Global Empire: The Web of Control

Meanwhile, the prices Third World countries receive for many of their traditional exports, from coffee and cocoa to rice, sugar, and cotton, continue to decline. The relative value of their exports has declined even more—for example, in 1975 a new tractor cost the equivalent of 8 metric tons of African coffee, but by 1990 the same tractor cost 40 metric tons. [x] However, it is difficult for these countries to move to production of more complex goods with higher value because they lack capital, access to markets, and workers with sufficient education. In fact, many IMF programs have required cuts in health and education spending, making it harder to improve the quality and capabilities of work forces with low levels of literacy and few technological skills. In some countries, such as Ghana, the percentage of school-age children who are actually in school is falling because of IMF-imposed budget cuts. [xi]

In addition to dominating and manipulating markets, First World elites use extra-market muscle to ensure their control—despite their constant invocation of the magic of free markets. They have insisted on what are called Trade-Related Aspects of Intellectual Property Rights (TRIPS), which they pushed through the Uruguay Round of trade talks in 1994 despite wide opposition. TRIPS allow patents and other intellectual property monopolies to shut Third World producers out of lucrative markets (thus keeping them trapped in commodity production).

As part of this strategy, the U.S. has insisted on defining genetic material, including seeds, human cells, and microorganisms, as patentable “ compositions of matter.” First World corporations have used TRIPS clauses to mine the Global South for local plants and other genetic resources that they can then patent, gaining exclusive production and sales rights—a strategy often called biopiracy. [xii] In one particularly perverse attempt, RiceTec, a Texas company, applied for, and received, a patent on India’s basmati rice—claiming that it had developed “novel” rice lines—genetic lines that had in fact been developed over centuries of breeding by Indian and Pakistani farmers.

Debt keeps Third World countries under control. Dependent on aid, loan reschedulings, and debt rollovers to survive—never mind actually develop—they have been forced to restructure their economies and rewrite their laws to meet conditions laid down in IMF structural adjustment programs and World Bank conditionalities. Unlike the U.S., they do not control the world’s reserve currency, and so cannot live beyond their means for long without financial crisis. As Doug Henwood, author of After the New Economy, points out:

The United States would right now be a prime candidate for structural adjustment if this were an ordinary country. We are living way beyond our means, we have massive and constantly growing foreign debts, a gigantic currency account deficit, and a government that shows no interest in doing anything about it. … If this were an ordinary country, the United States would have the IMF at our doorstep telling us to create a recession, get the foreign accounts back into balance, consume less, invest more, and save more. But since the United States is the United States, we don’t have such a thing happening. If it is not good medicine for us, then why is it such good medicine for everyone else?[xiii]

Corruption, always the handmaid of Power, serves as a mechanism of both profit and control—and it diverts attention from the real springs of power. Corrupt Third World leaders like Zaire’s Mobutu Sese Seko, who stole at least half of Zaire’s aid money,[xiv] are happy to take on additional debt for unnecessary, poorly planned, or inflated projects—debt that must be repaid by their countries’ citizens. And the IMF and World Bank were happy to continue lending to Zaire—even though their own investigators warned them that the money was being stolen. Mobutu’s support for Washington’s African policies during the cold war may have had something to do with their enthusiasm, but the round-tripping[ZC1] of loaned-then-stolen money must have played a role as well. Steve Berkman, in “The World Bank and the $100 Billion Question,” gives us an inside investigator’s account of how these schemes diverted development money into the pockets of corrupt elites. More generally, what has been called the “debt/capital flight cycle” has roused the interest of many loan committees: the Sag Harbor Group estimates that “at least half the funds borrowed by the largest debtors flowed right back out the back door, usually in the same year or even the same month the loans arrived.”[xv] John Christensen describes in “Dirty Money: Inside the Secret World of Offshore Banking” how secret accounts in out-of-control offshore banking havens like the Cayman Islands enable Third World elites to hide money they have stolen, embezzled, or derived from kickbacks, bribes, or drug trafficking. The same offshore institutions enable First World corporations and elites to hide their profits from taxation, leaving rank-and-file citizens to pay the bills. The Bank of Credit and Commerce International, incorporated under Luxembourg’s bank secrecy laws, pushed these offshore banking opportunities to new extremes, with as much as $15 billion being lost or stolen in the biggest bank fraud in the world. In “BCCI’s Double Game: Banking on America, Banking on Jihad,” Lucy Komisar explains why governments and regulatory authorities looked the other way: BCCI accommodated the banking needs of a range of powerful inside players—from the CIA and influential Democrats and Republicans in Congress to the Medellín drug cartel and al-Qaeda.

The privatization programs pushed by the IMF offer such rich opportunities for graft that they have been called “briberization.” According to Joseph Stiglitz, former chief economist at the World Bank, “national leaders told to sell their countries’ water and electricity companies … were keen to get commissions paid into Swiss bank accounts. … You could see their eyes widen” when they realized the scale of the opportunity in front of them, and “objections to selling off state industries were silenced.”[xvi]

But what of the leaders who want to pursue a populist agenda, those whose goals include national control and profit from their country’s resources? Suppose they don’t respond to the snares of corruption or the lure of an upscale First World lifestyle? The EHM game plan includes a full menu of options to ensure compliance, whether willing or not.

Divide and rule is, of course, the time-honored strategy of both conquerors and threatened elites. Subversion of the political process is one way to rein in a wayward country’s leadership. The U.S. and other powers make it a point to establish relationships with key players in the administration, the military, business, the media, academia, and the trade unions. After some quiet meetings and provision of funds to various groups, an uncooperative country might well find political tensions growing. The government encounters resistance from former supporters, and the political opposition becomes more strident. The media raises a state of alarm. Tension grows, and economists increase their assessment of business risk: money starts leaving the country for Miami or London or Switzerland, investments are delayed, layoffs increase unemployment. If the government gets the message and alters course, the sun comes out: money starts to return, and cooperation suddenly becomes possible. If the government tries to ride out the storm, other, more muscular strategies are brought to bear—from assassination of individual leaders to military coups to fomenting civil war.

Venezuela provides a recent case study. The U.S. government’s National Endowment for Democracy in 2002 provided almost $1 million to several business, media, and labor groups, helping finance their noisy campaign against populist President Hugo Chavez in the months leading up to the (unsuccessful) April 2002 coup against him. For example, the NED gave $55,000 to the “Assembly of Education,” run by one Leonardo Carvajal—who, coincidentally, was scheduled to be named minister of education had the coup leaders succeeded in putting Pedro Carmona, a pro-U.S. businessman, in power. [xvii]

Private or semi-official military forces are often useful as well. Andrew Rowell and James Marriott explore the growing interest in Nigeria’s oil on the part of both the West and China. In “Mercenaries on the Front Lines in the New Scramble for Africa,” they uncover another jackal operation: the role of Shell Oil’s security agents in making sure that Niger Delta oil profits are safe from the region’s people.

Exploiting ethnic or religious divisions within a country has often been a successful strategy. The U.S. was only too glad in 1979 to help support the Islamic fundamentalist mujahadeen in their struggle against Afghanistan’s socialist government, which, from the muj perspective, had clearly crossed the line by instituting a program to educate women; Osama bin Laden was a Saudi Islamist recruited by Pakistan’s intelligence services to help lead the CIA’s campaign. [xviii] Kathleen Kern, in “The Human Cost of Cheap Cell Phones,” describes how ethnic division in eastern Congo and Rwanda has been exploited by Western multinationals to ensure their access to coltan ore and other resources, at the cost of 4 million lives. In Nicaragua, the U.S. used religious and ethnic tensions to turn the Miskitu people on the country’s Atlantic coast against the Sandinista government. [xix]

And terrorism, though always publicly denounced, is often useful. In December 1981, a Nicaraguan Aeronica jetliner was blown up on the tarmac at Mexico City’s airport. [xx] The passengers had not yet boarded, so they were luckier than those on Cubana flight 455, which went down over the Caribbean in October 1976 after an explosion, killing all seventy-three passengers and crew. Cuban exile Luis Posada Carriles, who was convicted in Venezuela of having plotted the bombings, later admitted that he had received $200,000 from the U.S. government–funded Cuban American National Foundation for such attacks. [xxi]

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