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Raffique Shah


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Globalisation, highway to hell

April 18, 2004
By Raffique Shah

GLOBALISATION, the new buzz-word for free trade, not fair trade, will plunge the world into economic chaos never before seen in the history of mankind. Although the move in this direction has been underway for 30 years or more, developed countries, in particular, have accelerated its implementation by demanding that all countries, including the world's poorest nations, adhere to draconian rules of trade that will ensure many of them remain in persistent poverty. What is laughable, if one can afford to laugh in the face of impending misery, is that the rich countries that are prodding others to "fall in line", are themselves victims of their own designs.

First, a word on why free trade is not translated into fair trade by the authors of globalisation. Sugar is the perfect example of an agricultural commodity that survives on scams, but the inequity extends to other crops like coffee, cocoa, tobacco and bananas. In Oxfam's latest report, "Dumping on the World", the respected Britain-based organisation claims that EU countries are spending $3.30 (Euros) to export sugar worth $1, a subsidy to its beet farmers that costs its taxpayers hundreds of millions of dollars a year. Worse, this heavily subsidised sugar is dumped on developing countries (in the name of free trade). And this when it costs the EU around 25 cents to produce one pound of the sweet stuff, as against eight cents in India, 5.5 cents in Malawi and four cents in Brazil! The world price for raw sugar now stands at six cents per pound.

So incensed was The Guardian (London) on this issue, it carried an editorial that started this way: "It is difficult to find anything in the EU more perverse than its continuing subsidy of sugar. It is economic madness since the EU is shelling out hundreds of millions of taxpayers' money-that could be used to reduce its growing budget deficit-to grow crops at a loss that could be better grown elsewhere. It is immoral because subsidies prevent poor countries from growing sugar that would create hundreds of thousands of jobs."

But the countries that are pushing hardest for free trade are also suffering in other ways. In the US, for example, unemployment remains a major headache. They will tell you that the number of jobs has been rising since August: but the total number of jobs remains two million lower than it was three years ago (according to the Washington Post). In an article on why retraining retrenched workers is a nightmare, the Post cites large numbers of Americans in this "trap" who are, in their middle-to-latter-years, learning new skills for jobs that are simply not there! Where have all these jobs gone to? Off-shore, meaning to countries where similar or even better skills are available at a fraction of the cost. India, as one example, has cornered many high-tech companies and simple operations like "call centres". But there, the US-owned companies are paying workers one-eighth the cost they would pay US workers. In fact, these "call centres" are manned by university graduates who are paid the grand sum of US$5,000 a year.

This shift of operations by large US-owned companies is not new. For many years now most garment and sports shoes manufacturers have relocated their child-labour "sweatshops" to countries like China, Thailand and Malaysia. Just check that "made in" label on your Nike shoes and you'll see what I mean. In fact, even the "sweatshops" where illegal immigrants worked long hours for less-than-minimum wages inside the US have long crossed the border, first to Mexico, then to lower down Central America, and finally into the Caribbean and countries in the East.

The impact of relocation has been so severe, it has become a major elections issue in the US. John Kerry has repeatedly stated that should he be elected to the White House in November, he would cause US corporations to "bring those jobs back home or face punitive measures." That, of course, is easier said than done. Kerry is himself part-owner of H J Heinz & Co, whose ketchup and other food-processing operations operate largely abroad: of 79 factories owned by Heinz, 57 are located in countries where labour is dog cheap. Would he repatriate his companies' operations should he win the presidency?

In the face of these foreboding signs of very troubled times, it is difficult to imagine why governments in the Caribbean, and more so ours, are rushing in where fools tread carefully. Ken Valley, Mr FTAA, has convinced his colleagues to pump $60 million into BWIA (to add to what we have already given the ailing airline) just to remain in contention for the FTAA headquarters. What will the FTAA, and similar protocols, bring by way of benefits to this country? For starters, we can begin the funeral rites for sugar now. We may make gains with respect to oil and gas and downstream energy products. But will our manufacturers be able to compete with goods produced elsewhere where the "biggies" use child labour or grossly underpaid women? There will be no revival of agriculture since why should we produce any fresh food when we can buy the basic at minimal costs from Central and South American countries (that is, if the US and European farmers are driven out of business). All this hype about the "information age" and high-tech industries are best forgotten. We'll have highly qualified persons on our hands, but no jobs for them. Those jobs will have migrated to countries like India and China.

In other words, globalisation in its raw form spells death for countries that are poorer than ours, and a drop in living standards for us. It will even shake the economic foundations of the rich OECD countries, as I have shown. Clearly, there is a need to revisit this "free trade" farce, and instead, work towards "fair trade". That way, a global re-distribution of opportunities, hence wealth, would make for a more equitable world. That in turn would lessen conflicts between nations, because, as Trinis say, "a hungry man is an angry man". Hell, we may even be able to make Osama redundant as a "terrorist" since there will be nothing to fight for.

But such reason-and a green jackass -we shall never see. The dumbest men who ever held power across the world (check it out, those among you who know your history) will lead us into the valley of debt and death. And our equally stupid leaders will follow them like lollipop kids behind the Pied Piper. Oh, for divine intervention to save humanity from these sub-humans!