This week, the G-20, the 20 countries with the largest Gross Domestic Product, met to discuss the implications of the economic crisis. Both in the suites and on the streets, uncertainty and downright skepticism loom over the talks. President Lula of Brazil has already stated that the financial crisis has been caused by greedy profiteers from the U.S. and Europe.
Last Thursday, the Guardian reported him saying, “This crisis was caused by no Black man or woman or by no indigenous person or by no poor person…this crisis was fostered and boosted by irrational behavior of some people that are white, blue-eyed. Before the crisis they looked like they knew everything about economics, and they have demonstrated they know nothing about economics.”
If that is true, it is ironic to me that those that have the least will suffer the greatest. Those countries whose businesses do not even trade on the stock market will reap the devastation of the market collapse even more harshly than those countries that have allowed the market to go unregulated for years.
Haiti is the perfect example of this paternalism and poor judgment. For decades, the U.S. and Europe have meddled in Haitian political and economic affairs. None of that meddling has resulted in prosperity for any sector of the society, and has only put basic necessities out of the reach of the world’s poorest people. Eighty percent of Haiti’s people are forced to live on $2 a day, 50 percent survive on a $1 a day or less. One in four children are chronically malnourished. Despite these grim statistics, Haiti is still forced to pay the World Bank, an institution that was supposedly founded for poverty alleviation, one million dollars per week in debt payments. These debts were incurred because Haiti was forced to adopt many neo-liberal programs, programs designed to liberalize trade and put basic services (e.g., water, utilities) into the hands of big business. Like many countries, the loans to Haiti were put into the hands of dictators who supported the interests of big business and had no interest in servicing the poor.
Dr. Paul Farmer, who lived in Haiti for over 20 years providing healthcare to the poorest of the poor stated clearly, Haiti’s debt is both onerous and odious…[t]he payments are literally killing people, as every dollar sent to Washington is a dollar Haiti could spend on healthcare, nutrition and feeding programs, desperately needed infrastructure and clean water. Half of the loans were given to the Duvaliers and other dictatorships, and spent on presidential luxuries, not development programs for the poor.
Other countries have also suffered from the double speak and the purely ideological embrace of rabid unregulated capitalism. Around the world, the markets have been used to keep poor countries poor.
Vulture Funds, a term coined to describe hedge funds that buy the debt of poor countries in Africa and Latin America, are feasting from the inequalities of the world financial system. Simply put, Vulture Funds are extortionists who prey on the vulnerabilities of economically deprived countries who want to be able to enter the world market.
Vulture Funds have sued countries like Zambia for the full value of the debt plus ballooned interest and penalty payments. Like unscrupulous mortgage brokers, Vulture Funds have used both legal and illegal methods to coerce poor countries into payments that for many countries decimate their entire budgets for healthcare, sanitation and water.
While Lula’s comments may be politically incorrect, they embody the frustration of so many countries that have been intimidated into following the neo-liberal model, only to see it crumble at their feet. Instead of distracting from the failures of predictable paternalistic approaches, the West would be wise to listen to the voices from Brazil, South Africa, and beyond just the G-20, to find a solution with global recovery and benefits.
Nicole C. Lee is the Executive Director of TransAfrica Forum.
