looters - creating poverty . . . & obscene wealth

James Petras, Meet the Global Ruling Class:

. . . the Market, or better still, the US-IMF-World Bank orchestrated Washington Consensus was the driving force behind the rise of the Latin American billionaires. The two countries with the greatest concentration of wealth and the greatest number of billionaires in Latin America are Mexico and Brazil (77 per cent), which are the two countries, which privatized the most lucrative, efficient and largest public monopolies. Of the total $157.2 billion owned by the 38 Latin American billionaires, 30 are Brazilians or Mexicans with $120.3 billion . The wealth of 38 families and individuals exceeds that of 250 million Latin Americans; 0.000001 per cent of the population exceeds that of the lowest 50 per cent. In Mexico, the income of 0.000001 per cent of the population exceeds the combined income of 40 million Mexicans. The rise of Latin American billionaires coincides with the real fall in minimum wages, public expenditures in social services, labor legislation and a rise in state repression, weakening labor and peasant organization and collective bargaining. The implementation of regressive taxes burdening the workers and peasants and tax exemptions and subsidies for the agro-mineral exporters contributed to the making of the billionaires. The result has been downward mobility for public employees and workers, the displacement of urban labor into the informal sector, the massive bankruptcy of small farmers, peasants and rural labor and the out-migration from the countryside to the urban slums and emigration abroad.

The principal cause of poverty in Latin American is the very conditions that facilitate the growth of billionaires. In the case of Mexico, the privatization of the telecommunication sector at rock bottom prices, resulted in the quadrupling of wealth for Carlos Slim Helu, the third richest man in the world (just behind Bill Gates and Warren Buffet) with a net worth of $49 billion . Two fellow Mexican billionaires, Alfredo Harp Helu and Roberto Hernandez Ramirez benefited from the privatization of banks and their subsequent de-nationalization, selling Banamex to Citicorp.

Privatization, financial de-regulation and de-nationalization were the key operating principles of US foreign economic policies implemented in Latin America by the IMF and the World Bank. These principles dictated the fundamental conditions shaping any loans or debt re-negotiations in Latin America.

. . . Half of Mexican billionaires inherited their original multi-million dollar fortunes on their way up to the top. The other half benefited from political ties and the subsequent big payola from buying public enterprises cheap and then selling them off to US multi-nationals at great profit. The great bulk of the 12 million Mexican immigrants who crossed the border into the US have fled from the onerous conditions, which allowed Mexico's traditional and nouveaux riche millionaires to join the global billionaires' club.

Brazil has the largest number of billionaires (20) of any country in Latin America with a net worth of $46.2 billion , which is greater than the new worth of 80 million urban and rural impoverished Brazilians. Approximately 40 per cent of Brazilian billionaires started with great fortunes ­ and simply added on ­ through acquisitions and mergers. The so-called 'self-made' billionaires benefited from the privatization of the lucrative financial sector (the Safra family with $8.9 billion ) and the iron and steel complexes.

. . . What is repeatedly demonstrated in both Russia and Latin America is that the key factor leading to the quantum leap in wealth ­ from millionaires to billionaires ­ was the vast privatization and subsequent de-nationalization of lucrative public enterprises.

If we add to the concentration of $157 billion in the hands of an infinitesimal fraction of the elite, the $990 billion taken out by the foreign banks in debt payments and the $1 trillion (one thousand billion) taken out by way of profits, royalties, rents and laundered money over the past decade and a half, we have an adequate framework for understanding why Latin America continues to have over two-thirds of its population with inadequate living standards and stagnant economies.

The responsibility of the US for the growth of Latin American billionaires and mass poverty is several-fold and involves a wide gamut of political institutions, business elites, and academic and media moguls. First and foremost the US backed the military dictators and neo-liberal politicians who set up the billionaire-oriented economic models. It was ex-President Clinton, the CIA and his economic advisers, in alliance with the Russian oligarchs, who provided the political intelligence and material support to put Yeltsin in power and back his destruction of the Russian Parliament (Duma) in 1993 and the rigged elections of 1996. And it was Washington, which allowed hundreds of billions of dollars to be laundered in US banks throughout the 1990's as the US Congressional Sub-Committee on Banking (1998) revealed.

It was Nixon, Kissinger and later Carter and Brzezinski, Reagan and Bush, Clinton and Albright who backed the privatizations pushed by Latin American military dictators and civilian reactionaries in the 1970's, 1980's and 1990's . Their instructions to the US representatives in the IMF and the World Bank were writ large: Privatize, de-regulate and de-nationalize (PDD) before any loans should be negotiated.

It was US academics and ideologues working hand in glove with the so-called multi-lateral agencies, as contracted economic consultants, who trained, designed and pushed the PDD agenda among their former Ivy League students-turned-economic and finance ministers and Central Bankers in Latin America and Russia.

It was US and EU multi-national corporations and banks which bought out or went into joint ventures with the emerging Latin American billionaires and who reaped the trillion dollar payouts on the debts incurred by the corrupt military and civilian regimes. The billionaires are as much a product and/or by-product of US anti-nationalist, anti-communist policies as they are a product of their own grandiose theft of public enterprises.

Sanjay Suri, Free Trade Enslaving Poor Countries:

The new free trade agreements being signed up between rich and poor countries are proving far more damaging to the poor than anything envisaged within WTO talks, Oxfam said in a report Tuesday.

Poor countries are being forced into very deep tariff cuts," Emily Jones, author of the Oxfam report 'Signing Away the Future' told IPS. "These are often being reduced to zero under reciprocal so-called free trade agreements they are being forced to sign with rich countries."

That means poor countries are having to open up their markets to subsidized agricultural products from places like the EU, she said.
. . .

The agreements undermine moves to development, the report says.

"In an increasingly globalized world, these agreements seek to benefit rich-country exporters and firms at the expense of poor farmers and workers, with grave implications for the environment and development," it says.

The United States and the EU are pushing through rules on intellectual property that reduce poor people's access to life-saving medicines, increase the prices of seeds and other farming inputs beyond the reach of small farmers, and make it harder for developing-country firms to access new technology, the report says.
. . .

"Some developing countries find themselves between a rock and a hard place," said Jones. "Many are signing up to these so-called economic partnership agreements for fear of losing preferences," Jones said. Many of these countries have been offered export preferences in return for dropping tariffs against imports from developed countries.

The North America Free Trade Agreement (NAFTA) has brought 1.3 million job losses in Mexico in ten years, Jones said. Increased exports to the United States have failed to generate growth, and some studies show that the real wages in 2004 were less than in 1994, Jones said.
. . .

"When Mexico liberalized financial services in 1993 in preparation for NAFTA, foreign ownership of the banking system increased to 85 percent in seven years, but lending to Mexican businesses dropped from 10 percent of gross domestic product (GDP) to 0.3 per cent, depriving poor people living in rural areas of vital sources of credit."

Governments in developing countries usually come under strong political pressure to sign up to such deals, Simon Ticehurst from Oxfam in Bolivia told IPS. "But a lot depends also on the type of development models that governments present to their people," he said.

"Colombia and Peru have been signing up to these agreements. Others are more reluctant. "You now have a small country like Bolivia and many new governments across Latin America beginning to challenge the logic of free trade agreements."