a real way forward.

Much further east, and on a different continent, the consequences of the war in Afghanistan and the on-going consequences of the Iraq war (the sporadic suicide bomb attacks) are also proving disastrous for the respective populations.

Since 2004, there have been an estimated 72 Afghan civilian deaths attributable to the war – per month! Life expectancy in Afghanistan today is 44 years for women and 44.5 years for men. It is women’s death rate in childbirth that drags their life expectancy down. This is probably the highest rate of women dying in childbirth in the world – 2 for every 100 births. Only 10% of married women have access to, or can practice contraception.

Only 13% have clean drinking water access; food supplies are erratic, and drought has exacerbated this in the last year. As many as half of all children under 3 years old are severely malnourished.

As for education, after the years of civil war and the reactionary policy of the Taliban regime only 28% of all adults over 15 can read and write a simple sentence. The average schooling of adults is less than 2 years in duration. 35% of girls are now enrolled in school, but at this point only around 18% of women between 15 and 24 are literate.

And now the Afghan war has spilled over into Pakistan where poverty levels are also rising. The Asian Development Bank asserts that the proportion of Pakistan’s population living on less than $2 a day has fallen from 83% in 1996 to about 60% today. But in 2007 this bank also found that Bangladesh and Pakistan were the only countries in Asia where the poorest fifth of the population were worse off than they had been a decade earlier. Foreign aid workers administering flood relief were apparently shocked by the high levels of malnutrition they found. According to UNICEF, 44% of Pakistani children are suffering from chronic malnutrition, including 15% who are acutely malnourished.

Of course, North Africa and the Middle East remain on the boil – and not only because Libya’s “endgame” between rival militias continues, and because the Syrian crisis is escalating. The backdrop for the regional crisis remains Israel’s violent siege against the Palestinians both in Gaza and the West Bank which sporadically bursts into huge flames but never lets up.

The report of the UN’s Internal Displacement Monitoring Centre and the Norwegian Refugee Council revealed that in 2010, 27.5 million people on this earth were displaced within their own countries by armed conflict, generalised violence and human-rights violations, which is the highest number in a decade.

And just this last week what did we hear from Mali in north Africa?: “Clashes between the army and Tuareg rebels in northern Mali have forced 126,400 people to flee their homes since mid-January. Tuareg rebels are waging their biggest offensive since a 2009 rebellion as they demand autonomy in Mali’s vast north, and have launched several attacks on towns in the region since mid-January. Mali and Niger experienced uprisings as the Tuareg fought for recognition of their identity and an independent state in the 1960s, 1990s and early 2000s, with a resurgence between 2006 and 2009.” And we’re told: “Many Tuareg left for Libya where they later fought for Muammar Gaddafi’s regime, but after his death in October they returned, some heavily armed, to their home countries.” An “unintended consequence” as they say – but then isn’t the situation in Mali just another unresolved problem left to fester since colonial days?

The poverty of the poor countries today

Of the 49 poorest countries in the world, which the powers-that-be call the “least developed countries”, or LDCs, 33 are in Africa, 15 in Asia Pacific and 1 in Latin America.

The country that sits at the very bottom of the league tables which measure GDP is, maybe unsurprisingly, given what has already been said, the Democratic Republic of Congo. To give a measure of its poverty and using the World Bank’s figures for 2010 – the GDP per head (measured according to “purchasing power parity”) is $345, compared with Britain’s $36,000 per head. In Kinshasa you are 100 times poorer than here.

Yet the vast, 2.3m sq km, DRC is probably, from the point of view of natural resources, one of the very richest regions in the world – in the lush heart of Africa, straddling the equator, with green rain forests, mighty rivers, massive mountain ranges and the most abundant tropical fruit, wildlife and geological treasures, many still undiscovered…

It provides almost 80% of the world’s coltan production – a mineral ore vital for microtechnology. But this “development” is precisely why DRC is going through its worst period of “un-development” in its history so far – and why the east of the country has become one of the most unsafe places in the world for the poor to be – whether for workers in the mining industry or villagers scraping a living by subsistence farming in the forest clearings.

Today, 3 out of 5 Congolese are living on less than $1.25 (90 pence) a day, the UN measure of severe poverty. 70% in rural areas don’t have clean drinking water. A third of children under 5 are severely malnourished. Roads are unpassable and railways dilapidated. The whole DRC has only 1,746 miles of paved roads. A 50-mile trip can take up to 7 hours by car. But don’t worry too much – as we will later explain, British and European construction companies are taking care of the much needed road building…

Looking at the big – picture – of the 7bn or so people living in this world of ours, it is a little hard to know exactly how many are really living in poverty because the data is so poor. The UN’s latest Millennium Development Goals report (November 2011) claimed that compared to 1990, when 1.8bn were living on less than $1.25 a day, in 2005 – this had fallen to 1.4bn. But since then, there has been the 2008 spike in food prices that reduced many more people to starvation. It’s probably not wrong to estimate that a third of the world’s population doesn’t have enough to eat. What the UN can say is that for instance in South Asia, between 1995 and 2009 (15 years), “there was no meaningful improvement” in the prevalence of undernourishment among the poorest households. In Sub-Saharan Africa, and South Asia, there is the highest child mortality – between 1 in 8 and 1 in 14 (compared to 1 in 150 in the “developed” world).

Access to sanitation – which is not one of the UN’s development goals, even if it is fundamental to health – is probably a much better indicator of “development”. In the Asia Pacific region, where 60% of the world’s population lives, 1.8 billion people – or 45% of the region’s population has no access! In this region as a whole (it stretches from Turkey to New Zealand and includes Siberia) poverty was apparently reduced by more than half before the millennium: those in poverty fell from 50% in 1990 to 22% in 2000. But since the region includes countries where few live at this dire level of poverty – like South-Korea – but also countries like Nepal, where 55% live on less than $1.25 a day, what use is such a revelation? Taking the average for infant mortality of 36 deaths per 1,000 live births for the region again, there is a huge gap between the 103 deaths in Afghanistan and the 10 or less in the region’s richer countries.

Indeed, the main feature of the last decade and especially the last 5 years, is the huge and widening disparity between rich and poor countries and the same phenomenon affecting the population inside all countries – huge and widening disparities between the rich and poor. And despite all of the developments in every aspect of science and technology, the way the world is organised means that technology and iPads are absolutely useless to the vast majority of the earth’s peoples.

Let’s explain what we mean: after the albeit very exceptional earthquake in Haiti 2 years ago, 1.5m were left homeless. Today, 520,000 are still living in tents! And now cholera is their biggest enemy, because they have no direct access to proper sanitation nor clean water. In the capital, Port-au-Prince, 20,000 people are camped right in front of the presidential palace on the “Champs de Mars”. Nearby is ironically named Camp Red Carpet, where 14,000 people share just 6 latrines. Just south of the town is Camp Jericho where 5,000 live, sharing 18 latrines. Water is brought by trucks to these camps; stored in tanks or dispensed directly. In Jericho camp, Oxfam stopped distributing free water to people a few months ago – the policy is to let the people “take over and run things themselves” so now they must buy it by the bottle, even if most people don’t have jobs, let alone money to buy water!! It provides “a job”, but not many customers, to the water seller of course…

Most of the 10,000 NGOs which operated at the peak of the earthquake crisis have left – run out of money, lost interest, or simply disappeared. In the meantime the cholera epidemic continues, spread precisely by dirty water and lack of sanitation. An estimated 7,000 people have died from it. This January, the deputy director of the Pan American Health Organization, said that as of December, on top of the deaths, the Haitian government had reported more than 520,000 cholera cases with 200 new sufferers appearing each day. (He) said it was “one of the largest cholera outbreaks in modern history to affect a single country…There are also 21,000 cases in the neighbouring Dominican Republic where there have been 363 deaths.. … Haiti needed a huge campaign to improve its supply of drinking water which various international institutions had estimated could cost between $746 million and $1.1 billion.”

So would that be difficult to do? Why wasn’t it done initially? A cholera epidemic is a well-known risk and was recognised as such in Haiti before it even appeared! Yet the so-called “international community” apparently spent $2.4 billion in “humanitarian aid in response to the quake”. But it is anyone’s guess where it all went, since it was all being administered by the uncoordinated 10,000 strong “free market” of private NGOs from around the world. That should provide as strong a case as any against seeing the development of the huge NGO industry as some kind of positive phenomenon – it is rather a symptom of bankruptcy, not only of the system, but also its charitable approach to alleviating suffering.

It is the case that generally speaking, throughout the poor world, dirty water and lack of sanitation are big problems – exacerbating endemic famine in Somalia and Ethiopia and now Mauritania – but then the whole of the Sahel region is desertified. Capture of water and desalination would be necessary to solve the problem, but while technically possible, the cost under capitalism would never allow it. Just as it doesn’t even allow the further piping of water in Britain where there is a regular “drought” in the east Midlands and south while there is regular flooding in the north-west and Wales!

Aid for trade as long as they buy the guns

After the Structural Adjustment Programmes of the 1980s and 1990s imposed conditions like privatisation of all the limited utilities and state-run enterprises in exchange for loans at extortionate interest, the 2000s have seen a new form of screwing blood out of a stone in the poor countries. This is “aid for trade” under the auspices of so-called development assistance. In Britain the Department for International Development, administers this along with all other forms of aid – the budget being £8.4bn in 2010, up from £7.2bn in 2009. Which may seem a lot. But it is more than compensated for by what comes back – for the benefit of British companies.

A Brooks World Poverty Institute paper, published last December, said it far better than we could ” the Aid for Trade agenda emerges as a fig leaf, a cheap gift from the powerful to obtain the compliance of the marginalised whilst distracting attention from the wider economic and political structures that perpetuate their marginalisation, all dressed in the discourse of development.”

In fact this study give hundreds of examples of mainly EU and British development aid and “aid for trade”, which have nothing to do with tackling the poverty of the populations in poor countries and everything to do with shoring up capitalist – some local, but mostly foreign – operations and developing infrastructure purely for their benefit.

For instance in Kenya, EU-financed road building concentrated in those areas connecting large scale agriculture to the ports – thus securing around £500m worth of food imports from Kenya to Europe every year! Or there is so-called boomerang aid – whereby European money for road building in Uganda just helped to subsidise European firms. This even led the corrupt president Museveni to complain of the “third world” building standards of European firms when it came to the Kampala bypass. This project had involved the French company BCEOM, Italian Salini Constructori Spat and British TRL. It was meant to open in 2006 and eventually did so in 2009, but cracks had already appeared! The road funds allocated by multilateral agencies were over £1.3bn, mostly ending up in the pockets of the aforementioned companies in Europe!

The European Investment Bank has funded mining operations in both Zambia and in the DRC – where the conditions for workers and villagers are appalling. EIB loans (around £100m) to private sector companies to start extracting minerals at Tenke Fungurume mine in DRC caused people to be displaced to tent camps until they were forced to leave the area. For mineworkers, wages were low, overtime not paid and only token renovation of some schools and wells was done.

Similarly, when assistance is meant to be given to encourage enterprise – as in Haiti’s export processing zone (EPZ), the situation for workers “couldn’t have been worse”. For instance says the study, “One garment worker reported that she makes 125 gourdes (£2.50) a day, which is the Haitian minimum wage for piece-rate workers. After tax, her take-home is approximately £10 a week. With a day’s pay she can buy a cupful of rice, transport via group taxi, and pay down debt on her now-destroyed apartment [destroyed during the recent Haitian earthquake].”

As for what comes back to the donors, it is well documented that the poor countries are forced to become dependent on imports, even of basic foodstuffs, which they used to grow themselves to the point of self-sufficiency!

But worse is the fact that countries are blackmailed and bribed to buy western arms, which, if their value is added up, more than compensates for any supposed altruistic aid “just given” to the same countries. Overall, says the Stockholm International Peace Research Institute, the world’s top 100 arms-producing companies managed to increase their sales in 2009, despite the crisis – to $401bn, an 8% increase in real terms. Of these 100 companies, 78 are based in the US and Western Europe and generated $368bn (92%!!) of these total sales. A figure which should be compared to the foreign “aid” distributed in 2008 – a grand total of $119.8bn. One can only wonder just how much of this foreign “aid” is used by the regimes of the poor countries to buy yet more weapons from donor countries in order to line the pockets of these death merchants and their shareholders!

Smoothing out the differences – or exacerbating them?

When food prices shot up in 2008, the number of hungry people shot up by 150 million. Rioting broke out in more than 30 countries. Even in good times, the poor in such places must spend up to four-fifths of their incomes on food. Yet in February 2011, food prices stood 23 points above the record levels reached in June 2008. According to the World Bank, a further 44 million people were forced into extreme poverty.

At the beginning of 2011, World Bank President Robert Zoellick warned that prices were reaching “dangerous levels”… “Food security is now a global security issue, he said, urging G20 leaders to make the issue their top priority. “While not the primary cause for the political instability we see today in the Middle East, rising prices have nevertheless been an aggravating factor that could become more serious”. Citizens of Egypt, immediately before the overthrow of President Mubarak, were spending in excess of 40 per cent of their income on food alone.

Of course, this was driven by speculation on food, after other commodity markets failed to deliver the desired level of returns once the property bubble had popped in 2007. So today, political leaders like Sarkozy of France have embarked on a crusade to try to save the system from the turmoil caused by speculation – by trying to curb speculation on certain commodities. Already between 2002 and 2008, the number of financial contracts for derivatives in commodities had tripled – with almost all agricultural products seemingly suitable to be turned into financial assets. One notorious example is the London hedge fund which “bought” seven per cent of annual worldwide cocoa production on one day in July 2010, pushing the price to a 33-year high.

However, some hedge funds drive down prices, which can then result in thousands of small farmers being pushed out of the market and into starvation and result in food shortages due to the hoarding of produce as happened with wheat and rice in 2008. The speculators’ entry into the food commodity market (the so-called “financialisation” of food”) was facilitated by the US Commodity Futures Modernization Act 2000. But it really only came into its own after 2007, and has already had profound consequences for people living in poverty around the world.

This all adds up to a huge future food crisis, not because there aren’t more than enough resources, but because they cannot be accessed by populations. And what can be accessed is being degraded, systematically. The International Soil Reference and Information Centre estimated in 2009, that of the 11.5 billion hectares of land covered in vegetation, around 24% has undergone human-induced soil degradation, in particular through erosion. It predicts that by 2025, water scarcity will result in an annual loss of 350 million tonnes of food, equivalent to losing today’s entire global rice harvest! This is why there is a sort of doomsday scenario being painted for the future in terms of food and water supply – but this assumes, of course, that the current capitalist system prevails. Because under capitalism it is impossible to plan for food and water supplies on a world scale.

Linked to speculating on agriculture in general is the new craze of “land-grabbing” among banks, pension and equity funds, and corporations. They lease or buy large tracts of land on the cheap in poor counties – displacing subsistence farmers who may end up starving in urban shanty towns – in order to grow bio fuels or other non-food products. The World Bank estimates that between 2004 and 2008, the total amount of land devoted to biofuel crops doubled to 36 million hectares – bigger than the size of Italy, which is roughly 30 million hectares!

The cash-strapped governments of the poor countries have been easily persuaded to lease land for all kinds of large-scale commercial farming projects, or even for it to lie there unused for the time being as an investment for foreign shareholders! So for instance, the Ethiopian government recently leased land comprising 42% of the Gambella region – where it has also initiated a so-called villagization project. This entails resettling 70,000 people who occupied the now-leased land, but never had a formal title to it, to new adjacent locations by force – where huts have been placed in the middle of nowhere, presumably so that these villagers can become the future labour force of commercial agriculture. The government calls this “socioeconomic and cultural transformation of the people”! Indian, Saudi, and even Pakistani companies are involved, but also subsidiaries of European groups linked to big banks, including all the big British banks like Barclays, HSBC, Lloyds and RBS.

Capitalism is not part of the solution

We can only conclude that this system of exploitation has to be halted before it’s too late. The examples given should make it clear that it is not “sustainable”. Mahatma Gandhi is often quoted (and we apologise for doing the same, but this particular quote does illustrate the problem). When asked, on the eve of independence, whether he thought India could follow the British model of industrial development, he replied: “It took Britain half the resources of this planet to achieve its prosperity. How many planets will India require for development?”

Today, all the measures showing how poor countries are developing, not least the so-called millennium development goals, are designed to hide poverty and exploitation. And when they show improvements – like the apparent fall in poverty reported by the UN last year – whatever “growth” there may be, is inevitably restricted to a tiny minority, fuelling inequalities, if not corruption – and resulting, not in the expansion of production but the actual destruction of resources, in new rivalries leading to new conflicts – making this new so-called “growth” detrimental, if not malignant.

After over a century of domination and countless failed attempts by nationalist movements to shake off the domination of the imperialists, despair has reached such a point in many poor countries, that dying for beliefs which are 12 centuries old, and even committing suicide in their name, has come to be seen as a means to fight this domination. This is how rotten to the core capitalism has become. And yet there is a possible common future for the population of the whole world, together, utilising the pooled resources of this rich and diverse planet of ours for our collective benefit. Of course, all of the artificial divisions inherited from the past would have to be removed by the populations working together democratically, for once. The only condition for this would be the overthrow of the system of profit-making, of capitalism itself, and its replacement with a system based on the rational use of all human and material resources for the benefit of all. Of course, that would mean embarking on the path to communism. But this is the only way to a sustainable future using the one single planet we’ve got, for the time being.

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Comments
  1. […] This is just one way capitalism under-develops the world. […]

  2. PhilF says:

    One of the big polItical debates on the left has been around the ‘Brenner thesis’. Robert Brenner is part of a school of Marxists who concentrate on changes within Europe, especially changed social relations on the land, to explain the rise of capitalism. While Marx pays a lot of attention to this in ‘Capital’, particularly in his discussion of primitive accumulation, Marx also emphasises the role of foreign plunder, including the enslavement of many millions of Africans (a substantial number of whom died while being taken across the Atlantic by European slave merchants), in the rise of capitalism.

    One of the good things about this article is that it deals with the central role played by plunder of what is now the Third World in the rise of capitalism. Uneven development of different parts of the world isn’t just a natural occurrence but a *necessary prerequisite* for the emergence of industrial capitalism in the West, while the rise of imperialism copper-fastens such uneven development, ensuring that huge swathes of the world get permanent under-development. Well, permanent as long as capitalism remains.

    Phil