Growth without equity

With the country being put on a fast track towards a Presidential election which could change the course of our political history, the main candidates and parties are working out their manifestos. The immediate major concern, of course, is the ethnic conflict and the solution to it. Beyond, if not above, that issue is the long-term economic policy which could make, break or mar the country and the lives of millions of people. In a world order where a new empire comprising the Bush-Blair Coalition and its transnational corporations appears to be dictating terms, Third World countries like Sri Lanka need to avoid the temptation of presuming there is no valid alternative to globalized economic capitalism. In Sri Lanka this month was Dr. Walden Bello, regarded as one of the most respected thinkers in a movement that offers a viable alternative to globalization and wants to build a more people-friendly and sustainable development with a more equitable distribution of wealth and resources. This movement believes that growth without a growingly equitable distribution of wealth and resources would be not only counter-productive but socially catastrophic. Dr. Bello is the founding director of Focus on the Global South, a policy research institute based in Thailand, with offices in India and the Philippines. He has written 14 books, including most recently `Dilemmas of Domination: The Unmaking of the American Empire` (2005) and `Deglobalization: Ideas for a New World Economy` (2002). Giving a series of talks in Colombo, Dr. Bello traced the advent of neo-liberalism, the ideology that said basically the best way to move to sustained economic growth as well as the best distribution of income and wealth, is to leave it all up to the market. That, as far as the government was concerned, its major task was to get out of the economy and not interfere. Dr. Bello points out that in the early 1990s about 100 developing and transitional economies ' transitional meaning moving from state socialism to capitalism ' were being subjected to structural adjustment programmes. Sri Lanka was also one of those countries. At that time, the World Bank and International Monetary Fund basically were using the Third World debt crisis that erupted in the early 1980s, using the tremendous lack of financing for the developing countries to be able to settle their debts to the big commercial banks, to provide what were called structural adjustment loans, which would then be turned around as payments to commercial banks. This was the mechanism by which free market programmes were being pushed in so many parts of the developing world. According to Dr. Bello the main components of the structural adjustment programmes were; the liberalisation of trade -- which was an assault on protectionism; deregulation -- the idea being that the economy was being stifled by too many government regulations, especially those that were designed to protect the population from the ravages of the market and of course privatisation, despite the fact that many of the most efficient companies in the world, including in Asia, were run by the state. Nevertheless, state enterprises had a bad name, and if economic growth was to be unshackled, it was important to move state-owned or state-managed enterprises into the private sector. Basically, this was the thrust of structural adjustment programmes. So in the early 1990s, structural adjustment was at its height. At that time already the United Nations Development Program (UNDP) and a number of other agencies were saying that, well, structural adjustment had been in place for the last 12 to 13 years and the statistics were showing that the successes of the structural adjustment were few. Of the 100 countries that were under structural adjustment, it was hard to find the predictions coming true, the prediction that there would be sustained economic growth, that there would be less income inequality, and that there would be less poverty. Then in 1995 came the crown jewel, the World Trade Organization with all its hype. And now the world has an unholy Trinity to perpetuate a system where the rich countries get richer and plunder more while the poor Third World is plunged deeper into enslavement in poverty.