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Abstract In this essay I will argue that poverty has often been caused by the global order, sustained by corporate, governmental and individual interests. Acknowledging the historical trends of developing countries, from slavery to colonialism and independence, I will argue that the increasing poverty has largely been caused by those actors who have enslaved, colonised or otherwise forced conditions upon countries they deemed inferior. Noting how corruption, mismanagement and a lack of infrastructure are large reasons for modern poverty, I will argue that these are consequences of the historical processes, and were sometimes directly imposed upon developing countries, particularly on independence. Therefore, I will argue that responsibility for alleviating global poverty lies, firstly, with those who have benefitted from the global poverty, and secondly, as Singer argues, with those who have the available resources to help others without harming themselves. Essay While over 24,000 children die every day as a result of poverty and poverty-related causes (You et al. 2010), 1% of the entire world s population command 40% of the wealth (Davies et al. 2006). Such inequality means the three richest individuals now own more wealth than the 48 poorest countries and their 600 million people (Potter, 2000, p.80). One of the most striking issues is the importance of morally arbitrary factors: many people born in the developed world have life expectancies double that of many in developing countries (CIA, 2009). Indeed despite increased life-expectancy and reduced infant-mortality in developed countries, Life expectancy in some African countries has fallen by 20 years in the past decade (Berkeley, 2001). Case Study: the Democratic Republic of Congo To find who is responsible for alleviating such poverty, it must be considered that all but two African countries were annexed by Europeans. Many have been independent for less than half a century, and one of the most notable examples of exploitation was in the country currently known as the Democratic Republic of Congo. Since independence, Half of the country s children [have] died by the age of five (Berkeley, 2001, p.116) and twenty years after independence, in 1960, per capita income was less than one tenth of what it had been at independence. (Ibid. p.115) Critics argue that with a vast land area and a wealth of natural resources, mainly diamonds, copper and cobalt, the Democratic Republic of Congo has great potential squandered by domestic corruption, bad infrastructure and poor economic management. In support they cite Uganda, a country whose institutions were destroyed by brutal dictators like Idi Amin and Milton Obote, but which later achieved growth of over 5 percent annually (Ibid). While true, the root cause of the lack of infrastructure and rampant corruption are more illuminating. During colonisation, King Leopold II viewed the Congo as his private fiefdom , extracting the country s natural resources for the benefit of Belgians, leaving little or no infrastructure from which to build an independent nation: after independence, in a country of 15 million people, there were only sixteen university graduates . The human cost of colonisation certainly explains part of this stagnation as 5-10 million Congolese perished from overwork, malnutrition and outright slaughter during Leopold s tenure (Ibid). 1
Critics, however, point to the manner in which conditions have worsened since independence. For a newly independent country inheriting such conditions, however, to be saddled with huge debts and be expected to build an infrastructure, without prior experience, seems an impossible feat. The overshadowing figure of modern Congolese history is Mobutu Sese Seko. Embezzling up to $12 billion, only President Suharto of Indonesia was more corrupt in the twentieth century (Denny, 2004)1. Being Congolese, some argue responsibility for the actions of Mobutu and his allies is domestic, but the first problem is in what we call the Congo, as Virtually all of Africa s states had their borders drawn by colonial powers (Driscoll, 2009). These borders cut across traditional tribal boundaries and States, while methods of control, colonial powers often empowered a minority tribe to help coerce others, producing resentment and making it all but impossible for any coherent State to emerge. Such tribal conflicts are often blamed for instability in such regions, but the origins of conflicts for the monopoly of violence often arose from those colonial methods of control. Such methods contributed to persistent violence and political upheaval in Liberia, as well as the Rwandan genocide of 1994 (Berkeley, 2001).2 These inherited political problems created a high level of competition to succeed colonial powers. Although many countries elected leaders, most soon descended into some form of military dictatorship. In many cases, the former colonial power groomed leaders within the military, providing economic and military support for coup d états. From the early 1960s to the late 1980s there were over 70 military coups and 13 Presidential assassinations in Africa; the coup d état remains the most common form of regime change (Driscoll, 2009).The first leader of the DR Congo was Patrice Lumumba. Elected Prime Minister in June 1960, in the rhetoric of the Cold War it was feared Lumumba presented a Communist threat. Larry Devlin, a CIA operative, sent several concerned messages to Washington until President Eisenhower ordered the assassination of the new prime minister giving Devlin the necessary chemical tools (Berkeley, 2001, p.110).
3 Mobutu s friendship with Devlin is one of the reasons the US supported him. Financially and ideologically this became quite a prosperous relationship: the US directly provided $2 billion in
All dollars are in US$ unless otherwise stated. In Liberia, former President Samuel Doe was part of the Krahn tribe, traditionally a small tribe who were unproportionally privileged by American colonial powers. Supported by the US, Doe traded military positioning and unwavering allegiance in the international realm for military and financial assistance. American company Firestone came to own the World s largest rubber plantation and accounted for a quarter of Liberia s tax revenue, profit which came partially from bribing top officials with large houses and salaries. Charles Taylor used this deep-seated resentment of the privilege the Krahn tribe enjoyed to enflame violence, managing the conflict to position himself into power (Berkeley, 2001). Rwanda followed a similar pattern, though the Tutsis and the Hutus had intermarried and shared land peacefully until they were separated as distinct tribes by the Belgians during colonialism. Many scholars even argue that they are not distinct tribes. Given special privileges by the Belgians, resentment grew against the Tutsis and after independence the Belgians left Rwanda with a weak infrastructure and massive conflict between these groups. One tribe committed massacres of the other, and revenge was repeatedly sought. Powerful elites exploited this lack of accountability, as the tribes were generally blamed, rather than the political elites who had engineered the slaughters for their own ends (Berkeley, 2001 & Bowen, 1996). 3 Before the country s independence, Mobutu had served seven years in the army as punishment for being
expelled from several schools. Shortly afterwards he was exiled after being found writing for a nationalist newspaper opposed to Belgian rule. During his time in exile he met Devlin in Brussels, and the pair returned to Congo together in 1960. Becoming a colonel and chief of staff of the army, Mobutu used these positions to effect what he called a peaceful revolution , more commonly known as a coup d'état. Lumumba had not
foreign assistance, while the IMF and World Bank gave more in loans (Ibid). Mobutu s wealth trickled-down to his selected cronies, and his absolute control of the central bank enabled him to make a mockery of parliamentary budget appropriations , 10% of the allocated resources went to schools and teachers and 1/3 of the allocated healthcare budget to intended recipients (Ibid, p.114). Mobutu s monopoly of violence depended on US military and financial aid, and political wrangling stunted growth, while hyperinflation created recessions and huge conflicts. Such conflicts led to Africa s war , and after over a decade 5.4 million people died due to direct fighting, displacement, malnutrition and starvation. The onus of responsibility for DR Congo s poverty, then, is with the elite groups within the DR Congo, who were organising and directly carrying out the political oppression. These elites, however, were trained and funded by Western powers, including the American and British governments, who provided direct military support for Mobutu during several coup attempts. In exchange, the US received access to the country s vast natural resources and strategic military position, even acknowledging the deprivation of the Congolese people (Berkeley, 2001). Debt One the most real consequences for the people within developing countries is that no matter how much a leader steals from a country, how much the IMF or World Bank provide in aid , or how many protectionist measures richer countries implement to make their goods more competitive than those of poorer countries, it is the poor who must pay the price. That poverty is increasing while an elite minority gets richer is a clear consequence of that rich elite siphoning off loans and financial assistance, with little or no benefit for others. It is these ordinary citizens, however, who must pay for the past and present loans. Thus, despite numerous wars, coup attempts, assassinations, and an economy in ruin, it is those displaced and impoverished people who must pay the balance and the debt service to those who supported despotic leaders like Mobutu, profiting from their country s ruin. One of the most difficult issues to reconcile is the motive of such institutions. Despite claiming to be concerned with reducing poverty, a brief look at policies and actions reveals a greater concern for macroeconomic factors and special business interests (Stiglitz, 2002 & 2007). Latin America and the Caribbean, for example, paid Northern creditors $1.165 trillion in debt service alone, over the last two decades of the twentieth century. To eliminate Peru s extreme poverty, where 49% of the population live on less than $2 a day, would cost $332 million annually; tellingly, Peru pays five times that amount in debt repayments (Boyd, 1999). Many countries take out new loans to pay for debt service, inflation, and the original value of the old loans, creating a self-perpetuating cycle. Africa, Asia, Latin America and the Caribbean region owed $610 billion in 1980, a figure which grew nearly four-fold to $2.3 trillion in 1997. A 400% increase in seventeen years is unsustainable, and many countries cannot afford to repay their debts and invest in social services to benefit their people. Debt service in Honduras, for example, is 11% of GDP, double what the country invests in health and education. By the end of the twentieth century,
been assassinated by this point, but had been arrested, and despite escaping once he was caught again, and then tortured and killed. Devlin noted that although he had the approval and ability to assassinate him, this matter was dealt with internally , allowing Washington to take no responsibility (Berkeley, 2001).
Honduras had paid over $500 million in debt service, still owing $4.7 billion. In some countries debt service counts for 20% of GDP and for Brazil and Argentina, who were once hailed as free -market success stories, debt in excess of $250 billion and $150 billion respectively have led the countries to become some of the most unequal societies in the world. Argentinean debt increased 350% in the last decade of the twentieth century, while in a single year Brazil s debt rose 48% due to the devaluation of the real, Brazil s currency (Potter, 2000, pp. 70-71).4 This debt is in itself crippling, but much of the aid does not go to the poorest countries5, while the debt for the 60 poorest countries in the world rose from $25 billion in 1970 to $523 billion in 2002 (Shah, 2005).6 In Argentina, each person therefore owes $4,000 to the banks and institutions of the rich countries, while each Brazilian owes $1,300. This per capita debt expresses how some of the poorest people in the world are legally required to repay the debts of political leaders they neither elected nor wished for. It is not the Argentinean and Brazilian States who will repay the debt, but taxes collected from these people. In many cases elected leaders were even overthrown by the countries who now demand those repayments for aid given to the leaders they imposed upon that population. This, of course, places huge responsibility with the governments and institutions of the rich countries too, who not only profited from the exploitation of developing countries, but often directly contributed.7 Debt has become so profitable that for every $1 given in aid over $25 is given back in debt repayments (Shah, 2010). Vulture Funds Aside from a heavily unfavourable trading system and crippling debts, the Jubilee campaign have noted the growing predatory behaviour of vulture funds companies buying debt cheaply and suing developing countries in Western courts for the full value. One of the most high profile cases involved Zambia, a country where 72.9% of the population lived below the $1 a day poverty-line in 1998. Agricultural equipment and services were bought from Romania, on credit, but the country found itself unable to service the debt. In 1999 Zambia and Romania agreed to cancel the debt for $3.28 million. Donegal International, founded by Michael Sheehan, bought the debt before the agreement was finalised, and seven years later sued Zambia for the full $55 million value. According
The devaluation of currency, and a reduction in public spending, i.e. health and education, are common conditions imposed on countries by the IMF and World Bank when lending. The first is intended to bring exports and imports in line with the value of the currency, to facilitate growth, while the second is intended to ensure the country can repay its debt both are long-term solutions. Unfortunately, focus on such macroeconomic factors, as well as standardised policy with little or no proper investigation into the context of a country, has meant that the short-term pain for long-term growth has often turned into economic collapse. Health and education are themselves conditions for growth in developing countries, a healthy and qualified workforce is essential to any country, while high illiteracy rates will certainly not change by reducing funding in education (Stiglitz 2002 & 2006). 5 In 1988, net aid totalled $48 billion, 28% of which went to the least developed countries. By 1997 this figure was $50 billion, 27% of which went to the least developed countries (Potter, 2000, p.92). 6 J W Smith notes that compound interest accounts for nearly three-quarters of third world debt, the other quarter being actual money borrowed, debt service, etc. (Smith, 1994). 7 There are many examples of elected leaders in developing countries being overthrown, including the Nicaraguan government as later noted. In Chile, too, Salvador Allende was overthrown by a US-sponsored coup in 1973. General Pinochet took power and brought about a particularly violent and repressive regime. During the Cold War, however, his dedication to the free market and suppression of left-wing rebels, however unsavoury, represented geopolitical and economic interests for the US and UK and so this brutality was not only sponsored, but openly advocated by Western leaders (Chomsky, 2003).
to the Jubilee campaign Western courts are more sympathetic to creditors, and so Donegal went through the British High Court, who eventually awarded the company $15.4 million, 65% of what the country believed it was going to save from debt cancellation (Jubilee, 2008). Interestingly, Sheehan s larger company, Debt Advisory International, were accused by the Zambian legal team, headed by Tony Blair s brother William Blair QC, of offering a $2 million bribe to the former Zambian President to make the vulture fund s claim easier. Tellingly, the corporation also contributes $240,000 a year to lobbying firms to give their interests greater weight in Washington (Palast & Goodman, 2007). For million-and-billionaires to establish companies which buy debt cheaply suing the poorest , countries in the world for debt others have promised to cancel seems very quickly to be, as British Prime Minister Gordon Brown described it, morally outrageous (Ibid). One of the most notorious names in the industry of vulture funds is billionaire Paul Singer. In 1996 his company bought discounted Peruvian debt for $11 million, later threatening to bankrupt the country if it didn t pay the full value of $58 million, a figure he received. More recently, he has sued the Republic of Congo, one of DR Congo s neighbours, for $400 million, for a debt bought for just $10 million. Interestingly, Paul Singer was also the biggest individual contributor to George Bush, donating $1.7 million since Bush s first presidential campaign, also pledging $15 million to Rudy Giuliani s campaign to be New York Mayor (Ibid). The clear indication, then, is that the global economic order is established in favour of the rich elite, who in a modern world are better able to manoeuvre themselves through complex legal systems and influence politics directly in coup attempts and assassinations, or more indirectly through lobbying and donations. The consequence, however, is poverty for most of the world s population no hyperbole or exaggeration, given the dire conditions many people live through daily in their struggle for survival. There are, of course, many who are campaigning and fighting for a more just global system, including many in those countries who promised debt cancellation but couldn t foresee the actions of vulture funds or their own governments. However the very legal system which allowed this is the system which gave those countries their respective advantages and allowed them to exploit many developing countries. Perhaps Gordon Brown s moral abhorrence towards such actions shows a growing consideration for changing the rules of the game, but for the moment those rules remain the same, and it was Britain s own High Court which ruled in favour of Donegal International, to the detriment of the Zambian people. Conditions of Trade The conditions of trade which often accompany debt cancellation provide another sticking point. The IMF, for example, requires multiple conditions before accepting countries in their heavily indebted countries (HIDC) debt cancellation programme. Many of these conditions relate to removing barriers to trade, allowing foreign companies access to their domestic markets, while cutbacks in health and education are suggested, sometimes very forcefully, to cut back public spending and ensure countries can repay their loans (Stiglitz, 2002 & 2007). While sometimes successful in controlling inflation generally, the price of food and drugs has often increased, hitting the poorest hardest (Potter, 2000). The World Bank s programme, too, uses conditions which focus on similar goals. The British government were highly prominent in these decisions, Gordon Brown stating that debt forgiveness would be given should the countries use the relief productively, arguing that both 5
the IMF and World Bank will show how together macroeconomic, structural growth and anti-poverty programmes can bring less poverty and more growth . However John Pilger notes that there is no example of macro-economic, structural reform programmes, i.e. laissez-faire capitalism, reducing mass poverty, instead only many examples to the contrary8 (Pilger, 2000). Clare Short, Secretary of State for International Development at the time, announced the untying of British aid from British companies, arguing it is unfair that poor countries must be restricted to dealing with British companies. Often the British government imposed the condition that when borrowing money developing countries must purchase goods only from their companies, including goods for food and healthcare. Beyond the headlines, however, it was found that the Blair government was at the forefront of liberalising the entire procurement and contracting system in the third world , an industry worth $3 trillion, allowing multi-national corporations and the special interests to secure contracts in many previously unavailable markets (Ibid). These business interests, attached to loans and other forms of aid , have been estimated to cost developing countries $350 billion annually in trade (Potter, 2000). Debt and trade liberalisation, then, help create the unlevel 9 playing field which Western governments and businesses have used to extract huge profits. Shared Institutions On a practical level it is necessary to take a case-by-case study to assign responsibility for poverty. However if figures are correct, that $28 billion a year would provide basic education, water sanitation and nutrition for all people, this is clearly an achievable goal which the developed countries are partially responsible for, considering their profit from the current system (Shah, 2010). There is also, then, a need to reform the global trade system which, as Pogge notes, is built on unfair advantages from the initial existence of the State:
Any group controlling a preponderance of the means of coercion within a country is internationally recognized as the legitimate government of this country s territory and people regardless of how this group came to power, of how it exercises power, and of the extent to which it may be supported or opposed by the population it rules. (Pogge, 2002, p.112)
He cites how the Saudis, Suharto and Mobutu, with access to credit, could finance their regimes. Additionally, owning the country s resources, including the right to sell them to corporations and
The documentary Trade Rules are Nuts, for example, notes how Senegal and Mozambique were provided assistance, conditions of which were to reduce public spending, i.e. health and education, liberalise markets and privatisation. Senegal and Mozambique s growing industries collapsed under the weight of foreign competition, a regular occurrence former World Bank Chief Economist Joseph Stiglitz notes for the hypocrisy of the double-standards of such institutions imposing these conditions. The US and Europe, for example, have some of the highest subsidies and tariffs in the world, making it impossible for developing countries to compete (Jane 2002, Stiglitz 2002 &2006) 9 It has been estimated that trade liberalisation benefits only those countries with per capita incomes above $10,000, often severely damaging others who are forced to compete on an unfair playing field. In one example of calculated hypocrisy, the US offered to open their markets to 97% of developing countries goods during WTO negotiations. Although it looks good as a headline, the details show the number was specifically chosen to exclude all those competitive foreign goods, for example Bangladeshi textiles, while Bangladesh would be free to export jet engines and similar goods it is incapable of producing, in order to protect American markets (Potter, 2000).
governments, buyers are recognized anywhere in the world as the legitimate owner of these resources (Ibid, p.113). This international resource privilege helps maintain the rule of such leaders, and Pogge therefore assigns responsibility to those profiting from this system. Nagel, however, argues that the coercive nature of the State exists domestically. In this sense, justice is a requirement only of the State, precisely because of its coercive element: Justice is concerned with the relations between the conditions of different classes of people, and the causes of inequality between them (Nagel, 2005, p.119). Therefore, The right to justice is the right that the society one lives in be justly governed (Ibid, p.132). The issue with such an argument, however, is that it applies only to the independent State. No modern State has evolved without the interference of others. In particular, the right to a justly governed society has frequently been abused by external States, thus assigning them some responsibility for the subsequent poverty. Beginning with the injustice of colonialism, poverty is directly caused by the decisions of unjust leaders, often established by developed countries. Demands for justice, then, exist internationally in such cases. Mobutu is one noted example, but Pogge also cites Suharto, the only leader of the twentieth century considered more corrupt than Mobutu.10 With plenty of other examples, including Western-sponsored dictators throughout Africa, Asia and Latin America, there are serious questions of accountability (Chomsky, 2003 & 2007, & Hebditch and Connor 2005). Even the World Court have sided with developing countries on occasion, but the sheer power of the US, UK, and others, including their veto power in the UN and permanence in the Security Council, postpone or overrule their decisions.11 The Benefits of Globalisation Some argue, however, that there are many benefits to the global economic order. They suggest that the industrialisation of developing countries would not have occurred without such external intervention and, while poverty may exist, advancements in healthcare and education have meant many more do not. Risse, therefore, asks whether it is the feat of our global civilization that 34,000 children die daily of preventable causes, or that many more than this number do not (Risse, 2005). More detailed statistics suggest a lower number of deaths, improving the point that advancements in medicines have eliminated many diseases, and countries have access to technologies and resources which would otherwise be impossible. Such an argument is reinforced by an unlikely source, as even Karl Marx acknowledged that British rule in India would bring enhanced
The coercion Suharto exerted over the Indonesians was directly funded by British and American governments, Margaret Thatcher notably called him one of our very best and important friends (Pilger, 2008), while President Nixon, due to the country s natural resources, geopolitics and business opportunities, described Indonesia as the greatest prize in South-East Asia (Pilger, 1993, p.244). After supporting his coup, the CIA provided Suharto with a list of suspected communists, a list he used to kill up to one million people. 11 In Nicaragua, for example, the US-backed Somoza dictatorship had been overthrown by the people. The newly elected Nicaraguan government was even lauded by Amnesty International and the Inter-American Development Bank for social and economic progress respectively. However US interests were threatened and the CIA feared a backlash in other South American countries, as Nicaragua had overthrown the US-backed government to achieve such feats. They subsequently embarked on a terrorist bombing campaign which killed 1% of the population in an attempt to force the country to accept help from the Soviets, giving a pretext for direct invasion. Instead, Nicaragua appealed to the World Court for help, and were awarded $17 billion compensation, but this legal process was never completed as the US stepped up its campaign and overthrew the Nicaraguan government (Chomsky, 2003).
transport and trade opportunities, in themselves leading to greater development and industrialisation as the British realised that the transformation of India into a reproductive country [had] a vital importance to them (Marx, 1853). There is a limit to such benefits, however. Previous evidence has suggested that while many countries have had access to greater technology and industrialisation, their own populations have suffered. Many still have no access to such technologies precisely because they cannot afford it . Indeed Marx later noted that The Indians themselves will not reap the fruits of the new elements of society , and with more people in poverty than any other country, this seems accurate (Ibid). These limits suggest that poverty reduction could be greater and have occurred much earlier without special interests dominating the financial system. Risse s question, How does the global order harm the poor? is clearly answered in many cases, and despite some improvements for a few, the vast majority have suffered as a result of that order. Responsibility To assign specific responsibility requires a case-by-case study of each country. General trends, though, have made huge impacts on the lives of millions, if not billions, of people, while for a small minority the global order has provided a platform to great riches. This platform has seemingly been built on many of the poorest people, but reforming the global order would also benefit the middleclasses. For example, the British government subsidise their arms industry nearly £900 million per year, roughly £13,000 per job. Eliminating such subsidies would save tax-payers money and, more importantly in the agricultural and healthcare industries, would also provide cheaper necessary goods (Thomas, 2006). Corruption, lack of infrastructure, mismanagement and similar causes are certainly to blame for a large amount of poverty; however these are symptoms, and are themselves a result of the actions of political and economic elites. Globalisation has led to greater levels of inequality and insecurity in the world, only the richest have consistently benefited, whilst wealth has predictably failed to trickle-down (Stiglitz, 2002). Responsibility lies with everyone who plays some role in this system, not just because of the exploitation of past policies and the benefits we enjoy as a result, but also because we can help others without harming ourselves. Peter Singer suggests morality demands we help a child should we see them drowning nearby (Singer, 1972).12 Singer contends that it shouldn t matter if the child is in front of us or millions of miles away. As Nagel suggests, Humanitarian duties hold in virtue of the absolute rather than the relative level of need (Nagel, 2005, p.119), but with the right to a justly governed society itself globalised, justice is now a global issue. Responsibility for alleviating poverty is shared across the developed countries, who continue to benefit from the poverty of entire regions. Governments, multinational corporations, and organisations such as the IMF and World Bank have all had a hand in both causing global poverty. They also have the power to change that situation, and so long as they
Originally the case-study of the Chinese Philosopher Mozi. He used it to show that everyone has a fundamental sprout of goodness, and that it was external forces which corrupted each person s innate path to goodness. In a modern context, this idea suggests that it is the lack of direct information and similar reasons which cause us to overlook the suffering of people from other countries. With the proper knowledge and evidence we would therefore help (Mozi, 2001).
remain accountable to the populations they serve, it is the responsibility of those citizens to demand no more children drown, starve, or die from preventable illness in their name.
Word Count: 3,621 9
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