1 . I T ' S T H E E C O N O M Y , S T U P I D

amount of money foreign corporations could take out of the country. Worse still, he had organised a land reform programme which meant taking back control of the country's mineral resources from Western transnational corporations, and had given workers a pay rise, in defiance of International Monetary Fund orders. It did not take long for all US aid to be cut off, and for an alliance of the CIA, US investors and Brazil's landowning elite to organise a coup and install a military junta, which overturned Goulart's reforms.

Colonial powers, too, constantly sent troops to protect compliant regimes against popular revolts. Both France and Britain participated in the suppression of the Chinese Tai Ping rising, and later the Boxer rebellion. Britain also sent troops to help Khedive Ismail put down a nationalist revolt in Egypt. And Western powers still do not hesitate to do the same i f there is no other way of achieving their goals. Thus the Gabonese dictator President Bongo is supported by the French government, after French paratroopers flew in in 1964 to restore his obedient predecessor to power in their former colony.7 Many more examples of similar Western interventions could be quoted.

K i l l i ng t he Domestic Economy In order to provide a significant market for their products, it was necessary for colonial powers to kill the domestic economies of the countries they colonised. The favourite method was to tax whatever it was the colonials particularly liked to consume, as there was no way locals could meet their tax obligations without working in the mines and plantations, or growing cash crops for their colonial masters.

At the same time, every effort was made to destroy indigenous crafts. So, for example, the British deliberately set about destroy-

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"Th e libert y o f democrac y is no t safe i f th e peopl e tolerat e th e g r o w t h o f privat e p o w e r t o a poin t w h e r e i t becomes stronge r t h a n tha t o f th e stat e itself. That , i n essence, is fascism o w n e r s h i p o f g o v e r n m e n t by a n individual , by a group , o r any controllin g privat e power. " - Franklin D. Roosevelt, Quoted in the Corporate Crime Reporter.

ing the Indian textile industry, which had been the very lifeblood of the village economy. And in French West Africa in 1905, levies were imposed on all goods which did not come from France or its empire, pushing up the prices of local goods and ruining local artisans and traders.

Economic development after the Second World War, on the other hand, was theoretically supposed to help the ex-colonial countries build up their domestic economies. Yet, at the very start, the ex-colonies were forced to re-orientate their production towards a very small range of exports.

Sugar is a typical example. Under World Bank influence, vast areas in the Third World were converted to sugarcane cultivation for export, regardless of whether a market existed for the product. In fact, the US has always applied strict sugar import quotas, and the EU subsidises sugar beet production amongst its member states. Yet still, 'developing' countries are encouraged to produce vast volumes of cheap export sugar.

At the same time, Third World countries which seek to diversify their production are accused of 'export substitution' - a heinous crime in the eyes of today's economists, and one which is explicitly prohibited by the terms of structural adjustment programme (SAP) loans. And as Walden Bello and Shea Cunningham note in their book Dark Victory, SAPs tend to increase a country's exports but contract its domestic economy.8

I f Third World countries do succeed in developing a modest domestic economy, the West will set out to destroy it. The best example of this comes from the book Development Debacle: The World Bank in the Philippines.9 The book, based on 800 leaked World Bank documents, shows how that institution, in league with the CIA and other US agencies, deliberately set in motion policies to transform the rural peasantry into an urban proletariat, reduce the standard of living of the working classes by means of "wage restraint", destroy the local middle class and create a cosmopolitan, consumerist bourgeoisie dependent on the global economy.

This was achieved by providing the dictator Ferdinand Marcos with the funding to build up an army capable of imposing this programme onto his people by force. This he did, by declaring martial law and, as he himself put it, ensuring that he had "the authority necessary to implement new values, measures and sacrifices."10

Lending Money In order for the compliant elite of a Third World nation to be able to create the conditions for development, a large amount of funding is needed. For the West, lending money to those elites is the most effective means of ensuring that Third World development carries on along the 'right' lines.

I f the government is to be capable of repaying the money it has borrowed from the West, or from one of its institutional creations such as the World Bank or IMF, the money must be invested in enterprises that are competitive on the international market, for interest payments must be paid in foreign exchange, usually US dollars. Unfortunately, this is unlikely to occur: in many borrower nations, anything up to 20 per cent of the money will be skimmed off in the form of kickbacks to politicians and officials, and much of the rest will be spent on useless consumer products, mainly luxury goods for the elite. More will be spent on vast infrastructure projects which will not generate a return for a very long time, i f at all, and on armaments to put down any uprisings caused by devel-

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Development Debacle is based on 800 leaked World Bank documents and shows how that institution, in league with the CIA and other US agencies, deliberately set in motion policies to transform the rural peasantry of the Philippines into an urban proletariat destroy the local middle class and create a cosmopolitan, consumerist bourgeoisie dependent on the global economy. Similar policies have transformed places like Thailand into little short of sex outlets for Western businessmen.

opment. The result is that Third World countries which borrow from the West almost always fall into unrepayable debt.

Once in debt, they become hooked on further and further borrowing, thus falling under the power of the lending countries. At this point the latter, through the IMF, can institutionalise their control over a debtor country by Structural Adjustment Programmes (SAPs) which in effect take over its economy to ensure that interest payments are regularly met. Result: borrowing countries become de facto colonies of the West.

This technique, too, was used in the colonial era. In Tunisia, in the mid-1800s, a lot of money was lent to the Bey of Tunis to build up an army to loosen his ties with Turkey - not a profitable investment, and one which soon led him into debt. The French government, which had overseen the lending of the money, then subjected the Bey's economy to 'financial supervision', a key feature of which was that the French government had the right to collect and distribute the state's revenues, to assure that the French shareholders who had lent the money took precedence over all other debtors. President Clinton recently imposed a similar deal on the Mexican government as a condition for lending it the billions of dollars required to bail out its Wall Street creditors.

Today, the West has perfected the technique of lending money to Third World countries as a means of controlling them. Much of it, as we have already seen, goes euphemistically under the name of "aid" - something which is said to be necessary to tackle Third World poverty, which itself is said to be a symptom of "underdevelopment". The solution to Third World poverty, then, is more development, more investment in capital-intensive developments, more foreign corporations and fully open markets - precisely what the West can provide. Cheryl Payer quotes Galbraith on this situ-

" A really efficien t totalitaria n stat e w o u l d be on e i n w h i c h th e all-powerfu l executive o f politica l bosses an d thei r arm y o f managers contro l a populatio n o f slaves w h o d o no t have t o be coerced , because the y love thei r servitude. " - Aldous Huxley ation: "having the vaccine, we have invented smallpox."xi We have recently seen the result of that disease, and the faulty vaccine, in the collapse of the Eastern Tiger' economies, which borrowed and overspent to a massive degree in order to keep up a frantic pace of Western-style development.

Colonialism Today We have seen, then, how the 'Third World' has been controlled and directed for several hundred years by a Western elite; firstly under direct colonial rule, and then by the imposition of a 'development' paradigm which, for various institutional, political and economic reasons, it has been powerless to resist. We have also seen how the present global economic system was set up, and is maintained, in order to prolong that Western corporate control. In the' following article, Tony Clarke demonstrates clearly how populations in the North as well as in the South remain under the control of global corporations. He will show conclusively that, even as the 21st century dawns, colonialism is alive and well.D

References: 1. Partant, F., La Fin de Developpement, Francois Maspero, Paris, 1982. 2. Magdoff, H., Imperialism: From the Colonial Age to the Present, Monthly Review

Press, New York, 1978. 3. Fieldhouse, D. K., Economics and Empire, 1830 to 1914, Macmillan, London, 1984. 4. Piatt, D.C M. , "Economic Imperialism and the Businessman: Britain and Latin

America Before 1914", in Owen, R., and Sutcliffe, B. (eds) Studies in the Theory of Imperialism, Longman, London, 1976, p.311. 5. Ibid. 6. Danaher, K., with Moore Lappe, F , and Schurman, R., Betraying the National

Interest, Institute for Food and Development Policy, San Francisco, 1988. 7. Colchester, M. , "Slave and Enclave: Towards a Political Ecology of Equatorial

Africa", The Ecologist, Vol. 23, No. 5, 1993. 8. Bello, W., with Cunningham, S., and Rau, B., Dark Victory: The United States,

Structural Adjustment and Global Poverty, Pluto Press. London, 1994. 9. Bello, W., Kinley, D. and Elinson, E., Development Debacle: The World Bank in the

Philippines, Institute for Food and Development Policy, San Francisco, 1990. 10. Ibid. 11. Payer, C , Lent and Lost: Foreign Credit and Third World Development, Zed Books,

London, 1991.

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