Category: Agencies of development

Global Justice Now – A Useful Example of an NGO

Global Justice Now is a decentralized democratic global social movement which aims to challenge the powerful and create a more equal and just world.

It’s a great example of a small, politically oriented NGO (Non-governmental organisation) so makes a great study for that part of the Global Development module within A-level sociology.

Some of their current main campaigns include focusing on promoting Fair Trade that works for people and planet and the Freedom of movement for people (pro migration).

They have a strong anti-Corporate and anti-Trump agenda.

They organize several activities every year to highlight global social justice issues, which typically involve small protests and handing petitions to ministers expressing concern about generally neo-liberal policies.

They also produce a magazine full of leftist articles focusing on fair trade and the global south and organize occasional meetings around global social justice issues.

One of things to be critical of is how effective (or ineffective) this organisation is their budget is only £1.5 million a year, which is less than the annual salaries of most of the CEOs of the companies they criticise!

Still, it’s a good NGO case study and useful source of information to keep you up to date with global justice issues.

 

The Strengths and Limitations of NGOs in Development

The advantages of NGO Aid over Official Development Aid

  1. Generally smaller and thus more responsive to the needs of local communities than the kinds of large scale development projects undertaken in the days of Modernisation Theory.
  1. There is no political agenda as is often the case with government aid, and thus aid is not ‘tied aid’ – it is freely given.
  1. NGOs can provide a more continuous supply of aid compared to governments, which can be effected by elections
  1. NGOs are more likely to help the poorest of the poor, unlike TNCs who will only invest in slightly more developed countries that are more stable because these provide a better prospect for profit.
  1. NGOs provide one of the most critical voices of government aid agendas and provide a broader range of knowledge about life in developing countries compared to Official Aid Agencies

Limitations and Criticisms of Non-Governmental Organisations

  1. NGOs provide a tiny amount of aid compared to Governments and the World Bank – ODA from Britain is around £10 billion a year, total donations to development charities measured in the hundreds of millions. This relative lack of funding means NGOs can only do a limited amount compared to bigger, official aid agencies. NGOs cannot help to bring about Industrialistion or serious economic growth, only help small local communities with social development.
  1. NGOs spend much of their money on glossy advertising campaigns and administration costs rather than helping people in the developing world – a good 25% of money raised is spent on such costs.
  1. A lot of aid campaigns portray images of Africans as starving and helpless in order to generate sympathy and thus donations. This perpetuates the idea of Africa as a helpless continent incapable of helping itself, whereas the opposite is actually true – Africa is full of incredibly creative entrepreneurs.
  1. NGO Aid can often be misguided, doing more harm than good such as with the ‘buy a goat campaign’ or the ‘sponsor a child campaign’.

Related Posts

What are Non Governmental Organisations?

The Role of Non-Governmental Organisations in International Development

There is a very wide range of non-governmental organisations (NGOs). NGOs are groups of concerned citizens who are independent of the government and business, and are thus nominally non-political and non-profit organisations. NGOs typically have charity status and raise funds through a combination of voluntary donations from the public, but also grants from governments and other international development institutions.

Many NGOs are tiny, focusing on development in one region and specializing in one area, others, however, are global institutions, have huge budgets and work in several countries on numerous types of development project. This section focuses on these larger ‘aid organisations’ with an international focus – such as Oxfam and Action Aid. Although such organisations have an international focus, they still have a tendency to divide their attention so they focus on hundreds of different micro-level projects at one time.

Commentators generally point to four functions of NGOs in development

  1. The development function – Probably the most obvious – This typically involves focusing on small scale aid projects such as local irrigation schemes, or developing rural health and education schemes in conjunction with local communities.
  1. The Empowerment Function – More so than with private companies and Governments – NGOs aim to ‘empower’ local communities – This involves striving to give local communities a role in how aid projects are developed, but also lobbying International institutions like the European Union to establish trade rules which do not unfairly advantage Western companies and farmers. (We’ll come back to this point later).
  1. The Education Function – Oxfam is a good example of an NGO that puts a lot of money into developing education for schools and advertising to keep developing world issues in the public consciousness.
  1. The ‘emergency aid function’ – when natural or social disasters occur – Earthquakes, Hurricanes, Famines for example – NGOs are often the front line in the delivery of emergency aid.

The Role of the World Trade Organisation in International Development

The World Trade Organisation (WTO) is the body through which governments and businesses (mainly TNCs) negotiate the rules of trade, and settle trade disputes once these rules have been established.

The concept of the WTO first began with the 1947 the General Agreement on Tariffs and Trade (GATT) was signed by the Western powers to govern global trade and to reduce trade barriers between nations. In 1994, the WTO was set up to replace GATT, originally consisting of 126 members; it has since expanded to 164 member states currently.

wto

The WTO now has trade rules in place covering not only goods but also services such as telecommunications, banking and investment, transport, education, health and the environment.

The WTO is committed to the concept of free trade, believing that unlimited competition in the free market results in efficient production, innovation, cheap prices and the fastest possible rates of economic growth. They see government interference in markets as stifling businesses and being harmful to economic growth. WTO trade agreements and trade rules have thus tended to focus on reducing government intervention, such as the reduction of tariffs, subsidies and restrictions on imports.

However, critics argue that the WTO has hidden goals, and that it is really interested in helping rich countries and TNCs maintain their economic dominance. Chang (2010) for example has criticized the World Trade Organisation, arguing that its trade rules are unfair, and biased against developing countries. The WTO pressurizes poor countries to open up their economies immediately to western corporations and banks by abandoning tariffs (taxes) on western imports. However, the developed countries are still allowed to impose quotas on the imports of manufactured goods from poor countries, in order to protect their manufacturing industries.

Along the same lines as Chang above, McKay argues that WTO trade rules have rigged the terms of global trade in favour of the West and consequently the WTO is a rich man’s club dominated by the neo-liberal philosophy of the developed, industrialised nations.

A second major criticism of the WTO is that it is notoriously undemocratic – decision making at the WTO is dominated by a small group of Western members, with representatives of developing countries being outnumbered by the representativeness of wealthier countries and TNCS, even though the majority of the world’s population lives in those poorer countries.  A consequence of this is that the WTO tends to see free-trade as more important than protecting workers rights or the environment.

This brief article from Forbes suggests various reasons why poor countries fail to get decent trade deals out of the WTO:

–They are seriously understaffed–at the extreme, some states have no permanent delegation in Geneva, or just one or two people who must also cover other international agencies in the city.

–Their experience of trade policy issues and multilateral negotiations is limited.

–Individually, and even collectively, few account for a significant share of any element in world trade.

Philippe Legrain (2002), former special advisor to the Director-General of the WTO has acknowledged four main criticisms of the WTO:

  • It does the bidding of TNCs
  • It undermines workers’ rights and environmental protection by encouraging a ‘race to the bottom’ between governments of developing countries competing for jobs and foreign investment.
  • It harms the poor
  • It destroys democracy by imposing its approach on the world secretly and without accountability. He argues that the WTO’s free trade rules have prioritised the interests of TNCs over democratic and human rights.

Further sources of criticisms

Sources 

Chapman et al (2016) – A Level Sociology Student Book Two [Fourth Edition] Collins.

Criticisms of the World Bank

The World Bank claims that its major goal is to promote global development through poverty reduction, but there are many critics who argue this is a smoke-screen, and the real aim of the World Bank is to use conditional loans in exchange for countries establishing neoliberal economic policies which ultimately benefit western companies and financial institutions.

bad-samaritansHa-Joon Chang (2007) for example argues that the World Bank (and the IMF) present themselves as a ‘good Samaritans’ whose only motives are to assist the developing world, but they are actually ‘bad Samaritans’ because their motives are essentially selfish.

Chang argues that the real point of the World Bank (along with IMF and the WTO) is to create a policy environment in the developing world that is friendly to Transnational Corporations, an environment which benefits TNCs and small groups of elites in developing countries, but results in deteriorating social development for the majority of the people.

John Pilger in ‘The New Rulers of the World‘ puts it more bluntly:

Pliger argues that the World Bank (along with the International Monetary Fund) is the agent of the richest countries on earth, especially America, and its function is to offer loans to poor countries, but only if they privatise their economies and allow western companies free access to their raw materials and markets.

The World Bank says its aim is to help poor people, calling this global development, but in reality, the effects of its policies are that the rich get richer on running up debt, cheap labour and paying as little tax as possible, while the poor get poorer as their jobs and public services are cut to pay just the interest on the debt owed to the World Bank.

The documentary also claims that the bank operated during the entire cold war as an institution which distributed money to mainly authoritarian regimes in the third world that supported the West in the Cold War.

The World Bank in Indonesia (1960s – 1990s)

Probably the best historical case study which criticizes the role of the World Bank in development is the case of Indonesia. 

In the 1960s General Suharto seized power in Indonesia secretly backed the United States and Britain. He removed from power the founder of modern Indonesia, Sukarno – a nationalist who believed in economic independence for the country. He had kept the Transnational Corporations and their agents, the World Bank, and the IMF, out of the country, but with Suharto coming to power they were called back in to ‘save’ Indonesia.

This regime change was one of the bloodiest mass murders in post WW2 history, with more than a million people estimated to have died in the process. Suharto took brutal steps to consolidate his power by rounding up thousands and thousands of civil servants, school teachers and basically anyone with communist leanings and murdering them.

Within a year of Suharto’s coming to power the economy of Indonesia was effectively redesigned, giving the west access to vast natural resources, markets and cheap labour, what Nixon called ‘the greatest prize in Asia.

Over the next 30 years the World Bank handed out $30 billion in loans for development to the Suharto regime, turning a blind eye to the estimated million people who Suharto massacred during his rule. The Indonesian elite instigated many development projects with World Bank loans during this time, and many of them were seen as opportunities to skim money for themselves.

The Asian financial crisis of 1998 collapsed the Indonesian economy which resulted in Suharto stepping down from power, ending a 30 year rule during which time he stole an estimated $15 to $30 billion from the Indonesian people, giving him the dubious honour of being the most corrupt dictator in modern world history.

According to the World Bank’s own documents, by the end of regime, $10 billion out of $30 billion in loans remained unaccounted for (so around half of the estimate above is straight from the World Bank). Of course the debt remained, and still had to be paid back to the World Bank by the Indonesian citizens who had never seen a cent of that money.

According to the auditor general of the World Bank, if the citizens of Indonesia made a legal challenge against the World Bank over the remaining debt (given that they never received the money), the World Bank would be bankrupt, because this has gone on the world over.

The World Bank in Bolivia (1994)

Another specific case study which demonstrates the harmful effects World Bank policies can have on poor countries is the case of the World Bank’s Structural Adjustment Programme in Bolivia in the mid 1990s (clip below from ‘The Corporation’):

In 1994 the World Bank refused a $25 million dollar loan to a local water co-operative in Cochabamba, Bolivia. Instead, they insisted that the Bolivian government hand over the running of the local water supply to a French mulitnational named Bechtel. The agreement that the World Bank forced onto the Bolivian government gave the French company total control over the local water supply in Cochabamba, even over the rain water, and locals were forbidden from collecting rain water to drink – they either had to pay the company for water or die of thirst.

The problem was that the fees Bechtel was charging for water cost the average local resident more than they spent on food, or about half of their income (the other half they didn’t spend on food).

In response,  a resistance movement sprang up (no pun intended), to which the government responded with military force – and over a hundred people were wounded in the following skirmishes.

In this case, the government eventually backed down, and the water supply was returned to the control of the local community, meaning that water was again effectively available for free, but this goes to show the lengths the world bank will go to in support of Transnational Corporations.

A good documentary which puts the Bolivian water privatisation in historical and global context is ‘Blue Gold: World Water Wars’ – clip below…

Some negative consequences of Structural Adjustment Programmes in Africa 

Structural Adjustment programmes are the primary vehicle through which the World Bank provides conditional loans for development – through them, a country only receives loans if it adopts neoliberal (pro-business) policies – there are four main strands to this – prviatising public services, cutting taxes, deregulation, and developing an ‘export driven’ economy.

This useful blog post summarises some of the harms that World Bank structural adjustment programmes have done in Africa. To summarise just a few of them…  

  • Privatisation has meant that Transnational Corporations have been able to buy state enterprises at very low costs.
  • Tax reforms under structural adjustment programmes typically have meant tax cuts for the wealthy (lowering taxes on profits for example) and shifted the tax burden onto middle and low-income groups.
  • Deregulation has made it easier for TNCs to shift their profits abroad – to offshore banking accounts for example.
  • Cuts to public services such as health have increased the number of people without access to health care.
  • Cuts in public sector employment, have led to large increases in unemployment. (for example 300 000 civil servants were retrenched in Zaire – now DRC – in 1995).
  • Liberalisation of labour markets have led to the phasing out of minimum wage legislation.
  • Export orientation in agriculture has led to the elimination of subsistence agriculture and pushed people towards cities, leading to rapid urbanisation and an increase in slum-living conditions.
  • Various NGOs funded by international aid agencies have gradually taken over government functions in the social sector.

Evaluations of these Criticisms 

  1. Many of these criticisms are historical, and they may not apply to World Bank policy today.
  2. It’s actually quite difficult to evaluate how successful World Bank policies have been in promoting development, because you can never be sure what would have happened if World Bank policies and conditional loans had not been put in place, and it’s difficult to isoloate the specific effects of policies given the open-systems nature of global development.

Further Reading

Structural adjustment programmes – more harm than good for African development?  A useful blog post analysing the reasons why SAPs generally didn’t work in Africa, from 2015

The Role of the World Bank in International Development

The World Bank’s main function is to provide long-term loans to developing countries for development. These loans support a wide array of investments in such areas as education, health, infrastructure, agriculture, and environmental and natural resource management.

 

the-world-bank
The World Bank headquarters in Washington D.C.

According to the World Bank’s web site:

The World Bank Group has set two goals for the world to achieve by 2030:

  • End extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3%
  • Promote shared prosperity by fostering the income growth of the bottom 40% for every country

The World Bank is not a bank in the ordinary sense but a unique partnership to reduce poverty and support development. The World Bank Group comprises five institutions managed by their member countries.

Historically, the World Bank’s primary role in development seems to be in promoting free-market pathways to development, focusing primarily on GDP growth as the most important indicator of development. However, more recently there has been more of an emphasis on poverty alleviation and and improving social development, as well as making countries resilient to global challenges such as climate change and pandemics. .

Donor Countries and Countries viable for World Bank Assistance 

The World Bank is funded primarily by the governments of the world’s richest 60 developed nations, and the amount each country provides is broadly related to its GDP – the USA is the largest donor, for example, having contributed $1.5 billion, while the UK is third, with a contribution of just under $900 million (2010 figures). NB It’s worth noting that the amount of money channeled through the World Bank is increasing.

world-bank-commitments

This means that the remaining 130 countries, mostly outside of Europe, are eligible for development aid through the World Bank.

World Bank recpient countries.png
Countries eligible for World Bank Assistance 2016

The Scale Development Assistance Given by the World Bank

In 2016 the World Bank made over $64 billion dollars of commitments to developing countries, broken down by region below (World Bank Annual Report, 2016)

world-bank-commitments

So what does the World Bank actually do to promote development?

TBH it’s difficult to say – exactly what the World Bank does in each country depends, to an extent, on that country’s level of development. To check out what the World Bank does in each country, and for progress, see the World Bank’s country pages.

Historically, the World Bank has had a Neoliberal Development Agenda

Despite there being different development programmes in different countries, since the 1980s, the World Bank has generally favoured a neoliberal approach to development by offering loans only if developing countries adopt neoliberal policies such as the privatization of public services, deregulation, lowering taxation, and developing an export-driven (rather than a subsistence) economy (Chapman et al, 2016).

The World Bank and Structural Adjustment Programmes (SAPs)

Structural Adjustment Programmes (SAPs) are one of the main policy vehicles through which the World Bank and the IMF* have sort to encourage economic development in poorer countries. They basically involve encouraging poorer countries to adopt a neoliberal pathway to development, favoouring free-trade. 

Structural Adjustment Programmess were first introduced by the World Bank and the IMF in the 1980s in response to a debt crisis in Africa in the 1970s. Under SAPs, countries are able to get loans from the IMF or the World Bank if they accept conditions, which usually consist of adopting neoliberal policy reforms.

How did SAPs intend to fuel development?

SAPs required numerous developing countries to introduce the following neoliberal policies, which favoured free-market capitalism.

  1. Lower taxation, especially on profits – to provide incentives businesses and attract international investment.
  2. Privatisation of public services – neoliberals believe that state run services (such as health and education) are inefficient, privatising them means handing them over to private companies to run, which should deliver better services for cheaper because they’re more concerned with cost-cutting to maintain and increase profit.
  3. Deregulation – which included reducing the rules surrounding minimum wages, environmental legislation and health and safety, all of which make it more difficult to do business.
  4. Refocusing the economy to favour production for export rather than ‘import substitution’ –  many SAPs encouraged developing countries to invest money in ‘export processing zones’ which were special areas (typically near ports) which TNCs could move into to manufacture goods cheaply for export, taking advantage of the cheap labour in poorer countries, rather than spending money supporting smaller,  local industries producing goods for domestic consumption. A good example of this is provided through the current case study of Malawi. The World Bank’s web site says: ‘With support from the World Bank and other donors, the Malawi government has been developing a new national agricultural policy to refocus smallholder subsistence farming to commercial approaches’.

So What is the role of the World Bank in International Development?

Historically we can certainly say that the World Bank has made considerable efforts to support free-market capitalism, and some of its policies do seem have benefited some developing countries, such as the IDA graduates.

However, unfortunately for the World Bank, there is a lot evidence that many of its policies have not helped developing countries at all and numerous critics argue that its interventions in poor countries have actually made things worse for a lot of people, which is covered in a later post….

Related Posts

Criticisms of the World Bank (forthcoming)

Further Reading

Structural adjustment programmes – more harm than good for African development?  A useful blog post analysing the reasons why SAPs generally didn’t work in Africa, from 2015

The World Bank’s Malawi page

*The International Monetary Fund – I’ll post on this later.

Arguments for International Development Aid

Jeffry Sachs in ‘The End of Poverty’ (2005) makes the case for increasing spending on aid to developing countries. Taken mainly from chapters 12-16

(1) Why is Aid needed?

Sachs argues that injections of aid are needed to break the poverty trap –because there is no where else money is going to come from when there is insufficient income to tax or save.

Sachs uses a description of a visit to Sauri village in Western Kenya to describe the poverty trap – the villagers face a range of poverty related problems including poor food yields due to lack of fertilisers and nitrogen-fixing trees, the fallout from diseases such as AIDS and malaria and the fact that children cannot concentrate in school because of malnutrition. All energies and money are basically spent on combating disease and staying alive.

As a result of the poverty trap the village faces under investment in the following five areas

  1. Agriculture
  2. Health
  3. Education
  4. Power, transport and communications infrastructure
  5. Sanitation and water.

Aid needs to be spent boosting whichever of these areas are undeveloped (and all of them, all at once, if necessary) because a weakness in one can mean money is wasted on another (it’s pointless spending billions on education if disease means kids can’t concentrate in school, or lack of roads means they can’t get to school.). This should be based on what Sachs calls a ‘clinical diagnoses‘ of a countries requirements.

(2) How much aid is needed?

There’s a number of ways of looking at this

$70 per person per year for at least 5 years would being sufficient to provide suitable investment in these five areas for the poorest regions on earth (basically the bottom billion who are stuck in the poverty trap). After an initial 5 year period, Sachs believes that this figure should reduce considerably and that 10 years should be sufficient for a country to be self-sustaining financially.

Looked at globally The World Bank estimates that meeting basic needs costs $1.08 per person per day – 1.1 billion people lived below this with an average income of 77 cents. Making up the short fall would mean $124bn/ year, or 0.7% of rich world GNP.

(3) Arguements for providing International Development Aid

Firstly, using aid to eradicate poverty will make the world a more secure place

The US spends 30 times as much on its military as it does on aid (for the UK it’s about 8 times as much, 2002 figures), but spending money on military solutions is not going to make an insecure world more secure.

A CIA task force examined 113 cases of state failure between 1957 and 1994 and found that three explanatory variables are the most common:

  1. High infant mortality rates (which indicate low levels of material well-being)
  2. Openeness of the economy – the more open, the less stable
  3. Democracy – the more democratic, the more stable.

Sachs rounds off by listing 25 countries which America has intervened in following State Failure since 1962. His point is that state failure typically leads to US intervention, which is more costly than the price of providing aid which would prevent such interventions.

Secondly, Official Development Aid  is crucial to provide health, education and infrastructure, and because it makes up a significant part of the total income of many countries.

Thirdly,The  public will support a massive increase in aid if there’s leadership on the issue – nearly 90% of the US public support food aid (it depends how you frame the question). Also, broad support was garnered for The Marshall Plan, The Jubilee Drop the Debt Campaign and The Emergency AIDS campaign.

Fourthly – There is evidence that Aid can work:

Besides the usual green revolution and eradication of smallpox examples Sachs also cites…

  • The Global Alliance for Vaccines and Immunisation
  • The Campaign against Malaria
  • The Eradication of Polio
  • The spread of family planning
  • Export Processing Zones in East Asia
  • The Mobile Phone Revolution in Bangladesh

Five – the West can easily afford it 

Sachs points out that the richest 400 individuals incomes stand at just under $70 billion dollars, and the first two years of the Iraq War, which was an unexpected cost, was $60 bn a year, so basically yes. He also recommends a 10% additional tax on the richest for the purposes of development.

(4) Sach’s view of why Aid Doesn’t Always Work – Poor Countries Aren’t Getting Enough Aid! (**This can be used to criticise Dambisa Moyo”s views on aid. )

Poor countries are receiving no where need enough aid to make a difference to development – To demonstrate this he uses the West African Water initiative as an example – Worth $4.4 million over 3 years, but this only worked out at less than a penny per person per year, no where near enough to make a difference.

He also cites the case of Ethiopia – in 2003 it would have needed approx $70 billion to kick start development – half for health and most of the rest split between food productivity and infrastructure. It was then receiving $14 per head per year which was well short of the money needed. At the time the IMF acknowledged in private that this was not sufficient but in public made no mention of this.

Another way of outlining how limited current ODA is lies in the following:

in 2002 of $76 billion total assistance….only $12 billion amounted to what might be called development support to the poorest countries (most of the rest was emergency aid, with $6 billion being debt relief and $16 billion going to middle income countries.

As a result of this countries often don’t get anywhere near what they need – Sachs cites Ghana as an example – it requested $8 billion over 5 years in 2002 and got $2 billion. His point is that $2 billion is no where near enough to kick-start development.

(5)) Myths about why aid doesn’t work (**these could be used to criticise Dambisa Moyo)

He actually lists 10, but I’ve only included the first three!

Myth One – Giving aid is ‘money down the drain’

It is common to hear Americans bemoaning the fact that there is nothing to show for the amount of aid given to Africa. This is, however, unsurprising. The total amount of aid per Africa works out at $30 per head, but of this $5 goes to consultants, $4 was for food aid, $4 went to servicing debts and $5 for debt relief, leaving $12 per African.

Of the $3 of US aid to Africa, approximately 6 cents makes it on the ground African projects.

Myth Two – Aid programmes would fail in Africa because of backward cultural norms

Sachs points out that he frequently encounters prejudiced views based on African stereotypes even among those in senior positions in the aid industry – Such as the idea that Africans don’t understand western concepts of time. He dispels this by simply drawing on his own experiences telling him different things.

Myth 3 – Aid won’t work because of corruption

Nearly all low income level countries have poor levels of governance. However, corruption is not a reason to not invest in a country because the causal relationship runs in the direction of wealth reduces corruption. This is because when incomes increase people have more of an interest in keeping governments in check and there is more money to invest in good governance through better communication systems and a more educated civil service for example.

Looking at cross national comparisons reveals two things – Firstly that African countries governance levels are similar to similarly poor countries. That is to say that governance is not especially poor in Africa, and secondly there must be something else going which results in poverty other than poor governance – there are still some very poor countries in Africa with good governance yet high poverty, he cites Ghana as one such example.

Statistical indicators reveal that African countries grew at 3% percentage points slower than countries with similar levels of governance and income between 1980 and 2000. The reason for their low growth is geography and poorly developed infrastructure.

(6) A more ambitious approach to Development Aid

Ultimately Sachs believes we should be spending more on aid rather than less!

Sachs outlines ‘a needs assessment approach’ to development which basically involves identifying a package of basic needs, figuring out the investments required,, figuring out what poor countries can pay and then working out the finance gap which is what rich countries should meet. The list of basic needs includes such things as:

  • Primary education for all children, including teacher pupil ratios
  • universal access to antimalarial bednets
  • I kilometre of paved road per person
  • nutrition programmes for all vulnerable populations
  • access to modern cooking fuels
  • Access to clean water and sanitation.

To establish these poor countries would need $110 per person per year for 10 years (calculated by the UN for five countries – Bangladesh, Ghana, Cambodia, Tanzania and Uganda.

Of this Sachs believes that households and poor country governments could pay $10 and $35 dollars respectively meaning that $65 per person per year is the finance gap

Who should pay? Basically it breaks down like this…

USA – 50%
Japan – 20%
UK, Germany, France, Italy – 20%.

The Role of Transnational Corporations in Development

A few criticisms of  the role of Transnational Corporations in International Development 

Criticisms of Coca ColaTransnational Corporations are one of the primary agents of Global Capitalism and many have been criticised because of the social and environmental harms they cause in the pursuit of profit. In this blog I outline some case studies of Corporations exploiting workers.

My main inspiration for writing this blog is ‘The Corporation’ (1) (2). However, although this blog does draw on this excellent resource, it also provides more contemporary examples of corporate harm than this 2004 documentary.

Examples of Corporations exploiting workers

Probably the best known criticism to be levelled at well known Corporations such as Nike, Addidas and Primark is that they profit from ‘sweatshop labour’ – with the workers who manufacture their products working extremely long hours in poor conditions and for extremely low wages.

In chapter 5 of The Corporation, one researcher calculates that workers at one of Nike’s factories in Indonesia were earning 0.3% of the final selling price of the products they were making. Now, I know there are middle men, but in classic Marxist terms, this is surely the extraction of surplus value taken to the extreme! The anti- sweat shop campaigns are years old now, but still ongoing –

Of course sweat shop labour is not limited to the clothing industry – the BBC3 series ‘Blood Sweat and T shirts/ Takeaways/ Luxuries’, (3) in which young Brits travel to developing countries to work alongside people in a wide range of jobs, clearly demonstrates how workers in many stages of the productive process, including rice sowing, prawn farming, gold mining, and coffee packing, suffer poor pay and conditions. Many of the goods focussed on in this series end up being bought and the sold in the West by Transnational Corporations for a huge mark up, and it is extremely interesting to see the Brits abroad struggling with the injustice of this.

Apple SweatshopsThe Daily Mail recently conducted some undercover journalism in a Chinese factory that makes the i-pad – where the report they ‘encountered a strange, disturbing world where new recruits are drilled along military lines, ordered to stand for the company song and kept in barracks like battery hens – all for little more than £20 a week.’ Apparently workers have to endure shifts up to 34 hour s long, and the factory has been dubbed the ‘i nightmare factory’ (4)

Even worse conditions are to be found at some of Coke’s bottling factories in Columbia according to the killer coke campaign. Campaigners have documented a ‘gruesome cycle of murders, kidnappings and torture of union leaders involved in a daily life and death struggle’ at these plants. The bosses at some of Coke’s factories in Columbia have contacts with right wing paramilitary forces, and use violence and intimidation to force unionised labour out of work, and then hire non unionised labour on worse contracts for half the pay. There have been more than 100 recorded disappearances of unionised labour at Coke’s factories. (5) (6)

Now the Coca Cola Corporation is obviously not directly to blame for this, as Columbia is one of the more violent countries on the planet, and this culture of violence and intimidation is widespread. The company is, however, responsible for making the conscious decision to choose to invest in a region well known for such practices, and failing to either pull out or protect its workers.

See http://www.nosweat.org.uk/ for more details of Corporate Complicity in sweat shop labour and Union Busting (7)

(1)  http://www.youtube.com/view_play_list?p=FA50FBC214A6CE87 – All the chapters of the Corporation on youtube – although you should really show your support by purchasing this documentary!

(2)  http://www.thecorporation.com/ – The web site of The Corporation.

(3)  http://www.bbc.co.uk/programmes/b00s6103 – The BBC web site for the recent ‘Blood, Sweat and luxuries programme which has an interest blog of comments and a ‘what can you do to help’ link.

(4)  http://www.dailymail.co.uk/news/article-1285980/Revealed-Inside-Chinese-suicide-sweatshop-workers-toil-34-hour-shifts-make-iPod.html

(5)  http://www.killercoke.org/pdf/KCBroch.pdf – a link to the main campaign leaflet of the ‘killer coke’ campaign.

(6) http://www.staticbrain.com/archive/killer-coke-coke-is-the-drink-of-the-death-squads/ – featuring a video of the song ‘Coke is the drink of the Despots’ – sing along if you like!

(7)  http://www.nosweat.org.uk/files/New%20general%20leaflet%2009.pdf – A link to the most recent nosweat leaflet which has some nice ‘sweatshop sums’ peppered throughout which provide facts such as ‘Children as young as 10 were found working in a shop for Primark – Primark made sales of 1.1 billion in the sixth months to March 2009.’

The Golden Arches Theory of Decline – This 2016 post by George Monbiot argues that Transnational Corporations such as Mcdonalds are undermining democracy and that a global system which concentrates power in the hands of a relatively few TNCs is not compatible with the democratic will of the people of Nation States – hence why Trump won in the USA – he’s one of the few political candidates to have promised to limit the power of TNCs.