New Internationalist

The Empire Strikes Back

Issue 167

new internationalist
issue 167 - January 1987

The Empire Strikes Back
So many nations of the South have collapsed into despotism
and bankruptcy since their independence. Surely this proves their
incompetence at governing themselves? Ashok Mitra begs to differ.

It is easy to pontificate once you are perched on a per capita income of 15,000 U.S. dollars or more annually. The targets of your advice, admonition, barbs, ridicule, etcetera, are leaders and men in countries where the per capita income ranges around 150 to 400 American dollars, perhaps a little bit more, perhaps a little bit less. How much efficiency, pray, do you expect at this level of earnings? Efficiency is a function of income and capital stock. A higher income allows you the luxury of superior economic infrastructure and superior technology, each of which changes the milieu. Give us your ambience, your income and your assets, we will be about as efficient as you, and who knows, perhaps we will, for good measure, be magnanimous too: we will not rub it in that your assets and your standard of living have a casual link with the exploitation your people had subjected our people to for over a couple of centuries or even beyond.

Up to a point, the same exploitative process which raised the level of competence in the countries of imperialism ensured the economic and administrative retardation of the colonized territories. Even after the formal transfer of power the process continues, but you call it by other names and you have other modalities.

Fighting back:
major revolutionary
upheavals in the Third World

1974 Ethiopia
Deposition of Haille Selassie

1975 Cambodia
Khmer Rouge take Phnom Penh

1975 South Vietnam
National liberation Front takes Saigon

1975 Mozambique
Gained independence after popular revolt

1975 Angola
Gained independence after mass uprisings

1978 Afghanistan
People's Democratic Party of Afghanistan took power in a military coup

1979 Iran
Khomeini's Govt. installed after popular uprising

1979 Grenada
New Jewel Movement to power

1979 Nicaragua
Sandinistas depose President Somoza

1980 Zimbabwe
Independence after prolonged civil war

1985 Philippines
Marcos deposed after widespread civil disobedience

1986 Haiti
Baby Doc deposed

Source: Halliday, F The Making of the Second Cold War Verso 1983 and Keesings Contemporary Archives 1980 - 1986

Take, for instance, moral subversion. It is a convenient dual structure of morality: corruption at home is bad, it is however not so in those remote, wretched lands; there is therefore no harm in greasing the palms of local politicians so as to coax decisions in your favour. Pontificatory books are written condemning corruption in economic development in under-developed countries. These belong to the genre of prayers masquerading as wish fulfilments. Be persistent. Not all the politicians over there are corrupt, but if the bait is attractive enough one or two from amongst them may succumb. From then on it will be roses all the way.

Foreign governments therefore send out droves of confidential agents à la our man Wormold; it is a festival of corruption, but righteous corruption. You are out and yet not out; you must sell arms and junk of all descriptions to those people you have been forced to let go; you must have your pet transnational corporations entrenched over there, you must have a sizeable share of the lucrative export and import licenses these countries are doling out. The empire has ceased to exist. So what? Neither the imperial mind nor the imperial attitude has. Exploitation must be pursued through other means, therefore bribe your way in. It is your patriotic mission to render the government leaders over there corrupt.

Did you say that in the formerly colonial countries democratic institutions go to the wall in no time and military despots come on top? But is this not part of the Nahas Pasha1 syndrome? Your heart was never in setting these countries free; the compulsions of the post-World War II situation forced you to. You lost the short-term battle, but you are determined not to lose the war. You must ensure by whatever means the economic advantages you had enjoyed in the past. You bribe the politicians; in close collaboration with the transnational corporations, you plot strategy after devious strategy. You nonetheless want a more direct grasp on developing events, you therefore latch on to the native army. It is still a fledgling outfit; you promise, out of the goodness of your heart, to put it into regular shape. Altruism spilleth over, you pledge to sink your own money to spruce it up. The quantum of military aid in due course outstrips economic assistance. You proceed with purpose and determination; you pick your favourite colonel; you supply him with ideas - and with funds. You arrange for his professional advancement until one day he arrives at a position of sufficient vantage from where he can launch his coup. This is neither apocrypha nor allegory, but the story of military takeovers as they have taken place in quite a number of countries during the past 30-odd years.

The imperial powers have exhibited a uniformly unerring instinct in one matter. Their favourite politicians in the emancipated countries have invariably been those who side with social reaction. You had a hand in installing them; you would dearly love them to continue for ever. In a free climate, these reactionaries would be shown the door by the majority of the people.

Because of the tendency of Third World peoples to oust puppet-rulers installed by the West, it becomes necessary to cut corners, hedge the regular democratic processes and bend rules and laws. Remember what happened in Guyana more than 30 years ago, all because some politicians and civil servants at Westminster did not like the face of Cheddi Jagan - and some of his slogans? (See box). And what an impressive roster it will make: the names of all the criminals and tyrants,redoubtable Secretaries of State all the way from John Foster Dulles to Henry Kissinger handpicked in continent after continent to fortify 'collective security' and render the globe safe for democracy. (See box).

Two distinct assumptions it would seem, are at work: both have quasi-racist overtones. First is a sneering, supercilious hypothesis that the people to whom political freedom has been accorded are not yet mature for liberal democratic institutions. Don't you see, their social instincts are sometimes near-primitive, steeped in the mode and manners of the Middle Ages? There is therefore nothing particularly wrong if we foist a dictator on them.

The second and even more nauseating assumption is that unequal economic bargaining is a given law of nature. At one end the poor countries will be lectured on the theory of comparative advantage. They will be told how foreign exchange necessary for development can be had through the pursuit of free trade and the vigorous promotion of exports.

Text on the side of the boat reads: Political power grows out from the barrel of the gun.
Photo: Mark Edwards / Panos

At the other end though, the terms of trade will be tilted against these countries and the crudest quantitative restrictions imposed to shut off the entry of cheap goods manufactured by them. They will inevitably run into a balance of payments crisis; they will borrow and borrow and borrow from private foreign banks; they will borrow simply to meet the interest burden of past borrowings until a time will come when they cease to be credit-worthy.

Developing countries will then approach the International Monetary Fund, the World Bank and other such international institutions dominated by the erstwhile imperial powers. These institutions will set the most stringent conditions to bail them out. They will be asked to cut down their outlays on education, housing, nutrition and other social welfare programmes. They will be ordered to effect a reduction in food subsidies. They will be instructed to lower taxes on the rich and impose hefty levies on the poor. A free rein will be demanded for foreign capital and foreign goods. Once this is conceded, a crisis will develop in the domestic industries, resulting in massive lay-offs of workers.

The democratically elected government will run into difficulties. Should it refuse to abide by the orders of the international institutions, it will not get the money it has asked for, and without this money the economy will collapse. If it accepts the conditions set by the Fund and the Bank, widespread civil disturbances may ensue, since the standard of living of the majority of the people will be severely affected. Were it to spurn the Fund/Bank money and instead embark on a policy of self-reliance accompanied by a strict regime of sacrifice and abnegation, the government's political opponents would lose no time to take advantage of the situation.

In this atmosphere something has got to give. It is not really surprising that it is the so-called free parliamentary institutions which cave in. Not that those poor countries do not produce their autonomous crooks. But their social and political advance owes not a little to the crafty hands stretched across the seven seas: crafty, imperial hands.

Ashok Mitra is Finance Minister in the state government of West Bengal, India.

1 Nahas Pasha, and Egyptian nationalist leader was summoned to the premiership on the orders of the British Ambassador in 1942 as he was prepared to maintain Egyptian neutrality in WW2. He was dismissed two years later due to a scandal involving public changes of corruption, which was sensational even by Middle Eastern standards.

Victims

Guatemala and Arbenz
The popularly elected government of President Arbenz in the early 1950s acted to improve the wretched labour conditions on the plantations of United Fruit Company. The US corporation was the biggest landowner in the country. The government also expropriated all idle land for redistribution to campesinos. United Fruit were not amused. At the time the US Secretary of State, John Foster Dulles was working closely with his brother, Allen Dulles, Director of the Counter Intelligence Agency (CIA), to 'roll back communism'. The vigorous lobbying of United Fruit Company in Washington together with the evidence of dangerous extremism shown by the new Guatemalan laws, was convincing enough for the Dulles brothers. A CIA-backed military coup took place on 18 June1954. After the putsch, J F Dulles wired the new military leader to begin to round up 'communists'. The order initiated a bloodbath, with the immediate murder of more than 200 union leaders. Waves of right-wing violence have continued for the subsequent 30 years. United Fruit's unused fields were returned to them and labour conditions deteriorated again on their plantations.

 

Guyana and Cheddi Jagan
The writing was on the wall for the British Empire in the 1950s. Whitehall recognized this and the colonial administration began a graceless climb-down in British Guinea/Guyana by permitting a period of internal self-rule. To the chagrin of American and British decision makers, in 1961 Cheddi Jagan's mildly left-wing party won a third successive election. Subsequent budgets included a capital gains tax, and cries of 'creeping communism' came from more wealthy taxpayers. Things came to a head in 1983 with a general strike which lasted for 80 days and effectively humbled the government Funds to pay the strikers and other costs - like buying 15 minutes broadcasting daily on the national radio - were met by the Central Intelligence Agency. Altogether, the Sunday Times newspaper subsequently disclosed, about $400,000 was channelled through a London 'front' organization to Guyana Street rioting, arson and murder continued after the official end of the strike, giving Whitehall the excuse to change the basis of the national elections to one of proportional representation. When Jagan went to the country the following year, despite winning 46 per cent of the votes, the new system made sure he lost. And his party was never given another chance.

 

Chile and Allende
Elections in Chile in 1969 brought to power Salvador Allende, leading a coalition of left-wing parties. Henry Kissinger, the National Security Advisor to President Nixon, watched these developments from the White House with evident distaste. 'I don't see why,' he publicly commented in 1970, 'we have to stand by and watch a country go communist due to the irresponsibility of its own people'. Working closely with the Central Intelligence Agency and the International Telephone and Telegraphic Corporation (whose holdings had been nationalised in Chile after disclosures of their funding of opposition candidates in the elections) a three-year destabilisation programme was initiated, It included:

· Blocking international loans

· Blocking US food and manufactured imports to the country

· Doubling the aid given to Chile's armed forces

· Spending $11 million on covert action through the Central Intelligence Agency, including financing a crippling truck drivers strike in 1972 (subsequently admitted by the CIA Director to Congress).

The military coup of 1973 brought the death of Allende and 40,000 others; horrific violations of human rights have continued with monotonous regularity. In 1973 Henry Kissinger was confirmed as Secretary of State, the senior US foreign policy architect.


Tip of the Iceberg
Bribes admitted by US Pharmaceutical Companies in the 1970s.

Company

US rank in pharmaceutical sales, 1977

Amount of bribe disclosed ($)

Years of Payments

Merck and co.

1

3,603,635

1968 - 75

American Home Products

2

3,442,000

1971 - 75

Warner-Lambert

3

2,256200

1971 - 75

Pfizer

4

307,000

1971 - 76

Upjohn

6

4,245,949

1971 - 76

Squibb

7

1,919,000

1971 - 76

Bristol-Myers

8

3,034,570

1973 - 76

Schering-Plough

9

1,094,702

1971 - 75

Abbott Laboratories

10

774,000

1971 - 75

Johnson and Johnson

11

990,000

1971 - 76

Cyanamid

12

1,255,000

1973 - 75

SmithKline

13

712,700

1970 - 76

G D Searle

14

1,303,000

1971 - 76

Baxter-Travenol

15

2,160,220

1970 - 76

Revlon

16

189,600

1971 - 76

Dow

17

197,000

1970 - 76

Corporate bribery is straightforward. It means enticing someone to pervert, compromise or corrupt the position of trust they hold, to the advantage of that company. In some cases businesses can justifiably claim that the corrupted - from petty officials to Cabinet ministers - demand the bribe. Nevertheless, no-one would seriously dispute that multinational corporations too often grease palms without any prompting.

The figures above give a list of overseas bribes admitted by US drug companies to their government. It was part of a voluntary disclosure programme, and lessened the chances of government tax staff going through their books. These figures are certain to be underestimates - the tip of an iceberg. Researcher John Braithwaite found more disclosures being admitted after his work was due for publication. Having been found with your hand in the till it is only human to come clean on the least you can get away with.

To be fair, pharmaceutical manufacturers together with the petroleum refining industry are known to have worse records than is normal for international corruption. The opportunities for corruption arise because every drug has to be registered before being sold in each country. Co-operative officials are much in demand.

The bribes paid do not have to be high. John Braithwaite comments 'An Australian executive told me that in some Asian countries drug registration could be secured for a small payment. "Slip them $100 and you're alright". As the bribes being admitted amount to millions of dollars, that means there's a lot of corruption around'.

From Corporate Crime in the Pharmaceutical Industry by John Braithwaite, Routledge and Kegan Paul, 1984

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