Thursday, February 28, 2013

Why Did The Poorest Countries Fail to Catch Up? Vulture Globalization.


“Why did the poorest countries fail to catch up?”  Before we can discuss development or failure through war and peace in so-called undeveloped nation-states, it is important to recap the history of the beast that places a slave collar on those so-called undeveloped nation-states.

The relationship between war and development, and peace and development correlate in the constant exploitation and generation of global capital profit under the banner of capitalism and globalization.  Free trade agreements between nation-state actors, from the era of the Treaty of Westphalia and the East India Company, birthed the original concept of international markets and early capitalism.  Anyone who has studied capitalism in an unbiased manner understands the basic pillar of capitalism: to generate capital, one must own capital, and eventually the available capital becomes consolidated within an elite group of owners until more paper capital is created and placed into circulation which eventually devaluates currency.  It is important to consider that, within modern global capitalism that a devaluated national currency can be profited on internationally, by those with capital, through the international currency exchange establish through the International Monetary Fund (IMF).

The development of world submission to vulture capitalism, or globalization and development in politically correct terms; occurred through two major international wars.

World War II

After the Allied victory of World War II, the fallacy of the League of Nations was rectified by the creation of the United Nations and a five permanent member security council with veto power.  Four of the five permanent members were open free markets supporting capitalism, with Russia being the sole exception (although Communist nation-states still import and export trade).  The world globalization process began after WWII with the creation of the IMF, which regulated currency values exchanges of capital across nation-state borders, the General Agreement on Tariffs and Trade (GATT), which would become the World Trade Organization (WTO), and the International Bank for Reconstruction and Development, which would become the World Bank. 

What was the first thing the free market economic powers did upon the creation of the GATT?  They generously provided their colonial possessions with membership.  At this point, through “regionalized economic systems that provide the main motors of the global economy”, capitalism began to outgrow nation-state borders into a regional international so-called free market (Beger & Weber, p. 8).  Just as the early days of capitalism within nation-state borders, capital unleashed on the international stage began a process of capital generation and a consolidation period was initiated as the market expanded to enhance exploitation of colonial property natural resources with increasing technologies.  With the establishment of the GATT/WTO, the IMF, and the IBRD/World Bank, it is easy to see how “rich countries tended to grow as a club” and that there has never been “negative-growth in the rich world” (Milanovic, p. 4).  Capital creates capital. 

It was only the balance of power created by the bi-polar Cold War between capitalism and communism that held capitalism and the international market from globalizing, yet even in a stalemate capital was generated and consolidated by international banks and private sector capital through a massive arms race.

Cold War

After the collapse of the Soviet Union and the end of the Cold War in the “1990s, the most economically significant post-communist nation-states that arose from the collapse of the Soviet power (including Russia itself), were reconfigured as part of the ‘emerging economies’ or ‘emerging markets’” (Berger & Weber, p. 9).  With no communist hegemon to balance against the rising capitalist behemoth of the United States which had moved “to a position of unrivaled global power”, capitalist globalization expanded Eastward and Southward with the backing of the UN Security Council, and the collective capital of the IMF and World Bank, in order to open previously communist states and post-colonial states to the free market and, more importantly, globalize the former communist and colonial state borders for the infiltration of foreign private sector investment capital.

Globalization and international capital consolidation had become complete and was illustrated by the “key characteristic of global development by the 1990s was the growing concentration of economic power in the hands of a small number of large oligopolistic corporations” (Berger & Weber, p. 8).

Why Did the Poorest Countries Fail to Catch up?

The Carnegie Endowment for International Peace report by Milanovic reminds me of a kid that watches somebody get beat down on the playground and when asked about it by teachers and adults, replies “Did something happen to Johnny?”

This report was almost offensive to read as Milanovic simply regurgitates twisted World Bank statistics and points out previous economic theories on globalization, while puzzling over the “disastrous performance of LDCs during the era of globalization” like someone who masters quantum physics, but doesn’t understand the basic concepts of capitalism (p.9).  What is worse is that the bulk of statistics and charts create an overall average (or mean) for multiple categories, when each so-called LDC has a specific history of political, economic, and social events that has shaped its current political and economic condition.  Category averages derived from all countries, the statistics offsetting each other because of the number of states being averaged, offer little meaning when dealing with post-colonial states, post-communist states, and states that didn’t even exist before World War II.  

Let’s look at how Milanovic attempts to discern the failure of LDC development.  In these areas, we can see the exploitative arm of international capitalist profiting during times of civil and international conflict, as well as during times of peace.

1] Civil Wars and International Conflict.  Conflict and the banner of so-called reconstruction is the World Bank’s main capital maker.  The Bank, as it is often called in its own reports, gained its original calling during the reconstruction of Europe after WWII and has greatly expanded its international mandate and methods over the past half century.  Everywhere, meaning post-communist soviet satellite states and post-colonial LCDs, that the UN Security council has sent multi-national so-called peacekeeping forces to over the last thirty years, the World Bank has attempted to follow in their footsteps with reconstruction loan promises and foreign private sector capital actors ready for exploitive investment.  Behind some UN operations, states became stable enough for foreign private sector infiltration while in others, such as Somalia, stabilization was unsuccessful.  World Bank loans often come with conditions that open the flood gates for foreign capital investment that result in loan interest rate costs for the recipient state while “private capital flows in the past 20 to 30 years have generally gone from one rich country to another rich country” via the private sector exploitation of natural resources and cheap labor force exploitation in Lower Developed Countries (LDCs).

Even as the United Nations, and NATO for that matter, has continued to expand its role on the international stage, they contribute to enforcing hypocritical sanctions and eventual military ‘sticks’ that remove and rebuild state regimes that just will not accept the international free market ‘carrots’.  Each LCD nation-state that has been internationally ganged on, from Iraq to Libya and soon Iran, has an individual account that has ended the same way, with a new regime in place that opened to the global market and welcomed the World Bank and IMF.    

“Total disbursements from international financial institutions (IFIs) to the LDCs have grown from 2.75 percent of the recipient’s GDI in the first half of the 1980s to about 3 percent of their GDI in the first years of the new century.  The expansion was mostly due to an increase in World Bank loans to the LDCs”

2] Institutions, reform and policies.  When these terms are used to criticize a nation-state, it is usually because a domestic policy is barring maximum foreign private sector investment and profit in some way.  Institutions equal a stable government.  Private sector capital doesn’t generate profits well under politically unstable conditions.  In the cases of policy, requirements similar to deregulating energy or some other resource is usually the case.  Foreign private sector capital is unable to invest in domestic regulated resources.  In many cases with the World Bank, educational reforms (often technical) are an important issue.  This is an important condition because private sector capital needs a human work force on the ground in the LDC they are economically exploiting for profit.  These three terms, which can be attributed to many other areas outside of the simple examples I provided, are basically considered terms for World Bank and IMF loans.

  3] Lower trade (policies and outcomes) to Gross Domestic Product ratio.  The more debt a nation-state accrues under these international capitalist loans with conditions (which allow entry for the foreign private sector capitalist investors), the more slowed economic growth will be.  In 2011, Jamaica’s annual debt payments actually exceeded their annual GDP and the state defaulted from their 2010 IMF agreement (which, as I have mentioned in previous posts, the IMF loans capital in the strongest international currency while loan recipient states are required to pay back the loan in their own devaluated domestic currency).  In Jamaica’s case, the international economic community threatened to isolate them if they did not return to the IMF table for another loan, this one required a debt exchange at higher interest rates.

  4] Attracting foreign investment as a way to gain access to new technology.  If foreign investment owns the technology, they own the profits.  The foreign capital investment may create some temporary jobs, but when the foreign investment has exceeded its profiting, or a natural resource is depleted, the capital will again flow back to the rich nation-state or private sector international actor.  If the international loans are utilized to purchase technology, the loan repayment collects large amounts of interest (and if it is IMF, the currency difference adds to the total) while technologies have durations, and new technologies often replace older technologies making them obsolete in completing with new technologies. 

Closing Statement

There is no separate relationship between economic development during times of war and times of peace for developing nation-states on the international stage.  There is only the international caste of global capitalism.

Berger, M. T. & Weber H.  War, Peace and Progress: Conflict, Development, (in)security and Violence in the 21st Century.  Third World Quarterly, 30(1), 2009. P. 1-16.

Milanovic, Branko.  Why Did The Poorest Countries Fail to Catch Up?  Trade, Equity and Development Project, Number 62, November 2005.  Carnegie Endowment for International Peace.

 

 

Tuesday, February 26, 2013

17th-18th Century Propaganda - British Colonialism in India


Many of us with western society origins grew up under these state propagated misconceptions, and were quite shocked to begin studying international history, from an unbiased position, which equally represented the victim’s side of colonial exploitation.  These misconceptions, more precisely propaganda on undeveloped minds or diversions from the issues altogether, are often created and mass produced by controlling political forces.  Today, these elements are political, corporate, and state, most often in cooptation, while a combination of state and corporations during the age of British Empire, when technology of propaganda was basically limited to theatre and literature.  A good majority of those who reported from the colonial territories were either in the colonial territories on the dime of East India Company Shareholders, the British government or optimistic individuals, often in debt, present on behalf of their own private investments.  Prior to the technological expansion of the internet, even just twenty years ago, the information being taught in American and British schools were selective and state regulated.  It is no wonder that many of us, if we were lucky, heard about Martin Luther King once a year.  Even though the modern public school systems have been forced to expand certain areas of studies that the state would rather not reflect on, due to technologies that make researching historical documents instantaneous, the social shaping process is still the same today, only magnified tenfold, with the mass production of historical documentaries, books, and media.  One must own capital to mass produce information, and those entities that possess capital means of mass production are usually not eager to share unbiased information or accumulated capital, and usually utilize their capital toward the false glamorization, propagation of history or current politics, or, the current trend, diversion through mass production of meaningless entertainment.

The first example of colonial propaganda that we should take a look at is in the area of playwrights, as theater was a main form of entertainment, and social engagements, during the British Empire during the 16th, 17th and 18th centuries.  A play written for stage by Walter Mountfort in 1632, entitled ‘The Launching of the Mary’ is clear East India Company propaganda.  The play was “largely devoted to numerous speeches that are thinly veiled encomia extolling mercantilist philosophy” and was “focused on a singular objective: in the face of criticism from the general public and competitors, the play aims to defend and promote the ideology of its author’s parent company. The play is a text produced largely for its propaganda value”[1]. 

Of course, the political and economic positions, or more importantly the link to their source funding, which most often restricted or shaped written material created by playwrights, were not always obvious to a mind unfamiliar with current affairs, but often could be identified subconsciously, or naturally through the influences, experiences, acquired tastes, and second hand accounts related to the playwright.

On the literary front, there were scores of literary collections that created exotic, “benign and sunlit” mental images of colonialism under the British Empire.  The many writers and poets that glamorized the British colonies had traveled to those colonies on the funding of state or corporate entities, especially in India where “East India Company poets, like William Jones, John Leyden and Thomas Medwin, were dependent on the Company for patronage of their scholarship and advancement in their careers [2].

I have searched in-depth for the full text of the poems “Calcutta: A Poem” and “India: A Poem in Four Cantos”, but regrettably, to this point have not been able to access the text anywhere for referencing.

Even after the death of the East India Company, literature at the end of the 19th century and the beginning of the 20th century continued to reflect British colonialism as a natural event of civilization.  Rudyard Kipling’s ‘Jungle Book’ collection, to use a piece of literature that most everyone is familiar with, is set in colonial India and, even though a children’ book aimed mostly animal characters, presents British colonialism as a very natural way of life for the British. 

An example of this is the setting for the story of Rikki-Tikki-Tavi which paints the vivid setting of a secure, upper class family environment:

1.) Rikki-tikki went out into the garden to see what was to be seen. It was a large garden, only half cultivated, with bushes, as big as summer-houses, of Marshal Niel roses, lime and orange trees, clumps of bamboos, and thickets of high grass.” 2.) “They gave him a little piece of raw meat. Rikki-tikki liked it immensely, and when it was finished he went out into the veranda and sat in the sunshine” 3.)  “Early in the morning Rikki-tikki came to early breakfast in the veranda riding on Teddy's shoulder, and they gave him banana and some boiled egg. He sat on all their laps one after the other” [3]

[1] Choi, Myungjin.  Social Money: Literary Engagements with Economics in Early Modern English Drama, p. 58-60. University of Western Ontario, 2011.  Accessed on February 26, 2013 from http://ir.lib.uwo.ca/cgi/viewcontent.cgi?article=1391&context=etd

[2] Malhotra, Ashok.  The Making of British India Fictions: 1772-1823, p.35.  University of Edinburgh, 2009.  Accessed on February 26, 2013 from http://www.era.lib.ed.ac.uk/bitstream/1842/4504/1/Malhotra2009.pdf

Kipling, Rudyard.  The Jungle Book.  Public Domain.  Accessed on February 26, 2013 from http://www.online-literature.com/kipling/jungle_book/8/

Sunday, February 24, 2013

Analysis of Dr. Edward Said's Orientalism: Imperial Media Influence


           The theory of Orientalism, derived by Dr. Edward Said, is centered on the stereotypical views of western civilization towards the cultures and people of the East, once under British Imperialism, from the regions of the Middle East to Africa, and India.  While negative stereotypes exist in western civilization towards people in Africa and India, and people of color in general, these two geographic regions take a backseat to the mental imagery of the Middle East within the minds of most westerners.  In modern Western society, especially the United States, the stereotypes that the mass population has subconsciously developed towards people in the Middle East, for example that Israeli Jews are often innocent victims and that all Arabs are raving terrorists  that are hell bent on murdering westerners, are predominantly consumed through the abundance of media and television entertainment.  During the era of British imperialism and military occupation just over a century ago, the equivalent of television media was the distributed printed written word.

Alfred Egmont Hake

                The Hake account of the General Gordon evacuation mission in Khartoum in 1885 is a prime example of skillfully bias reporting that paints the Arab people of Khartoum, in modern Sudan, as blood thirsty savages.  Without explaining that Sudan was under military occupation by the British Protectorate Egypt, and that General Gordon himself had previously held the Governor-Generalship of Sudan from 1876 to 1879 when he angered a good majority of the population by removing a pillar of the local economy by abolishing slavery, Hake opens his account by capturing his British audience by creating a British protagonist that must rescue “Europeans, civil servants, widows and orphans, and a garrison of one thousand men, one third of whom were disaffected” from troubled Khartoum [1] .  The Hake account is obviously pro-British imperialism in nature and portrays the foreign occupiers almost in a defensive light while portraying the indigenous uprising as an act of aggression.  This is a common media reporting tactic which is still in heavy utilization today.   Take for example the Hake account of the steamer that had a “volley was fired into her, wounding an officer and a soldier. The steamer returned the fire, killing five”.  Hake’s report here focuses on the volley being fired and the two injuries instead of the five Arabs killed by machine gun fire, reminiscent of modern news reports of stray missiles being fired from the Palestinian territories into Israeli fields, with an Israeli response of shelling the entire civilian infrastructure [2].  There is a pro-British political slant in Hake’s account that portrays all Arabs as barbarians, and these types of spins have been commonly used on citizens of imperialist empires and states as one of the heavy components of Said’s concept of orientalism.

Charles James Wills

                The same type of orientalism opinion shaping and stereotyping can be seen on a socio-cultural level within Wills’ account on the Persian Wedding in 1815.  Wills clearly plays on his British reader’s Christian indoctrination, and unfamiliarity of Islamic culture to paint an absurdly bizarre, and even twisted, perception of Islamic marriage and Islamic society.  There is no attempt at unveiling cultural relativity between Britain and Persia in Wills’ account, nor any attempt at understanding cultural history outside of Christian culture in Britain.  Wills reports the account from a view of complete British cultural superiority toward any colonial element that is different from that of the British Empire.

                Wills is quick to take subtle negative jabs at the modesty of the Islamic bride with his description of her dress “which hangs down like a long mask in front of the Persian woman's face, when clad in her hideous and purposely unbecoming outdoor costume: which costume, sad to say, is also an impenetrable disguise. In it all women are alike”[3].  I am certain that Wills, while recording his judgments on this wedding for future popular print, never considered that Muslim men and women in Persia may have regarded the immodest dress of British women in the same manner in which Wills was viewing their conservatism.  One interesting aspect of Wills’ account is his strong interest in the procedures of the marriage contract, and British readers must have viewed this process, through Wills’ descriptive opinions, to be exotic and barbaric economic bartering even though these types of marriage contracts are recorded as far back into history as the biblical Old Testament, a book regarded by British Christians as sacred.  Again, it is the printed report during this era in history, long before the technology of television, which shaped the minds of the British masses and created what Dr. Said would eventually term, a century later, Orientalism.

Colonel L. du Couret

                Couret’s report on judicial procedures in Arabia continues the trend of stereotyping and orientalism within 19th and early 20th century British media with an outlandish printed account on two particular judicial cases he witnessed during an Arabian court session he was privileged enough to view.  Instead of actually describing the most common judicial procedurals “of the women who complained of ill treatment on the part of their husbands; men who accused their wives of frailty; divisions of inheritance to adjust; thefts and frauds to punish”[4], which would have provided a realistic estimate of justice, social trends, and judicial sentencing in Arabian society for the British people to understand, de Couret provides his audience of media consumption with accounts on the two most irregular and ridiculous events of the evening and provides no information at all on regular the judicial structure, trends or procedures.  Instead of portraying an unbiased view of this foreign justice system to the British people, Couret relates the 19th century Arabian judicial court to “tales related to us in the ‘Arabian Nights’" which was originally written over five hundred years prior and enhancing the subconscious ideology of orientalism [5].

Closing

                Imperialist states often control the views of their subjects and people, through propagated media such as print in the 19th century and satellite television in the 21st century, in order to justify their own actions and create unfavorable images of the people being exploited or conquered.  Said’s concept of orientalism is a reality, but the term ‘orientalism’ is only applicable due to the historical power distribution of the geographic globe.  If certain historic events would have developed different results, power roles on the international stage could have been different and the same media instruments of imperialism might create cultural stereotypes that a person such as Dr. Said might term “Europeanism” or “Americanism”.   

 

Notes

1. Hake, Alfred.  The Death of General Gordon at Khartoum, 1885.  Islamic History Sourcebook, Fordham University.  Accessed on February 23, 2013 from  http://www.fordham.edu/halsall/islam/1885khartoum1.asp

2. Hake, Alfred.  The Death of General Gordon at Khartoum, 1885.  Islamic History Sourcebook, Fordham University.  Accessed on February 23, 2013 from  http://www.fordham.edu/halsall/islam/1885khartoum1.asp

3. Wills, Charles.  A Persian Wedding, 1885.  Islamic History Sourcebook, Fordham University. Accessed on February 23, 2013 from http://www.fordham.edu/halsall/islam/1885persianwedding.asp

4. Du Couret, L.  Justice in Arabia, 1890.  Islamic History Sourcebook, Fordham University. Accessed on February 23, 2013 from http://www.fordham.edu/halsall/islam/1898arabiajustice.asp

 5. Du Couret, L.  Justice in Arabia, 1890.  Islamic History Sourcebook, Fordham University. Accessed on February 23, 2013 from http://www.fordham.edu/halsall/islam/1898arabiajustice.asp

Thursday, February 21, 2013

Jamaica - World Bank, IMF, UNDP, and UNCTAD


Jamaica, with an estimated population of 2, 709, 300 in 2011, has not succeeded in positive development, according to private sector dictated international standards, over the past four decades.  Currently, the largest challenge is Jamaica’s massive international debt “which is currently estimated at 139.7% of the Gross Domestic Product” (Work Bank, 2013). The Jamaican debt to GDP (Gross Domestic Product) ratio is third highest in the world.  The unemployment rate in Jamaica hovered at approximately 14.3% in 2012 with notably higher unemployment and crime rates among the youth.  Jamaica’s murder rate is one of the highest in the world today.

The World Bank

As would be expected, the World Bank has had its hands in Jamaica since its independence in 1962.  The World Bank currently boasts of seven ongoing projects in Jamaica: 1. Inner City Basic Services Project ($29.3 Million dollars), 2. Social Protection Project ($40 million dollars), 3. Jamaica Second HIV/AIDS Project (a meager $10 million), 4. Rural Economic Development Initiative ($15 million), 5. Early Childhoodhood Development Project ($15 million dollars), 6. Energy Security and Efficiency Project ($15 million dollars) and 7. Education Transformation Capacity Building ($16 million dollars).

The most recent activity of the World Bank in Jamaica is in the form of a Jamaica-World Bank Country Partnership Strategy (CPS), designated for the period of FY10 through FY13, with the goals of 1) supporting economic stability through fiscal and debt sustainability 2) promoting inclusive growth by supporting programs that strengthen human capital, prevent crime and violence and promote rural development, and 3) Promote sustained growth by improving competitiveness.  The Country Partnership Strategy is a joint effort between the World Bank, the Caribbean Development Bank and the Inter-American Bank.

Looking at these three goals in-depth, we see that the first pillar of supporting economic stability is where the two main policy-based loans are issued.  The second pillar of promoting inclusive growth and the third pillar to promote sustained growth are the areas where the private sector infiltrates the state, which will pay for these ‘contributions’ in development with conditional loan funding described in the first pillar of the World Bank agreement.  In order to illustrate these methods in most basic format: the field of crime prevention would entail the purchasing of new police technologies to battle crime, agricultural development would entail purchasing agricultural technologies, and battling diseases would entail purchasing technologies and medicines.

One of the major concerns contained in the Country Partnership Strategy between the World Bank and Jamaica was the issue that “35 percent of potential workers remained outside of the labor force and two-thirds of those have never passed a Grade 9 level test, which is a requirement to attain vocational certification” (World Bank, Country Partnership Strategy, 2010).  This is an issue because foreign investors can import their capital and detract natural resources, interest payments, and capital profits, but foreign capital requires technical workers on the ground.

The IMF

Jamaica recently agreed to terms with the IMF for a $750 million dollar loan with conditions, which could be finalized by the end of March 2013.  This comes after a 2010 IMF-Jamaica initiative (loan) became derailed (or default).  The current IMF loan to Jamaica comes with terms aimed toward a heavy push for a massive debt swap, the second debt swap that Jamaica has instituted since 2010, in which “860 billion Jamaican dollars ($9.1 billion) of higher interest local currency debt for lower-yielding bonds” (Rastello & Sabo, 2013).

Under a national debt so great, in conjunction to a barely surplus GDP (without loan payments included), is this not refinancing at the national level?  If there was any doubt, “Citigroup, which worked on the country's last debt swap, has also been mandated on this occasion.” (Kilby, 2013)  As a result of this second debt swap, which is basically considered a defaulted loan,  Fitch has “downgraded Jamaica's credit rating one notch further into highly speculative territory, to C, while Standard & Poor's Ratings Services lowered the country's ratings to selective default” (Tadena, 2013)

Submerged in such debt, yet capable of making a surplus, why would a state take on another international loan from the IMF after the first failure in 2010, when annual debt payments outweigh their entire annual GDP?  The following passages from a 2012 report on the Jamaican Economy by the Center for Economic and Policy Research provides an answer and paints a broader image:

“In the original IMF agreement, the Fund notes that, “[t]he [Jamaican] authorities anticipate that financial support from the Fund will also help unlock critical financing from other multilateral institutions.”  This likely was a driving factor for Jamaica’s reengagement with the Fund.” (Johnston & Montecino, p. 4)

Unlock critical funding from other multilateral institutions?

“….citing the direct economic benefits, Shaw cites the “positive signal” it would send to their international partners, the Inter-American Development Bank (IDB), World Bank, European Union (EU) and Caribbean Development Bank” (Johnston & Montecino, p. 4)

“While the IDB and World Bank are important sources of funding for the Jamaican government, they also hold a significant portion of Jamaica’s external debt, accounting for 15.0 percent and 7.7 percent respectively.  Repayments and interest paid to the IDB and World Bank partially offset the positive impact of their expenditures in Jamaica. In 2010, 1.2 percent of GDP ($159 million) went to repayments and interest to the two multilaterals. This number is anticipated to rise to $173.7 million in the current fiscal year.” (Johnston & Montecino, p. 5)

“The EU, which provides direct budget support, stopped disbursing, funds altogether after the ceasing of IMF reviews. In September 2011, the EU Ambassador told the Jamaican press, “We have already declared that we have to wait for Jamaica to re-engage with the IMF in order to continue disbursing our own funds,” adding, “We have a considerable amount of funding between now and the end of the financial year in the vicinity of US$70 million in grants for the budget, and part of the funds are quite ready to disburse as soon as the IMF issue is settled.”” (Johnston & Montecino, p. 5)

UNDP (United Nations Development Programme) and UNCTAD (United Nations Conference on Trade and Development)

I believe that the main problematic issue of ‘accepting continued international private capital credit or being completely cut-off by the international trade community’ that is facing Jamaica is evident at this point.  In closing, we will briefly look at the useless organizational tentacles of the United Nations. 

The last so-called contribution to Jamaica that was advertised by the UNDP was a series of Energy Conservation training courses conducted in Kingston at the end of 2012.  Energy conservation is one of Jamaica’s focus areas for attempting to reduce domestic spending as they go forward against insurmountable odds of attempting to gain a second independence, this time from international capital debt. (UNDP, 2013)

The Secretary-General  of the UNCTAD, Supachai Panitchpakdi, visited Jamaica in 2012 on a three day trip to commemorate the fiftieth anniversary of Jamaican foreign trade.  Meeting with political leaders, Panitchpakdi stated that “Jamaica has important economic capital upon which to build its development strategies in a manner ensuring greater inclusiveness, resilience and sustainability. Among these are a competitive labour force, strong export potential in tourism and other services, including the creative industries, and the existence of a large Jamaican diaspora community and its geographical proximity to the world's largest market - the United States.” (UNCTAD, 2012)  Seeing how Panitchpakdi’s visit to Jamaica was in November 2012 and Jamaica had derailed from the IMF in 2011, all this rhetoric about fifty years of foreign trade and new opportunities for development were an obvious public relation ploys encouraging a return to the international loan table, which has obviously occurred.

References

International Bank For Reconstruction and Development and the International Finance Corporation.  Country Partnership Strategy For Jamaica for the Period 2010-2013.  World Bank Report No. 52849-JM, February 23, 2010.  Accessed on February 20, 2013 from http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2010/09/13/000350881_20100913101116/Rendered/PDF/528490CAS0CORRIGENDUM0R20101001914.pdf

Jamaica Agrees $750m IMF Loan Terms.  BBC News, February 15, 2013.  Accessed on February 20, 2013 from http://www.bbc.co.uk/news/business-21478255

Johnston, Jake & Montecino, Juan.  Update on the Jamaican Economy.  Center for Economic and Policy Research, May 2012.  Accessed on February 20, 2013 from http://www.cepr.net/documents/publications/jamaica-2012-05.pdf

Kilby, Paul.  Investors Take Fresh Look at Jamaica After Deal.  Reuters, February 15, 2013.  Accessed February 20, 2013 from http://www.reuters.com/article/2013/02/15/jamaica-credit-idUSL1N0BF9KW20130215

Patterson, Chris.  Energy Conservation Critical to IMF Agreement – Minister Paulwell.  Jamaica Information Service, February 20, 2013.  Accessed on February 20, 2013 from http://www.jis.gov.jm/news/leads/33028

Rastello, Sandrine & Sabo, Eric.  IMF Agrees to $750 Million Jamaica Loan on Second Debt Swap.  Bloomberg News, February 15, 2013.  Accessed February 20, 2013 from http://www.bloomberg.com/news/2013-02-15/imf-agrees-to-750-million-jamaica-loan-on-second-debt-swap-1-.html

Tadena, Nathalie.  Moody’s Reviews Jamaica’s Rating for Possible Downgrade on Debt Exchange.  Wall Street Journal, February 14, 2013.  Accessed on February 20, 2013 from http://online.wsj.com/article/BT-CO-20130214-719384.html

United Nation Coference on Trade and Development.  Secretary-General Visits Jamaica on Fiftieth Anniversary of Country’s Independence, November 13, 2012.  Accessed on February 21, 2013 from http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=352

United Nations Development Programme.  Energy Conservation and Efficiency Training, February 19 2013.  Accessed on February 21, 2013 from http://www.jm.undp.org/node/629

Monday, February 18, 2013

East India Company


The East India Company had its origins at the beginning of the 17th century under the royal charter, titled Governor and Company of Merchants of London, by Elizabeth I, in order to compete with Portuguese traders in India and the Far East.  By 1708, the original joint-stock company had merged with a competing firm to create the Honorable East India Company.  The company amassed wealth in a variety of trade areas that included opium, cotton, tea, indigo, and silk.  By 1740, the company “was purely a commercial enterprise, which imported and exported from its factories in India”, and by the middle of the eighteenth century controlled the opium producing regions of Bengal and Bihar [1]  As the company expanded its territorial control over Mysire, Hyderabad, Punjab and the Mahratha states through a display of superior technological arms, “other Indian princes chose to preserve their independence by seeking an accommodation with the Company through unequal treaties, in which they agreed to surrender revenues” [ 2]  By 1815, the East India Company “owned the most powerful army in India and governed, directly and indirectly, Bengal, much of the upper Ganges basin and extensive areas of eastern and southern India”, and by  the turn of the 19th century, became “principally dependent on land taxes collected from the provinces it ruled” [3]  The private company found the most colonial success in the decentralization of Indian rule “where the central authority of Mughal emperors was dissolving” [4].

War, conquest and expansion also was a lucrative business which generated “profits, most of which found their way into the hands of soldiers” instead of making it “on to the Company’s reckoning sheets”[5]  The obvious difference between enlisting in the Royal military and the private Company military in India was that a man could acquire a handsome “nest egg for retirement or to provide an annuity for the families at home” more easily under the enlistment of the private sector.

The export profits in Opium were also immense until, in 1799, China, under emperor Kia King, banned the importation and cultivation of opium.  Prior to the Chinese ban on opium, it appears that the East India Company attempted to keep their ships out of the direct Opium trade into China by inserting middle men opium agents, who would buy it from company owned producers and processors. [6]  After the turn of the century, medical studies showing the benefits of opium became popular and opium exports were shifted toward Europe and the United States.

The accumulating wealth and military power of the East India Company was a growing concern within the British government and it appears that some of the Company’s overall profits were utilized in the form of bribes to Parliament and the Bank of England, “The power the East India Company had obtained by bribing the Government, as did also the Bank of England, it was forced to maintain by bribing again, as did the Bank of England. At every epoch when its monopoly was expiring, it could only effect a renewal of its Charter by offering fresh loans and by fresh presents made to the Government.” [7] 

With the loss of the American colonies after the Revolutionary War, bribes were no longer enough as the British Empire looked to rebound from their lost North American revenues.  After all, the British had accumulated a great level of debt from the American Revolution and the Seven Years War before that.   The India Bill was introduced in 1783 by Charles Fox and was defeated, but the following year a modified version was passed and from that point forward the British Empire began to slowly take control of the East India Company.  The Company finally ended trade in 1873.

[1] James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 123.

[2]  James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 128-29.

[3] James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 123.

[4] James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 124.

[5] James, Lawerence.  The Rise and Fall of the British Empire (New York: St. Martin’s Griffin, 1994), 130.

[6] Opium Throughout History. Frontline.  Public Broadcasting System, WGBH, 1998.  Accessed on Monday, February 18, 2013 from http://www.pbs.org/wgbh/pages/frontline/shows/heroin/etc/history.html

[7] Marx, Karl.  The East India Company-Its History and Results.  New-York Herald Tribune, June 24, 1853.  Accessed on February 18, 2013 from http://www.marxists.org/archive/marx/works/1853/07/11.htm

“The events of the Seven-Years-War transformed the East India Company from a commercial into a military and territorial power[122]. It was then that the foundation was laid of the present British Empire in the East. Then East India stock rose to £263, and dividends were then paid at the rate of 12 1/2 per cent. But then there appeared a new enemy to the Company, no longer in the shape of rival societies, but in the shape of rival ministers and of a rival people. It was alleged that the Company’s territory had been conquered by the aid of British fleets and’, British armies, and that no British subjects could hold territorial sovereignties independent of the Crown. The ministers of the day and the people of the day claimed their share in the “wonderful treasures” imagined to have been won by the last conquests. The Company only saved its existence by an agreement made in 1767 that it should annually pay £400,000 into the National Exchequer.  But the East India Company, instead of fulfilling its agreement, got into financial difficulties, and, instead of paying a tribute to the English people, appealed to Parliament for pecuniary aid. Serious alterations in the Charter were the consequence of this step. The Company’s affairs failing to improve, notwithstanding their new condition, and the English nation having simultaneously lost their colonies in North America, the necessity of elsewhere regaining some great Colonial Empire became more and more universally felt. The illustrious Fox thought the opportune moment had arrived, in 1783, for bringing forward his famous India bill, which proposed to abolish the Courts of Directors and Proprietors, and to vest the whole Indian government in the hands of seven Commissioners appointed by Parliament. By the personal influence of the imbecile King [George III] over the House of Lords, the bill of Mr. Fox was defeated, and made the instrument of breaking down the then Coalition Government of Fox and Lord North, and of placing the famous Pitt at the head of the Government. Pitt carried in 1784 a bill through both Houses, which directed the establishment of the Board of Control, consisting of six members of the Privy Council” – Karl Marx, New York Herald Tribune (June 24, 1854)

Thursday, February 14, 2013

Jamaica - Foreign Private Sector Investment and IR Dependency Theory

“Dependency theory emerged in the 1960s as a critique of the modernization approach. It focused on the allegedly baleful legacy for developing countries, not only of imperialism, but also of the Western-dominated international economic system” (Cook, 2013).

Jamaica is a developing island nation, the third largest in the Caribbean, which has surpassed the 2.7 million people in population and falls under a representative, or parliamentary, democracy government structure. The country is riddled by crime, corruption and poverty. Natural resources in Jamaica consist of forestry, agriculture (cane, bananas, coconuts, coffee, tobacco rice), and Minerals (Bauxite, gypsum, limestone, marble, silica). The state of Jamaica has only been an independent nation for slightly over 50 years, and was previously under British control when “at midnight on Aug. 6, 1962, in the national stadium, the flag of the British empire was lowered for the final time and replaced by the gold, black and green Jamaican flag” (McFadden, 2012).

Jamaica, being relatively young in gaining independence from British colonialism, seems to fall heavily within the conditions described under dependency theory in that the Jamaican economy is shaped and reliant on foreign industrialized actors, in this case by American and international private sector corporations unleashed under the North American Free Trade Agreement, established in 1994. In attempting to narrow down one example of dependency theory, which today appears to rest on international corporate actors instead of solely relying on developed foreign government economies on the international stage, I came across a trade and investment agency named the Jamaica Promotions Corporation (JAMPRO). This gateway entity, which operates under the Jamaican government’s Ministry of industry, Investment and Commerce, facilitates foreign investments into the country. The list of foreign and international corporations that invest in Jamaica, and therefore establish economic dependency, are numerous and the names well known to most Americans: Microsoft, Fujitsu, IBM, Xerox, Citibank, Alcoa, Texaco, Sealy, and these are only a few of the larger known conglomerates. There are already a very large number of foreign corporations in Jamaica, and it appears that this developmental economic reliance, which theorists from the Marxist school of thought might term exploitation, appears to be expanding.

With expansion plans to expand the Panama Canal by 2015, commercial maritime activity is expected to boom. The government of Jamaica, with assistance from the World Bank Group and JAMPRO, plans to create a massive logistics hub in order to become a major logistics link in the global free market chain. The proposed project, announced in January, is the centerpiece of the Jamaican Government’s growth strategy and is expected to create jobs and position Jamaica on the international stage alongside Rotterdam, Singapore and Dubai. Of course, the World bank Group and their international private sector investors have already been able to get their hands into the early phases of the project as the “World bank has been working closely with the Industry, Investment and Commerce Ministry over the past month and a half to determine how best to take advantage of Jamaica’s competitive edge in terms of attracting specific investments” (Smith-Edwards, 2013).

Cook, Elizabeth. Lesson Notes Week 2 Theories of Development. AMU. Accessed February 12, 2013 from https://edge.apus.edu/xsl-portal/site/207381/page/0f7045fd-d18a-4b96-907c-262fe631922d

Herath, Dhammika. Development Discourse of the Globalists and Dependency Theorists: Do the Globalisation Theorists Rephrase and Reward the Central Concepts of the Dependency School? Third World Quarterly, 29 (4), 2008.

Investing in Jamaica 2012. JAMPRO Trade and Investment. Jamaican Ministry of Industry, Investment and Trade. Accessed February 13, 2013 from http://www.jamaicatradeandinvest.org/7F6E533D-740A-4329-9AF8-CD8AF2384E9C/FinalDownload/DownloadId-46DD60B66317188432F168D1782D7A31/7F6E533D-740A-4329-9AF8-CD8AF2384E9C/documents/InvestJamaica2012_web.pdf

Lee, Wendy. Introduction to the Geography and Natural Resources of Jamaica. Hofstra University, 1985. Accessed on Febriary 13, 2013 from http://people.hofstra.edu/jason_d_williams/HUML/Handbooks/19-Geography.pdf

Smith-Edwards, Alecia. World Bank to Provide Assistance on Logistics Hub Project. Jamaican Information Service. Government of Jamaica, February 12, 2013. Accessed on February 13, 2013 from http://www.jis.gov.jm/news/leads/32965

U.S. Department of State. The Bureau of Consular Travel. Jamaica, 2011. Accessed on February 13, 2013 from http://travel.state.gov/travel/cis_pa_tw/cis/cis_1147.html

Monday, February 11, 2013

Brief Note: Difference of British colonies in the so-called new world from Spanish, Portuguese , French and Dutch Colonies

The largest contrast between the British colonies of North America and the Spanish, French, and Portuguese territories in the so-called new world, to include the colonies in the West Indies and the Caribbean, was religion. The British colonies were predominately Protestant and Puritan in character while the Spanish, Portuguese and French colonies were overall Catholic. The only exception to this religious balance of power was the Dutch Quakers. The animosity between the protestant and Catholic religions could be seen from the beginning phases of British colonialism to North America as “all Hispanophobes and passionate anti-Catholics” were “willing to support colonization projects as a means of damaging Spain” and as “a way of removing potentially subversive Catholics from England” (James, 5). The divide between these religions was so great in the early North American colonies that in 1634, Catholics in the settlement of Maryland “were officially cautioned to hold their masses discreetly for fear that they might antagonize their protestant neighbors” (James, 10).

The conflicting ideologies of Protestant-Puritanism and Catholicism can also be seen in the new world conflicts between Britain and Spain. After Portugal and the Dutch had been humbled by British power, British leaders such as Cromwell began to view attacks on Spanish territories in the West Indies as an opportunity to “simultaneously damage the wealth and prestige of a leading Catholic power” which would be “interpreted as a victory for Protestantism” (James, 30). The British strike into the West Indies not only served as a protestant victory, it gained the Jamaica for the British Empire, which would become a major sugar producer for the rising hegemon.

Other notable differences were in the fields of agriculture and colonial work force characteristics. In the west Indies and the Spanish dominated Caribbean, where Britain held Barbados and later took Jamaica, Sugar was the staple crop that “enabled some plantation owners to become millionaires” (James, 17). In the North American British colonies, such as Virginia, it was the tobacco crop that “began a revolution that transformed the infant colony and the British economy” (James, 7). In order to export these valuable commodities, a large labor force that could handle physical labor was required. The Spanish colonies of the Caribbean, as a result of the Catholic Papal Bull Dum Diversas issued by Pope Nicolas V in 1452 to the king of Portugal, were already using African slaves prior to the emergence of noticeable British North American colonies. While European colonies in the Caribbean and North America attempted to utilize indentured servants, or settlers, for their main labor forces at the beginning of their colonization process, the African slave trade, provided by Portugal trade vessels, started to flourish during the 16th century in the Spanish Caribbean. The first records of African slaves in British North America show a much later exposure to African slave labor. The first written record of African slaves within a British North American colony were 20 Africans sold at Jamestown, Virginia around the year 1619.

The final difference that separated the British Colonies of North America from the Spanish, Portuguese, Dutch and French territories is that Britain was a rising hegemon that “from 1650 onwards” embarked on a massive ship building program in order to dominate the seas (James, 29). This “blue water school of foreign policy” advanced colonial possessions for Britain, advanced autarky and mercantilism, and eventually allowed the British Empire to become the predominate force in both the trans-Atlantic slave trade and international trade.

James, Lawrence. Rise and Fall of the British Empire, 3rd Ed. New York: St. Martin’s Press, 1997.

Public Broadcasting Station, WNET New York. Slavery and the Making of America: Time and Place. Educational Broadcasting Corporation, 2004. Accessed on February 11, 2013 from http://www.pbs.org/wnet/slavery/timeline/index.html

Sweet, James. Spanish and Portuguese Influences on Racial Slavery in British North America, 1492-1619. Accessed on February 11, 2013 from http://yale.edu/glc/events/race/Sweet.pdf

Thursday, February 7, 2013

Third World was for Cold War, Developing is for Globalization

Just as the term ‘third world’ was an appropriate Cold War term for “countries which were neither ‘Western’ AICs, with well-developed free market economies, nor countries of the Soviet bloc”, I view the term ‘developing countries’ as a reflection of economic globalization and view these ‘developing’ countries to be heavily laden with natural resources, and in most cases suffering from political instability, mass poverty, civil or foreign initiated conflict, or economic collapse (Calvert & Calvert, 2007).

What once was an international stage filled with individual nation-states under a model of realism, with each individual actor pursuing nation-state goals and interests, has now become an international stage where the majority of nation-state actors are integrated into a multi-level globalized economic market in which private sector actors (corporate-states) pursue interests and profits within a model of realism similar to how nation-states competed and warred with each other during the period between the Treaty of Westphalia and the end of the Second War World. With the creation of the United Nations and the United Nations Security Council after World War II, private sector globalization was granted international structure through IGOs such as the World Bank Group, International Monetary Fund (which sets currency exchange rates to allow capital to move across nation-state borders), and the World Trade Organization. The Marshall Plan set the standard for private sector reconstruction.

During the Cold War era the global stage was divided into a private sector capitalist market bloc and a communist bloc, with ‘third world’ nation-states that were not affiliated to either. Once the Soviet Union collapsed in 1991, the western nation-state powers, championing the banner of free market capitalism, and the private sector wasted little time in expanding the free market eastward to assimilate post-Soviet satellite nation-states into the global market. Some of these nation-states were anxious for the opportunity, while others, such as natural resource-rich Bosnia-Herzegovina, required UN peacekeeping intervention. Today, under the ideology that “Africans need the same things Europe and Japan needed after World War II: infrastructure, energy, integrated markets linked to a global economy”, the majority of ‘developing’ countries are in Africa and South America, many of which are still dealing with political and economic ramifications from colonialism as they transition into private sector ‘development’ (Zoellick, 2010). Similar to Marshall Plan after World War II, the private sector is brought into a nation-state under the guise of reconstruction, or some other humanitarian guise, behind the World Bank Group which “evolved from the International Bank for Reconstruction and Development as facilitator of post-war reconstruction and development” (World Bank, 2012). Similar to how NAFTA impacted South America, the “World Bank Group is already working with Africans and Chinese to create industrial zones” (Zoellick, 2010).

The majorities of ‘developing’ countries become ripe for entry into, and open to the exploitation of their natural resources, by the global private sector market under three methods: 1) Political instability or post-war destruction 2) Extreme poverty, disease, sanitation, or any of the UN Millennium goals or 3) Sanctions and regime removal by unilateral nation-state or collective UN coalitions (which means the carrots did not work, so it is stick time).

This is not to say that the population of a ‘developing’ nation-state does not benefit in some areas from foreign private sector investment, but the primary goal of private sector capitalism is to maximize profit.

Calvert, Peter & Susan. Politics and Society in the Developing World, 3rd ed. (Harlow, England: Pearson Longman, 2007). Accessed on February 6, 2013 from https://edge.apus.edu/xsl-portal/site/207381/page/0f7045fd-d18a-4b96-907c-262fe631922d

World Bank. World Bank Official Web page, 2012. Accessed on February 7, 2012 from http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/0,,contentMDK:20653660~menuPK:72312~pagePK:51123644~piPK:329829~theSitePK:29708,00.html
Zoellick, Robert. 2010. The End of the Third World. The International Economy (Spring): 40-43.