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Posts Tagged ‘economy’

Is this really progress?

Monday, July 31st, 2006

Oliver Bruce

sao paolo skylineEver seen the news when the government releases its figures for the economic activity over the last year or quarter? Ever wondered what it all meant? Or why, even though we seem to be making “progress”, often it has little impact on our lives in our community?

The Origins of our Success
At present, we measure how we are doing economically as a country with something called the Gross Domestic Product (GDP). It was first created during the Second World War as a way of measuring productivity, and has been in place ever since as a way of measuring the size and growth of economies. It is formulated as being the total amount of spending (both governmental and private as well as investment) and exports of a country minus the imports.

Why might we be heading in the wrong direction?
If a woman was to get breast cancer, does that sit with you as being a good or bad thing? If we use the GDP to measure our “progress”, you will find that the cost of the chemotherapy, drugs, surgery, hospital visits, fuel to get to the hospital etc. are all contributing to the GDP of a country, that would not have been spent if she hadn’t got sick. This illustration reveals the dilemma: not all economic growth is actually contributing to the wellbeing of those in society. In fact, most undesirable factors (oil spills, unsustainable native forestry etc) are considered to be beneficial to the economy. And where does that lead us?
man throwing money
Where might we go from here?
In the mid 1980’s it was identified that we needed to look at the way we were measuring progress. Thanks to the work of people like NZer Marilyn Waring and Professor Herman Daly in the field of uneconomic development (identifying that some economic activity creates a decline in human wellbeing) there have been several attempts at creating newer, more realistic looks at how to measure our economic gains and impact. One such measure called the Genuine Progress Indicator (GPI) was formulated to take into account such things as crime and income distribution, and balance these measures with that of economic activity.

Why is GPI better?

This means that the picture that is presented of our ‘progress’ directly correlates to the issues that determine our standard of living (such as how safe we are). It’s a far more holistic representation of what is going on both economically, socially and environmentally - which is integral in shifting how we measure our progress, and our subsequent actions, towards causing positive change. Sustainable development is a concept based on the balance of these three pillars’: economic, social and environmental development.

Why is how we measure things so important?
Decisions made by policymakers (governments, councils and the like) are based upon wanting to progress and work towards a better quality of life. As the saying goes, “when you have a hammer in your hand, every problem starts looking like a nail”. When you have a measurement as narrowly focussed as that of the GDP, the decisions made will often not have the intended effects. It is not a simple matter to explain, and the answers are not black and white. What is important is that we recognise that what we have isn’t serving us, and that we need to work towards implementing better methods of analysis so that we can accurately aim towards a better world.

LEARN MORE

  • For a more in depth explanation on the Genuine Progress Indicator visit Converge website
  • Read the Wikipedia entry on GDP
  • For more information on the other methods of measuring progress, and environmental impact, look at the Redefining Progress website
  • Check out work by Marilyn Waring, including her book “Counting for Nothing” and her documentary “Who’s Counting?” For more information on the theories of uneconomic development (Remember this woman was in government at age 23!) Read about her on wikipedia
  • The magazine Adbusters explains the problem well
  • The documentary “The Corporation” explains the problem faced with the institution of the multinational corporation. A fantastic film that explains more about the problems of not valuing that which cannot be quantified. This can be borrowed FREE from the Global Education Centre library. Contact eva@globaled.org.nz for details.

TAKE ACTION:

  • Tell people.
  • If you are at university, ask the economic professors about the questions.
  • Read more.
  • Make a film for the Media that Matters festival ;)

To tell you the truth, one of the most difficult things about this is that there are few concrete actions that can directly impact this. The process of change requires first for us to realise what we are doing, then actively seek to help change the course of the field of economics towards that of a more holisitic discipline…in other words do the same thing to economics that has affected nearly every other academic discipline = Postmodernist thought.

But yeah, it’s not as simple as that. If you have any ideas let me know, I am happy to hear what any of you suggest — comment in the forum…

Two faced land of the free

Thursday, January 12th, 2006

Cameron Walker
petrol pumps
Members of the Bush Administration regularly claim that the aim of American foreign policy is to spread ideals of democracy, freedom and liberty around the world. However, the actions of the US Government in its dealings with other nations regularly seem to contradict this.

We were all told the war on Iraq was to bring democracy to a nation suffering under Saddam Hussein. In the first year of the American occupation of Iraq, the nation came under the authority of the Coalition Provisional Authority and its American head Paul Bremer. During this time Bremer decreed 100 orders or changes Iraq had to make to its’ economy.

Instead of helping Iraqi people rebuild from decades of war these changes all strengthen American corporations at the expense of ordinary Iraqis. For example, Order 39 allows for 100% foreign ownership of Iraqi banks, mines and factories and also decrees that corporations may take 100% of their profit out of Iraq, instead of investing it in the local economy, which is in dire need of development. (Palast Greg Adventure Capitalism’)

Order 81 prohibits Iraqi farmers from saving seed from year to year. Instead they must fork out large amounts of money to buy new seed from American agribusiness corporations, such as Cargill. According to the United Nations Food and Agricultural Organisation (FAO) in 2002 97% of Iraqi wheat farmers saved their seeds. This process helped avert famine during the harsh sanctions on Iraq in the 1990’s. As the British magazine the Ecologist points out:

“The US, however, has decided that, despite 10,000 years practice, Iraqis don’t know which wheat works best in their own conditions, and would be better off with some new, imported American varieties. Under the guise, therefore, of helping get Iraq back on its feet, the US is setting out to totally reengineer the country’s traditional farming systems into a US-style corporate agribusiness.” (Smith Jeremy Order 81’)

No Iraqis were involved in making these decisions. They were forced on the war-wrecked nation in such an un-democratic way it would have made Saddam Hussein proud. An insider implementing the US government’s economic policies in Iraq told the American journalist Greg Palast: “They have [Deputy Defence Secretary Paul] Wolfowitz coming out saying it’s going to be a democratic country … but we’re going to do something that 99 percent of the people of Iraq wouldn’t vote for.”

The one of the few Saddam era laws retained by the American occupation forces in Iraq is the law that restricts union organising in public sector industries. Since 2003 Iraqi unionists have been busy actively opposing American moves to sell Iraqi industries to American corporations. As Hassan Juma’a Awad, a leading member of Iraq’s General Union of Oil Workers says:
“It was our duty as Iraqi workers to protect the oil installations since they are the property of the Iraqi people and we are sure that the US and the international companies have come here to put their hands on the country’s oil reserves”.

Iraqi unionists have had some big victories but also have had to suffer great costs. A general strike broke out in Basra when the British tried to install a notorious mayor who was a member of Saddam Hussein’s Ba’ath Party. Oil workers forced US Vice President Dick Cheney’s company Halliburton to employ Iraqis to complete reconstruction work in one city where unemployment was as high as 70%, instead of importing Kuwaiti oil workers. (Bacon David Interview with Hassan Juma’a Awad’)

Unions suffered persecution under Saddam. Today they face repression by both the American occupying forces and the remnants of Saddam’s regime that make up part of the murderous insurgency’. Some unionists have been kidnapped and murdered.

While the US is bringing democracy’ and free market capitalism to Iraq at gunpoint, it is also using huge amounts of effort to undermine the democratically elected government of Hugo Chavez in Venezuela.

Chavez, described by US Secretary of State Condoleeza Rice as “a negative force in the region [South America]”, won a landslide election victory in 1998 and was again popularly re-elected in 2000. In 2004 he won a recall referendum on his rule with 58% of the vote, which was declared free and fair by foreign observers including former US President Jimmy Carter.

In 2002 opponents of Hugo Chavez launched a coup in which the president was briefly overthrown and held under house arrest. The head of the Venezuelan Federation of Business, Pedro Carmona Estranga, appointed himself President.

Most nations around the world condemned the coup as anti-democratic and called for Chavez to be released and returned to office. The USA failed to condemn the coup and became one of the few nations in the whole world to recognise the coup government of Carmona. After a huge public outcry on the streets of Venezuela Chavez was returned to power.

In 2005 the pro-Bush US evangelist minister Pat Robertson said on his TV program, The 700 Club’ that the US should assassinate Chavez.

Why do the US government and its allies hate Chavez so much when he is a seemingly popular democratic leader? Well he has raised taxes on US oil companies and increased the price of oil exports to pay for large social programmes for the poor in urban slums, known as barrios. He vocally criticises US “free trade agreements” in Latin America as new world imperialism and also criticised the war on Iraq.

Despite its rhetoric the US government is quite happy to put corporate profit ahead of democracy.

SOURCES

Bacon David (September 2005) Interview with Hassan Juma’a Awad’ The New Internationalist, p33, issue 382

Hari Johann (August 26, 2005) Awaiting the hit’ in oil rich rogue state’, The New Zealand Herald, pB4

Palast Greg (October 26, 2004) Adventure Capitalism

Smith Jeremy (February 2005), Order 81’, The Ecologist

MORE ARTICLES ON CHAVEZ

The Rise of America’s New Enemy by John Pilger

White House and Media Escalate War of Words Against Hugo Chavez by Scott Harris

Banking with minutes

Monday, November 14th, 2005

Omar Hamedclock

A young minor offender being sentenced by his peers, an American insurance company being paid for in time, a peer tutoring system that rewards students with recycled computers and Glasgow residents paying for tarot card readings by doing gardening. Four very different applications of one simple idea. Time as currency.

Across 12 countries, over 500 Time Banks are working towards what many see as the “Third Economy”. From Ghana to Japan there are now community organisations structured not around money but around time. It’s not charity, it’s community; it does not value dollars, it values time. Time Banks trade hours of voluntary work, work done for the community and for individuals. It does not create an economy, it creates a society.

It works simply, you give up one hour of your time to voluntary work and you gain one time dollar. You can spend that tax free dollar on local services and other people’s time volunteered by other participating individuals and organisations. And it does not matter if you are a corporate lawyer doing community legal work or a sixteen year old tutoring your neighbour’s children, everyone’s hour is worth the same. A computer system calculates how many time dollars you have and sends you an account based on your earnings and spending.

In London you can spend that time dollar on drama classes or gaining IT skills. There are no longer recipients of charity or what the creator of this system, American Civil Rights Lawyer, Edgar Cahn, calls “the throw away people”.

Time Banks are based on four principles; Assets, that every human being is one, Redefining Work, no more taking women’s, children’s, or volunteers’ work for granted, Reciprocity, replacing one way acts with two way ones, and Social Capital, what British PM Tony Blair calls the “magic ingredient”, the work done that benefits the community and through ongoing investments of which we can turn social breakdown into social cohesion.

Surprisingly, Time Banks have been incredibly successful. In London alone there are 31 Time Banks that have clocked up over 28 000 hours in voluntary work. In Chicago refurbished computers were given out to 4800 students, in up to 50 problem schools, who did one hundred hours of peer tutoring and whose parents also did eight hours of community work. Academic results went up, bullying went down.

The crime ridden and notoriously poverty stricken housing development Benning Terrace in Washington DC now clocks up enough hours to buy four tons of food per month at the local food bank.

Law firm Holland and Knight billed the Shaw community in Washington for $230 000 in time dollars after they closed crack houses, made frozen government money available for a local playground, cleaned up local police corruption and kept the neighbourhood school open. The community repaid this by helping with the local clean up, school tutoring, a night escort service for elderly and by phoning in license plate numbers of drug dealers’ cars.

The benefit to the community does not end with the deed. With each payment and repayment bonds within the community strengthen and those people who have been told that they have no value; the unemployed, immigrants, the young and the elderly discover that they can in fact be an asset to the community. One participant of the scheme said it was “impossible not to make friends”.

In the UK, participation in Time Banks by those earning less than ’£10 000 is double that of the same demographic group participating in traditional volunteer work. Time Banks are redefining the responsible democratic citizen. A Californian law firm receives payment for legal advice by clients turning up to demonstrate outside the workplaces of bad employers.

Time as money schemes have the potential to revitalise the public sector by turning it from resource-stretched to resource-rich. With the expansion of the Time Bank scheme long waiting lists of mental health patients will be a thing of the past.

British doctors are already referring patients with long term depression to local Time Banks. What about New Zealand’s over stretched parole service and high rates of reoffending? In San Diego ex-prisoners pay for aftercare services in time dollars earned by being part of a support group.

In Washington D.C. volunteer youth jurors on a special Youth Court jury are paid in time dollars for their work. The youth offenders go before the court and are given community service sentences, Lifeskills training, they must make an apology to the victims and become a youth juror themselves.

The Youth Court is helping break down the cycle of reoffending which many justice systems encourage. In this way youth suddenly become responsible for participating in their community and finding alternatives to crime. One youth who was sentenced at the Youth Court later became a volunteer juror, helping other youth like himself.

What of Auckland’s growing traffic problem caused by low rates of public transport use? Plans have already been made in London for a “Tutor Commuter” program. You will be able to learn French on the Underground or teach English to new immigrants on the bus on your way to work.

In the 21st century Time Banks will have their day. Cahn’s goal, “To create a society where decency and caring are rewarded automatically” is becoming a reality in London, Washington and many other cities. How long before New Zealand joins this global movement? It is only a matter of time.

LEARN MORE

Time Dollar USA

Time Banks UK

Neo-colonialism ratified at Pacific Islands’ Forum

Friday, November 4th, 2005

Omar Hamed

Today Pacific Island nations at the Pacific Island Forums have welcomed and endorsed the Pacific Plan, a blueprint for neo-colonialism in the south Pacific.

wto

The Governments of Australia, the Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Nauru, New Zealand, Niue, Papua New Guinea, Republic of the Marshall Islands, Samoa, Solomon Islands, Tuvalu and Vanuatu, and representatives of Palau and Tonga. New Caledonia, French Polynesia Timor-Leste and Tokelau endorsed the Pacific Plan which is mainly based around implementing a number of trade liberalisation agreements notably Pacific Island Countries Trade Agreement (PICTA), the Economic Partnership Agreements (EPA) and the Pacific Agreement on Closer Economic Relations (PACER).

Professor Wadan Narsey, the Director of Employment and Labour Market Studies at the University of the South Pacific in Fiji has a good and brief summary of these different agreements in the Pacific Magazine.

Particularly concerning was the news that Pacific leaders have adopted a roadmap that paves the way for, “Expansion of market for trade in goods under the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA), the Pacific Island Countries Trade Agreement (PICTA), the Pacific Agreement on Closer Economic Relations (PACER), and through trade arrangements with non-Forum members.

  • Integration of trade in services, including temporary movement of labour, into the Pacific Island Countries Trade Agreement (PICTA) and the Economic Partnerships Agreement (EPA).” A clear reference to WTO GATT and GATS agreements.

wtokills
The recent round of talks this week has angered some NGOs concerned at the speed with which these trade agreements are taking place. Greenpeace Oceans Campaigner, Lagi Toribau said in a press release at the end of the conference that “Despite the rhetoric about security in the Plan, it currently fails to deliver true security for Pacific Island communities, such as health, food and real energy security”.

Oxfam New Zealand Executive Director, Barry Coates was at a meeting of civil society groups in Papua New Guinea to launch a report on Vanuatu’s accession to the World Trade Organisation called “Make Extortion History” and to seek a freeze on trade negotiations. He said on the Oxfam website that “Small Pacific countries have much less to gain than most other nations from joining the WTO, due to factors like the wide dispersal of their populations and the great distances to markets. They of all countries should be allowed to try and find ways to use international trade as a means to enhance their development. Instead, they are subjected to intense pressure to open up their economies for the benefit of foreign exporters and multinationals.”

Oxfam New Zealand have been watching the Pacific Plan for some time now and their report “Make Extortion History” and a number of Pacific focused reports about the effects of economic deregulation and New Zealand’s extortion in the pacific are available online.

Although NGOs wanted more time and more consultation John Howard and Helen Clark pushed through the Pacific Plan. “I believe the work that is being done to build a region-wide consensus about what the priorities are will in turn then influence national plans and give people guidance on how to take that development further,” stated Clark pushing ahead priorities that Professor Jane Kelsey has linked with a strategy of colonialism and exploitation in the South Pacific. Kelsey in her reader friendly A PEOPLE’S GUIDE TO PACER, The Implications for the Pacific Islands of the Pacific Agreement on Closer Economic Relations points out that “Pacific people were excluded from debating these developments because of the secretive way that trade negotiations are conducted and the willingness of governments to buy into that anti-democratic process. Regional NGOs, especially PANG, challenged the lack of transparency and‚ civil society input when they discovered what was happening in 2001. Their voices were ignored.”

Kelsey has also been involved in a number of other studies of recolonisation in the Pacific and her major reports concern the Economic Partnership Agreements and PACER.

Dev-Zone, an Aotearoa NGO resource Centre on international trade and development, and the Global Education Centre’s sister organisation, has a number of different resources available on their website concerning trade in the Pacific.

In the lead up to the Hong Kong WTO conference in December Kelsey has said in a press release for the Action, Research & Education Network of Aotearoa (ARENA) that, “Those of us whose governments are making these outrageous demands (through PACER, PICTA and the WTO) need to find ways to challenge their role in that process.” Kelsey further highlights the need for sustained campaigning around the WTO conference in regards to the behaviour of the WTO and the role New Zealand and Australia play in the South Pacific.

For further articles about the Pacific Plan check out Arena and Scoop.

This Article and Photos were published on Indymedia on October 28, 2005.

Hunger, poverty and the real agenda of the IMF and world bank

Tuesday, October 18th, 2005

Cameron Walker

Created out of the Bretton Woods Conference of 1944 the World Bank and International Monetary Fund (IMF) claim to have the noble aims of helping third world nations to finance the building of infrastructure and to bridge balance of payments difficulties. However, many claim both institutions help ruin the economies of Third World nations through forced structural adjustment programmes, which are a condition to any loans or aid from them. Many also claim that the policies of both institutions directly benefit powerful multi-national corporations.

IMF logoThe draconian terms of the structural adjustment programmes often include the elimination of tariffs on imports, the forced privatisation of state owned assets, the removal of subsidies to local producers, the reduction of crop diversity and the forced export of crops to a small number of foreign buyers. These policies often lead to much poverty and injustice.

In 1999 the Bolivian city of Cochabamba privatised its public water supply under the intense pressure of the World Bank. The citizens of Cochabamba then as a result faced water bill price hikes of $20 a month. In a nation where the minimum wage is under $100 a month this was absolutely disastrous. What is even more shocking is that after privatisation the citizens of Cochabamba ended up paying more a month for water than people who live in the wealthiest suburbs of Washington D.C.

The policies of the World Bank and IMF are largely blamed for causing Malawi’s 2002 famine. The strings which were attached to an IMF loan package to Malawi included the privatisation of the Agricultural Development and Marketing Corporation, removal of agricultural subsidies to small farmers and the deregulation of price controls on staple foods such as maize. Between October 2001 and March 2002 the price of maize increased by 400 percent as a result of these policies. In 2002 Malawi spent 20 percent of its national budget on debt repayment to Western creditors. This is more than Malawi spent on health, education and agriculture combined.

The foreign debt of many Third World nations will literally take hundreds of years to pay off. Indonesia’s foreign debt for example is $262 billion. This is 170 percent of Indonesia’s gross domestic product. Every day poor nations pay $100 million to Western creditors in debt repayment, mainly to institutions such as the IMF and the World Bank. Since the 1980’s the policies of these institutions have led to developing nations paying out five times as much capital to rich industrialised nations as they have received in aid.

Decisions at the World Bank and the IMF are made by a vote of the board of executive directors, which represent member states. The voting process does not reflect proper democracy because voting power is determined by the amount a member state contributes to the institutions. This means the U.S.A has roughly 17 percent of the vote and has a dominant voice on policy and at times has exercised the power of veto. The World’s seven largest industrialised nations have 45 percent of the vote at the World Bank and IMF. As a result of this the policies of the World Bank and IMF often directly benefit industries based in Western industrialised nations. The company which bought Cochabamba’s water supply after it was privatised was Aguas del Tunari, part of International Water Limited, a British based company half owned by the American engineering giant, Bechtel. U.S. treasury officials have estimated that for every $1 the United States contributes to International development banks, U.S. exporters win more than U.S. $2 in bank financed procurement contracts.

It would seem to be common sense for poor nations to be encouraged to be self sufficient in food production; common sense seems to be contrary to World Bank and IMF policy. Some poor nations have had to endure having their crop diversity limited and then being forced to export the few crops produced to Western Nations. In the early 1990’s the famous investigative journalist John Pilger pointed out that forty percent of arable land in Senegal is used for growing peanuts for Western margarine and in Ghana fifty percent of arable land is used for growing cocoa for export to make Western chocolate bars. Both of these nations suffer malnutrition yet export most of their crops; a scene reminiscent of Ireland under British Imperialism during the potato famine of the 1840’s.

It is easy to come to the conclusion that the World Bank and IMF’s true agenda is very different than the one they sell to the public. They claim to help poor nations but really aid multinational corporations at the expense of Third World nations. These two institutions need to be greatly reformed to be any use in helping tackle one of the greatest problems of the early 21st Century, poverty.

References

Burgo, Ezequiel and Stewart, Heather ( 29/10/2002) The Guardian

Pilger, John (1994) Distant Voices London: Vintage

Pilger, John (2002) The New Rulers Of The World London: Verso

LEARN MORE

World Bank/IMF Factsheet

Greens shouldn’t waste time with immoral greed merchants

Wednesday, October 12th, 2005

Cameron Walker

Despite a well intentioned and highly publicized meeting, big business still finds the Green Party scary. By the way the media has portrayed this it seems like we are all supposed to be worried that the anti-business Greens’ may well form part of the next government.

On the contrary I would be more worried if big business and their lobbyists weren’t afraid of the Green agenda.

Policies which place the best interests of the business leaders and lobbyists present at the meeting, such as Telecom CEO Theresa Gattung and Business Roundtable Executive Director Roger Kerr, don’t necessarily co-incide with the best interests of the majority of New Zealand’s people or indeed the nation’s economy.

New Zealand’s telecommunications network was built up by the taxpayer, a form of economic collectivism the likes of Roger Kerr would no doubt oppose today. In 1990, as part of New Zealand’s neo-liberal reforms, Telecom was sold off for the small sum of $4.25 billion to two American multinational corporations Bell Atlantic and Ameritech. Considering the fact that every year since 1990 Telecom has posted profits well into the hundreds of millions of dollars makes the privatisation seem like an act of corporate welfare.

Thousands of technical staff were layed off, to be replaced with contractors on worse pay and conditions. Meanwhile the ranks of management, many with no specific knowledge of telecommunications, and their pay packets ballooned. Theresa Gattung receives a pay packet of 2.9 million a year. Yet just three years ago many Telecom technical staff, found out that if they wanted to keep their jobs they would have to apply to work for a contracting firm and lose their sick leave and redundacy payments that they’d built up over many years. Telecom claimed it needed to do this to remain viable.

According to Statistics NZ only 22 percent of Telecom shareholders are New Zealanders. This means the majority of Telecom’s profits go to wealthy overseas shareholders rather than being re-invested in the New Zealand economy or in the telecommunications network.

When they act like this it’s not suprising that these so called business leaders’ would oppose Green proposals to limit foreign control of the economy, strengthen workers rights and to increase the minimum wage.

Roger Kerr, and his organisation the Business Roundtable, have spent much time, effort and resources over the past two decades, supporting basically every government policy that has increased big business profits, at the expense of workers and the poor. He is also noted for opposing policies which help the majority of people, such as four weeks annual leave.

In the 1980’s the Business Roundtable viewed Pinochet’s Chile as a suitable economic model for New Zealand to follow.

In 1988 after TV One’s current affairs programme, Frontline, exposed that the workers employed by a New Zealand forestry company in Chile were axing trees, while wearing open toed sandals and living in rat infested huts, then Roundtable Chairman Ron Trotter, argued that New Zealand needed Chilean style’ labour laws.

A few years later the Roundtable got their wish when the Employment Contracts Act was passed, leading to less bargaining power for unions and worse wages. Its not suprising that one commentator dubbed New Zealand’s free market reforms Pinochet without the gun’.

Despite the well documented evidence that New Zealand’s neo-liberal reforms greatly increased poverty and inequality Kerr says we need to go back to the days of Pinochet without the gun’.

The Greens shouldn’t waste time trying to reassure the Roger Kerrs and Theresa Gattungs of our nation. To do so appears to be appeasement. If the party is to keep its principled policies then it should expect oppostion from such unscrupulous people and organisations.