Este informe se escribió por Guido Bilbao y se publicó por el Centro Pulitzer. Guido Bilbao es periodista argentino quien ha vivido quince años en Panamá. El Centro Pulitzer es una innovadora y galardonada organización de periodismo sin fines de lucro dedicada a apoyar el compromiso en profundidad con asuntos globales poco informados. También apoyó una parte del trabajo hecho para el informe el Rainforest Foundation y la Alianza para la Conservación y el Desarrollo, una organización panameña. Se produjó el informe en cuatro informes especiales para el periodico panameño La Prensa. Estoy muy agradecido a Guido y al Centro Pulitzer por el permiso a proporcionar un ‘link’ a este reportaje muy importante para los y las lectores de este sitio web.

Les recomiendo este informe como una de lo más significativa ilustraciones del proceso de desarrollo y de la manera en la cual ese proceso opera en los paises en vía de desarrollo. Saca los parecidos entre el actual modelo extractivista de desarrollo y el modelo de desarrollo piratical basado en el robo de hace quinientos años. El informe refiere especifícamente al país de Panamá, pero el estilo de desarrollo descrito es tan pertinente a muchos otros paises latinoaméricanos.

http://pulitzercenter.shorthand.com/laconquista/index.html

This report was written by Guido Bilbao and produced for the Pulitzer Centre. Guido Bilbao is an Argentinian journalist who has lived in Panamá for fifteen years. The Pulitzer Centre on Crisis Reporting is an innovative award-winning non-profit journalism organisation dedicated to supporting in-depth engagement with under-reported global affairs. Some of the work behind this report was also supported by the US Rainforest Foundation and by the Panamanian Alliance for Conservation and Development. It was produced as four separate special reports in the Panamanian daily newspaper La Prensa. I am grateful to Guido and to the Pulitzer Centre for permission to provide a link to this important report in this website.

I recommend this report as one of the most important current-day illustrators of the development process and the way that process operates in so-called developing countries. It draws out the similarities between the current extractivist model of development and the 500 year old piratical and theft-based model of development. The report relates specifically to Panamá, but the style of development that it describes is just as pertinent to many other Latin American countries.

Read the full article here: http://pulitzercenter.shorthand.com/atlanticconquest/index.html

By Rod Driver

13 April 2021

The focus of attention of ‘The Violence of Development’ website is clearly the problems of development in the region of Central America, and a high proportion of the articles we include in our monthly additions to the website relate directly to the region. Just occasionally, however, we include a more general article such as this one. Although the data it presents is global, the issues it raises with clarity and simplicity relate indirectly to Central America as much as they do to other regions of the world. We are grateful to Rod Driver for permission to reproduce the article in our website and for the clarity with which he articulates the problems of development. His website is called ‘Elephants in the Room’ because it covers topics which the mainstream media fails to discuss honestly, and it can be accessed at: https://medium.com/elephantsintheroom/

Rod’s articles explain how the international economic system is rigged to transfer wealth from poor countries to rich. 

The article was first published by Global Research an online resource of The Centre for Research on Globalization (CRG), an independent research and media organisation based in Montreal: globalresearch.ca/

Key words: political economy; poverty; slavery; GDP; neo-colonialism.

“Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings” (former South African President, Nelson Mandela)

The world’s population was about 7.8 billion people in 2020. About 2.2 billion people do not have access to safe drinking water, and over 4 billion do not have safe sanitation[i]. About 800 million suffer from chronic undernourishment. A fifth of all children under 5 suffer from stunted growth[ii]. Each year approximately 6 million children and many millions of adults die of easily preventable diseases[iii], and 9 million people die of hunger[iv]. Some progress has been made on some of these issues, particularly in China. However, things have been getting worse in other regions, such as Africa[v]. Since 1960, the income gap between rich countries and poor countries has roughly tripled in size[vi].

Economic Exploitation — Rich Countries Keep The Poor In Poverty

We have seen in earlier posts that rich countries, led by the US, will use extreme violence to get their chosen leaders into power in other countries, in order to control resources and trade. These leaders have little interest in the welfare of their poorest people, and are prepared to use brutal methods to control their citizens. We have also discussed some of the ways in which the economic system transfers immense wealth from poor people to rich. Rich countries, led by the US, reinforce a global financial and trade system that perpetuates inequality. The exploitation of the world’s poorest people is like a modern-day form of slavery. Some of them earn just enough to die very slowly of malnutrition. Rich nations inflict what has been described as “protracted death-by-deprivation”[vii].

When people cannot earn a decent living any other way, they will resort to selling cocaine, heroin, sex, blood and organs. When they are really desperate some will even sell their own children into slavery. It is estimated that there are at least 40 million slaves in the world[viii], and there are still 150 million children involved in child labour[ix]. The scale of these problems is immense — the number of avoidable deaths each year is similar to a world war. However, dealing with some of the biggest problems, such as diarrhoea, is technically straightforward. A simple combination of salt, sugar and water is all that is required, yet still millions of people die from it. Dealing with starvation is also straightforward. The United Nations Food and Agriculture Organisation (FAO) regularly measures food production and every year the total amount of food produced in the world is easily enough to feed everyone on the planet with a considerable amount left over.

Numerous observers have pointed out that poverty and inequality are the real Weapons of Mass Destruction. If we had a global war on under-development, just a small fraction of global military spending would be enough to solve these problems worldwide[x]. Unfortunately, there is currently no serious attempt to do so. Politicians from advanced nations often make statements about dealing with poverty, yet their actions make it clear that this is propaganda. They have no intention of making the changes to the global economic system that would solve these problems, because their focus is on structuring the world’s economy to benefit themselves and their biggest companies.

Measuring Poverty — Lies, Statistics and Propaganda

There is a great deal of propaganda surrounding the economics of poor countries and development. Leaders from rich countries want us to believe that the economic system is working for poor countries, so they try to manipulate the figures to tell us how many people have escaped poverty. However, they focus on a definition of extreme poverty, which refers to people earning under $1.90 per day. This figure is so absurdly low that it is meaningless. Many people earning more than this are unable to meet their basic needs, such as eating enough food. One of the leading researchers on the subject, Jason Hickel, has suggested that a figure of $7.40 per day is a better benchmark for measuring poverty, and other researchers have come up with a similar figure[xi]. His data shows that more than 4 billion people — that is over half the world’s population — are below this line, and therefore unable to meet their basic needs.

Measuring Progress — The Absurdity of GDP

In order to measure how well a country is doing economists use what is called GDP (Gross Domestic Product). It is supposed to be the total value of all the goods and services that we buy and sell, but it is extremely misleading. The former governor of the Bank of England, Mark Carney, has noted that decorative diamonds are mostly useless, but we attach a huge price to them, whereas water is the most important substance on Earth (along with air and sunlight) but it has almost no economic value[xii]. If a mother looks after her child, this is not measured in GDP as no money changes hands. If a mother pays a nanny, money does change hands, so this increases GDP, yet the same work has been done. The most important source of nutrition for babies, human breast milk, has no value according to economists. As one leading expert pointed out:

“as far as economics is concerned, if you are ironing, shopping or child rearing, you are ‘at leisure’”[xiii]

Huge swathes of important human activity, such as caring for children, caring for elderly relatives and simply running a household, are not included in economic data.

GDP measures some activity that is bad for society. Spending large amounts of money solving crimes, mopping up after an oil spill or treating car crash victims all counts as GDP, when it is clear that having fewer crimes, car crashes and oil spills in the first place would be better. Illegal transactions such as drugs are also counted. It is commonly accepted that the fastest way to increase GDP is to go to war.

Natural resources such as trees are only counted in GDP if we are intending to cut them down and use them for timber. They are not counted if we leave them in the ground as part of the natural landscape, yet they play many important roles in relation to climate change, land stability, flooding[xiv] and air quality[xv]. All of the things that are not counted in GDP are actually worth far more than the things that are counted[xvi]. GDP is clearly not a good way to measure how well a country is doing.

Some groups have been trying to develop indicators that provide a better measure of progress and quality of life, such as the United Nations Human Development Index (HDI). This includes things like educational standards and healthcare. Some of these indicators show that since 1970 much of the world has made little progress[xvii]. If you take a simple measure like how many children die before the age of five, we find that medical care for poor people in the US is far below the standards of most advanced nations and is on a par with many poor countries.

The Distribution of Wealth Matters

The use of GDP is misleading because it ignores how wealth is distributed. Even the poorest countries have some incredibly rich people and most countries have a group that would be called middle class. If a small number of people get much richer and the rest go backwards, the GDP of a country can increase, and the ‘average’ wealth can increase, creating the illusion of progress, when in fact poverty and inequality can be getting worse. GDP does not tell us how many children receive good education or how many people have access to healthcare[xviii]. Analyses that look at different sectors of society, such as the richest and poorest parts of the population, are better, but governments do not like these being discussed because it then becomes apparent that many poor people are making little progress, or even going backwards, under the current system. The GDP for India has been rising quite rapidly, but over half of the population still earn below $3 per day[xix].

The economic system has to be a means to an end, not an end in itself. What we should be aiming for is a better quality of life for everyone, and in particular, to improve the standard of living for the poorest people in both rich and poor countries. There is a strong case to suggest that advanced nations do not need any more growth. They simply need better distribution. As one leading expert has noted:

“We could live in a highly educated, technologically advanced society with zero poverty and zero hunger, all with significantly less resources and energy than we presently use.”[xx]

Neocolonialism — Some Countries Were Doing Better Before We Interfered

The media tend to blame foreign governments for poverty, but do not mention that the US and Britain regularly overthrow governments that were trying to improve living standards for their poorest people, or that the economic system has been manipulated to exploit poor countries. Journalists often talk about corruption in poor countries, but usually fail to mention that it is companies from advanced nations that pay the biggest bribes. During the 1950s and 1960s, many poor countries progressed quickly, because rich countries did not interfere as much as they do today. Many of those countries went backwards rapidly once the US and other rich nations interfered again, in what is sometimes called neocolonialism.

Providing healthcare and good education to the whole population, and getting people off the lowest rung of poverty is not difficult. Socialist countries such as Cuba, or the Indian state of Kerala, have excellent life expectancy. Iraq and Libya had socialist systems, and were very close to being first world countries before the US and Britain destroyed them. If poor countries are allowed to choose their own leaders, and to determine their own policies, many of them might make a genuine effort to get all of their people out of poverty.

To Understand Poverty, Study The Rich

If we want to understand poverty, we can only learn a limited amount by studying the poor. We really have to study the rich and the powerful, in advanced nations as well as poor countries. They determine relationships between countries, and they determine how the national economy is structured. They determine how industrialised a country is, and they play a major role in determining the distribution of wealth within society.

We saw in earlier posts that international companies obtain huge amounts of ‘free lunches’ (extra profits that they have not earned). We also saw that the total transfer of wealth from poor countries to rich countries each year is over $2 trillion[xxi]. A large part of that wealth transfer becomes extra profits for the world’s biggest companies. The US government has a range of methods to force countries to participate in this rigged system. These can include bribery, sanctions and war. The single biggest obstacle to the elimination of global poverty is US foreign policy.

Key Points

There is huge poverty around the world, because people with power are actively keeping it that way.

Getting whole populations off the lowest rung of poverty is not difficult if governments make that a priority, and advanced nations do not interfere. To understand poverty we have to study the rich and powerful in both rich and poor countries.

Useful Websites

Worldbank.org has good data (but don’t take any notice of their policy recommendations)

Jason Hickel, ‘Does the West really care about development’, Guardian, 5 Mar 2016

https://www.theguardian.com/global-development-professionals-network/2016/mar/05/does-west-care-development

Further Reading

Jason Hickel, The Divide: A brief guide to global inequality and its solutions, 2017

Zak Cope, The Wealth of Some Nations, 2019

References

[i] WHO/UNICEF JMP, ‘1 in 3 people globally do not have access to safe drinking water’, WHO/UNICEF Joint Monitoring Program, 18 June 2019, at https://www.who.int/news-room/detail/18-06-2019-1-in-3-people-globally-do-not-have-access-to-safe-drinking-water-unicef-who

[ii] 2018 World Hunger and Poverty Facts and Statistics, at https://www.worldhunger.org/world-hunger-and-poverty-facts-and-statistics/

[iii] WHO, ‘A child under 15 dies every 5 seconds around the world’, 18 Sep 2018 https://www.who.int/news-room/detail/18-09-2018-a-child-under-15-dies-every-5-seconds-around-the-world-

[iv] theworldcounts, ‘Around 9 million people die every year of hunger and hunger-related diseases. This is more than from AIDS, malaria and tuberculosis combined’, updated daily, at https://www.theworldcounts.com/challenges/people-and-poverty/hunger-and-obesity/how-many-people-die-from-hunger-each-year

[v] Roge Karma, ‘5 Myths About Global Poverty’, Current Affairs, 26 July 2019, at https://www.currentaffairs.org/2019/07/5-myths-about-global-poverty

[vi] Jason Hickel, The Divide: A brief guide to global inequality and its solutions, 2017

[vii] Nafeez Ahmed, ‘The Hidden Holocaust — Our Civilizational Crisis part 3: The End Of The World As We Know It?’, 1 Jan 2008, at https://www.nafeezahmed.net/thecuttingedge//2008/01/hidden-holocaust-civilizational-crisis.html

[viii] https://en.wikipedia.org/wiki/Slavery_in_the_21st_century

[ix] UNICEF, ‘Child Labour’, 3 Sep 2020, at https://www.unicef.org/protection/child-labour

[x] SIPRI, cited in Reuters, ‘Just 10 percent of world military spending could knock off poverty: think tank’, 4 April 2016, at https://www.reuters.com/article/us-global-military-goals/just-10-percent-of-world-military-spending-could-knock-off-poverty-think-tank-idUSKCN0X12EQ

[xi] World Bank, ‘Nearly half the world lives on less than $5.50 a day’, 17 Oct 2018, at https://www.worldbank.org/en/news/press-release/2018/10/17/nearly-half-the-world-lives-on-less-than-550-a-day

[xii] Mark Carney, ‘From moral to market sentiments’, 2020 Reith lectures, BBC Radio 4, 4 Dec 2020, at https://www.bbc.co.uk/programmes/m000py8t

[xiii] Marilyn Waring, ‘The unpaid work that GDP ignores — and why it really counts’, TED talk New Zealand, Aug 2019, at https://www.ted.com/talks/marilyn_waring_the_unpaid_work_that_gdp_ignores_and_why_it_really_counts?language=en#t-329180

[xiv] Emma Kemp, ‘Planting trees to tackle flooding’, The Ecologist, 14 March 2019, at https://theecologist.org/2019/mar/14/planting-trees-tackle-flooding

[xv] Simon Williams, Online calculator shows how trees improve air quality and reduce health costs’, UK Centre for Ecology and Hydrology, 12 July 2019, at https://www.ceh.ac.uk/news-and-media/news/online-calculator-shows-how-trees-can-improve-air-quality-and-cut-health-costs

[xvi] Jason Hickel, ‘Is the world poor or unjust’, 22 Feb 2021, at https://www.jasonhickel.org/blog/2021/2/21/is-the-world-poor-or-unjust, The absurdity of GDP is illustrated in the following discussio of ‘Leprechaun economis’ when Ireland’s GDP changed 35% due to re-calculation. https://en.wikipedia.org/wiki/Leprechaun_economics

[xvii] Genuine Progress Indicator, at https://en.wikipedia.org/wiki/Genuine_progress_indicator, UNHDI at http://hdr.undp.org/en/statistics/, 2020 Human Development Report at http://hdr.undp.org/en/2020-report

[xviii] Victoria Fan et al, ‘Valuing health as development: going beyond gross domestic product’, British Medical Journal, 23 Oct 2018, at https://www.bmj.com/content/363/bmj.k4371

[xix] World Bank, ‘$1Billion from World Bank to protect India’s poorest from Covid-19 (Coronavirus)’, 14 May 2020, at https://www.worldbank.org/en/news/press-release/2020/05/13/world-bank-covid-coronavirus-india-protect-poor

[xx] Jason Hickel, ‘Is the world poor or unjust’, 22 Feb 2021, at https://www.jasonhickel.org/blog/2021/2/21/is-the-world-poor-or-unjust

[xxi] Dinyar Godrej, ‘A brief history of impoverishment’, New Internationalist, 20 April 2020, at: https://newint.org/features/2020/02/10/brief-history-impoverishment

Whilst Central America is the stage for the case studies and examples, the theme of development is a general one which applies to other regions of the world too. Since President Truman introduced the race for development in 1949, western style development has been inextricably linked with the need for economic growth. Even now, when the predominant system of development is facing financial meltdown and the planet is facing environmental catastrophe, a majority of scholars exercise their minds in the attempt to find the most appropriate way of achieving a form of economic growth that will reduce human poverty and inequality and ensure development for all. These scholars and practitioners of development include Fukuyama, De Soto, Sachs, Sen, Easterly, Collier, and Moyo. Various thinkers of renown and critics of neoliberalism, such as Stiglitz, Shiva, Klein and Khor, have questioned this emphasis and see the pursuit of ever greater economic growth as the villain of the piece. They have had some success in academia, the liberal media and with the anti-globalisation movement, but little effect in practical and political terms on a global scale and in terms of making progress in preventing the major environmental threats facing the planet.

The development of Central America has exercised the minds of many other non-Central Americans over the last few decades, not least employees of the World Bank, IMF, various US agencies such as the US Agency for International Development (USAID), the National Endowment for Democracy (NED), the Drug Enforcement Agency (DEA), and the European Union. US agencies such as these take it as standard operating procedure that they should interfere in Central American elections and fund Central American political parties which support US positions. This is often done in contravention of international law and is always done against the spirit of free and fair elections. This distortion of the idea of democracy offers us a perverted view of development, and is yet another illustration of how development is dictated by a western, specifically US, agenda, imposed as a top-down model of development, violently if necessary.

The prevailing model of development today is that of neoliberalism or neoliberal economic development. It has been so since Ronald Reagan outlined its essence in his ‘magic of the market’ speech at the 1981 North-South Conference in Mexico. There, neoliberalism was characterised by the dominance and application of free market principles and trickle-down growth. Neoliberalism sees development as a single linear progression of economic growth and wellbeing, often portrayed as a series of steps or stages (such as Rostow’s The Stages of Economic Growth[i]) to the promised land of a developed state. There is an almost universal acceptance that there can be no ‘development’ without economic growth and no economic growth without free trade, an equation that commands near universal respect but which Gilbert Rist warns us we should question.[ii] Given that neoliberalism is the prevailing model of development, it is impossible not to associate it with the violence which characterises so many of the ‘development’ projects which are witnessed in the following chapters of this book.

Many more have joined the debate about ‘development’ since the Thatcher-Reagan axis took the direction of development along the neoliberal lines of the Washington Consensus[iii], a direction which, at a macro scale, is still largely followed today despite the recent financial crisis that it has suffered. Indeed, it is interesting to note that the IMF (which must be held at least partly responsible for leading the world into the financial crisis) has been put in charge by the G8 leaders of recovering from it, an appointment that does not bode well for the acceptance of progressive ideas and experimentation with alternatives.

It is of interest to note the results of the socialist and social democratic governments that have arisen over the last ten to fifteen years in Latin America. Before the 1980s, such movements would have been undermined, subverted and put down by the violent hegemony of national oligarchies supported by the United States. These days such tactics are much less likely to be employed, but they are still far from dead and buried as was shown by the coup d’état in Honduras in 2009 (see Chapter 9). Rather, the new left and centre-left governments have been allowed to follow their own chosen route of development with the western powers feeling relatively safe in their belief that there is only one route available and that is the route dictated by the IMF, World Bank and World Trade Organisation (WTO), namely the Washington Consensus.

There is no doubt, however, that neoliberal economic development has come to be reviled by large sectors of the population since the onset and continuation of the 2008 financial crisis. As Seumas Milne puts it:

A voracious model of capitalism forced down the throats of most of the world for the last 20 years as the only acceptable form of economic management, at a cost of ever-widening inequality and devastating environmental degradation, has now been discredited.[iv]

Milne refers to “the tide of progressive social change that has swept Latin America” as a “globally significant shift”.[v] I should like to agree that we are on the cusp of a major global shift away from the single, prevailing, imposed model of neoliberalism, but I believe that such a judgement may be a little premature. An indication of the limited options available to the recently elected and relatively progressive Third World governments is the growing rift that is forming between the social movements which have supported those new and progressive governments and the new governments themselves. This rift was shown at the Americas Social Forum held in Paraguay in August 2010. In many of the sessions the social movements condemned the progressive governments on the grounds they were continuing with an economic model based on extractive industries such as opencast mining and the monoculture of genetically modified crops like soya and sugar cane for fuel. The debates focused on the ‘commons’, such as water and biodiversity, which continue to be appropriated by multinationals, undermining the food sovereignty of the people.[vi]

Whilst the grassroots clamour for alternative development routes is still growing, there is limited evidence that governments are responding accordingly. But despite this continuity of neoliberal economic development, even those who retain their faith in neoliberal economics now recognise that it has failed to produce the development of humanity in a good number of countries – witness Collier’s book ‘The Bottom Billion’, and Moyo’s ‘Dead Aid’. As Eduardo Galeano states, “Despite its deceptive splendours, this development is a banquet to which few are invited and whose main dishes are reserved for foreign stomachs.”[vii]

[i]   Rostow, W. (1960) The Stages of Economic Growth: A Non-communist Manifesto, Cambridge: Cambridge University Press.
[ii]   Op.cit. (Rist, 2008).
[iii]   The Washington Consensus – a set of economic principles that emerged from the US government, IMF and World Bank as an international geopolitical regime.
[iv]   Seumas Milne (30 December 2009) ‘A decade of global crimes, but also crucial advances’, The Guardian, London.
[v]   Ibid.
[vi]   The Guardian (17 August 2010) ‘New rifts in Latin America, but no confrontation’, The Guardian, London, www.guardian.co.uk/commentisfree/2010/aug/17/social-rift-latin-america
[vii]   Eduardo Galeano (1973) Open Veins of Latin America: Five Centuries of the Pillage of a Continent, London: Monthly Review Press.