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The creation of capital demand was the first phase

April 01 - 07, 2002

The 32nd meeting of World Economic Forum, a theatre where only the mightiest were allowed to perform, was going splendidly in Waldorf-Astoria Hotel when United Nations Secretary General Kofi Annan, a major activist of globalization, released a somewhat perplexing statement, "Business leaders of the world are not sharing enough to eradicate poverty. It is up to you to prove [the antiglobalists] wrong, he said, with actions that translate into concrete results for the downtrodden, exploited and excluded". Mr. Annan has said right, but the question is that are these statements working practically. If the answer is yes then why 1.5 billion of world inhabitants are below poverty line. If the answer is yes then why only 10% elite controls 80% of world wealth. If the answer is yes then why per capita income of south is inert over a 40-year analysis while that of south has up surged to over $20,000 from $7500 and in some regions over $40,000. But the answer is wrong, the answer was the attack of 11th September on the economic heart of the leader of globalization. And probably an answer may be in the future, in the form of a big burst, a burst of the patience of dispiriting south.

Since Anti-colonial revolutions had helped south vacate their territories from north, they were gifted with some lasting snags, the dispute of Kashmir in South Asian region, Taiwan-China clash in East Asia and Palestine -Israel dispute in Arab territory etc. It was obvious prediction; these regions might grow faster than any other developing region, and could counter world orders. West developed a sophisticated technology of so-called 'armed race'. Which required huge amounts of capital to defeat the rival. The creation of capital demand was the first phase. To meet the ends, help of west loyal community in poor countries was sought. West-loyal politicians were to retain tensions both inside and at borders and the landlords of the community were given the task to fly capital or the lifeblood of economy outside its skeleton. They were promised the safety of their interests in against. Other strategies like explosion of demonstration effects, restrictions on the flow of research and technology were all used to achieve the sole objective of ever dependency and flex of south towards the north.

It worked well, but since the period of isolation was gone and south economy became export oriented, their literacy rates up surged and their intra-regional cooperation increased. They started initiating round-table conferences to come to some mutual solution of their disputes, or at least to pause the violence. West didn't like that, but they couldn't express it loudly. They had to plan some other way to combat this new chaos. And of course they found it. Through the creation of twins, The IMF and The World Bank.

These two babies grew more vigorous and were converted into creditors' cartel. They showed the performance above the heights. This cartel is responsible for converting a major portion of the world into Heavily Indebted Poor Countries (HIPC). The fact that debt owed to North by South has mounted from $639 billion in 1980 to $1,341 billion in l990 even after paying $1280 in debt servicing is alone panic. Pakistan case is no more different. Our debt burden has inflated to $39.5 billion from $13 billions after Zia regime. But the irony is that we have paid some $30 billions since then in debt servicing. Then there was more in the shape of socalled stiff conditionalities. These have to's caused such harms as unbalanced growth of economy, deepening poverty, high levels of inflation, lower purchasing powers, negative balance of trade and balance of payments and an unending recession. Aid and grant were also used, but since debt proved to be more sturdy. With the increase in the quantum of economy of donor countries, their development assistance kept on shrinking and it has never crossed United Nations recommended figure of 0.7% of GNP.

Then a new era of globalization began. Actually it was the beginning of global-isolation of South from the North. From Bretton Wood to GATT to WTO, purpose was the same, 'suck the blood of poor'. Because transnational corporations of south were interested in manufacturing their products by employing cheap labor of poor countries, they entitled it, globalization. But they never wanted to actually benefit the poor countries. West started using so called globalization and trade liberalization vehicles to rob the hard earned wealth of south. Repatriation of profits by multinational corporations surged to 90% of what they earned by the end of 20th century. West used these powerful MNC's to manipulate weaker markets and also weaker political system of south and whenever they needed to flop any of these weak economies they did, by using the twins and these MNC's. Argentinean collapse is indeed the collapse of Bretton Wood systems. Brazilian President Fernando Henrique Cardoso said at the event. "The Bretton Woods system has become obsolete." IMF lent heavily at the time when Argentina had sufficient forex reserves but not in chaos; result was the burst of $132 billion debt balloon. Leaving millions of people unemployed and contracting her economy almost to half.

This unfair game gave a new twist to southern approach. "There was a clear improvement in the awareness of developing countries at Doha, and in their capacity to deal," says EU Trade Commissioner Pascal Lamy.

Stiff confrontation from emerging block at Doha forced Europe to consider phasing out subsidies for its farms, which elbow out produce from poor, farm-based economies. They compelled the United States to consider limits on anti-dumping laws, which are often used against cheap exports from emerging manufacturing powers. Horst Kohler, managing director of the International Monetary Fund, rebuked America for trade policies that artificially protect the U.S. textile and farm industries against lower- cost imports - the very products that less-developed nations are most able to produce. This is incredible, Europe's lead negotiator at Doha, Lamy, says that trade has not only "risen on the agenda of these governments," but trade ministers are increasingly powerful figures in the developing world. Trade ministers like Maran and South Africa's Alec Erwin are "punching above their weight," says Lamy. This new strength will force Europe and America to spend more time courting opinion in the developing world.

Actually west has never felt such muscular punch before. Or perhaps east has never experienced such disparity. But one thing is confirmed, that the players are now, the leaders of poor nations. Their demand of radical changes in the rules of international trade is now stronger. What globalization bestowed them, only loss? All the losers of the game like people without assets, wages, people with low skills, the uneducated, workers, labor, debtors, small firms, firms having no access to markets and without brands, local communities, local cultures, global poor, human security came in the basket of the poor. From Seattle to Davos, the enraged anti-globalization road show had pressed its case that rising trade and capital flows are bringing nothing but oppression and instability to the developing world.

If economists now base the poor economies' growth largely on the willingness of wealthy nations to proactively join war against poverty. Then west will have to share; this share will be in wealth, in power and in mankind, if it is not done. No one can stop the reoccurrence of 11 September event and ultimate failure of war against terrorism.