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Global Trade Watch E-Newsletter #31 - June 2005
NB: This is an archived newsletter. Information may no longer be current, and links to other sites may not always work.
* EDITORIAL: WHO’S RESPONSIBLE FOR POVERTY IN AFRICA?
With the meeting of G8 leaders in Scotland this weekend and the Live8 Concerts happening around the world, it’s a good time to talk about Africa and its problems. Bob Geldof and Bono have done a good job in recent months to publicise some some solutions to Africa’s ongoing grinding poverty: increasing aid flows, writing off debts, and reducing trade barriers in rich countries. In fact they’ve been so successful that when the leaders of the G8 - the group of rich, Western countries - meets this weekend, they will be focused squarely on this agenda.
At the same time however, there has been a reluctance on their part - and from the media - to seriously discuss the causes of Africa’s ongoing poverty. Yet it is clear that solutions cannot be truly effective unless the causes of problems are understood.
Conservative newspaper columnists everywhere have jumped on this opportunity to push their own claims that Africa’s problems are Africa’s own fault - the results of decades of rampart corruption by African leaders and wars fought between Africans. ‘Nothing to do with the West’, they imply.
This looks like a plausible enough argument, except when you start to compare it with the facts. You see, Africa hasn’t always been doing as badly as it is now. Look back just a few decades, and thing looked very different. Between 1960 and 1980, Sub-Saharan Africa’s GDP grew by 36% – not as much as developed nations, but not bad. Compare this with the next eighteen years, 1980 to 1998, when Sub-Saharan Africa’s GDP actually decreased significantly - it’s economic output shrunk by 15%!
Did Africa suddenly discover corruption and war after 1980, but not before? No, these had been happening since the time of – and partly as a result of – European colonialism. So what has changed since the seventies which might explain Africa’s decline? Well, two significant elements of the global economy changed in the early eighties. The first was the displacement of Keynesian economics – which argues for a positive role for government in managing economies – by ‘neoliberal’ economics – a dogmatic belief that open markets, deregulation and privatisation can solve all society’s ills. The second change was the move by International Monetary Fund and World Bank from providing short-term credit to the developed world to providing long term ‘structural adjustment’ loans to developing countries. Joseph Stiglitz, winner of the 2001 Nobel Prize for economics, describes how “in the 1980s, the era when Ronald Reagan and Margaret Thatcher preached free market ideology in the US and UK, the IMF and World Bank became the new missionary institutions, through which these ideas were pushed on the reluctant poor countries that often badly needed their loans and grants.” The IMF and World Bank’s structural adjustment loans have been used to impose the dictates of neo-liberal economics on over 100 developing nations around the world - including most of Africa - and at the same time created the hundreds of billions of dollars of debt that have forced most African countries into a slave-like relationship with the West.
But while the Live8 concerts have drawn attention to the massive debt burden on poor African countries, the most significant cause of African poverty has gone unmentioned: the ‘structural adjustment’ conditions imposed by the IMF and World Bank on African economies in return for the loans. These conditions have forced radical changes on most African nations, including huge cuts to public spending on health and education, trade liberalisation, privatisation and deregulation. Stiglitz describes how these policies have “led to hunger and riots in many countries, and . . . often the benefits went disproportionately to the better off, with those at the bottom sometimes facing even greater poverty.”
Take Zambia for example. During the 1990s, the IMF imposed a structural adjustment package on Zambia in return for its loans. The package involved liberalising Zambia’s trade barriers, privatising it’s industries and cutting budgets for health and education. IMF-imposed trade liberalisation led to a flood of imports, devastating Zambia’s farming and manufacturing sectors – particularly textiles. Whereas in 1992 Zambia had sported 140 textile manufacturing firms, by 2002 this had been reduced to just eight. IMF privatisation programs caused many previously state-run enterprises to collapse, with Zambia’s President remarking that the IMF’s program “has been of no significant benefit to the country . . . privatisation of crucial state enterprises has led to poverty, asset stripping and job losses.” The ratio of undernourished people in Zambia increased from 45% to 50% during the 1990s’ decade of IMF structural adjustment. Infant mortality rose from 19 deaths per 1000 births in 1980 to 202 deaths per 1000 in 1999. Even the IMF’s stated goals of creating economic and employment growth have failed miserably, with a fall in real GDP during the entire decade of the 1990s, and corresponding large declines in Zambian employment.
As terrible as it is, Zambia is by no means not a lone example - the story is much the same in the rest of Africa. In Ghana, new school fees imposed as a result of structural adjustment forced two-thirds of rural families to stop sending their children to school. In Kenya - already being devastated by AIDS - new IMF-imposed medical fees resulted in a drop of 65% in the number of women seeking advice about sexually-transmitted diseases. In Senegal, structural adjustment during the 1990s led to an increase in poverty from 60% to 80% between 1994 and 2003, and an increase in the proportion of the population that is undernourished from 23 per cent in 1990-92 to 25 per cent in 1998-2000.
And just in case you were wondering who’s in charge at the IMF and World Bank - who’s responsible for all this ‘structural adjustment’ in Africa, you can probably already guess: The G8 nations. You see, unlike democratic institutions, decisions are made at the IMF and World Bank based on how much money nations contribute. As a result, the G8 controls a vote of 48% of the votes on the IMF’s board, leaving only 52 per cent for the other 176 IMF members. In stark comparison, the largest African member of the IMF – South Africa – holds just 0.87 per cent of the total voting power .
The moral of all this is that fighting for global justice means more than just getting the G8 to ‘drop the debt’. It means fundamental reform of global institutions must take place, including an end to disastrous neoliberal structural adjustment policies, and giving poor countries a real voice in the global institutions which have so much power over them. The UK UK Department for International Development has already taken a lead by removing conditionality from it’s entire aid program because “some conditionality has promoted reforms that have made poor people worse off”. Why doesn’t Australia do the same?
* JOB OPPORTUNITY: Economic And Trade Policy Officer
The British High Commission in Canberra is seeking a Policy Officer for its Economic and Trade Policy section. The position will be on a two-year contract basis with a negotiable salary around $55,000. Ideally, the position would suit a person with proven experience in economic and/or trade policy analysis that can demonstrate judgement, initiative and the ability to work across a wide range of issues. Economic qualifications would be an advantage but are not essential. The successful candidate will have: The ability to monitor, analyse and report on Australian domestic economic conditions and a wide range of trade policy related issues including the World Trade Organisation, agriculture, energy, financial issues, transport, labour issues, and Information and Communication Technology. Selection criteria and any further information can be obtained from Ray Whitton on (02) 6270 6610. Written applications addressing the selection criteria and detailing any formal qualifications are to be received by the Deputy Management Officer, British High Commissioner, Commonwealth Avenue, Yarralumla, ACT 2600 by close of business 8 July 2005.
* Sun July 10, 1-3pm - Rally: No Channel Deepening in Port Phillip Bay - The Victorian government plans to destroy much of Port Phillip Bay to increase the size of ships which can enter - all in the name of increased trade. Nine weeks of "trial dredging" are scheduled for August 2005. There is no proven economic case for this environmental vandalism. The total cost of the Channel deepening project so far $575+ million. Direct economic benefit to Victorians $523 million. Speakers, Live Music, BYO Picnic, Interactive Theatre - 'The Dredge - PoMC on Trial'. Wear Red, carry Red, fly Red and see Red Boats, kayaks, whales, dolphins and seals welcome. WHERE: SORRENTO PIER, Point Nepean Rd, Sorrento. Melway Ref: 157 B7. Transport Details: Queenscliff ferry leaves hourly, bus leaves from Frankston, parking available. Call 0410 113 900 and check the website for other arrangements: http://www.bluewedges.org
* Thurs July 14. at 7pm - Film Fundraiser: "The Yes Men" in aid of East Timor - The librarians who form the Friends of the National University of East Timor Library (FUNTLL) are organising a film night to raise funds to buy new textbooks for the library. The film is 'The Yes Men' (M). The subjects of this extremely funny documentary, The Yes Men are the consummate 21st-century guerilla activists. Accepting invitations sent to their fake World Trade Organisation website, they have travelled the world appearing as global trade advocates at international gatherings of government and industry. WHERE: Cinema Nova, Lygon st Carlton. Cost $20.00.
* Fri July 29, 6pm - PUBLIC MEETING : Corpocracy vs the Global Commons - Featuring: Phyllis Bennis, Fellow of the Institute for Policy Studies, representative of US anti-war coalition, United for Peace and Justice, and author; Sharan Burrow, president of the Australian Council of Trade Unionsand President of the International Council for Trade Unions; Margo Kingston, well-known political journalist; Rod Quantock - MC. WHERE: Storey Hall RMIT, 344 Swanston St, Melbourne. Cost $5. Details here.
* July 30-31: Conference: Advance Australia Fair: Building Sustainability, Justice and Peace - More than ever, workers rights, the environment, democratic institutions, indigenous peoples, women and students are coming under pressure from neo-conservative economic and social policies, and war. Only by coming together can we support and strengthen the movements that we are a part of, and start to turn the tide. WHERE: Melbourne Trades Hall, 54 Victoria St, Carlton South. Visit www.nowwethepeople.org to register.
NEW SOUTH WALES
* July 14 & 15, 7pm - Film Screening: “The Take” - Naomi Klein and Avi Lewis' brilliant documentary about workers' resistance to globalisation in Argentina. Director Avi Lewis will be on hand to take questions after the Film. Fundraiser for Sydney Social Forum. WHERE: Chauvel Cinema, Paddington Town Hall. More info: http://www.sydneysocialforum.org
* July 29 to 31: Brisbane Social Forum - The Brisbane Social Forum is an exciting opportunity for activists, thinkers and the general community to meet to discuss issues of peace, globalisation, social justice, democracy and environmental sustainability. The Brisbane Social Forum is not just for activists. Everyone concerned about issues of peace, social justice and globalisation is welcome to attend. The Forum will be an “open space” of speakers, workshops and performances created for and by your participation. For more...
* Please email in your upcoming events!
* BILATERAL AND REGIONAL FREE TRADE AGREEMENTS NEWS *
* NZ takes Australia's apple ban to WTO (Jun 30) - Australia's ban on New Zealand apples has been coming under international scrutiny, with the case being taken to the World Trade Organisation (WTO) in Geneva. Australia has banned New Zealand apples for more than 80 years, saying it has to protect growers from the plant disease fire blight. But New Zealand says there is no risk and Australia is blocking free trade. More...
* Civil society groups voice concerns over GATS talks at WTO (Jun 27) - More than 160 civil society organizations from around the world sent a letter to WTO ambassadors in Geneva Thursday expressing their deep concerns regarding the current round of negotiations on the General Agreement on Trade in Services (GATS), which is part of the 'single undertaking' under the July 2004 Framework. More...
* Blair vows to break up CAP for Africa's sake (Jun 19) - Tony Blair will warn his European partners in the final two weeks before the crucial Gleneagles G8 summit that unless they dismantle the £30 billion Common Agricultural Policy, Africa will never free itself from poverty. More...
* West accused of concealing farm subsidies (Jun 15) - The European Union and the United States are paying out billions of pounds in secret subsidies to their farmers as they exploit every available loophole to avoid real concessions to the developing world in the current round of global trade talks, Oxfam said today. More...
* Trade Group to Start Talks to Admit Iran (May 27) - The World Trade Organization announced on Thursday that it would start talks to admit Iran as a member, an apparent reward for Tehran's agreement to continue to freeze its nuclear activities. More...
* Full scale of WTO challenge to health and environment revealed (May 23) - Friends of the Earth International today publishes a revised analysis of the World Trade Organization’s newest threat to national laws protecting the environment, social well-being and health. An increased number of governments are now understood to be using the the WTO’s non-agricultural market access (NAMA) negotiations, to make a breath-taking total of 212 challenges to the laws of other countries. More...
* India overturns patent laws (May 23) - Under intense pressure from the World Trade Organisation to obey international laws, India has now overturned its patent laws for all medicines invented since 1995. That means an end to cheap copies of AIDS drugs. More...
* U.S. Officials, Firms Rebuff Calls to Withdraw from WTO (May 17) - U.S. officials and companies are rallying around the World Trade Organisation (WTO), against reviews critical of the 10-year-old body's record of helping developing nations reap the rewards of liberalised global commerce. More...
* Lamy Set to Head WTO (May 13) - Pascal Lamy, former European Union (EU) commissioner for trade was set to become the next head of the World Trade Organisation (WTO) Friday after Carlos Perez del Castillo of Uruguay, Lamy's only remaining rival, withdrew from the race to lead the world trade body. More...
* Not in my Nama (May 11) - In a conference room on the shores of Lake Geneva, trade negotiators are drawing up plans that could eventually have a devastating impact on the global environment. The World Trade Organisation's member states are negotiating what they call "non-agricultural market access" or Nama, and have started compiling a wish list of national laws they would very much like to bury. More...
* WORLD TRADE ORGANISATION NEWS *
* Govt to uphold rights in trade deal (Jun 19) - Australia will not sell out on human rights issues just to get a lucrative free trade agreement with China, Trade Minister Mark Vaile says. Mr Vaile said Australia and China would keep the free trade talks, which began last month, separate from any debate over human rights issues. More...
* Trade concerns 'intruding' in Chen treatment (June 5) - The Federal Government has been accused of putting trade ahead of its responsibilities to protect asylum seekers, in the case of defecting Chinese diplomat Chen Yunglin. Mr Chen left the Chinese mission 10 days ago, saying he could no longer support his Government's treatment of dissidents. Australian Workers Union national secretary Bill Shorten told Channel 10 the Government has been slow to act in Mr Chen's case for fear of endangering a possible free trade agreement with China. More...
* India, Australia to expand economic ties (May 19) - India and Australia are to create a trade and economic framework. India's Commerce Minister and Australia's Trade Minister announced the project after talks in Sydney. More...
* Bosses Play China Card (May 13) - Major NSW employers are using John Howard’s free trade agreements to slash jobs and demand $250 a week wage cuts. Auto component manufacturer have targeted 800 employees for the dole queue and at least two other manufacturers, employing more than 600 people, say job losses are inevitable, as a result of the coming China-Australia FTA. More...
* WORLD BANK / IMF NEWS *
* Denying democracy: How the IMF and World Bank take power from people (Jun 1) - This new report from the World Development Movement explores the democratic deficit in the World Bank and the IMF. Read the full report here...
* New World Bank Chief Seen Hawking Bush Agenda (May 31) - Paul Wolfowitz, the former U.S. deputy defence secretary, becomes the World Bank's 10th president Wednesday amid expectations he will lead the global lender down an increasingly politicised path. More...
* World Bank Chief's Send-off Stirs Conflict Among His Critics (May 27) - A party Thursday night to honour outgoing World Bank President James Wolfensohn for 10 years at the helm of one of the world's most powerful financial institutions has ignited disagreement among some of his critics over how to deal with the public lending agency. More...
* OTHER GLOBAL TRADE NEWS *
* AIDS Drugs Take Centre-Stage at Trade Talks (Jun 28) - After tiptoeing around the issue for months, Thailand's trade negotiators will have to finally reveal where they stand on the life-or-death question of producing cheap, generic anti-AIDS drugs. The debate over intellectual property rights (IPR), which includes protecting the patents of expensive medications produced by pharmaceutical giants, is due to feature prominently during the next round of talks to shape a Thai-U.S. free trade agreement (FTA). More...
* Yes to Democracy, No to Free Trade (May 31) - If the U.S. wants to be received as a partner in the Americas, it could start by developing a trade policy that benefits not just U.S. corporate interests, but the vast majority of poor workers and farmers in Latin America. More...
* Aid Policies Turning Killers (May 16) - Free market policies have led to more than 4,000 farmers killing themselves in the state of Andhra Pradesh in India, says a report by the charity Christian Aid. More...
* Cadbury gobbles Green & Black's (May 13) - Organic chocolate maker Green & Black's, whose Maya Gold chocolate was the first Fairtrade product to go on sale in Britain 11 years ago, has been sold to Cadbury Schweppes for an undisclosed sum believed to be about £20m. More...
* The Power of Fair Trade (May 13) - Fair Trade is more than just talk. By buying Fair Trade goods, consumers are actively supporting both an alternative, just system of exchange as well as the well-being of individuals involved in the growing and making of Fair Trade goods. And the results are real. More...
* Free Trade Pact Faces Trouble in Congress (May 10) - With record trade deficits, concerns about lost jobs and an overarching fear that the United States is losing out in the accelerated pace of global changes, the sentiment in Congress is shifting away from approving new free trade agreements. More...
* Email George Bush and help African Farmers
E-mail George Bush and demand he implement the recent legally binding WTO ruling, which will help West African farmers and their families work their way out of poverty. Click here.
* Third World Network
The Third World Network is an independent non-profit international network of organizations and individuals involved in issues relating to development, the Third World and North- South issues. TWN’s website is a mine of information on global trade and justice issues: http://www.twnside.org.sg
"First the preferential trade deal with the US. I can’t, if I were to be accurate, call it a free trade deal, because manifestly it wasn’t. Whatever else the US FTA is, it’s a pygmy of a deal. We may export a few more utes and canned tuna and over an eighteen year period, a little more beef. We may even export more Camrys, although there’s an equal chance we’ll get the opposite if our Altona plant can’t compete with the Kentucky plant six times its size. These games will be more than offset, however, by further losses in manufacturing, IT, entertainment and other areas. There’s little doubt that the deal will result in a widening trade deficit with the US, and will be a negative for employment."
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