By Prof Michel Chossudovsky Global Research, April 17, 2020 |
Url of this article: https://www.globalresearch.ca/ |
There is a serious health crisis which must be duly resolved. And this is a number one priority.
But there is another important dimension which has to be addressed.
Millions of people have lost their jobs, and their lifelong savings. In developing countries, poverty and despair prevail.
While
the lockdown is presented to public opinion as the sole means to
resolving a global public health crisis, its devastating economic and
social impacts are casually ignored.
The unspoken truth is that the novel coronavirus provides a pretext to powerful financial interests and corrupt politicians to precipitate the entire World into a spiral of mass unemployment, bankruptcy and extreme poverty.
This is the true picture of what is happening. Poverty is Worldwide. While famines are erupting in Third World countries, closer to home, in the richest country on earth,
In India:
From Mumbai to New York City. It’s the “Globalization of Poverty”.
Production is at a standstill.
Starvation in Asia and Africa. Famine in the U.S.
All countries are now Third World countries. It’s the “Thirdworldisation” of the so-called high income “developed countries”.
And what is happening in Italy?
People
are running out of food. Reports confirm that the Mafia rather than the
government “is gaining local support by distributing free food to poor
families in quarantine who have run out of cash”. (The Guardian)
This crisis combines fear and panic concerning the COVID-19 together with a sophisticated process of economic manipulation.
Let us first examine the impacts pertaining to the developing countries.
Developing Countries. The IMF’s “Economic Medicine” and the Globalization of Poverty
Is the coronavirus crisis part of a broader macro-economic agenda?
First some historical background.
I
spent more than ten years undertaking field research on the impacts of
IMF-World Bank economic reforms in Africa, Asia, Latin America, Eastern
Europe and the Balkans.
Since
the early 1980s, “strong economic medicine” was imposed on indebted
developing countries under what was called the “structural adjustment
program” (SAP).
From
1992 to 1995, I undertook field research in India, Bangladesh and
Vietnam and returned to Latin America to complete my study on Brazil. In
all the countries I visited, including Kenya, Nigeria, Egypt, Morocco
and The Philippines, I observed the same pattern of economic
manipulation and political interference by the Washington-based
institutions. In India, directly resulting from the IMF reforms,
millions of people had been driven into starvation. In Vietnam – which
constitutes among the world’s most prosperous rice producing economies –
local-level famines had erupted resulting directly from the lifting of
price controls and the deregulation of the grain market. (Preface to the
Second Edition of the Globalization of Poverty, 2003)
The
hegemony of the dollar was imposed. With mounting dollar denominated
debt, eventually in most developing countries the entire national
monetary system was “dollarized”.
Massive
austerity measures were conducive to the collapse in real wages.
Sweeping privatization programs were imposed. These deadly economic
reforms -applied on behalf the creditors- invariably triggered economic
collapse, poverty and mass unemployment.
In
Nigeria starting in the 1980s, the entire public health system had been
dismantled. Public hospitals were driven into bankruptcy. The medical
doctors with whom I spoke described the infamous structural adjustment
program (SAP) with a touch of humor:
From Structural Adjustment to Global Adjustment
Today, the mechanism for triggering poverty and economic collapse is fundamentally different and increasingly sophisticated.
The ongoing 2020 Economic Crisis is
tied into the logic of the COVID-19 pandemic: No need for the IMF-World
Bank to negotiate a structural adjustment loan with national
governments.
What
has occurred under the COVID-19 crisis is a “Global Adjustment” in the
structure of the World economy. In one fell swoop this Global Adjustment
(GA) triggers a Worldwide process of bankruptcy, unemployment, poverty
and total despair.
How
is it implemented? The lockdown is presented to national governments as
the sole solution to resolve the COVID-19 pandemic. It becomes a
political consensus, irrespective of the devastating economic and social
consequences.
No need to reflect or analyze the likely impacts. Corrupt national governments are pressured to comply.
The
partial or complete closing down of a national economy is triggered
through the enforcement of so-called “WHO guidelines” pertaining to the
lockdown, as well as to trade, immigration and transportation
restrictions, etc.
Powerful
financial institutions and lobby groups including Wall Street, Big
Pharma, the World Economic Forum (WEF) and the Bill and Melinda Gates
Foundation were involved in shaping the actions of the WHO pertaining to the COVID-19 pandemic.
The
lockdown together with the curtailment of trade and air travel had set
the stage. This closing down of national economies was undertaken
Worldwide starting in the month of March, affecting simultaneously a large of number of countries in all major regions of the World. It is unprecedented in World history.
Why did leaders in high office let it happen? The consequences were obvious.
This closing
down operation affects production and supply lines of goods and
services, investment activities, exports and imports, wholesale and
retail trade, consumer spending, the closing down of schools, colleges
and universities, research institutions, etc.
In
turn it leads almost immediately to mass unemployment, bankruptcies of
small and medium sized enterprises, a collapse in purchasing power,
widespread poverty and famine.
What is the underlying objective of this restructuring of the global economy? What are the consequences? Cui Bono?
Needless
to say this Global Adjustment (GA) operation is far more detrimental
than the country-level IMF-WB structural adjustment program (SAP).
It is neoliberalism to the nth degree.
In
one fell swoop (in the course of the last months) the COVID-19 crisis
has contributed to impoverishing a large sector of the World population.
And Guess who comes to the rescue? The IMF and the World Bank:
“The
WHO is there to protect the Health of the People, The IMF is there to
protect the health of the World economy” says Georgieva.
How does she intend to “protect the World economy”?
At the expense of the national economy?
What’s her “magic solution”?
At
first sight this appears to be “generous”, a lot money. But ultimately
it’s what we might call “fictitious money”, what it means is:
The ultimate objective is to make the external (dollar denominated) debt go fly high.
The IMF is explicit. In one of its lending windows, the Catastrophe Containment and Relief Trust, which applies to pandemics, generously,
Nonsensical statement: it is there to replenish the coffers of the creditors, the money is allocated to debt servicing.
No conditions on how you spend the money. But this money increases the debt stock and requires reimbursement.
The countries are already in a straight-jacket. And the objective is that they comply with the demands of the creditors.
That’s
the neoliberal solution applied at a global level: No real economic
recovery, more poverty and unemployment Worldwide. The “solution”
becomes the “cause”. It initiates a new process of indebtedness. It
contributes to an escalation of the debt.
The
more you lend, the more you squeeze the developing countries into
political compliance. And ultimately that is the objective of the
failing American Empire.
The unspoken truth is that this one trillion dollars ++ of the Bretton Woods institutions is intended to drive up the external debt.
In recent developments, the G20 Finance ministers decided to “put on hold”, the repayment of debt servicing obligations of the World’s poorest countries.
The cancellation of debt has not been envisaged. Quite the opposite. The strategy consists in building up the debt.
It is important that the governments of developing countries take a firm stance against the IMF-World Bank “rescue operation”.
The Global Debt Crisis in the Developed Countries
An
unprecedented fiscal crisis is unfolding at all levels of government.
With high levels of unemployment, incoming tax revenues in developed
countries are almost at a standstill. In the course of the last 2
months, national governments have become increasingly indebted.
In
turn, Western governments as well as political parties are increasingly
under the control of the creditors, who ultimately call the shots.
All levels of governments have been precipitated into a debt stranglehold. The debt cannot be repaid. In the US, the federal deficit “has increased by 26% to $984 billion for fiscal 2019, highest in 7 years”. And that is just the beginning.
In
Western countries, a colossal expansion of the public debt has
occurred. It is being used to finance the “bailouts”, the “handouts” to
corporations as well as “the social safety nets” to the unemployed.
The
logic of the bailouts is in some regards similar to that of the 2008
economic crisis, but on a much larger scale. Ironically, in 2008, US
banks were both the creditors of the US federal government as well as
the lucky recipients: the rescue operation was funded by the banks with a
view to “bailing out the banks”. Sounds contradictory?
The Privatization of the State
This
crisis will eventually precipitate the privatization of the state.
Increasingly, national governments will be under the stranglehold of Big
Money.
Crippled by mounting debts, what is at stake is the eventual de facto privatization of
the entire state structure, in different countries, at all levels of
government, under the surveillance of powerful financial interests. The
fiction of “sovereign governments” serving the interests of the
electors will nonetheless be maintained.
The
first level of government up for privatization will be the
municipalities (many of which are already partially or fully privatized,
e.g. Detroit in 2013). America’s billionaires will be enticed to buy up
an entire city.
Several major cities are already on the verge of bankruptcy. (This is nothing new).
Is
the city of Vancouver up for privatization?: “the mayor of Vancouver
has already indicated that he feared the bankruptcy of his city.” (Le Devoir, April 15, 2020)
In America’s largest cities, people are simply unable to pay their taxes: The debt of New York City for fiscal 2019 is a staggering $91.56 billion (FY 2019) an increase of 132% since FY 2000. In turn personal debts across America have skyrocketed.
“U.S.
households collectively carry about $1 trillion in credit card
debt”. No measures are being taken in the US to reduce the interest
rates on credit card debt.
The New World Order?
The lockdown impoverishes both the developed and developing countries and literally destroys national economies.
It destabilizes the
entire economic landscape. It undermines social institutions including
schools and universities. It spearheads small and medium sized
enterprises into bankruptcy.
What kind of World awaits us?
Recall
Kissinger’s historic 1974 statement: “Depopulation should be the
highest priority of US foreign policy towards the Third World.” (1974
National Security Council Memorandum)
The political implications are far-reaching.
What kind of government will we have in the wake of the crisis?
Concluding Remarks
There is a lot of misunderstanding regarding the nature of this crisis.
Several
progressive intellectuals are now saying that this crisis constitutues a
defeat of neoliberalism. “It opens up a new beginning”.
Some
people see it as a “potential turning point”, which opens up an
opportunity to “build socialism” or “restore social democracy” in the
wake of the lockdown.
The evidence amply confirms that neoliberalism has not been defeated. Quite the opposite.
Global
capitalism has consolidated its clutch. Fear and panic prevail. The
State is being privatized. The tendency is towards authoritarian forms
of government.
These are the issues which we must address.
That
historical opportunity to confront the power structures of global
capitalism, –including the US-NATO military apparatus– remains to be
firmly established in wake of the lockdown.
|
Disclaimer: The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible for any inaccurate or incorrect statement in this article. |
Copyright © Prof Michel Chossudovsky, Global Research, 2020 |
“La sabiduría de la vida consiste en la eliminación de lo no esencial. En reducir los problemas de la filosofía a unos pocos solamente: el goce del hogar, de la vida, de la naturaleza, de la cultura”. Lin Yutang
Cervantes
Hoy es el día más hermoso de nuestra vida, querido Sancho; los obstáculos más grandes, nuestras propias indecisiones; nuestro enemigo más fuerte, el miedo al poderoso y a nosotros mismos; la cosa más fácil, equivocarnos; la más destructiva, la mentira y el egoísmo; la peor derrota, el desaliento; los defectos más peligrosos, la soberbia y el rencor; las sensaciones más gratas, la buena conciencia, el esfuerzo para ser mejores sin ser perfectos, y sobretodo, la disposición para hacer el bien y combatir la injusticia dondequiera que esté.
MIGUEL DE CERVANTES
Don Quijote de la Mancha.
La Colmena no se hace responsable ni se solidariza con las opiniones o conceptos emitidos por los autores de los artículos.
MIGUEL DE CERVANTES
Don Quijote de la Mancha.
La Colmena no se hace responsable ni se solidariza con las opiniones o conceptos emitidos por los autores de los artículos.
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