one of the best and shortest analyses of how big money
takes over the world, without warfare. Haiti, front and center,
opens the way to see other victims and understand the system itself.
Ed
From: "Sid Shniad" <shniad@gmail.com>
There's real hope from Haiti and it's not what you expect
"Until 1994, the country at least grew its own staple crop: rice. But the
IMF came in and ordered the government to cut its rice tariff from 35 per
cent to 3 per cent. Suddenly the market was flooded with rice grown in the
US by hugely subsidised farmers, and Haiti's rice farmers went bust.
Hundreds of thousands swelled to the slum-cities and sweat shops of
Port-au-Prince, where they built mud huts – and were buried in 2010. The IMF
reduced the country from self-sufficiency to dependency, in a move known
locally as "the Plan of Death". It was one of the external political
earthquakes that made this natural earthquake far more deadly."
*By Johann Hari *
The IndependentUK: 5 February 2010
In the weeks after a disaster like the Haiti earthquake, journalists
always search for an upbeat twist to the tale. You know it by now – the baby
found alive after a week under wreckage. But this time, a shaft of light has
parted the rubble and the corpses and the unshakeable grief that could last
for years. In the middle of the Haitian people's nightmare, a system that
has kept hundreds of millions like them poor and broken might just have
shown its first fracture.
To understand what has happened, you have to delve into a long-suppressed
history – one you are not supposed to hear. Since the 1970s, we have been
told that the gospel of the Free Market has rolled out across the world
because the People demand it. We have been informed that free elections will
lead ineluctably to people choosing to roll back the state, privatise the
essentials of life, and leave the rich to work their magic for us all. We
have seen these trends wash across the world because ordinary people believe
they offer the best possible system.
There's just one snag: it's not true. In reality, this gospel has proved
impossible to impose in any democracy. Few
politicians<http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-theres-real-hope-from-haiti-and-its-not-what-you-expect-1889958.html#>have
believed in its core tenets more than Ronald Reagan and Margaret
Thatcher – yet at the end of their long terms, after bitter battles, the
proportion of GDP spent by the state remained the same. Why? Because these
doctrines are extremely unpopular, and wherever they are tried, they are
fiercely resisted. There are majorities in every free country for a mixed
economy, where markets are counter-balanced by a strong and active state.
The gospel spread across the poor world because their
governments<http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-theres-real-hope-from-haiti-and-its-not-what-you-expect-1889958.html#>were
given no choice. In her masterpiece The Shock Doctrine, Naomi Klein
shows how these policies were forced on the world's poor against their will.
Sometimes rich governments did it simply by killing the elected leaders and
installing a servile dictator, as in Chile. Usually the methods were more
subtle.
One of the most marked came in the form of "loans" from the International
Monetary
Fund<http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-theres-real-hope-from-haiti-and-its-not-what-you-expect-1889958.html#>(IMF)
and the World
Bank<http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-theres-real-hope-from-haiti-and-its-not-what-you-expect-1889958.html#>.
The IMF would approach poor countries and offer them desperately needed
cash. But from the 1970s on, they would, in return, require the countries to
introduce "structural adjustments" to their economy. The medicine was always
the same: end all subsidies for the poor, slash state spending on health and
education, deregulate your financial sector, throw your markets open.
Here's a typical example of what happened next. In Malawi, the country's
soil had become badly depleted, so the government decided to subsidise
fertiliser for farmers. When the IMF and World Bank came in, they called
this "a market distortion", and ordered Malawi to stop at once. They did. So
the country's crops failed, and famine scythed through the population. Tens
of thousands starved to death. The Malawian government eventually listened
to the cries of its people, kicked out the IMF, and reintroduced the
subsidies – and the famine stopped that year. The country is now an exporter
of food again.
When people are living so close to the edge, even small increases in prices
can break them. The IMF systematically disregards the fact that every
country that has lifted itself out of poverty has done the opposite of its
commands. For example, South Korea went from poverty to plenty in just two
generations by protecting and heavily subsiding its industries and jacking
up state subsidies – to the IMF's horror.
Even Professor Jeffrey Sachs – one of their former lackeys – calls the IMF
"the Typhoid Mary of emerging markets, spreading
recessions<http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-theres-real-hope-from-haiti-and-its-not-what-you-expect-1889958.html#>in
country after country". So why do they carry on like this? Primarily,
it
is because IMF programmes work very well – for the rich. They ensure that we
get access to the cheapest possible labour and can help ourselves to the
glistening resources that inexplicably ended up under their soil.
The serve-the-rich ideology that caused our economy to crash in 2008 has
been crashing poor countries for a long time. But there's a sting. After
decades of ordering poor countries to slash subsidies and state spending,
the IMF reacted to the recession by urging rich countries ... to spend a
fortune subsidising the banks, and to increase state spending. They wouldn't
dream of drinking the medicine they have been serving out to the poor for so
long. It's not as if the IMF has learned from its mistakes: it has just
forced countries from El Salvador to Ukraine to Pakistan to sign
deals<http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-theres-real-hope-from-haiti-and-its-not-what-you-expect-1889958.html#>committing
themselves to leave the state inert in the face of severe
external shocks to their economies. No: the IMF only imposes its deadly
prescriptions on those too weak and too distant to matter.
Here's where Haiti comes in. The IMF agenda has often been forced on
populations when they are least able to resist – after a military coup, a
massacre, or a natural disaster. For example, the people of Thailand fought
for years against clearing their locals off their beaches to make way for
holiday resorts, and voted against the privatisation of water and
electricity. But immediately after the tsunami, both were pushed through.
After the earthquake, something similar was poised to happen to Haiti. The
IMF announced a $100m loan, stapled on to an earlier loan, which requires
Haiti to raise electricity prices, and freeze wages for the public-sector
workers who are needed to rebuild the country. So when people emerged from
the rubble, they would find an economy rigged even more heavily against
them.
There is no doubt about what the Haitian people would think: they know the
IMF. Until 1994, the country at least grew its own staple crop: rice. But
the IMF came in and ordered the government to cut its rice tariff from 35
per cent to 3 per cent. Suddenly the market was flooded with rice grown in
the US by hugely subsidised farmers, and Haiti's rice farmers went bust.
Hundreds of thousands swelled to the slum-cities and sweat shops of
Port-au-Prince, where they built mud huts – and were buried in 2010. The IMF
reduced the country from self-sufficiency to dependency, in a move known
locally as "the Plan of Death". It was one of the external political
earthquakes that made this natural earthquake far more deadly.
But something new and startling happened this month. For the first time, the
IMF was stopped from shafting a poor country – by a rebellion here in the
rich world. Hours after the quake, a Facebook group called "No Shock
Doctrine For Haiti" had tens of thousands of members, and orchestrated a
petition to the IMF of over 150,000 signatures demanding the loan become a
no-strings grant. After Naomi Klein's mega-selling exposé, there was a
vigilant public who wanted to see that the money they were donating to
charity was not going to be cancelled out by the IMF.
And it worked. The IMF backed down. It publicly renounced its conditions –
and even said it would work to cancel Haiti's entire debt. This is the first
sign that exposing and opposing the IMF's agenda works. Klein says it is
"unprecedented in my experience, and shows that public pressure in moments
of disaster can seriously subvert shock doctrine tactics." Of course, the
IMF needs to be watched vigilantly. Already it seems to be rolling back some
of its panicked initial rhetoric and saying that "beyond the emergency
phase" it may go back to business as usual. Very powerful interests want the
IMF to continue to dance to their tune.
But thanks to all the ordinary Europeans and Americans who pushed back,
Haiti will not be IMF-ed up now, in its darkest hour. Not this time. Not
these people. Not again. These should be the first baby-steps of a campaign
to finally stop the IMF's poverty-promoting machine steam-rolling across
continents. On the political Richter scale, that would mark a 7.0 – for the
causes of democracy and justice.
j.hari@independent.co.uk
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