To:
"The Collective Human Conscience;":;
Subject:
"Democracy vs Mediaopoly";
Stiglitz, chief economist of the World Bank tells
about its elitist conspiracy to rob humanity.
From:
"David D. Piney" <wu712@victoria.tc.ca>
The Globalizer Who Came in from
the Cold
"It has condemned people to death," the former
apparatchik told me. This was like a scene out of Le Carré.
The brilliant old agent comes in from the cold, crosses to our side and in hours of debriefing, empties his memory of horrors
committed in the name of a political ideology he now realizes has gone rotten.
And here before me was a far bigger catch than some used
Cold War spy. Joseph Stiglitz was chief economist of
the World Bank. To a great extent, the new world economic order was his theory
come to life.
I "debriefed" Stiglitz
over several days, at Cambridge University, in a London hotel and finally in
Washington in April 2001 during the big confab of the World Bank and the
International Monetary Fund. Instead of chairing the meetings of ministers and
central bankers, Stiglitz was kept exiled safely
behind the blue police cordons, the same as the nuns carrying a large wooden
cross, the Bolivian union leaders, the parents of AIDS victims and the other
"antiglobalization" protesters. The
ultimate insider was now on the outside.
In 1999 the World Bank fired Stiglitz.
He was not allowed quiet retirement; US Treasury Secretary Larry Summers, I'm
told, demanded a public excommunication for Stiglitz
having expressed his first mild dissent from globalization World Bank-style.
Here in Washington we completed the last of several hours
of exclusive interviews for the Observer and Newsnight
about the real, often hidden, workings of the IMF, World Bank and the bank's 51
per cent owner, the US Treasury. And here, from sources unnamable (not Stiglitz), we obtained a cache of documents marked
"confidential"
"restricted" and "not otherwise [to be] disclosed without
World Bank authorization". Stiglitz helped translate one, a
'Country Assistance Strategy" from bureaucratese.
There's an Assistance Strategy for every poorer nation, designed, says the World Bank,
after careful in-country investigation. But according to insider Stiglitz, the Bank's staff "investigation" consists
of close inspection of a nation's
five-star hotels. It concludes with the Bank staff meeting some begging,
busted finance minister who is handed a
"restructuring agreement" pre-drafted for his
"voluntary" signature (I have a selection of these).
Each nation's economy is individually analyzed, then, says Stiglitz, the Bank hands every minister the exact same
four-step program.
Step #1; is Privatization -- which Stiglitz
said could more accurately be called "Briberization".
Rather than object to the sell-offs of state industries, he said national
leaders -- using the World Bank's demands to silence local critics -- happily
flogged their electricity and water companies.
"You could see the bureaucrats eyes widen" at the prospect of
10 per cent commissions paid to Swiss bank accounts for simply shaving a few
billion off the sale price of national assets.
And the US government knew it, charges Stiglitz,
at least in the case of the biggest "briberization"
of all, the 1995 Russian sell-off. The US Treasury view was this was great as
we wanted Yeltsin re-elected. We don't care if it's a corrupt election. We want
the money to go to Yeltzin via kick-backs
for his campaign.
Stiglitz is no conspiracy nutter
ranting about Black Helicopters. The man was inside the game, a member of Bill
Clinton's cabinet as chairman of the president's Council of Economic Advisers. Most ill-making for Stiglitz
is that the US-backed oligarchs stripped
After briberization, Step #2; of
the IMF/World Bank one-size-fits-all rescue your- economy plan is "Capital
Market Liberalization". In theory, capital market deregulation allows
investment capital to flow in and out. Unfortunately, as in Indonesia and
Brazil, the money simply flowed out and out. Stiglitz
calls this the "hot money" cycle. Cash comes in for speculation in
real estate and currency, then flees at the first
whiff of trouble. A nation's reserves can drain in days, hours.
And when that happens, to seduce speculators into returning
a nation's own capital funds, the IMF demands these nations raise interest
rates to 30 per cent, 50 per cent and 80 per cent. 'The result was predictable
', said Stiglitz of the hot money tidal waves in Asia
and Latin America. Higher interest rates demolished property values, savaged
industrial production and drained national treasuries.
At this point, the IMF drags the gasping nation to Step #3:
Market-Based Pricing, a fancy term for raising prices on food, water and
domestic gas. This leads, predictably, to Step 31/2: what Stiglitz
calls "The IMF riot."
The IMF riot is painfully predictable. When a nation is
down and out, [the IMF] takes advantage and squeezes the last pound of blood
out of them. They turn up the heat until, finally, the whole cauldron blows
up-- as when the IMF eliminated food and fuel subsidies for the poor in
Indonesia in 1998. Indonesia exploded into riots, but there are other examples
-- the Bolivian riots over water prices in April 2000 and, in February 2001,
the riots in Ecuador over the rise in domestic gas prices imposed by the World
Bank. You'd almost get the impression that the riot is written into the plan.
And it is. Stiglitz did not know
about the documents the BBC and the Observer obtained from inside the World
Bank, stamped over with those pesky warnings "confidential",
"restricted" "not to be disclosed". Let's get back to the
"Interim Country Assistance Strategy" for Ecuador. In it the Bank
several times states -- with cold accuracy -- that they expected their plans to
spark "social unrest", to use their bureaucratic term for a nation in
flames.
That's not surprising. The secret report notes that the
plan to make the US dollar
Ecuador's currency has pushed 51 per cent of the population below
the poverty line. The World Bank "Assistance" plan simply calls for
facing down civil strife and suffering with "political resolve" --
and still higher prices.
The IMF riots (and by riots I mean peaceful demonstrations
dispersed by bullets, tanks and tear gas) cause new panicked flights of capital
and government
bankruptcies. This economic arson has its bright side - for foreign
corporations, who can then pick off remaining assets, such as the odd mining
concession or port, at fire sale prices.
A pattern emerges. There are lots of losers in this system,
but one clear winner: the Western banks and US Treasury, making the big bucks
from this crazy new international capital churn. Stiglitz
told me about his unhappy meeting, early in his World Bank tenure, with
Ethiopia's new president in the nation's first democratic election. The World
Bank and IMF had ordered Ethiopia to divert aid money to its reserve account at
the US
Treasury, which pays a pitiful 4 per cent return, while the
nation borrowed US dollars at 12 per cent to feed its population. The new
president begged Stiglitz to let him use the aid money
to rebuild the nation. But no, the loot went straight off to the US Treasury's
vault in
Washington.
Now we arrive at Step 4 of what the IMF and World Bank call
their "poverty reduction strategy" Free Trade. This is free trade by
the rules of the World Trade Organization and World Bank. Stiglitz
the insider likens free trade WTO style to the Opium Wars. That too was about
opening markets, he said. As in the nineteenth century, Europeans and Americans
today are kicking down the barriers to sales in Asia, Latin American and
Africa, while barricading their own markets against Third World agriculture. In
the Opium Wars, the West used military blockades to force open markets for
their unbalanced trade. Today, the World Bank can order a financial blockade that's
just as effective -- and sometimes just as deadly.
Stiglitz is particularly emotional over the WTO's intellectual property rights treaty (it goes by the
acronym TRIPS, of which we have more to say later in this chapter). It is here,
says the economist, that the new global order has "condemned people to
death" by imposing
impossible tariffs and tributes to pay to
pharmaceutical companies for branded medicines. "They don't care,"
said the professor of the corporations and bank ideologues he worked with, "if
people live or die."
By the way, don't be confused by the mix in this discussion
of the IMF, World Bank and WTO. They are interchangeable masks of a single
governance system. They have locked themselves together by what are
unpleasantly called "triggers". Taking a World Bank loan for a school
"triggers" a requirement to accept every
conditionality-- they average 111 per nation -- laid down by both the
World Bank and IMF.
Did any nation avoid this fate?
Yes, said Stiglitz, identifying
Botswana. Their trick? "They told the IMF to go
packing."
So then I turned on Stiglitz. OK,
Mr Smart-Guy Professor, how would you help developing
nations?
Stiglitz immediately proposed radical land reforms, a
direct attack at the heart of "landlordism" and the usurious rents
charged by the propertied oligarchies worldwide, typically 50 per cent of a
tenant's crops. So I had to ask the professor: “as you were top economist at
the World Bank, why didn't the Bank follow your advice?” "If you challenge
[land ownership] he said, that would be a change in the power of
the elites, and that's not high on their agenda."
"It's a little like the Middle Ages," the insider
told me. "When the patient died they would say, 'Well, he stopped the
bloodletting too soon; he still had a little blood in him'."
I took away from my talks with the professor that the
solution to world poverty and crisis is simple: remove the bloodsuckers.
Joe Stiglitz survived his sacking
from the World Bank and complaints about our interviews. In September 2001, he was
awarded the Nobel Prize in Economics.
This is an excerpt from Greg Palast's
book "The Best Democracy Money
Can Buy." For more information visit GregPalast.com.
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and therefore effective democracy which is singularly able to
counterbalance the excesses of the human predators who've
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