vendredi 24 décembre 2010

Corruption rules the world

Even if Britannia once ruled the waves, corruption now rules the world! As early as 2000, we were warned about the growth of banking fraud and the fact that it would damage the world economies. But as is practically always the case no one listened.

Corruption is now both a major cause and a result of world poverty. All levels of society are affected, from local and national governments, the civil service, the judiciary, large and small businesses, and the military. Corruption, whether it be in a rich or poor country affects the poorest in society the most.

At a global level corruption is linked to American hegemony in the international business world, which has created conditions where corruption can flourish and has a deleterious effect on people’s conditions around the globe. People who already have little or no control over their destiny.

The full impact of corruption on poverty is difficult to measure, because many irregularities have been made legal. Unfair trade agreements, structural adjustment policies, etc. Blatant corruption is easy to detect, but in a legalized form people have now got used to it.

Corruption is not limited to third world despots. Rich countries encourage it in their dealings with poorer countries, instead of attempting to eradicate it. One aspect was the impact of the cold war, which led to supporting dictatorships, destabilizing democracies and funding opposition (terrorist) groups. Another aspect is the fact that big business offers bribes to the rulers and officials of third world nations in order to exploit their countries’ natural resources, gain export contracts (arms trade and construction principally) This is justified by saying that bribery is necessary in order to gain the market ahead of competitors ready to do the same thing. Thus corrupt rulers, who fill their foreign bank accounts with lots of dollars, are kept in power to suppress their own people.

Another major problem is the drug trade. The effect of international and national laws that prohibit drugs creates a rarity value, irresistible to producers, smugglers and dealers. This trade is always accompanied by violence and corruption, and when it is the reason for waging war, as in the case of Afghanistan, it makes criminals of the rich and powerful countries’ rulers.

Bribery is very persuasive and at the same time difficult to detect. Many western companies do not dirty their own hands, but use their slush funds to pay agents to make sure their deals succeed. In fact it is now an accepted practice in western countries where bribes are treated as legitimate business expenses and are therefore tax deductible. The professor Robert Neil of Trinity College Cambridge has written an excellent book about all this, entitled, ‘Public corruption – the dark side of social evolution.’

All this affects domestic political behaviour. And we now experience the aftermath of the cold war attitude, as demonstrated by the numerous recent scandals in Europe and America. The fear of Soviet intrusion in places where western governments had an interest, has been replaced by the effects of globalization, in which the multinational corporations, with the exception of those in Singapore which needs its reputation for honesty to remain a banking centre, maintain a level of bribery which involves the astronomic sum of 80 billion dollars a year. Just the sum needed, according to the United Nation, to eradicate hunger in the world.

The corrupt policies of the multinational corporations have the following effects in developing countries. The undermining of development and the encouragement of inequality and poverty. Smaller domestic firms are at a disadvantage. Money that could be used to eradicate poverty is transferred into the hands of the rich. Decision making favours the few elite and not the common people. An increase in debt that benefits the company and not the country. There is also the bypassing of local democratic processes, the circumvention of legislation and the promotion of weapons sales.

The International Monetary Fund and the World Bank encourage corruption, in spite of preaching the contrary. Their policies form the backbone of globalization, and have been criticized for increasing poverty. Structural adjustment, rapid deregulation, privatisation, the necessity for civil service reform and economic liberalization. Also the opening of trade barriers before the developing countries are economically ready to do so. Thus corruption is rife, and although the Western country hypocrites complain about it, their policies make the problem worse.

In 1987 the World Bank asserted, “any reform that increases an economy’s competitiveness will reduce incentives for corrupt behaviour.” Thus policies that lower controls of foreign trade, remove entry barriers to private industry, and privatize state firms in a way that ensures greater competitiveness, is a good thing. The World Bank has not changed its opinion. It continues to claim that corruption can be fought through an economy’s deregulation, public sector reform in areas such as customs, tax administration and the civil service, and the strengthening of anti-corruption and audit bodies and decentralization. Nevertheless, empirical evidence from the World Bank itself, suggests that far from reducing corruption, such policies and the manner in which they are implemented have in some circumstances increased it.

Jubilee 2000 has similar criticisms.. Rich country politicians and bank officials argue that because dictators were kept in power thanks to the western arms trade, and were given loans to squander on ill advised schemes, the people of those countries, who fought against the repressive regimes, cannot be trusted not to waste the money released by debts cancellation. This is the irrational and illogical IMF and World Bank philosophy. Power is more important than integrity in a system that benefits the rich rather than the poor in developing countries. US government export credit agencies promoted inappropriate and unprofitable projects, and then criticized third world governments for their inability to control their finances because they accepted the ill advised projects in the first place.

The most striking aspect of World Bank and IMF (aid and debt relief) is that the employees of these institutions have virtual dictatorial powers to impose their whims on recipient countries. This is because poor countries are obliged to accept IMF and World Bank structural adjustment programs and other conditions before they get their money. There is supposed to be transparency and participation, but in final negotiations between ministers and the IMF and World Bank employees, the latter can refuse to submit programs to the boards of those institutions if the poor countries do not accept their conditions.

Joseph Stiglitz the Nobel Prize winning economist has said that reforms often bring advantages to some groups while disadvantaging others, and one of the problems with policies agreed in secret is that a governing elite may accept an important policy which does not affect themselves, but which harms the impoverished population. (Elimination of food subsidies for example.) Democracy is therefore undermined because elected governments are accountable to Washington based institutions, instead of their own people. The potential for corruption therefore increases.

Contracts offered on a no bid basis breed corruption and crime. The USA, Italy, France and Great Britain are all guilty of this. Quite apart from the bribes and retro-commissions connected with arms sales, the World Bank and the UN are criticized for corruption while supposedly fighting it. (2 billion dollar oil for food scandal.) At the World Bank Paul Wolfowitz was forced to resign after it was revealed that he had moved his girlfriend to a new government post with a very high salary without review by the ethics committee. Wolfowitz’s appointment was already controversial as architect of the Iraq invasion.

The present chairman, Robert Zoellick, a former trade representative and executive of Goldman Sachs has been criticized by Joseph Stiglitz as a man with no real experience in economic development of poor countries. He is also a close friend of the pharmaceutical industry and the bilateral trade agreement he negotiated for the US effectively blocks access to generic medication for millions of people.

Traditionally a European governs the IMF, but only someone the Americans choose. The present man at the top, Dominique Strauss-Kahn, a potential candidate for the French presidency in 2012, has also had his share of problems. He however wasn’t forced to resign.

The system is not illegal but it is corrupt.

The combined wealth of the world’s 225 richest people is over a trillion dollars, (the equivalent of the yearly income of the poorest 2.5 billion. In the US the richest 1% possess 40% of the total wealth. The next 19% another 45%, and the bottom 80% have 15% of the nation’s wealth. Globalization and neo-liberalism has made the multinational companies accountable to no one. The working man or peasant is worth no more than a piece of trash. The Cargill Corporation controls the world’s food grain trade thanks to subsidies to US agriculture which subverts that in developing countries because the price is determined in Chicago. The World Trade Organisation is a capitalist predator which imposes general agreements on trade and services (GATS) on developing countries. It controls water, education and health.

The Organization for economic co-operation and development (OECD), the Organization of American States, the World Trade Organisation plus the World Bank and the UN General Assembly all say that corruption impedes economic development. At the same time a Swiss banking source has estimated that there are more then 420 billion dollars being held in the account of African heads of state. Cronyism, nepotism, or favouritism are now considered normal practices, and the dividing line between organized crime, money laundering, and legal business is becoming more and more blurred.

Post communist Russia was robbed of 140 billion dollars in one year (1998) due to the Nauru affair.

Wall Street fraud continues and the American economy has been described as a giant Ponzi scheme.
The Madoff affair is more than likely the tip of the iceberg.

Even the Vatican is not the godly place it pretends to be.

And according to Wikileaks Russia is a Mafia state.
But that is just American hypocritical and provocative propaganda. After the collapse of the Soviet Union the FMI and the World Bank pursued a policy in Russia, which thanks to the billions of foreign currency brought a whole layer of criminal elements to the surface. Apparently, Pakistan is not too happy with the IMF either:

Without forgetting the Enron scandal. we have seen the sub-prime scandal and are now facing the foreclosure-gate one. How many more lie around the corner? Too much financial corruption leads to a lack of confidence. And a lack of confidence means no investment and no economic growth. The strategy of the banks is to hide their losses, muddle through as best they can, and get the government to keep the interest rates as low as possible. Economic recovery is a long way off, because propping up banks pretending to be solvent raises a country’s debt and is counterproductive in the long run. If governments do not enforce the law against the financial bandits and let them get their own way, they are then totally impotent to solve their nations’ economic problems.

According to Keynes debt is only good if it stimulates the economy. Giving money to banks to gamble with will not stimulate anything other than eventual economic collapse. Inequality is becoming too great, and with dominant banks like Goldman Sachs, J.P Morgan, Bank of America, Citigroup and Morgan Stanley manipulating the markets rather than helping to create employment, there will eventually be tens of millions of impoverished starving people all over the world, armed with whatever weapons they can get their hands on, ready to cut the throats of corrupt leaders and bankers wherever they happen to be.

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