6. The New Imperial Age

The realities are often presented with admirable frankness by the rulers and their ideologists. The London Financial Times features a lead article by the economic correspondent of the BBC World Service, James Morgan, under the heading: "The fall of the Soviet bloc has left the IMF and G7 to rule the world and create a new imperial age." We can, at last, approach the fulfillment of Churchill's vision, no longer troubled by the "hungry nations" who "seek more" and thus endanger the tranquility of the rich men who rule by right.

In the current version, "The construction of a new global system is orchestrated by the Group of Seven, the IMF, the World Bank and the General Agreement on Tariffs and Trade (GATT)," in "a system of indirect rule that has involved the integration of leaders of developing countries into the network of the new ruling class" -- who, not surprisingly, turn out to be the old ruling class. Local managers can share the wealth, as long as they properly serve the rulers.

Morgan takes note of "the hypocrisy of the rich nations in demanding open markets in the Third World while closing their own." He might have added the World Bank report that the protectionist measures of the industrial countries reduce national income in the South by about twice the amount provided by official aid, largely export-promotion, most of it to the richer sectors of the "developing countries" (less needy, but better consumers). Or the UNCTAD estimate that non-tariff barriers (NTBs) of the industrial countries reduce Third World exports by almost 20 percent in affected categories, which include textiles, steel, seafood, animal feed and other agricultural products, with billions of dollars a year in losses. Or the World Bank estimate that 31 percent of the South's manufacturing exports are subject to NTBs as compared with the North's 18 percent. Or the 1992 report of the UN Human Development Program, reviewing the increasing gap between the rich and the poor (by now, 83 percent of the world's wealth in the hands of the richest billion, with 1.4 percent for the billion at the bottom of the heap); the doubling of the gap since 1960 is attributed to policies of the IMF and World Bank, and the fact that 20 of 24 industrial countries are more protectionist today than they were a decade ago, including the US, which celebrated the Reagan revolution by doubling the proportion of imports subject to restrictive measures. "And the upshot of decades of lending for development is that poor countries have lately been transferring more than $21 billion a year into the coffers of the rich," the Economist observes, summarizing the gloomy picture.

Individual cases fill out the details: for example, the quotas imposed by the US, UK, and France on their commercial rival Bangladesh, on grounds that its textiles threatened local industry; as the Financial Times puts it, "The Bangladesh government has been particularly stung by a US decision to impose anti-dumping duties of up to 42 percent on shop towels," imports that "amounted to a princely $2.46 [million]" from "one of the poorest of nations." Or the dumping of highly subsidized US and EC wheat and beef surpluses in Mali, Burkina Faso, and Togo, undermining native producers in such powerful competitors as the Sahel. Or US concerns over the threat to the US steel industry posed by imports from Trinidad-Tobago.⁴⁶

"Third world [finance] ministers who have painfully dragged their own budgets out of persistent deficit have been particularly galled by the failure of industrial nations" to observe the rules, the Financial Times reports. "Echoing the gloom felt " in the South, World Bank president Lewis Preston deplored the practices of the industrial societies, who demand that the Third World "bear the burden of [structural] adjustment in the rich countries as well as in their own" and repeatedly fail to live up to their promises to reduce protection and provide aid. After a meeting of high-level officials of the donor countries, "World Bank officials say openly" that "they will back away from" their promises once again. Even "once-generous donors such as Sweden" are cutting back, while "less generous countries, such as the UK and US, ...are expected to cut still further" their minuscule contributions. A meeting of non-governmental organizations (NGOs) meanwhile concluded that "Structural adjustment imposed by the World Bank and [IMF] have brought disaster to the working poor of as many as 100 countries," forced "to open their markets to a flood of cheap imports" while the rich refuse "to abandon their subsidies, quotas and high tariffs." The result is "`brutal' suppression of wages and living standards" and elimination of social programs, the effects increasing as the programs are implemented over the past decade or more.⁴⁷

The institutions of "the new ruling class," which now "run large parts of the developing world and eastern Europe," "encourage" their clients to follow "the right kind of reform policy," Morgan continues. They must scrupulously avoid the policies that have led to successful development from 17th century England to East Asia's "little dragons" today, keeping to "the right kind" that have been highly beneficial to the international ruling class, if to few others. And when economic controls do not suffice to "encourage" proper behavior, we can resort once again to the security forces.

⁴⁶ World Bank, in Trócaire Development Review (Catholic Agency for World Development, Dublin, 1990); Chakravarti Raghavan and Martin Khor, Third World Economics (Penang), March 16-31, 1991; Economist, April 25, 1992; Watkins, Fixing, 75, 49, 64; Frances Williams, FT, June 11, 1992; Kent Jones, Fletcher Forum, Winter 1992. On Reaganite protectionism, see DD, ch. 3; and for extensive detail, Bhagwati and Patrick, Aggressive Unilateralism; Bovard, Fair Trade Fraud.

⁴⁷ George Graham, FT, Sept. 25; Nancy Dunne, FT, Sept. 24, 1992.