Role of Foreign Capital Investment in a Country Rich in Natural and Human Resource
Prime Minister Modi seems convinced that India
and Indian could only develop with the help of foreign capital investment and
is prepared to offer these investors all the concessions and facilities they
demand to maximize their profit. John Perkin in his book Confessions of
Economic Hit Man (EHM) gives other side of the story. He starts the
preface of his book as, “Economic
hit men (EHMs) are highly paid professionals who cheat countries around the
globe out of trillions of dollars. They funnel money from the World Bank, the
U.S. Agency for International Development (USAID), and other foreign
"aid" organizations into the coffers of huge corporations and the
pockets of a few wealthy fami-lies who control the planet's natural resources.
Their tools include fraudulent financial reports, rigged elections, payoffs,
extortion, sex, and murder.” He adds that this game has taken on ‘new and
terrifying dimensions during this time of globalization.’ In the Prologue of
the book he writes about the role foreign capital had played in Ecuador. Below
is just a summary of this Prologue.
Quito,
Ecuador's capital is situated at an altitude of nine thousand feet. The city of
Shell, a frontier outpost and military base hacked out of Ecuador's Amazon
jungle to service the oil company, is nearly eight thousand feet lower than
Quito. It is inhabited mostly by soldiers, oil workers, and the indigenous
people from the Shuar and Kichwa tribes who work for them as prostitutes and
laborers.In 2003, I
departed Quito in a Subaru Outback and headed for Shell on a mission that was
like no other I had ever accepted. I was
hoping to end a war I had helped create. As is the case with so many
things we EHMs must take responsibility for, it is a war that is vir-tually
unknown anywhere outside the country where it is fought. I was on my way to
meet with the Shuars, the Kichwas, and
their neighbors the Achuars, the Zaparos, and the Shiwiars — tribes determined to
prevent our oil companies from destroying their homes, families, and lands,
even if it means they must die in the process. For them, this is a war about
the survival of their children and cultures, while for us it is about power,
money, and natural resources. We EHMs build a global empire. We are an
elite group of men and women who utilize international financial organizations
to foment conditions that make other nations subservient to the corporatocracy
running our biggest corporations, our government, and our banks. EHMs provide favors. These take the form of loans
to develop infrastructure — electric generating plants, highways, ports,
airports, or industrial parks. A condition
of such loans is that engineering and construction companies from our
own country must build all these projects. In essence, most of the money never
leaves the United States; it is simply
transferred from banking offices in Washington to engineering offices in New
York, Houston, or San Francisco.
Despite the fact that the money is
returned almost immediately to corporations that are members of the corporatocracy (the creditor), the
recipient country is required to pay it all back, principal plus interest. If an EHM is completely successful,
the loans are so large that the debtor is forced to default on its payments
after a few years. When this happens, then like the Mafia we demand our
pound of flesh. This often includes one or more of the following: control over
United Nations votes, the installation of military bases, or access to precious
resources such as oil …. Of course, the
debtor still owes us the money—and
another country is added to our global empire.
Driving
from Quito toward Shell on this sunny day in 2003, I thought back thirty-five
years to the first time I arrived in this
part of the world. I had read that although Ecuador is only about the size of
Nevada, it has more than thirty active volcanoes, over 15 percent of the
world's bird species, and thousands of as-yet-unclassified
plants, and that it is a land of diverse cultures where nearly as many
people speak ancient indigenous languages as speak Spanish. I found it
fascinating and certainly exotic; yet, the words that kept coming to mind back
then were pure, untouched, and innocent. Much has changed in thirty-five years. At the
time of my first visit in 1968, Texaco had only just discovered petroleum in
Ecuador's Amazon region. Today, oil accounts for nearly half the
country's exports. A trans Andean pipeline built shortly after my first visit
has since leaked over a half million barrels of oil into the fragile rain forest— more than twice the
amount spilled by the Exxon Valdcz.'2 Today, a new $1.3 billion, three
hundred-mile pipeline constructed by an EHM-organized consortium promises to
make Ecuador one of the world's top ten suppliers of oil to the United States.3 Vast areas of rain forest have
fallen, macaws and jaguars have all but vanished, three Ecuadorian
indigenous cultures have been driven to the verge of collapse, and pristine
rivers have been transformed into flaming
cesspools.
During
this same period, the indigenous cultures began fighting back. For instance, on
May 7, 2003, a group of American lawyers representing more than thirty thousand
indigenous Ecuadorian people filed a $1 billion lawsuit against ChevronTexaco
Corp. The suit asserts that between 1971 and
1992 the oil giant dumped into open holes and rivers over four million
gallons per day of toxic wastewater contaminated with oil, heavy
metals, and carcinogens, and that the company left behind nearly 350 uncovered
waste pits that continue to kill both people and animals.
Knowing the part I had played in
destroying this beautiful country was once again taking its toll. Because of my
fellow EHMs and me, Ecuador is in far worse shape today than she was before we
introduced her to the miracles of
modern economics, banking, and engineering.i Since 1970, during this
period known euphemistically as the Oil
Boom, the official poverty level grew from 50 to 70 percent, under- or
unemployment increased from 15 to 70 percent, and public debt increased from
$240 million to $16 billion. Meanwhile, the share of national resources
allocated to the poorest segments of the population declined from 20 to 6
percent.
Unfortunately, Ecuador is not the exception.
Nearly every country we EHMs have brought under the global empire's umbrella has suffered
a similar fate. Third world debt has grown to more than S2.5 trillion, and the
cost of servicing it — over $375 billion per year as of 2004 — is more than all
third world spending on health and educa-tion, and twenty times what developing
countries receive annually in foreign aid. Over half the people in the world
survive on less than two dollars per day, which is roughly the same amount they
received
in the early 1970s. Meanwhile, the top 1 percent of
third world households accounts for 70 to 90 percent of all private financial wealth
and real estate ownership in their country; the actual per-centage depends on the specific country.
The Subaru slowed
as it meandered through the streets of the beautiful resort town of Banos, famous for the hot baths created by underground
volcanic rivers that flow from the highly active Mount Tungurahgua. Children ran along beside us, waving and trying
to sell us gum and cookies.
Then we left Banos behind. The spectacular scenery ended abruptly as
the Subaru sped out of paradise and into a modern vision of Dante's Inferno.
A gigantic
monster reared up from the river, a mammoth gray wall. Its dripping concrete
was totally out of place, completely un-natural and incompatible with the landscape.
Of course, seeing it there should not have
surprised me. I knew all along that it would be waiting in ambush. I had
encountered it many times before and in the past had praised it as a symbol of
EHM accomplishments. Even so, it made my
skin crawl.
p.xix That hideous, incongruous wall is a dam that blocks the
rushing Pastaza River, diverts its waters through huge tunnels bored into the
mountain, and converts the energy to electricity. This is the 156-megawatt Agoyan hydroelectric project.
It fuels the industries that make a handful of Ecuadorian families wealthy, and
it has been the source of untold suffering for the farmers and indigenous
people who live along the river. This hydroelectric plant is just one of many
projects developed through my efforts and
those of other EHMs. Such projects are the reason Ecuador is now a member of
the global empire, and the reason why the Shuars and Kichwas and their neighbors threaten war against our oil companies.
Because of
EHM projects, Ecuador
is awash in foreign debt and must devote an inordinate share of its national budget to paying this off, instead of using its
capital to help the millions of its citizens officially classified as
dangerously impoverished. The only way Ecuador can buy down its foreign
obligations is by selling its rain forests to the oil companies. Indeed, one of
the reasons the EHMs set their sights on Ecuador in the first place was because
the sea of oil beneath its Amazon region is believed to rival the oil fields of
the Middle East. The global empire demands
its pound of flesh in the form of oil concessions.
Ecuador is
typical of countries around the world that EHMs have brought into the economic-political fold. For every $100 of crude taken out
of the Ecuadorian rain forests, the oil companies receive $75. Of the remaining
S25, three-quarters must go to paying off the foreign debt. Most of the
remainder covers military and other government expenses — which leaves about
$2.50 for health, education, and programs
aimed at helping the poor. Thus, out of every $100 worth of oil torn from the
Amazon, less than $3 goes to the people who need the money most, those whose lives
have been so adversely impacted by the dams, the drilling, and the pipelines,
and who are dying from lack of edible food
and potable water.All
of those people —
millions in Ecuador, billions around the planet —are potential
terrorists. Not because they believe in communism or
anarchism or are intrinsically evil, but simply because they are desperate.
We
EHMs are crafty; we learned from history. Today we do not carry swords. We do
not wear armor or clothes that set us apart. In countries like Ecuador, Nigeria,
and Indonesia,
we dress like local schoolteachers and shop owners. In Washington and Paris, we
look like government bureaucrats and bankers. We appear humble, normal. We
visit project sites and stroll through impoverished villages. We profess
altruism, talk with local papers about the wonderful humanitarian things we are
doing. We cover the conference tables of government committees with our spreadsheets and financial projections,
and we lecture at the Harvard Business School about the miracles of
macroeconomics. We are
on the record, in the open. Or so we portray ourselves and so are we accepted.
It is how the system works. We seldom resort to anything illegal because the
system itself is built on subterfuge, and
the system is by definition legitimate.However — and this is a very
large caveat —
if we fail, an even more sinister breed steps in,ones we EHMs refer to as the jackals, men who trace their
heritage directly to those earlier empires. The jackals are always there,
lurking in the shadows. When they emerge, heads of state are overthrown or die
in violent "accidents."10 And if by chance the jackals fail, as they failed
in Afghanistan and Iraq, then the old models resurface. When the jackals fail,
young Americans are sent in to kill and to
die.
As I passed the
monster, that hulking mammoth wall of gray concrete rising from the river, I headed
on down intcHhe jungle to meet with the indigenous people who are determined to
fight to the last man in order to stop this empire I helped create, and I was
overwhelmed with feelings of guilt.
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