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Wanted: A Show of Strength

An SJC member visits human rights organizations in Guatemala

By Eric Lamoureux

 One memory of my visit to Guatemala stands out as most striking: a column of 20, brown-shirted police officers, standing around a corner, holding long night-sticks, waiting for the order to march.

   Why were they there? For the same reason I was. Up the street a few metres, about two hundred people were demonstrating in front of the Guatemalan government offices. Half the demonstrators were calling for the resignation of the leader of the National Assembly, General Efrain Rios Montt. Facing them were the general's supporters, playing loud music to drown out their calls.

   Rios Montt's previous crimes as dictator in 1982 and 1983 are well-documented; the scorched-earth policy of his regime was responsible for the deaths of thousands of his countrymen. But this day, in 2000, he was under fire for a complicated, Watergate-style scandal about altering passed tax legislation. When found out, he proceeded to ignore accusations and cover up the crime. The scandal has left many Guatemalans baffled and, as a result, deeply troubled.

   When I arrived in Guatemala in mid-September, as part of an unofficial, four-person delegation from the Social Justice Committee, every human rights groups was talking about this scandal and how it was demoralizing an already uneasy civil society.

   Every group we spoke to also had a story about a staff member or a volunteer or a sister organization that had recently experienced harassment, attacks, violations. Threatening phone calls, members beaten up, offices broken into and files stolen...these things sounded like the stuff of wartime. But Guatemala is at peace!

   Don't believe it. The human rights workers don't. Group after group told us about the escalating climate of violence towards them, about growing fears for their safety, and about how the government was ignoring their pleas for protection. The international solidarity that had given them some measure of protection during the war had been drying up. With "peace", many international supporters had turned away to other, jazzier causes, thinking all was well in Guatemala .

   Again and again, we heard them tell us: Don’t turn away! Don’t believe that all is well in Guatemala ! Don’t think for a minute that human rights abuses have stopped! Don’t abandon us, not now! Because in Guatemala , many of the same old guard still hold power in "peacetime", so when international attention turns away, this same old guard returns to its same old tricks, and people suffer.

   Many groups thanked us for the SJC's continuing support for their cause. They were grateful for the letters and the e-mails and the faxes to government officials, telling them that international eyes are watching and that they do not approve. The old generals in Guatemala like to think they can act with impunity; only international pressure tells them they can't. Groups implored us to keep watching, and keep writing.

   Despite the danger, the Guatemalans were still fighting back. This demonstration was called for by groups on the left, like the Grupo de Apoyo Mutuo and CALDH, who had agreed to stage a weekly protest against Rios Montt, proclaiming that they would not accept his abuses any more, demanding that he resign.

   We had been asked to come to the demonstration and act as international observers in case of violence. That week, there wasn't much. At one point, though, the 20-man police column marched into the fray, just to let everyone know they were there, and marched right out again. A show of strength.

   Those people in Guatemala working to preserve human dignity and stop the abuse of rights also need a show of strength. From us. They need their friends around the world to demonstrate the strength of their support for their struggle. They count on our pressure to provide them with the protection they need to do their jobs. Especially now, when elements within their country seem to be declaring open-season on human rights workers.

   Developments since our return to Montreal show how desperate the situation is becoming. On September 30, the Grupo de Apoyo Mutuo sent the SJC this latest news:

- Government deputy Mario Rivera, of Rios Montt's own party, the FRG, has implied that protesting groups at the next demonstration will attempt terrorist actions against the Congress. In effect, he is calling human rights groups a bunch of terrorists;

- Minister of the Interior Byron Barrientos has revealed that the National Police has information suggesting that the offices of a human rights organization will be destroyed and burnt in the coming days, adding to the intimidation those groups already feel;

- Rios Montt himself recently commented in a conversation that the next demonstration would lead to bloodshed.

   Guatemalan human rights groups are now asking for urgent action on our part. They want letters sent to their government, calling for protection for human rights workers. This pressure is particularly important in these volatile times in Guatemala . People who are interested in helping, or who want more information on the current situation, should contact Gloria at the SJC, 933-6797.

At the Centre of Hope

 by Eric Lamoureux

   When the people of Zamoran stood up in their cinder-block community centre and applauded us, I didn't understand what was going on. We'd just arrived in their community, and they'd never met me before. What was the big deal?

   This was my first visit to El Salvador , or to any part of Central America . Although I've volunteered with the Social Justice Committee for five years, often giving presentations about life in the Third World , I'd never managed to actually see with my own eyes what it was really like. So when I found out that a group was going down from the SJC, and I had free time, I jumped at the chance.

   Zamoran is in eastern El Salvador , in a region known as the Bajo Lempa, meaning the lower river Lempa region. The geography is important; this is a flood plain. During Hurricane Mitch in 1998, the river burst its banks and covered the area in chest-high water.

   After the floods, the people of Zamoran picked up their lives again, as they'd done after many disasters in the past. Although most of the work was done by the people themselves, they had a bit of help from the St. Monica parish of NDG, in Montreal , which has been twinned with the parish in Zamoran for some years now. In fact, the community centre we were in bears the name "St. Monica Community Centre".

   Sharon Di Fruscia, a member of St. Monica's, was the leader of our group through this portion of our trip. It was in deference to her and the work her parish has done that the people applauded. But they didn't draw a line between Sharon and the rest of us. The people I spoke to were just grateful for our interest in them. I've never had my hand shaken so many times, with so much enthusiasm, as I did that afternoon in Zamoran.

   After the applause, we were seated in the choice seats in the house, and the welcoming ceremony began. There were speeches from several community leaders. Music was provided by a band made up of local young guys. We were toasted with a cup of a traditional Salvadoran drink. All around, it was a party, and everyone in the community had shown up.

   During the ceremony, I was stricken by how important it was for these people to have something as simple as a place to meet. September being the middle of the rainy season, the land around Zamoran was soggy and muddy. Walking through it was like treading on a dirty, soaked sponge. Physical details like that make meeting difficult. Having a roof to hold off the rain and a concrete floor to put chairs on and walls to tie it all together make an enormous difference. It had become an official place, where the business of the community is transacted, where discussions are held and decisions are taken. It serves this purpose not just for Zamoran, but for over 45 communities in the surrounding area.

   In the days that followed, we attended several meetings, from the community council to youth groups to a pastoral session. Meetings in this community are NOT passive events. Every time people come together, everyone is given the opportunity to speak. Meeting facilitators even draw out the quiet ones, making sure all voices are heard. At mass, the local priest does not preach; he questions, and the people answer. This is the purest democracy, and it is working for these people.

   How do I know it's working? Compare the people of Zamoran to those in the capital, San Salvador . In the city, we heard stories of demoralization over the conduct of the government, over the privatization of health care, over an economy which provides less than 1% of the population with the minimum wage. It was difficult to hope in the city. But in Zamoran and the surrounding communities, they could draw together in this centre and talk. They could hold onto their hope, despite the civil war and the floods and the continuing efforts of the government to relocate them and sell their land to private interests. They could focus on what was important to them: building their community.

   When we left, there was another party, a farewell. Again there were speeches and applause and songs. Even dancing. All in that community centre. And I understood a bit better what was going on, although not entirely. I still have a hard time grasping how they can continue to hope so fervently amidst so many reasons for despair. I also wonder where we, in Canada , would come together to say "Welcome!" if they came to visit us. I hope we would be able to greet them as warmly.

Get your hand out of my pocket!

How a privileged minority take the wealth of the world

Despite years of energetic global economic growth, most of the world lives in poverty. The money is out there, but most people will never see more than a fraction of it, because of systemic methods of siphoning money up through the classes into the hands of the wealthy few.

   Although the world's economy has been expanding relentlessly, most people have not benefited from it.  Africa went into a decline in the 1980s and still hasn't recovered. Incomes in Sub-Sahara Africa fell by 21.6% between 1980 and 1997. Worker's real wages in Latin America also fell below the levels of the 1970s. Even in the United States , the median hourly wage dropped steadily from $11.46 in 1979 to $10.82 in 1997.[1]

  These methods include:

   The context for these in our time is the Third World debt crisis, which will figure in honest history as a low in human behaviour.

  Third World debt

    The Third World debt crisis has been the ugly underside of the world economic system for years. The search for profit brought large amounts of money into the world's impoverished countries, because of the abundance of cheap labour and natural resources. Money salesmen competed to pump out the loans, believing that sovereign loans - those contracted by a government - were a safe bet. Too often, the funds were used for industrial mega-projects with little benefit to the people or went back into the northern banking system as local elites joined in investing overseas ("capital flight") or stole the money and sent it back north through private accounts.

   Done in by increases in interest rates, oil prices, and inflation, even countries like Mexico couldn't maintain their debt payments. The Mexico crisis of 1982 was the first big sign that something was very wrong. The protection of the international banking system was assured, however, as the Bretton Woods Institutions - the IMF and World Bank - found themselves a new role in bailing out commercial lenders and assuming the debts themselves.

   Most impoverished countries do not manage to make the payments on half the debt that comes due. The rest is rolled over with added interest and punitive costs. The debt has increased over the years of the crisis, even though for most of the debt the amount borrowed was paid off years ago.

   The strong public reaction to the loan shark behaviour of the IMF and World Bank brought a new approach to debt. The "Heavily Indebted Poor Country Debt Initiative" (HIPC Initiative) was announced, by which poor countries could promise to comply with IMF orders for a period of some years. If they were judged to have done this successfully, they could expect their total debt to be reduced. Of course, the amount they would actually pay in debt service each month or year would not be affected, since they hadn't been able to make the payments anyway.

   The financial institutions recognized that the debt crisis allowed an opportunity to demand access to the resources of the affected countries. The IMF and World Bank insist on the deregulation and privatization of profitable, resource-based activities like mining and oil production as part of a debt relief package. The deregulation of labour markets is also a priority - meaning lower standards in worker safety, wages and working conditions. Dismantling unions is often a part of the deregulation and privatization process.

 Money - what's it worth?

    There is a word in economics for the social and environmental costs of production and economic growth that are carried by society at large. These are called "externalities".

 The cleanup of a river after a cyanide spill at a gold mine, the replanting of a clear-cut, the hospitalization of people whose systems are in retreat from the onslaught of something in the air they breathe or in the food they eat - these have costs that are often passed on to the community to deal with and pay for.

 When we measure externalities, we get a better sense of the costs and benefits. We get to evaluate and chose: is it worth it? It is a concept that is helpful when we talk about the methods of producing goods and services - the staples of economic theory - and maybe it can be applied to the whole system of production.

   For example, what are the social and environmental costs of forcing impoverished countries to make payments on debts that any legitimate creditor would have written off years ago as unpayable without severe human suffering?

   How about the costs to communities that can't collect the business taxes because the corporations are channelling their money through offshore tax havens?

   When a currency speculator cashes in for a multi-million dollar profit, where does the money come from? No goods or service was produced in the transaction. One way or another, the money comes out of the production of society as a whole.

The IMF

    "The financial crises of recent years suggest that all is not well with how the global financial system works," says IMF chief economist Michael Mussa.

   The IMF is the supposed guardian of the world's economic health, yet its chief economist misses the point entirely.

   Ask the impoverished people of the world - the majority that live on this planet - about the world financial system, and how long things have not been "well". For that matter, ask middle-class Canadians whether they think 400 people, mostly men, should be controlling most of the wealth of the world. Ask if you should cancel the debts of the impoverished.

   We're talking to you, Mr. Mussa.

   There are some people who have their hands in others' pockets. This booklet looks at some of the mechanisms of the international economic system that provide their wealth and power.  The IMF is as good a starting place as any.

   The policeman of global finance, the Fund (as it likes to be called) watches over currency - who's buying, who's selling. It has been steadily increasing its power, and most recently was able to manipulate the Third World debt crisis so that impoverished countries are lining up to sign over their natural resources and any hope of worker protection, hoping for some debt relief.

   The IMF sits judgement on the standard conditions of debt relief - the deregulation and privatization of a country's natural resources. Mining, oil and fishing must be turned over to corporations, while the regulation of industry and commerce is dismantled.

            "But globalization s much more than an economic phenomenon. To many it means the growth of an international culture - and by that they mean an American culture -at the expense of national and local cultures. I do not know to what extent that is happening now... But I am sure it is an important source of opposition to globalization."

    So says Stan Fischer, First Deputy at the IMF. He works with Mr. Mussa.

   Neither of them has his hands in anyone's pockets. Their job is to make sure the system works okay. They keep a clean nose.

   Things went badly in East Asia , though, when the crisis hit in 1998. The Thai currency, the baht, began to fall the year before, with the economy very vulnerable because of the volume of short-term debt. Investors headed for the exits, pulling out their investments and dropping the baht in favour of different currencies that looked like they were on the rise. The panic spread to other countries of the region because of the interconnectedness of their economies.

   The IMF went in with a standard prescription package - tighten the budget and cut back on the amount of money and credit that is available. The crisis worsened, and the affected economies went into contractions that were particularly harmful to the poor and to ordinary workers. The IMF multi-billion dollar bail-out package, put together with public money, was designed to cover the risks of international investors, not the people who live in the region.

The World Bank

    Although the World Bank is not as servile in its devotion to international finance as the IMF, its spending in support of “development” in impoverished countries is dominated by its loyalty to corporate profit.

   Most recently the Bank announced its support of a US$3.7 billion oil project in Chad and Cameroon , sponsored by Exxon/Mobile corporation. Both countries have human rights problems, and Cameroon is widely regarded as one of the most corrupt countries on earth, but the project fits perfectly with the Bank’s history of funding fossil fuel exploitation and support of the large oil companies. This will be the largest private investment project in Africa for the next five years, with public funds being used in a variety of ways to insure the safety of private investment in a climate of violence and corruption.

Tax havens and offshore financial centres

    The notion of "offshore" implies a small island country floating somewhere in the eternal summer of the tropics. This is often enough true, but there are comparable centres in places like London and New York . Offshore centres share two main aspects in their service of the profit motive:

   Businesses can escape their tax obligations through these tax havens, and arms dealers and drug traffickers can launder huge amounts of dirty money.

   With tax havens available to international companies, developing countries have cut their corporate tax rate in half over the past ten years. If their tax rates matched those in wealthy countries, they would be at least 75 billion dollars richer each year. International companies that take advantage of tax havens have a strong competitive advantage over smaller domestic companies.  No government can maintain the social and economic infrastucture it requires to generate social well-being and environmental protection without reasonable levels of tax collection for the businesses that operate within its borders.

    Tax havens make it easier for the plunder of public wealth. 80 million dollars was looted from Nigeria by the dictator during the Abacha regime. Tax havens and other tax loopholes are incentives for corruption, and the plunder of public funds by corrupt elites is too common in impoverished countries.

Economic crises

    Tax havens and offshore financial centres operate at the core of global financial markets, adding currency instability and shifting of capital flows. Now this system is in turmoil, since such a large amount of capital is in its unregulated competition for the highest profit in the shortest time.

   Volatility in large markets contributed to the Asia economic crisis, doubling the number people in poverty in Indonesia . The crisis put tens of millions of people out of work. Unemployment in Indonesia tripled in 1998, and millions of Indonesians now earn less than the cost of subsistence on rice.

   After three years, Thailand and Indonesia are struggling under the public debt that was taken on to try to prop up economies bled dry by greed and corruption.

Corporate power

    Of the 100 biggest economies, 51 are companies and 49 are countries. The power of the state has been under attack for years as corporate power rises, packing a political wallop greater than ever before. The increased power of agencies like the IMF, which operates largely for the benefit of private profit, has come at the cost of power in United Nations agencies which, whatever their flaws, are the only international agencies with the potential to challenge corporate power on behalf of citizens and their political representatives.

   The UN Commission on Transnational Corporations, which set out to provide codes of conduct for corporations, was killed off in 1986. The International Labour Organization has been gutted of power, while the UN Commission on Trade and Development and the UN Development Program have been relegated to the peripheries of globalization, ineffective relics of a time when state power was large enough to bring a human rights approach to global economic development. The World Trade Organization has taken charge of areas that had been part of the mandate of these agencies, and given the power to demand that national legislation be set aside if it interferes with the profit demands of the corporations.

   Multinational corporations have shifted to being “global” entities in that they present a homogenous image, bringing the product and a primarily American culture together for universal consumption, regardless of the national base of the corporation or the local cultural characteristics wherever their products are sold.

   The expansion of corporate culture is largely driven by a desire to capture the spending of young people. Although a quarter of the world’s population lives in poverty deep enough to place them out of consideration as consumers, there is still a strong belief that the expanding market that will drive corporate profits in the coming years will be powered by the young people of developing countries. Market analysts looking at China see family patterns where four grandparents and two parents are eager to provide the best for the one child. They will sacrifice and save what they can so that this child will have what they could not. So MTV, Nike and Coke are there to show what the young people of the world should have.

   The total assets of the 100 biggest transnational corporations has grown to over four trillion dollars, an increase of 700% over the half trillion they had twenty years ago. Yet these businesses employed fewer people, providing about a million fewer jobs than they did in 1980.

   Job security has become a thing of the past. Almost 3 million Americans work in temporary jobs they get through temp agencies, a 1200% increase over the number of temps used in 1970. For the many people that work in the anonymous factories the world over that contract with the famous not-so-famous name brands, job security is non-existent.

   Companies that operate internationally are increasingly mobile, taking advantage of the competition between countries, especially impoverished ones, for their “investment” dollars. They look for the lowest taxes, the weakest labour protection standards and lowest wages, and the services of police or military forces willing to crush labour unrest.

   The free-trade zones that have been set up throughout the Third World are zones of fear, where people work long hours at low pay, largely outside whatever protection their government ostensibly provides. They know their jobs will only last as long as they are healthy, young and without children. The corporations that operate in these zones can ship in material for assembly, and ship out the finished products without paying taxes to the host country, so they can take advantage of cheap compliant labour without the hassle of paying taxes and thus contributing to the society as a whole. The result, of course, is that there are no social services available in communities where the people who work in the zone factories live.

   In Sri Lanka, free trade zone workers wake from their dormitories, where their sleeping space is marked on the floors by painted white lines. They walk to work because there is no public transportation, along roads that are dark and dangerous because there is no money for streetlights. The mayor of the town of Rosario, which has the largest free trade zone in the Philippines with over 200 factories, says of the companies that operate there that “they don’t pay anything. We need water, we need roads, we need medical services, education.” But he is frustrated that his town “cannot even provide the basic services that our people expect of us” because only a small minority of companies there[2] pay any taxes at all.

   The response to the rise of corporate power is similar to the struggles of people for greater political power. It begins with information - greater transparency about how they function, and the social and environmental impacts they have. Businesses hide their operations behind an array of excuses, one of the most common being “commercial confidentiality”, as if the demands of a competitive marketplace were sufficient for the setting aside of concerns about the abuse of people and the environment.

   Even public agencies that operate to support businesses use this rationale. The Canadian Export Development Corporation refuses to release even basic information about its lending, claiming commercial confidentiality, even though its equity is almost entirely public money, provided by governments unwilling to demand responsible public accounting of how it is spent.

Military spending

    The Coalition to Oppose the Arms Trade tracks the export of military equipment from Canada to regimes that violate human rights. In its newsletter “Press for Conversion”, the coalition holds that “Canada is selling military hardware to foreign police and military institutions that are well known to be regularly and systematically abusing human rights… Economic and social rights to education, health, housing and employment are ignored or undermined by many recipients of Canadian military exports. Canada is selling tools of war and repression to many regimes spending vast amounts on security structures to quell demonstrations and strikes by those striving for a better life.”

   At $305 billion, the U.S. military budget request for FY'01 is more than the combined spending of the next twelve nations, more than five times larger than that of Russia, the second largest spender.  The United States and its close allies spend more than the rest of the world combined, accounting for 63% of all military spending. Together they spend over thirty times more than the seven rogue states. Global military spending was $785 billion in 1998.

   These are a few of the mechanisms by which money is moved into the hands of a privileged minority. Understanding how they work is a starting point for making changes for the better.

- Derek MacCuish