FREQUENTLY ASKED QUESTIONS ABOUT GLOBALIZATION
AND ALTERNATIVES

The Americas

From 1960 to 1980, before the IMF and neos took over, income per person grew 73 percent in Latin America.

Neoism began in the Americas with the bloody, U.S.-backed coup in Chile that put the brutal dictator Agusta Pinochet in power.

In the wake of that coup, Pinochet invited U.S. economists from the University of Chicago test their ideas. When these experiments failed or were unpopular, which was always, state terrorism kept the neos in power.

U.S. President Clinton came to Chile for the launching of FTAA negotiations and proclaimed Chile to be "the model for the hemisphere." We cannot say we were not warned.

First, some notes:

For the GDP of Mexico to keep up with population growth, it must grow by 7% every year. This has only happened once in the 7 years of NAFTA so far.

In Mexico, technically "employed" means that a person has worked at least one hour in the past week. This means that "employed" people may be underemployed or doing unpaid work.

NAFTA

Neos said that NAFTA would bring Mexico lots of high-paying jobs, among other promises.

Farms

Instead of bringing industrial development to Mexico, the percentage of farm workers has actually stayed the since NAFTA. Before NAFTA, cities had been growing faster.

The share of the labor force in less-urbanized areas and the share engaged in agricultural activities have both stayed about the same, around 50% and 20-25%. (INEGI-ENE 1991 and 1997). (4)

Cities

Since NAFTA, more workers are employed in low-productivity, low-pay self-employment (street vendors, for example) or businesses with less than five employees. Self-employed workers increased by 50%, and the share of workers having unpaid jobs as their first occupation doubled.

These trends have hit the young the most. The share of workers aged 12 to 14 doing unpaid work rose from 40% to 60% between 1991 and 1998.

High-paying jobs in manufacturing, construction, trade, and communications industries fell in percentage. Manufacturing wages fell by about 21% between 1993 and 1999, and fringe benifits were lost. (The December 23 1996 Business Week admited (on Page 30) that worker's real wages in Mexico had fallen 21% in two years. Why is this bad? Because people are pouring their lives into their work and getting less in return? No, because "Consumer buying will likely remain weak" .) Between 1991 and 1998 wages decreased by fell by 27%, while overall hourly income from labor decreased 40%.

Unpaid workers increased from 4.6% to 12%.

Maquiladoras

Most of the growth in Mexico is maquiladora factories, which are isolated from the rest of the Mexican economy - for example, the 1995 recession across Mexico had little effect on them.

Maquiladora workers, mostly young women, live in squalor and are often subjected to sexual harassment. Long working hours strain their family ties and limit their educational opportunities.

In Ciudad Ju rez, Mexico, across the Rio Grande from El Paso, Texas, starting salaries average less than a dollar an hour, and most workers wear out due to the monotonous work before they can get a raise. Factories have poor ventilation, unsanitary bathrooms, and abusive managers. It is also an example of "less government": running water and sanitation are rare, roads are mostly unpaved, schools are severely overcrowded, and bus service is so sporadic that many workers rise before dawn to make it from their shantytowns to work on time.

With NAFTA and other neo policy in Mexico, lives are unstable and people get less for their hard work. Of course, the wealthy are wealthier - so when neos say "no pain, no gain" who know whos pain and whos gain they are talking about.

Resistence

On the day NAFTA came into affect the Zapatista uprising began in Chiapas. Despite the brutal crackdown, in the year 2000 hundreds of thousands of Zapatista supporters rallied in Mexico City.

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Argentina is known for being one of the IMF 's favourite pupils, even though external debt has increased from 43 to 133 billion dollars between 1983 and 2000.

Today 90% of the banks and 40% of industry are owned by investors in rich nations, health and education are in tatters, the average salary is worth half its 1974 value.

1976-83 A military dictatorship creates a massive debt, borrowing from the IMF. Most of the money go to corrupt friends of the dictator. The bill is left to be paid off by President Raul Alfonsin.

July 1988, serious recession begins. So far there has been no recovery.

1989

President Raul Alfonsin is ruined by massive strikes. He goes, but the IMF stays in power.

In March 2000, the IMF approves a US$7.2 billion three-year stand-by credit. The strings attached is that Argentina must continue with "the proposed labour market reform and deregulation", and "the further reform of the social security system". The plan raises taxes from 8 to 22 per cent.

December 1999

Even though the people democratically elected a centre-left Government, that government is forced to break its promises and reduce the rights of workers. Strikes begin.

27 April 2000

Thousands protest the IMF reforms, about 50 are arrested 30 people injured.

May 2000

Social security is cut. More protests, dozens injured and many arrested. Rural communities in a similar situation block roads when government officials visit.

31 May 2000

80,000 people take to the streets in protest, even the Catholic Church (usually too conservative to support such actions) and politicians from both the governing and opposition parties join in to "insist that the Government apply the programme for which it was elected" instead of the IMF policies.

9 June 2000

A now-illegal 24-hour general strike is supported by more than 7.2 million workers. The approval ratings for the Government's economic policy fall from 35 per cent in January to 13 per cent in July.

29 August 2000

Teachers and scientists go on a one-day strike to protest against a 12% cut in wages.

In August, the Financial Times reports how "a wave of discontent is sweeping across Argentina, eroding the government's political capital and prompting it to adopt desperate measures to create jobs and kick-start the economy. But the measures may have backfired and put the brakes on the economy [and] even supporters of the governing Alliance will be looking to distance themselves from an unpopular government." The neos attempts to blame a democractically elected government for IMF disasters does not succeed: In a survey by the Argentina-based Centre for Public Opinion Studies, 70% blamed the IMF for the new policies, 65 per cent believe its policies are not successful, and 88 per cent maintain that the government should fight back against the IMF.

The Argentine courts find the IMF directly responsible for Argentina's debt.

Judge Jorge Ballestro points out that the debt is part of "a damaging economic policy that forced [Argentina] on its knees through various methods, and which tended to benefit and support private companies - national and foreign - to the detriment of society." Moree than 5,000 people gather outside the congressional building in the capital to demonstrate their support.

5 Sept 2000

Pedro Pou, President of the Central Bank of Argentina writes a "Technical Memorandum of Understanding" to Horst Kohler,

Managing Director of the International Monetary Fund.

Under the subheading "improving the conditions of the poor," is an agreement to drop salaries under the government's emergency employment program by 20%, plus "a 12-15 percent cut in salaries" of civil servants, and cutting payments to the aged by 13% under both public and private plans.

The letter then predicts these actions will cause economic production to rise 3.7%. In fact, by the end of March, the nation's GDP had already dropped 2.1% below the year earlier mark, and nosedived since.

Writes Gregory Palast of the Guardian (London)"Still, the IMF's scheme could work. All, that is required is 'flexible' workforce, willing to bend to lower pensions, lower wages or no wages at all. But, to the dismay of Argentina's elite, the worker bees are proving inflexibly obstinate in agreeing to their own impoverishment. One inflexible worker, Anibal Verón, a 37-year-old father of five, lost his job as a bus driver; his company owes him 9 months pay.

Verón joined the 'piqueros,' the angry unemployed who blockade roads (39 blockades began just this week). In clearing a blockade in November, the military police allegedly killed him with a bullet to the head.

The death in Genoa of anti-globalization protestor Carlo Guiliani was Page One news in the US and Europe. Verón's death was page zero. Nor did you read about Carlos Santillán, 27 nor Oscar Barrios, 17, gunned down in a church courtyard in Salta Province when the police fired on a protest against the IMF austerity plan."

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Bolivia has been working with the IMF since 1985

In 1986 IMF-puppet president Victor Paz Estensorro decided to turn 15,000 miners into 15,000 peasents. The miners did not like the idea, but jailing a few hundred of them made it easier for them to understand his point of view. 47% of children are malnurished. Unemployment rose to 30%, but then, maybe a third of the population just suddenly got lazy.

February 1996: the World Bank tells Cochabamba's mayor that unless it privatized its water system the city could forget receiving any more World Bank aid for local water development.

In July 1997 World Bank officials told Bolivian President Gonzalo Snchez de Losada during meetings in Washington that privatization of the Cochabamba water system was also a precondition of receiving international debt relief.

In September 1998 Bolivia received an ESAF loan for US$138 million, on the condition that Bolivia "privatise all remaining public enterprises" , including water.

Maria Teresa Segada, a specialist from the Higher University of Sans Andres, says "when the neoliberal economic model was implemented in 1985, government leaders asked the Bolivian people for patience and sacrifice, but now, 15 years later, patience has run out..."

In February 2000, the IMF grants another US$46.1 million PRGF loan in addition to US$1.3 billion in debt relief under the Enhanced HIPC Initiative in return for "progress in the implementation of structural reforms."

December 1999/January 2000

Water is privatized, as the neos suggested, and taken over by International Waters Ltd, (Based in London, Owned by US Bechtel) water prices go up 35%. In Cochabamba, Bolivia's third largest city, they rise by as much as 200%.

The average water bill is estimated to equal 22% of a monthly wage of a self-employed man and 27% for a woman. After protests shut down the city for four days, the Government promises to reverse the rate increase.

February 2000

The Government breaks its promise, resulting in more protest. 175 protestors are injured and two are blinded. The Government AGAIN promises a price freeze - until November.

April 2000

On April 6, 2000 14 economists, parliamentarians, lawyers and community leaders were invited to discuss the issue. When they came, they were arrested.

When others protested, the army opened fire on the crowd with live ammunition. As many as eight people are killed.

The President (origionally a dictator) set curfews and crushed civil liberties - shutting down radio stations, pulling protest leaders from their beds in the middle of the night, flying them to a remote jungle jail to keep them away.. In La Paz, there are also scattered protests in which 30 people are injured and 11 arrested. In a separate incident, hundreds of police officers go on strike in the capital, demanding salary increases. Eventually the government gives in.

From its US headquarters, Bechtel made a statement saying that the protest had nothing to do with them raising the price of water. They said the protest was against "crackdown on coca-leaf production." In short, they called their opponents crackheads and went back to counting their money.

They also said that they had to rise prices because they planned to buy water at 600% more than they needed to at a dam (Misicuni) that had not even been built.

At the World Bank, low-level technocrats had long ago sided against the Misicuni dam project, and warned of social upheaval if prices rose. Other World Bank hydrologists and technicians created a cheaper plan, which would involve competetion instead of monopoly.

However, the World Bank Director had ignored them and called for price hikes.

This historic uprising - the first time in a decade anywhere in the world that such huge corporations were kicked out of a nation, was mentioned in the Washington Post ... in paragraph 10 of a story, on page 13 of the Style section (repeat: STYLE section).

Weeks later, on April 26, the Financial Times reported that a protest headquarters contained "faded portraits of Che Guevara" in the lead paragraph. That people had been gunned down in the streets was not reported, though it speculated that the protestors were drug smugglers. Why druglords would worry so much about not being able to pay their water bills was not explained.

The editor of the Bolivian newspaper Gente (People) published an investigative series exposing the sweetheart deals between the U.S.-European investors and politically connected Bolivians. At the end of April, Gente's publishers, admitting to threats of financial ruin by the water system's Bolivian partners, demanded that the editor, Luis Bredow, print a retraction of his reports. Bredow printed the paper's retraction ... and his resignation in protest.

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Inter-American Development Bank (IADB) calculates that 10 per cent of Brazil's wealthiest families now take 47 per cent of the country's income. The poorest 10 per cent earn less than 1 per cent of that.

For decades politicians have promised land reform, yet one percent of land owners control 44 percent of the lands.

Pollution is out of control, perhaps because every year the president issues an amnesty to criminal polluters.

When the federal government privatised Rio Light, selling it to Electricite de France and Houston Industries of Texas, 40% of the workers were laid off, wages were cut, and prices were raised. Stock dividends rose 1000% despite massive blackouts.

During the 90s private militias and police have killed several hundred poor landless peasants participating in peaceful occupations of unused or underused lands belonging to wealthy landowners.

In Buenos Aires, the water system was privatized - among the new owners is the World Bank itself! Water prices rose, 7,500 workers were laid off, and "quality" got even worse. Just like every water privatization from the Philippines to East Anglia.

In November 1998, the IMF offered Brazil a US$18 billion stand-by loan. During their fifth review of the agreement the IMF "noted with satisfaction" the situation in Brazil, although it "encouraged the Brazilian authorities to press ahead with their privatisation efforts and the further liberalisation of external trade".

April 2000

A Tribunal on Foreign Debt in Rio de Janeiro claims that "the policies of the IMF have proved disastrous and have increased the foreign debt even more, while imposing the endless moratorium on social spending. Those who must pay the debt are children, workers in rural areas and the countryside, black people, indigenous people and the environment."

September 2000

A referendum asking whether Brazil should discontinue IMF reforms is backed by more than a million people.

All the main cities in Brazil are "crammed" with demostrators calling for the referendum, with more than 100,000 protestors in Sao Paulo. The Government had called the referendum "stupid" and an isolated project undertaken by "minorities" , but was unwilling to test their opinion with a vote.

January 2001: The World Social Forum a mass meeting with over 10,000 participants, debates alternative forms of globalization. A parade is watched by about 10 police, and everything is peaceful.

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On 27 February 1989, structural changes imposed by the IMF were followed by a popular uprising (the caracazo), but is is put down with 4,000 dead.

This nation, repeatedly described as a "democracy" during the FTAA Summit, assassinates a union organizer every three days on average.

This is not enough for Washington, which is working on "Plan Columbia". The government of Colombia has officially acknowledged that in the past 12 months the paramilitaries, who have committed the largest number of crimes against humanity, have increased their forces by 81%, and have expanded their influence to 40% of the country.

IMF overview

In September 1999, the IMF approves a three-year credit worth US$2.7 billion in support of "the government's structural reform agenda" , which has given Columbia a 20% unemployment rate. The IMF calls for this agenda to continue and for Columbia to "downsize the public sector, mainly through privatisation, and reduce public sector spending"(This does not include spending on death squads).

The new budget calls for 5,000 public sector jobs to go and wage increases to be kept below the rate of inflation, with more cuts to social security.

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Often known as the Switzerland of the Americas, Costa Rica has a reputation for democracy, peace and good welfare provision. Even the neo magazine The Economist admits that Costa Rica has had "a democratic tradition, respect for the rule of law and a well-educated workforce."

However, in 1995, Costa Rica was granted an IMF stand-by credit for US$78 million on the condition that "private sector participation in areas previously reserved for the public sector is increased" and "a far greater role by foreign investors in areas such as electricity generation, insurance and banking" is provided for.

Congress passed a law allowing the state telecommunications company, the Costa Rican Electricity Institute (ICE) to be privatised. This would be used as a test to see how other privatization would be treated by the people.

A University of Costa Rica survey finds that 53 per cent oppose the ICE reform while only 20 per cent support it; 92 per cent say the people should have been asked first and 84 per cent believe there should be a referendum. This makes no difference.

March 2000

During protests on 16 March, one person is killed and five are wounded by police gunfire. At least 50 student protesters are arrested. Television images show police beating youths who are trying to run away. Police report that 40 protests have taken place on 21 March all around the country. On 23 March, 10,000 marchers descend on the presidential residence demanding the withdrawal of the bill. In a clash with university students in a San Jose suburb, police beat demonstrators and arrest 52 students.

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IMF overview

In April 2000, the IMF grants a stand-by loan worth US$304 million which will mobilise over $1.7 billion in additional resources from other creditors. The agreement notes that "the programme [of reforms] is very demanding and successful implementation will require firm resolve on the part of the authorities (also known as "dictatorship"), and the support of the Congress and the public at large (which has never happened.)". The reforms include the dollarisation of the economy, wage restraint, the removal of subsidies and "for important structural reforms in the labour market, the oil sector, and privatisation". In the first review of this agreement, the "directors were encouraged by the steps taken to inject more flexibility in the labour market, increase private sector participation in the economy, as well as the commitment to phase out price regulations on domestic fuels and electricity."

7 January 2000

After a year of prices rising by more than 60% and a 7% decline in economic growth, President Jamil Mahaud, declares a state of emergency even though military leaders support the president and insist there is no threat of a coup. The reason for the state of emergency is to crush protests.

10 January 2000

Lawrence Summers, US Treasury Secretary, pledges full support for Ecuador.

15 January 2000

40,000 natives plan a week of protests against the government and IMF, only to be met by 35,000 soldiers and police.

22 January 2000

Military guards switch sides and allow 3,000 protesters occupy Ecuador's Congress building while more than 10,000 protest outside.

Protesters also surrounded the supreme court despite tear gas. The Clinton Whitehouse claims that the protestors "are seeking to establish an unconstitutional regime".

In Guayaquil, Ecuador's second largest city, protests lead to several injuries.

When Mahaud flees the Presidential Palace the military takes power, then puts the vice-president, Gustavo Noboa, in power. The puppet has changed, but the IMF is still in control.

March 2000

In order to qualify for an IMF loan, the Government introduces a package of new laws to reform the labour market and the financial sector, increase privatisation efforts, provide oil pipeline permits and dollarise the economy.

May 2000

The National Educators Union goes on strike for five weeks over the proposed IMF cuts in spending and salaries. Noboa says "I'm willing to go all the way with this. If they want to strike for a year, let them do it. We're not going to back down." Protests by teachers in Quito are dispersed by riot police using tear gas.

June 2000

The Government removes fuel price subsidies, resulting in the rise of gas prices. (Yes, the same prices blamed on enviromentalists).

15 June 2000

A general strike is joined by 30,000 doctors, who stage a 72-hour sit-down protest.

In Quito, protesters who try to march on the government palace are met with tear gas and riot police. One passer-by receives a bullet wound.

In Guayaquil, a bomb explodes outside Citibank and demonstrators are dispersed with tear gas.

26 June 2000

Only 43% of the population supports the "new" Government.

7 August 2000

As the IMF dollarisation bill is debated physical fighting breaks out in the Congress chamber.

10 August 2000

Noboa tries to dissolve Congress, but does not gain military support.

9 September 2000

Ecuador formally adopts the US dollar as its currency. The IMF states that "dollarisation has proceeded rapidly and has calmed the financial markets".

12 September 2000

Ecuador's transition to the dollar turns into chaos as many people are left without the means to buy or sell.

Although trading is now meant to be in dollars, many small shops and stall-holders have been left without coins to exchange.

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IMF overview

The IMF grants a US$21 million loan on 7 June 2000 under the PRGF. The IMF urges the Honduras authorities "to proceed quickly with structural reforms, especially the privatisation of telecommunications and electricity distribution and the reform of the social security and pension system" . On 10 July 2000, Honduras gets US$900 million in debt relief under the Enhanced HIPC Initiative in "recognition by the international community of the country's progress in implementing reforms in macroeconomic, structural and social policies".

May - July 2000

As the IMF forces more service cuts, strikes erupt.

On 12 May, 8,000 hospital workers in 28 hospitals and 500 clinics go on strike. Riot police are deployed in and around public hospitals.

On 26 June, thousands of workers take part in a national strike demanding a raise in the minimum wage. On 27 July, thousands of secondary school teachers go on strike over unpaid wages. Teachers have not been paid since February.

August 2000

As the government plans to privatize electricity, telecommunications and social security a 24-hour general strike breaks out.

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In the 1980s, the U.S. government under Reagan spent several hundred million taxpayers dollars to move US electronics and apparel jobs into 204 low-wage Caribbean "export processing zones". In the end wages and living standards in the Caribbean fell - and so did exports!

In 1991 the U.S. International Trade Commission admitted the plan "has not fueled economic growth and development in the region."

Haiti

In 1980, the Haiti produced 180,000 tons of rice per year.

In 1995, the IMF forced it to slash its tariff on rice by over 47 percent. By 1998 rich production had fallen to 105,000 tons. The only growth was in small farm bankruptsies.

Dominican Republic

When the IMF conquered the Dominican Republic in 1983, bread prices rose 200%.

In April 1984, with a third of the population unemployed and , 0.07% of landowners owning 45% of the land, mass protests erupted. When the dust settled president Blanco said "the armed forces and the national police have given an example of restraint, displaying their high level of professionalism , elevated human feeling and respect for life..." while killing 186 protestors, including a 13-year old girl and a 70-year old woman. 5,000 were arrested.

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Jamaica

Some of the above examples are mixed bags. however, I have saved the best for last. Jamaica shows how democracy is overruled by the race to the bottom, and how dispite being given hhuge advantages, a purely neo government turned a growing democracy into malnurished chaos.

Between 1950 and 1962 Jamaca was growing at a rate of 5 to 6%. Trade expanded 800%. Jamaca boasted parliamentary democracy, free speech, and a higher life expectancy than Portugal - and trade unionism.

In 1972 Micheal Manley was elected. He set out to improve health services, literacy, and give equal wages to women and free secondary education to all.

This could not go unpunished. Investment left, aluminimum corporations moved factories away, and even tourist agents suddenly found the beaches of Jamaica to be somehow less sunny. Unemployment doubled, debts rose.

Despite this, Manley was reelected with a huge majority. When he followed IMF demands, he lost popularity, and in 1980 neo Edward Seaga was elected.

Seaga was the first foreign politician Reagan recieved after inaguration. The US general accounting office said he "hoped to make Jamaica an example of what could be accomplished when assisance was provided to a government that shared the US belief that private-sector growth could lead to development".

And that is just what they did.

Aid to Jamaica was second only to Israel. Reagan gave 700,000,000 taxpayers dollars to Jamaica, and gave Jamaican goods duty-free access tot he USA. Seaga did his part of the bargain and cut 6,200 government jobs in 1984 alone.

The result? Water, electricity and telephone rates doubled, as did the debt by 1989. Anemic mothers and food prices nearly doubled as well, and in 1982 Jamaica had its first polio death in 30 years. 23,000 Banana farmers went out of business. The only growth industries were tourism, drugs, and sweatshops in the "Kingston Free Zone".

On Janurary 14, 1985, a 20% increase in fuel costs was the last straw. Mass protests and riots erupted, at least 7 were killed. Seaga said "the pain we all feel" was "inevitable".

The World Bank, on the other hand, called 1984 "a successful year for Jamaica".

Democracy a memory

1994, Human Rights Watch reported that children were being jailed under atrocious conditions. As of 1999 the conditions were about the same:

Though Jamaican law prohibits any child from being held in police custody for more than twenty-four hours, children, often whos only crime was being abandoned by their parents, were kept in jail (One thirteen-year old boy was held for eight months without trial after being accused of stealing a radio) where they were often crowded, starved, beaten, raped, and even tortured with mock executions.

During the 1990s official statistics listing an average of 140 people killed by police annually - in a country of only 2.6 million.

On 14 March 2001 witness said that police had murdered 7 young men who had been pleading for their lives in Braeton, Kingston.

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