The same ulterior motives

Najma Sadeque

Although the World Trade Organisation (WTO) has been around for more than a decade and a half now, it is surprising that most businessmen, industrialists and traders, know very little about it and are completely oblivious of its origins, objectives and modus operandi. Most have a very simplistic understanding of WTO - that it exists merely to facilitate trade, so what's so bad about that? Ask the usual businessman to explain the WTO and its rules to you and to define exactly what is good about it, few will be able to go beyond generalities. The average merchant assumes that all WTO member countries are subject to the same 'equal' rules.
These foggy beliefs harbour only partial truths; the devil lies in the detail. The sameness of rules however don't necessarily translate into fairness of rules. What is very profitable for one can be very unjust and disastrous for the other. This unfortunate state runs deep in Pakistan. Yet the businessman usually cannot clarify who exactly made the rules and by what right and whose consent; and how countries unequal in resources, skills, economic activities and output among other things, can benefit 'equally' from identical rules created in the abstract and not in the context of the ground realities of all countries.
The businessmen forgets the other side of the coin: that rules are more often than not laid down by bureaucrats and politicians who are not necessarily well-informed, sometimes in consultation with the business community but not invariably; that trade doesn't just involve the traders but also those who as consumers buy and use the goods, processes, knowledge and services traded. While people worldwide have always have been the victims of constant repetition of propaganda posing as news or research, no segment of society in the world is more effectively influenced than that of businessmen and bureaucrats.
While the multinationals that own or control most global resources, finance, services, technology and knowledge and accrue whopping profits, at least 50,000 people die every day not as a result of war or natural disaster but from extreme poverty and its fallout caused by the free market.
The 'free market' is a misleading term. It suggests freedom and democracy and therefore equal opportunity for all. It doesn't work out that way at all in real life. The very idea and ideology of the free market took root as a result of decades of corporate lobbying, quickly followed by glorification by western governments. Among those who have profited the most from the free market are the International Financial Institutions (IFIs) led by the World Bank and IMF, the main shareholders of which are the US and other most industrialised Northern countries, and who were the very culprits that forcefully paved the way for free trade in the first place.
Most people don't comprehend what World Bank and IMF have to do with WTO, but it was the Word Bank that engineered 'export-orientation' as preparatory ground for 'free trade'. Once governments' mindsets were manipulated and convinced that exports were the only path to progress, entrapping them was easy. Endless loans put them deeper and deeper into debt until they were no longer in a position to resist on unreasonable and destructive structural adjustment conditions. Today globalization under WTO has so swamped the public mind, some tend to think that World Bank and IMF are no longer a problem. The fact is the World Bank and IMF, continue to this day, to work together with the WTO in mutual back-scratching symphony.
The IMF is known as the Shylock of all banks to which governments turn when the World Bank will not give any more because they've taken too much already which they're unable to pay back. So why not stop borrowing and try to live within one's means and try new and innovative ideas instead? Because then the otherwise secretive World Bank (and IMF) wastes no time in letting the world know that this country is bankrupt; in other words, giving potential investors and big lenders a warning signal that it should stay clear from this country because no one can guarantee they can earn or get their money back. Isolated, and since everyone doesn't have the principles or courage and mettle of Castro who took on a blockade imposed by the US and the rest of the west, the government buckles and approaches IMF on bended knee. Thus the begging bowl syndrome spread around the southern hemisphere. World Bank and IMF being creatures of America would of course not offer help where help was really needed.
The IMF, unlike the World Bank, does not bother to pretend to be a nice guy. It states plainly at the very outset that it is NOT a development bank and that it does not involve itself with poverty reduction. They are in it for the money, although the language they use to say that is far more convoluted. It hob-nobs with other global financial institutions, the Wall Street banks, the US Treasury, the Bank of England and other major banks because the policies the IMF imposes on Southern governments have to bring profits to private investors and financial speculators; it doesn't matter whether the borrowing county benefits or not. The IMF lends to governments on the very condition that from the revenue it collects, the state's first duty is towards making repayment of the loan, not to its citizens. It doesn't matter if people have to starve if food subsidies for the poor are cut or if schools and hospitals have t be closed down because there's no money left for doctors or medicines and teachers and books, or any other state-provided service for the public.
The IMF calls this 'structural adjustment' which is not a comprehensive enough term to demonstrate to what extent it intervenes in the country's revenue and financial schemes to appropriate money to pay its dues first, not after domestic needs have been seen to and the government is allowed to repay with the amount it comfortably can without causing mass distress.
If the IMF is not a development bank according to its own definition, then what is it except a commercial one, but a far more profiteering and exploitative one making impositions that no other commercial bank could dare? If it is not a development bank, why then are governments pandering to it? The answer is that the IMF, figuratively speaking, is the hoodlum half of this bank partnership in which the World Bank is the mafia don who looks like a gentleman. - It carries out World Bank's dirty work of recovering loans through underhanded methods that World Bank doesn't want to sully its fingers with. The fact remains that the two operate hand-in-glove; the IMF only loans money to cover interest payments that the country has not been able to make for World Bank loans.
The matter doesn't end there. Once foreign investors learn that a country has received an IMF loan, it is a signal that it is 'safe' to invest there and the country is ripe for 'pickings' because the IMF will be ensuring it adheres to the conditions that are conducive for foreign investment. This includes relaxation on the movement of capital, insisted on by the IMF. It means that financial speculation can take place and flight of capital may happen when things go dead wrong; and the government is helpless to stop foreign exchange being drained from the country while local businesses are destroyed. This has happened over and over again all over the South. The government's own rules no longer count; only the IMF's does. In effect, the country is being ruled by a financial dictatorship in the form of the World Bank/IMF, backed by unspoken but palpable American might.
The IMF was originally created to maintain financial stability by making loans to countries in urgent need to make necessary imports and debt repayments, or to keep exchange rates on and even keel. But that was done when IMF's dollars were backed by gold. But since 1970, the dollar has been backed only by the fancy paper it is printed on and nothing more. It will give no country gold in exchange for even a fraction of the dollar reserves it might be holding. The US is the only country in the world that has the 'right' to print money that has no economic foundation to it, and to buy real goods with worthless paper. It is nothing more than an IOU forced on the South that the latter dare not refuse and cannot buy anything anyway because it goes into debt repayment.
For decades, while the World Bank and IMF were spreading its lending tentacles all over the world and wearing away Southern resistance - much of it through overthrow of democratic governments and planted dictatorships -- WTO's predecessor GATT with its non-binding rules, was building up its strength, enabled by this lending duo to compromise the southern countries, and finally into signing the WTO agreement although it was clearly loaded against them.
Contrary to what the Shaukat Azizes of the world tell their people, WTO does not exist to benefit countries and peoples. It is there for the benefit of the business world, and the business world alone, and had deviously made it binding for governments to serve the business world at the cost of the larger populations. How democratic or 'free' or 'competitive' is such behaviour, and how even is the playing field? For the borrowing country, it's a match in defeat is a foregone conclusion. Wherever there's a country already so broken that deprivation has led to conflict and civil war, it can be taken for granted that IMF has been there.
It is essential for businessmen to understand that there is no such thing as a free market and a level paying field. The players have highly varying strengths and weaknesses; pitting the industrialised North against a South still not recovered from colonisation, is like placing a seasoned player against small schoolchildren. The free market is only accessible to those with great financial resources, so it is anything but free, and biased at the outset. It is to the shame of southern governments that, with a few honourable exceptions, they do not verbalise this blatant deceit and exploitation which is nothing less than a continuation of the same old colonization through newly-devised tricks garbed in jargon.
Businessmen also need to understand that everything in the world is not supposed to be subjected to investment, competition and speculation, such as the basics of life -- food and shelter for survival, and essential services such as water, sanitation, primary education and primary healthcare. The majority of people are not competitive by nature and are content with having their main needs fulfilled ad a reasonable degree of comfort, and everyone has long ago already acknowledge that these are part of human and civil (and religious) rights which cannot be compromised.
Furthermore, technologies for mass production kill jobs; they don't create more jobs. They create knew kinds of jobs but for fewer and fewer people. If everything is up for 'free trade' -- which process has already relieved billions of their jobs and first rights to basic local resources - their markets can only keep shrinking if local needs and markets are not being addressed, and if the masses don't have employment and purchasing power while the wealthy and middle-class numbers become too small to be categorised with mass-produced goods. Killing the mass consumer is a prime stupidity; consumers -- like good and markets -- have to be helped to make their purchasing power grow and enabled to remain consumers. To think otherwise is to be penny-wise, pound foolish.
When mass poverty prevails, crime and civil and cross-border war are not far behind, and businessmen have everything to lose thereby. Even if not for altruistic reasons, it is in the interest of businessmen to ensure a growing consumer market through fair wages and other public rights. With almost two hundred countries vying each other for other countries markets, there have to be more losers than winners. Markets are NOT unlimited, just as material growth cannot be unlimited in a material and biological world. Since energy-intensive mass production is destructive to the environment and natural resources, there has to be an upper limit on production to some point, at least on this planet. What is inevitable is that more people will have to share less, and the focus should be on quality and multi-purpose capabilities and environmentally-friendly technologies rather than quantity.
Export markets can also be fickle. Fierce competition often leads to over-production and then to saturated and lost markets owing to change of fashion or technology. When war or blockades or natural disaster wipe out one's exports, the domestic market is the saving grace, also for surplus production. Ultimately, the safest market is at home, where it's easier to change one's business or strategy with the least loss or pain, where one knows one's market personally and better, and where one can evolve with the market.
According to the World Bank/IMF, prosperity comes from 'economic growth', and the best way to rapid growth and poverty alleviation is large-scale production and exports. The 'free market' model suggests that all resources for manufacture or trade should be freely available for purchase to anyone who can buy. Their claim is that, once freed from state controls, competition brings about efficiency and the best producers. The reality on the ground showed something very different. It made both the state and the producer irresponsible.
The state began to disregard the minimum amount of resources that needed to be reserved for the local economy and population. By not placing limits, government gave free rein to investors to buy up resources and privilege. That alone led directly to small entrepreneurs becoming smaller until they were squeezed out, and for consumers unable to buy all needs because of shortages or when prices rose because far less resources were left for purchase. Those with the most money -- not necessarily the best producers, or producers at all -- mopped up all they wanted. While fair competition between equals does indeed compel each producer to try and produce a better product than the others, this can hardly happen when the competition is not even. Often, small producers with a superior product been forced to sell out to their bigger competition (with huge advertising budgets) simply for lack of sufficient funds.
Far from being the 'level playing field' that the WTO keeps harping on, it creates a ground of non-equals with vast and increasing disparities between them. The ground is prepared instead for monopolies and cartels. People who are perfectly content to confine their economic activities to the local or national market, often feel they have no choice but to enter highly competitive global market, or failing that, to restructure their production or services, even if against their will, to serve bigger companies already in the global market.
It's not just the WTO people have to deal with; the reins are still held by the crafty World Bank/IMF.