AFTERMATH OF A WEB OF DECIET-A SOUTH ASIAN PERSPECT-
Posted on June 11th, 2010

J JAYASUNDERA

When the future of Humanity is at the edge of an abyss, when 40% of the world are living below poverty lines, with worsening disparity between the Rich and the Poor, worsening environmental damage and rapid depletion of resources it is time to reflect. Independence from Britain heralded by the rousing speech from Prime Minister Nehru gave the south Asians the hope to aspire for a better world after almost hundred years of subjugation. The post war western economies had other ideas heralded the new mechanics of exploitation and subjugation. This neo-colonial agenda has inflicted great harm to this world of ours in the name of liberal Democracy and Capitalism. Instead it has turned out to a web of deceit, corrupt and immoral. It is appropriate to quote the author of the bible of capitalism Adam Smith in his book moral sentiments to realise how even his philosophy has been selectively used in this immoral system. Smith wrote

” This disposition to admire and almost to worship ,the rich and the powerful and to despise and at least to neglect persons of poor and mean condition though necessary to establish to maintain the distinction of ranks and order of society is at the same time the great and the most universal cause of the corruption of our moral sentiments”

Even 200 years ago he reckoned that it was in the nature of humanity to develop a economic system for the good of all mankind. Unfortunately the present system has strayed away from it and privatised profit and socialised loss.

PRESENT NEO COLONIAL ECONOMIC SYSTEM

A)     Manipulation of the monetary system

The wealth of this world is zero sum. It is the distribution of this wealth that is the prime focus of this economic system. For the indulgence of a few the others pay the price sometimes with their life.  UNICEF estimates half a million children die every year because of the debt crisis. Following the end of the Second World War after the Breton Woods conference the IMF and the World Bank was established to control the world monetary system. The Dollar was to become the main international currency. Quite contrary to the general belief it is printed by the Federal Reserve, a semi government institution .It is exchanged for Treasury Bills for which the government pays interests. Until 1971 the Dollar had to be backed up by Gold reserves. President Nixon took the Dollar off the gold standard and floated the currency when he found that America did not have enough Gold to back it. Thus the yard stick of measurement of the value of the currency was removed. The real power however was achieved when the Saudis were influenced to price oil in Dollars in 1974. There was a fourfold increase in the oil prices and the accrued money was circulated through the western Banking system. Thus every country had to have a reserve of Dollars for their oil consumption.  Instead of gold the Dollar was now backed by oil. The poor countries were forced to fix their currencies to the Dollar or expose themselves to the vagaries of the currency markets. Fixing the currency to the Dollar has opened themselves to the economic management of the United States the biggest debtor in the world. The poor are paying the price for the overindulgence of the Rich.

DEBT TRAP

After the increasing oil prices the Third World was desperate to borrow dollars to finance their oil imports. The newly acquired Dollars of the petroleum exporting countries were lent to the Third World through the western Banking system.  With the floating of the Dollar its value was determined by the International currency casino. The banks increased the money in circulation by not only by the multiplier effect but also by printing without any reserve to back it. Thus the world had been flooded with Dollars whose value is determined by the currency casino’s which Obama calls  “Monopoly Money”. Having created the dependence on the Dollar, In 1982 the Interests rates for the American Dollar rose to over 20%, thus pushing the Third world into greater debt.

This was when the IMF and the World Bank stepped in to serve the entrapped Third world to alleviate poverty. After Thirty years the poverty in the Third world has got much worse. They had a fixed agenda for any assistance. They were public spending cuts for health, Education and welfare, devaluation of the currency, Privatisation of government assets, Open Economy and encouragement of foreign investments with Tax breaks and easy transfer of profits. Thus the gate was open for foreign firms to acquire assets of the poor countries cheap and in the name of industrialisation to use its cheap labour at slave wages.   Strikes and workers rights were legally done away. In Sri Lanka workers who went on strike in the 80’s were expelled. They had no legal recourse. These were all done in the name of efficiency and a better future. However it has proven to be a trap into poverty and slavery for the poor and a foreign debt that can never be repaid. The future prospects were bleak. The only option was migration. Hence the BRAIN DRAIN. Another free transfer of resources.

It is said that Africa pays $13 in debt repayment and receives 1$ as aid. The exploitation has never stopped.

FEDERAL RESERVE BOARD

The creation of Dollars is in the hand of the Federal Reserve. This institution was created in 1913 by the Federal Reserve act whilst the congress was busy getting ready to leave for the Christmas vacation. The Federal Reserve is a private institution owned by private banks with the President and the congress having some input. The Board works behind closed doors and is  with no congressional oversight or control. There is a lot of speculations as to who   the power behind this organisation is.  They who control the Dollar control this world.

” THE REAL TRUTH IS “”…” THE FINANCIAL ELEMENT IN THE LARGE CENTRES HAS OWNED THE GOVERNMENT SINCE THE DAYS OF ANDREW JACKSON”  —   PRESIDENT FRANKLYN ROOSEVELT 1933

 CREATION OF MONEY

Creation of the world currency the dollar is in the hand of the Federal Reserve .It prints whenever it wants out of thin air without any reserves to back it. Recently during the Banking crisis it increased the liquidity by trillions of Dollars in what was called Quantitative easing to save the banks. This did not affect the value of the currency from the prospect of the Third World. They are already fixed to the Dollar. There is no effective method to control the value. The banks create the principal but not the interests. New loans are continually produced expanding the money supply, inflating the prices and robbing the holders of the value of their money at the same time charging interest on the monopoly money. The irony is that the interest is paid in real earned money. The over growth of liquidity creates the boom and bust economies which has led to the present economic crisis in the west. At the end of the day the poor who are at the bottom of the ladder living off the crumbs of the rich suffer.

ECONOMIC WEAPONS OF MASS DESTRUCTION

Capitalism is acquisition of capital. Unfortunately the world has been bribed into the belief that capital is assessed with the proxy of money. The Dollar. With the increase in money supply be it by printing, monopoly money, bonds etc which has no fool proof method of assessment of its value makes a mockery of the financial system. Matters were made worse when regulatory controls of the banks were removed by President Clinton. This was the origin of growth of the system of derivatives. Derivatives ( Hedge Funds) are used to speculate on the market from currencies to commodities. The supply demand basis of the market was thus corrupted. These are the new economic weapons of mass destruction. The result has been the wide fluctuations in oil prices and other resources in this casino market. The profits are shared by the rich but the producer usually the third world does not get a share of it. The run on the Asian markets in the late 90’s was secondary to betting against the currency .This was the cause of the collapse of the Asian markets. The only country that stood up to the IMF was Malaysia under Mahathir Mohammed. He accused the IMF of using the crisis to enable big corporations to take over third world economies and successfully brought Malaysia out of the financial crisis with no help from the IMF. All Asians should lament that we have no leaders of the calibre of Mahathir Mohammed. Capitalism has no affiliation to nationalism or sovereignty.  Derivatives have now been used in the west to undermine even the economies of the west .  It will be interesting to see how the governments that worked hand in glove with the money lenders and their backers would respond.

GEOPOLITICAL WARS

The present wars be it in Congo or Iraq are wars for resources. The war in Congo is a standing example. Congo is well endowed with rich resources of minerals. After independence in the Late 50’s Congo elected the Late Patrice Lumumba as Prime Minister who was killed. It is alleged that foreign agencies were involved in his murder. Following the killing there was an insurrection funded by foreign interests. Finally a pro western Dictator Mobutu was elected after a coup. He embezzled the mineral wealth with the help of his foreign backers. Billions of Dollars have been embezzled out of the country. Unfortunately the country is still at war with itself.   The present wars be it named as against terrorism are wars for resources. All wars from the battle of Waterloo have been bank rolled.  The irony is that the ordinary citizens are made to foot the bill. Socialising the cost and privatisation of profit is the motto.

 WORLD BANK AND DEVOLEPMENT

This is one of five organisations started after World War 2. Its web site says that it has been established to alleviate poverty in the world. If its record after 70 years is to be assessed it has been a failure from a view of the poor. It has however very successfully indebted countries. Development has been a trogon horse for corruption, non viable projects and successfully destroying the rural economies. The environmental damage related to the massive projects under taken with the help of the World Bank has caused a lot of hard ships for the people. In Sri Lanka the accelerated Mahawei project is a example. Promise of producing all the electricity needs and self sufficiency in food has yet to be achieved after 30 years. The environmental and climate change has to a degree made a mockery of the whole project from a financial percept. According to a senior minister the estimates were hyped and the corruption related to the project is alleged to have made many rich. The corrupt money of course is deposited in the western banking system be it London or Switzerland. This is recycled back to the poor countries. The poor has to bear the brunt of paying the loan. Under these circumstances how the World Bank expects to alleviate poverty is beyond once imagination.  The only achievement is subjugation by debt.

Fortunately for Sri Lanka another project under the auspices of the world bank “Regaining Sri Lanka ” for one reason or the other never got off the ground. If it succeeded to establish Sri Lanka the environmental Damage and mass rural displacement would have been disastrous. A similar project in Andhra Pradesh “Vision 2020″ geared to export led, corporate controlled Industrial project is expected to displace 20 million rural people by 2020. In spite of a change of government in 2004 the leaders had to take marching orders from the WTO, World Bank and the corporations. The project continued. Vedana Shiva one of the co authors of the article giving the above information states a growing number of projects are being pushed through the legislature that threaten to rob the poor of their seeds ,their food, their health and their livelihood. The World Bank and the IMF are geared to embezzle wealth of nations create debt to be used as a means of subjugation.

ENVIORMENT AND DEVOLEPMENT

Environmental protection has never been one of their prime concerns of the World Bank although they pretend otherwise. Climate change, pollution which is affecting every aspect of human life are neglected by this new developmental programmes geared only to the sustenance of a system of subjugation and transfer of resources. Rapid development programmes although is a money earning exercise for the corporations and the rulers, has long term detrimental effects on the environment.  Slow development with environmental issues addressed as time progresses should be the way.

The latest oil spill in the Gulf of Mexico is a standing example. It was interesting to hear President Obama accuse the regulatory authorities of working in conjunction with BP to take unnecessary risks in oil exploration. He has now banned exploration in the Gulf. IF the public services in the USA have been influenced by BP to take risks it is unimaginable what risks they must be taking in the vulnerable countries in the Third World. The multinational companies practice creative accounting. They take the profit but the pollution is left for the others. That cost is never accounted.

THE EMPIRE

The Empire led by the USA and the west presides over a world controlled with the power of the Dollar and when it fails by the power of might. President John Adams  once said that there was two ways of conquering and enslaving nations . One was by the sword and the other was by debt. Having conquered by debt the Empire needs stability. Thus Regional powers are selected who at the behest of the mighty keep the smaller countries under control. Governments all over the world have been well manipulated surreptitiously into a mould that is replicated all over the world in a hierarchical manner. It is one great family of clones some big some small.

GOVERNMENTS

The corruption and the immorality that the IMF, The World Bank and in general the world economic order brings to the World has created Governments that are at the helm of predatory societies that is geared to the embezzlement of wealth of the nations. Commissions and Bribes are the determining factor for any projects. Public and Parliamentary debates and discussions are irrelevant in determining public and regulatory policies. Selected servile individuals and a few technocrats are used to determine and fine tune the policies. These policies are geared not for the benefit of the country but to empower themselves. Politics have become governments and is used as a mechanism of governance and the citizens have become subjects. The bank balances they have acquired are safely tucked away in the west. They are the instruments of control by the outsiders. Violence against the subjects is the mechanism of control of the populace. No one dare question their rights. No wonder Parliaments are full of criminal elements.

 From Mobutu to Abacha the estimated embezzled wealth to the western Banking system goes into Billions. It is interesting that President Marcos had wealth estimated to be $25 Billion invested in the west. Ironically the Pilipino external debt was $ 25 Billion. Aid by the Poor to the Rich

Confusion and Instability in society is a must to prevent any uprising and confrontation of the policies of the government. This is carried out by the foreign sponsored NGO’s, Christianisation with a view to destroying the cohesion in society. The media is corrupted to reflect the interests of the powers abroad.

 REGIONAL POWERS

India is crowned the regional power in South Asia.  It is the natural ally of the west against the threat from China.  The Indian foreign policy lacks the ability to harmonise with her neighbours using the most potent soft power it has which is one of common inheritance. How can it, when it is supposed to act at the behest of the west. The ruling classes lack the vision to think beyond themselves. The extravagance and the blind faith in westernisation is modernity will one day alienate her own people. From a south Asian prospect hegemonic behaviour of the Indian Foreign policy and the behaviour of people like Nirupama Rao  only goes to prove that the poor in the sub continent has very little hope in overcoming this web of deceit. Exploitation and subjugation is part of her agenda with a view to continuing the system.

EFFECTS OF THE NEW ECONOMIC ORDER ON SOCIETY

URBANISATION

Capitalisation determines the restructuring of society.  This new economic order tends to concentrate capital in cities at the expense of the Rural Areas. This attracts populations from rural areas to the cities for employment. As a result there is a natural increase in the population. Unfortunately the governments and the World Bank in its development does not take into account the cost of urbanisation.

Housing

The demand for housing is such that there is an increase in the prices of houses. Not forgetting the need for utilities such as water, Electricity etc.  The infra structure that is necessary for waste disposal, drainage of surface water have been completely neglected.  As a result flooding, landslides are a common occurrence. Not forgetting of course the growth of shanties with inadequate sanitary facilities etc that is inhuman and a health hazard. The devastation in Haiti would have been less damaging if there was no urbanisation.

Health

With a ever increasing population health care provision for health care would be a major issue. In view of the change in the environment and the disharmony it creates harmful vector expansion can cause new disease patterns. In Sri Lanka Dengue fever has become endemic. In addition of course close living and the stresses and strains of urban habitation cause many social and mental issues that are hardly addressed by the governments.

Deprived Classes

With in urban societies the sub class of the most deprived is endemic with violence and drug abuse etc. This destabilisation is very obvious in the west. This under class although financially supported by the government is to be pitied. They are dehumanised into a class which is associated with a lack of aspirations, lack of family life, drug abuse etc. This is a path I am sure Asians would not aspire to.

Rural Deprivation

With the capital mainly in the cities there is untold misery for the rural poor. This complicated by the big multinationals demanding displacement of the poor from their land for mining, agricultural development etc only leads to worsening of their misery.

Governments in south Asia has failed her people by accepting development projects mainly geared to the sustenance of the ruling classes. Their irresponsibility for blindly accepting  corporate advice without adequately giving thought to the problems of urbanisation  has created a situation that could one day be a financial disaster., when taking in to account the expenses for health care, housing and the natural disasters  like flooding, Landslides etc. Short term rapid development can only lead to a disaster from which you cannot extract yourself. 

 MIGRATION

In Sri Lanka the economy has been driven to the ground by a costly war and corruption. The saving grace economically for the poor was employment in the Middle East. The price they have paid is enormous. The death Rate of the migrant workers is higher than in Sri Lanka.  In addition of course the abuse and rape they have to endure is unimaginable. The ruling classes are oblivious to this suffering; they are only interested in the foreign currency returns. The social discord it creates for the families left behind are not even been assessed.

Migration to the more affluent countries as illicit immigrants and refugees is the other option. Well although on the short term it is lucrative on the long term there are Health issues that are never properly understood. Coronary Artery disease and Diabetes are common and increased in Indian migrants to the U.K.

A WORLD IN REVOLT

The present economic system has globalised marginalisation of society. The gap between the Rich and the Poor has widened with in countries and between countries. The social stability that was there even in poverty has been disrupted by a false economy. Fortunately or unfortunately there has been a very welcome change in society because of the fast developing communications and education. This has brought forward the revolt against marginalisation. Be it in Greece, Thailand India or China the fight that against the system has started. The ruling predatory governments unfortunately will only respond to it by violence. Drunk with the power of monopoly Dollars the governments have only one answer. This is Suppression of legitimate grievances. In Sri Lanka where the literacy rate was 96% there has been three insurrections in the last 30 years. About a hundred thousand youth have sacrificed their lives.  Whatever the basis the economy and the inability of the government to address the legitimate aspirations of the young have been the precipitating factor. The insurrections have caused immense damage to the economy. The prime cause has been a false development programmes, bribery and corruption and the web of deceit of a corrupt international monetary system and its effect on governance. The road ahead is grim unless there is internal dialog and proper governance addressing the problems of the financial system. The west cannot be trusted to cure the inherent problems as the present system serves it well.

One Response to “AFTERMATH OF A WEB OF DECIET-A SOUTH ASIAN PERSPECT-”

  1. Andare Says:

    Very good article which lays out the truth about the current global financial system. I am not an Economist, but in my mind, if we can be free of the Dollar for our purchases then we could do well. Can we not go back to barter systems we had earlier for rice etc., where we had a rubber/rice pact? If we can sign barter agreements with our major trading partners and get all our basic imports for tea, rubber, coconut & gem stones which are our major exports, then would we not be free of the dollar? If the dollar collapsed totally then we would not be affected. We would be paying for the real goods with real goods and not a worthless paper currency whose value is manipulated by the superbrains in the US banks.

    Another idea is to create a currency based on a basket of goods which can be agreed upon by the G5 and G15 group? This new currency will be the global standard for world trade.

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