The Tsunami and the Brandt Report: Part 2
Mohammed Mesbahi and Dr Angela Paine
Share the World's Resources
April 3, 2005
 |
| Having lost his parents and a daughter, Rajan Kanaharathnam returns with his wife and surviving child to the ruins of their home in the eastern Batticaloa district of Sri Lanka. Credit Geoff Crawford/Tearfund |
Since the December 2004 tsunami, world opinion has shifted. People have been so moved by the plight of the people in the devastated areas that they have begun to talk about poverty and injustice in other parts of the world, such as Africa. Some of the poorest people in the world are concentrated in Sub-Saharan Africa where, as Kofi Annan's Special Adviser Jeffrey Sachs notes: "We have the resources to save millions of lives and raise the basic infrastructure."
Over the past few decades, official development assistance to Third World countries has been declining and few donor countries now give the internationally-agreed 0.7% of their gross domestic product. Jeffrey Sachs would like to see donor countries increase their aid budget. But, in the end, it will be popular opinion that pushes governments into rethinking their aid policies. Since the tsunami, people have been increasingly questioning the meanness of their countries' aid budgets and demanding that more aid is given to Third World countries.
Jeffrey Sachs has recently presented the Global Plan to Achieve the Millennium Development Goals. The report, developed by 300 economists and researchers, reiterates many of the aims of the Brandt Report:
Eradicate extreme poverty and hunger
Achieve universal primary education
Promote gender equality and empower women
Reduce child mortality
Improve maternal health
Combat HIV/AIDS, malaria and other diseases
Ensure environmental sustainability
Develop a global partnership for development
The World Bank, Devalued Currencies, Debt and Poverty
Some 20,000 poor people die every day from preventable diseases in Africa, partly because their governments are paying $30 million dollars a day in interest to the World Bank, the IMF and the rich world creditor nations. Currently, for every dollar that is given to Africa in aid, one-and-a-half dollars goes out to pay the interest on debts.
Third World debt today is $2.6 trillion. Between 1982 and 2003, the poor world has paid $5.4 trillion in interest. This means that the poor world has already paid back the loan amount it now owes more than twice. Brandt called for total Third World debt forgiveness. However the World Bank, the IMF and rich creditor countries were not prepared to forgo the huge amounts of interest they were receiving every year from poor, heavily indebted countries. But over the past 20 years, a groundswell of public protest has gradually been growing, demanding an end to Third World debt.
After the tsunami, the voice of the protesters grew, with public protests in Belfast, where young people marched, demanding the immediate cancellation of the debts of the countries affected. As a result, governments have been pressured into giving Third World debt some serious thought. British Chancellor Gordon Brown, who initially proposed freezing debt repayments for a year, is now leading a campaign for 100 percent multilateral debt relief for poor countries. [See: Brown Pushes Tsunami Debt Relief BBC News] The G8 finally announced on January 9 that all tsunami-afflicted countries would have their debt repayments halted.
In the past, funding for debt relief has come from the aid budget. It is essential that this does not happen now.
The WTO and the Third World
Brandt recommended restructuring the World Trade Organization (WTO) to allow proportional representation and decision-making by poor countries of the Third World. He wanted to establish a new code of conduct for international corporations, to curb their power and prevent them from carrying out environmentally unsound practices and to improve conditions of the workers. He proposed trade liberalization and the removal of trade barriers.
Unfortunately General Agreement on Tariffs and Trade (GATT) has done just that, but only in the Third World, while maintaining protectionist trade barriers in the First World, where the rich counties spend $300 billion every year in subsidies that prevent the poor countries from having access to their markets. Brandt wanted to remove these subsidies, which give the rich world an unfair advantage.
Since the issuance of the Brandt Report, the WTO and the Free Trade Agreements have carried out a policy of perpetual trade liberalization at any price. The result has been disastrous for the Third World, which comprises 85% of the world population. Their share of international trade is only 25% because prices for everything that they export, from raw materials to cash crops, have fallen and continue to fall. Legislation designed to promote health and protect the environment in Third World countries has been challenged and overruled in the name of trade liberalization.
The Brandt Report noted that the abolition of the gold standard had a disastrous effect on the currencies of Third World countries. When the US set up the flexible exchange rate system in 1971, Third World currencies began to fluctuate and, in most cases, to fall in value. This was/is because investors could now buy and sell currencies on the world stock market, thus causing their value to increase or decrease at a moment's notice.
Rich countries such as the US and the EU were better protected against these currency fluctuations simply because they had larger amounts of money. This has led to rich people in Third World countries investing their money in the US in order to protect it from the monetary instability of their own countries. This money has bolstered the US dollar, which otherwise would not be able to withstand the enormous fiscal and trade deficits incurred during the Bush administration.
Brandt wanted to stabilize world currencies and another Nobel Prizewinner, the economist James Tobin, proposed a solution. In 1971, he suggested that a tax of less than 0.5% on all foreign currency exchange transactions would deter currency speculation. Support is growing for the Tobin Tax, which would reduce the volatility of exchange rates and raise much-needed revenue to pay for sustainable human development.
Brandt was concerned about the huge waste of resources involved in military spending. Arms sales to poor countries contribute to conflict, increase their burden of debt and further impoverish them. According to a White Paper prepared by Former British Secretary of State for International Development Clare Short, 24 of the 40 poorest countries in the world (mostly in Africa) have recently suffered and continue to suffer armed conflict. The Brandt Report recommended the conversion of arms production into civilian production, reducing arms exports, making the whole arms export business transparent and taxing the arms trade.
Since the Brandt Report sales of armaments have increased massively, with the US and the UK two of the largest producers and exporters. In 1999, Britain was exporting about £4 billion ($7,478,646,398) worth of armaments per annum. The UK has a government agency especially dedicated to the promotion of arms export: the Defense Export Services Organization.
The British Government, which actively encourages the sale of arms to poor countries, has recently granted arms export licenses to a number of countries with repressive regimes.
British taxpayers subsidize the armament industry to the tune of approximately £200 million ($373,874,032) per annum. The reason why governments subsidize corporations who export weapons is because the public allows them to. Taxpayers' money benefits arms exporters, who do inestimable harm to the Third World countries that buy the arms. These countries are spending money they can ill afford on armaments, instead of investing in services.
The Campaign against the Arms Trade recommends putting a stop to subsidies to arms manufacturers and exporters. Now, more than ever before, the madness of making and exporting arms should be exposed. According to estimates from the World Bank, world poverty could be relieved by spending approximately one-tenth of the world's annual military budget.
Not everything in the Brandt Report is relevant today, but significant portions of it are more relevant than ever: those parts that refer to the necessity to cancel Third World debt, reduce arms trading and to put in place and enforce international legislation to protect the environment. The world was not ready for these proposals in the 1980s but it is ready now. A huge groundswell of public opinion is calling for debt cancellation, a reduction in arms trading and a halt to the destruction of the environment. [The Brandt Report has been updated by James Quilligan. See: www.brandt21forum.info]
Nobel Prizewinner Willy Brandt had high hopes when he and his team of experts compiled their detailed reports. They spent years researching world poverty and the best way to alleviate it. Brandt's far-reaching vision predicted many of the human and ecological disasters that have occurred as a result of neoliberal economic policies since the 1980s. His reports laid out an alternative system of global governance, based on the principle of sharing: sharing the world's resources and sharing responsibility for the environment. He proposed that every member of the human race had a right to food, water, shelter, clothing, education and healthcare. Only when every human being's basic needs have been fulfilled will the worlds population stabilize. Social sustainability is the prerequisite for environmental sustainability.
Perhaps world leaders could be persuaded to re-examine both the original reports and their updated version and to come together to discuss how to implement some of the recommendations. World opinion is calling for a more equitable and just world in which everyone has the right to food, water, shelter, clothing, education and healthcare; where the power of corporations is curbed in favor of human rights and the environment; where governments are shamed into putting a stop to arms exports and where the money currently squandered in wars is spent on raising the standard of living of the world's poor.
Without sharing the world's resources, there can be no justice and without justice there can be no peace
Mohammed Mesbahi is Chair and Founder of Share the World's Resources and Dr. Angela Paine is on the staff of STWR. The authors may be reached c/o STWR, PO Box 34275, London NW5 1XT, www.stwr.net, mohammed@stwr.net / Mesbahi@slsuk.com
For more information contact:
