BOOK REVIEW
IBON and Chossudovsky’s Globalization of Poverty

Michel Chossudovsky applies a political prescription to his critical research, which is what research should be. Socio-economic investigations inevitably demand answers. The answers are now provided by anti-globalization and anti-imperialist movement of peoples who are increasingly armed with the truths and lessons drawn from critical researches and from their own social investigations and historical struggles.

By Bobby Tuazon
Bulatlat

The other side of the crisis is that the state’s economic policies have been engineered by policy makers whose own interests – trading, banking, real estate and others – profit from the same conditions that are imposed on the country by the global institutions. They subscribe to the neo-liberal theories of privatization, trade liberalization, deregulation and other bitter economic prescriptions that impoverish and oppress the people no end.

Forced to explain, government functionaries reduce the country’s chronic financial and economic crisis into publicly-palatable micro problems such as budget deficit, corruption or poor tax collection. This is because either they want to divert public scrutiny from the stink created by their own garbage policies or their myopic neo-liberal perspectives prevent them from delving into the roots and complexities of the crisis.

The Philippine press - monopolized as it is by the same interests and being, by and large, beholden to the powers-that-be in government - echo the same lies and fallacies. Erroneously, it is fixated to the notion that economic issues are concerns that only government experts, corporate executives and the academic elite from the University of the Philippines, Wharton, Asian Institute of Management and other business schools are qualified to discuss for the public’s enlightenment.

They forget the fact that there are some institutions, progressive academics, research groups, alternative media, public advocates and mass leaders from grassroots organizations who are not only capable of debating the issues but also in ferreting out the truth from the lies and prevarications peddled by the same neo-liberal and bourgeois thinkers who, in the first place, brought this country of ours into what it is today. Unlike the paid hacks and spin doctors of Malacañang, truth is on their side because their own socio-economic and political investigations are done in the spirit of public service and volunteerism and not because they have some private interests to protect.

IBON Foundation

IBON Foundation is one research and think tank organization that has consistently earned the ire of government and shaken the intellectual claims of mainstream economists. Now in its 26^th year, IBON has been the steward of critical research in the country, conducting investigations into economic, social, political and even military issues least explored by other well-funded research agencies. Its reports, surveys and publications essentially take the people’s perspective and proceed from the vision that research should be critical and analytical and should be geared toward social and political transformation. This, I think, is one major reason why Malacañang and the corporate elite, for lack of sound arguments or out of fear, often dismiss IBON as “leftist.”

When the story about the fiscal crisis came out more than a month ago, cause-oriented groups, progressive NGOs, reporters and even many academics and students naturally gravitated toward IBON as a source of information and analysis. As it is wont to do whenever some pressing issues develop, IBON came out with a primer on the fiscal crisis and other publications and became part of a series of forums tackling the financial crisis. Very timely, IBON has published or co-published several books about globalization, world poverty, the U.S. war of aggression in Iraq and Jose Maria Sison: At Home in the World – Portrait of a Revolutionary, co-authored by Ninotchka Rosca and Prof. Sison.

One of the books most sought after at IBON is Michel Chossudovsky’s The Globalization of Poverty and the New World Order, whose second edition was originally published in 2003 by Global Outlook in Ontario, Canada. Chossudovsky is a professor of economics at the University of Ottawa and director of the Center for Research on Globalization (CRG), which hosts the critically-acclaimed website www.globalresearch.ca. His writings have been translated into more than 20 languages. He is also one of the leading intellectuals of the anti-war movement.

Chossudovsky’s 367-page Globalization of Poverty describes the nuances of a New World Order which sustains itself on human poverty, social injustice, wars of aggression that it instigates and undermines the rights of women and children. Specifically relevant to the Philippines’ financial crisis is Chapter 3 on “Policing Countries through Loan ‘Conditionalities.’” Here, the author outlines how indebted countries such as the Philippines have enlarged their debt by being forced to adopt the IMF’s policy prescriptions under the structural adjustment program (SAP) for obtaining new loans from multilateral institutions belonging to the Paris and London Clubs. The package of structural reforms under SAP, dubbed as “economic stabilization program,” includes trade liberalization, deregulation of the banking system and other industries including oil, the privatization of state enterprises, tax reform, the privatization of agricultural land, wage freeze, “poverty alleviation” and “good governance.”

As a result, the IMF’s reform program diverted resources away from the local economy and allowed the dumping of large quantities of imports from the rich countries exacerbating trade imbalances. How the “stabilization measures” contribute to enlarging the external debt is explained by Chossudovsky: among others, the new policy loans are used to pay back old debt thus increasing the debt stock; and trade liberalization forces the new loans to be used for importing goods from the First World-dominated world market as domestic production is replaced by imports. Ironically, the IMF-WB motto is “short-term pain for long-term gain.” Poor countries have yet to hurdle agonizingly the hump of long-term pain.

Financial disasters

Chossudovsky illustrates how IMF-WB policy reform sowed financial disasters in many countries particularly in Asia and the Middle East, Latin America, Africa, the Balkan states as well as Russia and former member-countries of the Soviet bloc. For instance, he cites the case of Vietnam where, he notes, the more than 50 years of struggle against French and American occupation is being rewritten by neo-liberalism and free market mechanism. The same economic pills would explain the famines and civil wars that have gripped many African countries including Somalia, Rwanda and sub-Saharan Africa as well as the ethnic strifes in the Balkan states that were fomented by IMF-WB and the armed intervention of the United States and NATO countries.

In a similar vein, the Philippines’ chronic financial crisis continues to agitate unrest particularly in the labor, peasant and urban poor front who comprise the majority of the population. It fuels the Left-led armed revolution and the Moro struggle for self-determination. In 1959, a financial crisis ensued after the U.S. Export-Import Bank and U.S. private banks cut off loans to the country and by 1961, following the peso devaluation under Diosdado Macapagal, foreign debts ballooned to $600 million.

Ferdinand Marcos went on a frenzy of heavy foreign borrowings via IMF-WB that led to a severe financial crisis in 1983. By the fall of the Marcos dictatorship in 1986 foreign debt had risen to $27 billion and local public debt to P144.4 billion. All Marcos’ predecessors continued to rely on foreign borrowings. But Gloria Macapagal-Arroyo’s huge foreign borrowings surpassed the combined borrowings of Ramos and Estrada so that today government’s total consolidated  public debt is P5.9 trillion or 137 percent of the GDP.

The resurgence of social unrest and the armed revolutionary movement, which began in 1969, has been fueled by this worsening financial crisis. Crisis begets revolution.

But economic devastation is a global phenomenon as well and is taking place alongside wars of aggression mounted by the United States and other monopoly-capitalist countries in their drive for world hegemony. “War physically destroys what has not been dismantled through deregulation, privatization and the imposition of ‘free market’ reforms,” asserts Chossudovsky. “War and globalization go hand in hand.” This is the reason why, he believes, the struggle against global capitalism must bring together social movements from all over the world “in a common pursuit and commitment to the elimination of poverty and a lasting world peace.”

Chossudovsky applies a political prescription to his critical research, which is what research should be. Investigations into the meltdown of financial markets and the destruction of national economies which makes independent states vulnerable to multinational domination and military intervention and the aggravation of global poverty will inevitably demand answers. The answers are now provided by anti-globalization and anti-imperialist struggles now rising across all corners of the world by peoples increasingly armed with the truths and lessons drawn from critical researches and from the people’s own social investigations and historical experiences. Bulatlat

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