The corporate coup

for the

the World’s Water

the water crisis

The Earth has only a limited quantity of replenishable, terrestrial fresh water. As population increases, the amount available per capita decreases. This is assuming that demand per capita remains the same. But demand does not stay constant. Demand per capita increases with each advance toward industrialization. This is the essence of the world’s present water crisis.

1. The Finitude of the Earth’s terrestrial, replenishable fresh Water: The Earth has a finite quantity of terrestrial, replenishable fresh water. This quantity consists of the approximately 110,000 billion cubic meters (m³) per year of rain and snow which fall on dry land.

Of this original 110,000 billion cubic meters, 70,000 billion cubic meters (64 percent) re-enter the atmosphere, and 40,000 billion cubic meters (36 percent) flow back to the oceans.

a. The 70,000 billion cubic meters which return to the atmosphere, do so through evaporation and transpiration (evapo-transpiration) – the natural release of moisture by plants.

Of this 70,000 billion cubic meters available through evapo-transpiration, 18,200 billion cubic meters (26 percent) are appropriated by humans for cultivation, grazing, forests and human-occupied areas. The remaining 51,800 cubic meters (74 percent) must meet the needs of all the non-human terrestrial ecosystems. This is the water which renders possible all non-irrigated vegetation, both natural and cultivated (crops).

b. The 40,000 billion cubic meters which are converted to run-off, become the flow of rivers, streams and underground aquifers.

Of this 40,000 billion cubic meters surface run-off, 12,500 billion cubic meters (31 percent) have a flow sufficiently stable to be accessible to humans. [This figure includes about 3,400 billion cubic meters of water stored in large (at least 15 meters high) dams which regulate river flow]. This is the water which maintains aquatic life, including fisheries, and is used by humans for irrigation, industry, municipalities, dilution, hydropower, navigation, and human aquatic diversions. The other 27,500 billion cubic meters (69 percent) are either geographically, temporally, and/or spatially inaccessible.

Of this 12,500 billion cubic meters accessible run-off, 9,030 cubic meters (72 percent) are withdrawn by humans.

Of the 9,030 cubic meters withdrawn by humans, 6,780 billion cubic meters (75 percent) are returned to surface run-off, usually contaminated either by agriculture, industry or domestic activities. The other 2,250 billion cubic meters (25 percent) are consumed – that is, not returned to the streams after use. For the most part, this water re-enters the atmosphere via plant transpiration. Irrigated agriculture accounts for most water consumed, and it is for this reason that major rivers, such as the Colorado, no longer reach the ocean. Cotton and alfalfa are among the most “thirsty” crops. Consumed water also includes evaporation, as, for instance, from reservoirs.

Total fresh Water used by Humans: The total quantity of fresh water used by humans, consists of the 18,200 billion cubic meters appropriated from evapo-transpiration, plus the 6,780 billion cubic meters used from accessible run-off. This equals 24,980 billion cubic meters per year.

Per capita fresh Water accessible to Humans, Year 2000: In 2000, world population was 6,230,000,000. On a per capita basis, therefore, the amount of water used by humans, was 24,980 billion cubic meters / 6.23 billion = 4,010 cubic meters per person per year. This is 24,980 / (70,000 + 40,000) = 23 percent of the Earth’s terrestrial, replenishable fresh water, and 24,980 / (70,000 + 12,500) = 30 percent of the terrestrial, replenishable fresh water which is accessible to humans (University of Michigan 2006b, pp. 1 and 4-9. This and other numerous references summarized in Hall 2006c, pp. 22-25 and 27. World on Line undated, p. 1).

Minimum human Water Requirement:

(Conversion Factor: One cubic meter (m³) of water = 1,000 liters).

The minimum human requirement for water is approximately 1,000 cubic meters per person per year.

The range between 1,000 and 2000 cubic meters is defined as “water stress.”

Less than 1,000 cubic meters availability is defined as “water scarcity.”

The proportion of the minimum requirement used for personal purposes (drinking, cooking and sanitation), is minimal – 36-72 cubic meters per year (100-200 liters per day) – that is, 5 percent. Most of the requirement (95 percent) is used for agriculture, industry and energy production.

Note: Barlow quotes 18 cubic meters per year (50 liters per day) for personal use. In my opinion, this is low (Barlow 2007, p. 5. Petrella 2001, pp. 27-28. Klare 2001, p. 142. Both references summarized in Hall 2006c, pp. 25 and 27. See also Hall 2004c).

2. Population Growth: In the six years 1994-2000, world population grew at the rate of 1.78 percent per year – in 1994, the population was 5.63 billion and in 2000, it was 6.23 billion. This growth of 0.1 billion yearly, means that humans are adding to their numbers every three years, the equivalent of the population of the United States (0.3 billion) (World on Line undated, p. 1. Population Reference Bureau 2007, p. 2).

Per capita fresh Water accessible to Humans, 2025, projected: By 2025, world population is projected to be 8 billion.

* Evapo-transpiration: The amount of water appropriated by humans from evapo-transpiration cannot increase without causing further damage to all non-human terrestrial ecosystems. One must assume, therefore, no change in the 18,200 billion cubic meters presently appropriated by humans from evapo-transpiration.

* Accessible Run-off: The amount of run-off made accessible to humans could increase from 12,500 to 13,700 billion cubic meters – a 9.6 percent increase, a difficult but achievable feat.

* Proportion of accessible Run-off used by Humans: The proportion used from the accessible run-off could increase from 54 percent (6,780 out of a total of 12,500 billion cubic meters) to 72 percent (9,830 out of a total of 13,700 billion cubic meters) – a considerable but feasible achievement.

Assuming these two increases to water availability, and assuming further that on the average, per capita water demand remains the same (and, therefore, adjusting only for the pollution dilution required for the additional population), the per capita accessible water, in 2025, will be almost a fifth less than it is today – going from the 2000 amount of 4,010, to a 2025 amount of 3,504 cubic meters per person per year:

Evapo-transpiration . . . . . . . . . . . . . . . . . . 18,200 billion cubic meters

Used from Run-off . . . . . . . . . . . . . . . . . . . 9,830 “

____________________________________________________

Total available. . . . . . . . . . . . . . . . . . . . . . . 28,030 “

Available per capita . . . . . . . . . . . . . . . . . . 3,504 m³/per person/year

Decrease, 2000-2025 (from 4,010 to 3,504) 17 percent

(University of Michigan 2006b, p. 9, summarized in Hall 2006c, p. 26).

3. Scarcity: Signs of overuse of water are present throughout the world:

a. In 1999, about 10 percent of the global harvest was being produced using water supplies that were not being replenished (Postel 1999, p. 80, cited in Barlow 2007, p. 12; cited in Barlow and Clarke 2002, p. 60; cited also in Hall 2005, pp. 7 and 18).

b. In 2003, half the world’s population (3,150,000,000 people) was living in countries where water tables were falling and wells were drying up (Brown 2004, cited in Hall 2005, pp. 7 and 18).

c. In 2003, 434,000,000 people faced a scarcity of water (Population Action International 2003, cited in Worldwatch Institute 2005a, p. 62; cited in Hall 2005, pp. 7 and 18).

(For the definition of “water scarcity” and the minimum human requirement, University of Michigan 2006b, pp. 1 and 4-9, summarized in Hall 2006c, pp. 23, 25 and 27. See the present document under The Water Crisis, No. 1, The Finitude of the Earth’s terrestrial, replenishable fresh Water, Minimum human Water Requirement).

d. In 2006, 2,000,000,000 people were living in countries facing water stress. Countries defined as facing water stress are those which consume yearly more than 20 percent of their renewable water supply (Barlow 2007, pp. 1 and 3. United Nations Development Programme 2003, pp. 10 and 125, cited in Hall 2005, pp. 8, 14 and 19).

e. In 2000, 1,100,000,000 people had no access to safe water. This number is steadily increasing (Barlow 2007, pp. 1 and 3. United Nations Development Program, p. 103, cited in Hall 2005, pp. 8 and 19).

4. Inequality: The global water crisis is, in part, an inequality in water distribution crisis, and it, in turn, is one aspect of a larger crisis – that of the widening gap in money possession between members of humanity. The wealthy enjoy boutique water. The poor have access only to contaminated water.

a. In 2000, 1,100,000,000 people (one person in five) had no access to safe water (United Nations Development Programme 2003, p. 103).

b. In 2000, 2,400,000,000 people lacked access to improved sanitation. These were people without access to adequate excreta disposal facilities, such as a connection to a sewer or septic tank system, a pour/flush latrine, a simple pit latrine, or a ventilated, improved pit latrine. An excreta disposal system is considered inadequate if it is public (that is, not private or shared), and if it cannot effectively prevent human, animal and insect contact with excreta (Barlow 2007, p. 3. United Nations Development Programme 2003, pp. 103-104 and 357, cited in Hall 2005, pp. 8, 14 and 19).

c. In 2006, half the world’s hospital beds were occupied by people with an easily preventable water-borne disease (Barlow 2007, p. 3).

d. The minimum human requirement for personal needs – drinking, cooking and sanitation – is 36 to 72 cubic meters per year (100 to 200) liters per day.

In 2006, the average inhabitant of North America used almost 600 liters per day. The average inhabitant of Africa used 6 liters per day (Barlow 2007, pp. 1 and 5).

5. Abuse: Humanity is depleting, polluting, diverting, and (through global warming) diminishing the Earth’s supply of water at a rate which is both alarming and steadily increasing. Ecological systems are deteriorating.

In wealthier countries, the policy of unlimited economic growth based on wasteful industrial, trade and farming practices, contributes to shortages of water (Barlow 2007, pp. 1, 3, 29 and 31).

a. Depletion:

i. Surface Water: Rivers are being depleted due to overuse, the “mining” (withdrawal until complete depletion) of the ground water that feeds them, and the construction of dams.

The world’s major rivers which no longer reach the sea include the Colorado and the Rio Grande (U.S.), the Nile (Egypt), the Yellow River (China), the Indus (Pakistan), the Murray (Australia), the Jordan (Middle East), and the Oxus (Central Asia).

In 1950, there were 5,000 large dams around the world. In 2000, there were 45,000 large dams. The rotting of the trapped organic materials creates methane, a major greenhouse gas. Dams disrupt river flow patterns and aquatic habitat. One-third of the worlds’ fresh water fish species are either extinct or endangered.

ii. Ground Water: Humans are “mining” ground water at an exponential rate. The practice is largely unregulated. In 2000, 2,000,000,000 people (one third of the world’s population) depended on groundwater supplies for their daily use. Groundwater accounted for 20 percent of the global water used annually by humans.

The United States is presently dependent on non-renewable ground water for 50 percent of its daily water use.

Aquifers are not only being over-pumped, they are being polluted with both chemicals from industry and, in areas with poor drilling practices, with sea water (Barlow 2007, pp. 11-12 and 21-22).

b. Pollution:

i. Raw Sewage: The Third World discharges 90 percent of its wastewater untreated into local rivers, streams and coastal waters (Barlow 2007, pp. 6 and 28).

ii. Desalination: The desalination of every liter of sea water produces one liter of a lethal by-product. This poisonous discharge consists of a combination of:

* Concentrated brine.

* The chemicals and heavy metals used to prevent salt erosion, and maintain the reverse osmosis membranes.

* The decomposed remains of aquatic life (plankton, eggs, larvae, fish) trapped during the intake process. The rotting of these remains reduces the oxygen content of the water near the discharge pipes, thus adding to the stress on marine life already caused by the poisonous brine discharge which fans out into the ocean from the discharge point.

c. Diversion:

i. “Virtual” Water Trade: Water is massively displaced through the trade of “virtual” (“embedded”) water – the export of crops and manufactured goods, together with the water that was used in producing them.

About 20 percent of the water used in the world to-day for human purposes, is exported to another country. This usually consists of the transfer of water from the poor to the rich, as when Kenya destroys the waters of Lake Naivasha to grow roses for export to Europe. However, this is not always the case. The United States exports one third of its water withdrawals, a major factor in the drying out of the American Midwest and Southwest.

The water needed to produce one kilogram of:

* Cotton: 30,000 liters.

* Meat: 10,000 liters.

* Wheat: 1,000 liters.

The water needed to produce one liter of:

* Ethanol: 1,700 liters.

ii. Urbanization and the Destruction of Vegetation: The paving over of water-retentive natural environments, and the destruction of vegetation (through deforestation, land over-grazing, and poor farming methods), reduce water vapor from the local hydrologic cycle. Precipitation, unable to seep into fields, meadows, wetlands and streams on its way to the sea, is carried there directly (as if it had fallen on a large umbrella) – leaving less water in the local watershed for evaporation and transpiration. Water vapor, which moderates temperature and weather, is lost to the local water system.

iii. Sewage Disposal: At present, humans direct massive amounts of fresh water directly to the oceans through sewage systems – a diversion of sufficient magnitude to be a major cause of global warming (see item ii. above).

iv. Pipeline Re-direction: In rural, indigenous and farm communities, a major cause of desertification is the diversion of water through giant pipes from the local watershed to large urban centers. Two major bodies of water, the Aral Sea, in Asia, and Lake Chad, in Africa, have already been destroyed through diversion (in their cases due to excessive withdrawals for irrigation), and this destruction took place using the now outdated, less efficient canal method of diversion (Barlow 2007, pp. 9 and 26).

d. Desertification: The Himalayan glaciers which feed the great rivers of Asia – the Yangtze, the Indus, the Ganges, the Brahmaputra, the Mekong, and the Yellow – are melting to fast (due to global warming) that their melt-water increases soil erosion, causing deserts to spread. This melt-water then evaporates without ever forming a river (Barlow 2007, pp. 6-29).

commodification for Control

1. Commodification: The fact that water is not recognized as a human right, has led to a shift in the origin of water policies, from individual governments and the United Nations, to global institutions representing private interests. For businesses, the commodification of water (that is, convincing the public that water is a commodity to be bought and sold like any other), is an imperative first step to their ability to make a profit from it.

A powerful corporate cartel is presently seizing control over every aspect of the world’s water for its own profit. Its goal is the deregulation of water by governments, and the trading of water on the “free market” like any other commodity. Those who can pay, can live (Barlow 2007, pp. xii and 1-2).

2. The Privatization of water: Worldwide, private, for-profit water companies are already major players. They:

a. Bottle water and sell it.

b. Deliver drinking water to municipalities.

c. Remove waste-water from municipalities.

d. Use new technologies, such as nanotechnology, to recycle polluted water and sell it as drinking water.

e. Provide infra-structure technologies to replace old municipal water systems.

f. Own desalination plants.

g. Extract water from watersheds and aquifers.

h. Own and operate many of the world’s dams.

i. Own and operate many of the world’s pipelines, moving huge amounts of water through them, for sale to big cities and industries.

j. Control the vast quantities of water used in industry, farming, mining, energy production, and the manufacture of water-intensive goods, such as computers and cars.

k. Control the “virtual water” trade (trade in water-intensive foods and commodities).

l. Buy groundwater rights and whole watersheds so as to own large quantities of water stock.

m. Trade in water shares – they buy, store and trade water on the open market.

Whereas in the North, the public delivery of water helped produce the industrial age, in the South at present, this public model has been abandoned for a private water delivery system, which, not coincidentally, benefits the water corporations of the North. A private model for the global South has been planned, and is being carried out, by some of the most powerful corporations in the world.

The Growth of the private Water Industry:

In 1990, when world population was 5.3 billion, 50,000,000 people (1 percent) were buying water from a private water provider.

By 2000, when world population was 6.1 billion, 600,000,000 people (10 percent) were buying water from a private water provider.

Counting only people with water services gives a different perspective. In 2000, 1.5 billion people had no water service, either public or private. This means that, of the 4.6 billion people who had water services, 13 percent were buying their water from a private provider.

The largest Water Companies: The ten largest water companies are:

a. Suez (before 2001, Lyonnaise des Eaux), of France, with revenues of US$60 billion.

b. Veolia (previously Vivendi Environment), of France, with revenues of US$34 billion.

c. Thames Water, of Great Britain, with revenues of US$2 billion.

d. SAUR, of France.

e. Agbar, of Spain.

f. Other large companies include AquaMundo, of Germany

and

Biwater, Severn Trent, Kelda Group, and Anglian Water of Great Britain.

The world is moving toward a corporate-controlled fresh water cartel, with private companies, backed by governments and global international institutions, making fundamental decisions about who has access to water, and under what conditions. Do they own the water they sell? If so, can they decide who lives and who dies? Who will take care of nature? What will provide the impetus to lessen our present abusive practices (such as the depletion of aquifers and water needed by nature, as well as pollution, diversion, and desertification due to global warming)?

In 2007, Uruguay was the only country in the world with a constitutional amendment guaranteeing both the right to water and the public delivery of it (Barlow 2007, pp. 62-63, 91-95 and 174 . United States Bureau of the Census 2006, p. 3).

vehicles of control

Publically-supported Institutions

1. The World Bank: The World Bank (previously known as the International Bank for Reconstruction and Development) became operational in 1946, as one of two institutions created by the Bretton Woods Agreement among World War II Allies – the other institution being the International Monetary Fund (IMF). John Maynard Keynes led the delegation of the United Kingdom.

“The World Bank Group”: The Bank consists of five agencies, collectively known as the “World Bank Group.” Two of these agencies focus their work on developing countries, and are commonly referred to as the “World Bank.” These two agencies are the International Bank for Reconstruction and Development (IBRD) (established in 1946) and the International Development Association (IDA) (established in 1960). The two agencies are active in the fields of human development, agriculture, rural development, environmental protection, infrastructure, and governance. They provide loans at preferential rates to member countries, and grants to the poorest countries. Loans and grants for specific projects are generally linked to wider policy changes in the sector in question or the economy as a whole, in the direction of privatization of public agencies.

The other three agencies of the World Bank Group are the International Finance Corporation (IFC) (established in 1956) which provides financing to the private sector, the Multilateral Investment Guarantee Agency (MIGA) (established in 1988) which provides insurance against certain types of risk, including political risk, such as local resistance to the private sector, and the International Centre for Settlement of Investment Disputes (ICSID) (established in 1966) which works with governments to reduce investment risk, and arbitrates when governments try to break their contracts with private investors.

The World Bank Institute : The World Bank Institute is the capacity development branch of the World Bank, making available learning and other capacity-building programs to member countries.

Ownership and Control: The World Bank Group is owned by its member governments. The International Bank for Reconstruction and Development (IBRD) has 185 member governments. The other agencies have between 140 and 176 member governments.

First World countries control the Bank. Votes are proportional to financial contributions. In 2008, the United States held 16.4 percent of the total votes, Japan 7.9, Germany, 4.5, France 4.3 and the United Kingdom 4.3. Changes to the Bank’s Charter require an 85 percent majority, hence the U.S. has veto power over any major change in the Bank’s governing structure.

The President of the Bank has always been a U.S. citizen nominated by the president of the United States, the Bank’s largest shareholder. The present president is Robert Zoellick, former Deputy Secretary at the U.S. State Department, and former Chairman of the Board of International Advisors at the global financial services firm, Goldman Sachs.

Total Lending: In Fiscal 2007, World Bank loans totaled $24.7 billion (including loans, credits, guarantees and grants). Of this total, $6.3 billion (26 percent) were dedicated to development, and of this latter amount, $3 billion (48 percent) – (or 12 percent of the total loans) – were dedicated specifically for water, sanitation and flood protection.

Regional development Banks and the International Monetary Fund (IMF): Regional developments banks, such as the Inter-American Development Bank, the Asian Development Bank, and the African Development Bank follow the same policy as the World Bank, as does also the International Monetary Fund.

During the 1980’s, the World Bank abandoned its policy of Third World national development, for a policy of forcing poor countries to adopt an economic model favoring the corporations of the First World. The Bank would agree to a re-negotiation of the poor countries’ loans, only on the condition that these countries put in place a “Structural Adjustment Program” – meaning the selling of public enterprises and utilities, and the privatization of essential public services, such as health care, education, electricity, and transportation. The International Monetary Fund (IMF) issued its first full-fledged “structural adjustment program” in 1983.

In 1989, the change in policy of the World Bank (and the IMF) became official when John Williamson, one of the economists most influential in shaping the activities of the World Bank and the International Monetary Fund (IMF), made clear that he considered the shock therapy which had been applied in Bolivia, in 1985, as “the big bang” moment – a breakthrough in bringing the Chicago School doctrine to the entire globe. The reason was not economics but tactics. Bolivia’s hyper-inflation meltdown had permitted the pushing through of a program politically impossible under normal circumstances.

That year, Williamson presented a list of economic policies which both the World Bank and the IMF would henceforth consider as the bare minimum for “economic health,” calling the list, the “Washington Consensus” on the desired macro-economic framework which would create a truly global economy fueled by market forces.

Masquerading as technical and non-contentious policies, the list included privatization, deregulation, “free trade” and drastic cuts in government spending. It also included such boldly ideological claims as:

“All state enterprises should be privatized,”

and

“Barriers impeding the entry of foreign firms should be abolished.”

By the early 1990’s, water and sanitation services were included in the bid for privatization. The ability of poor countries to choose between public and private water systems was severely eroded. The Bank was using its enormous power for the benefit of corporations in the North, opening up for them the enormous markets of the South. In its agreements, the Bank would state directly that the promotion of private investments, was one of its principal goals.

In 1993, the Bank adopted its “Water Resources Management Plan.” Noting the “unwillingness” of the poor to pay for water services, the Plan states that water should be treated as an economic commodity, with an emphasis on efficiency, financial discipline and full-cost recovery – the latter meaning the setting of water prices sufficiently high to both recover the corporate investment and make an acceptable profit.

In 2000, at the Second World Water Forum, in The Hague, the Bank and the World Water Council, issued the report of their World Commission on Water for the 21^st Century. The title of the report is, “World Water Vision – A Water-secure World.” Its recommendations include:

a. Payment for Water by Third World “Consumers.” Should governments not be able to afford building the needed infra-structure, the private sector should be encouraged to do so.

b. Full-cost Pricing for Water Services. This means that consumers should pay, not only for the cost of their water, but more than that, so that the “investors” can make a profit. This was the first time that in an official UN-related document, full-cost pricing for water services was recommended.

The Forum declared that water is not a human right, but a “human need” – and as such, is just as easily delivered by private companies as by governments.

In 2003, at the Third World Water Forum, Kyoto, Japan, the Bank issued the report of its panel, chaired by Michel Camdessus, formerly head of the International Monetary Fund (IMF). The report is entitled, “Financing Water for All.” Among its recommendations are:

a. Full-cost recovery for water projects by water companies.

b. The use of pubic funds to pay for the preparation of private contracts and tenders.

c. The founding of a Liquidity Backstopping Facility to guarantee corporate profits in cases of currency devaluation, local resistance or political conflict.

In 2006, at the Fourth World Water Forum , in Mexico City, Mexico, official sponsors included Coca-Cola and Grupo Modelo (the Mexican beer giant).

During the Forum, the United Nations released “The UN World Water Development Report, 2006.” The Report is critical of water companies breaking non-lucrative contracts, and retreating from the global South because of local resistance:

“To provide the poorest section of society with adequate water services is typically viewed as a high-risk enterprise that largely lacks opportunities for economic return . . . It is high time to bring the governments back in.”

Nevertheless, that same year (2006), the World Bank published a report, “Toolkit on Water and Sanitation” in order to:

“assist governments in developing countries which are interested in using private participation to help expand access to water and sanitation.”

The report:

“reviews key issues that governments need to resolve in order to introduce private participation . . . considers some of the key reform choices for the water sector, upstream of the private participation arrangements . . . [and] considers how the chosen arrangement can be embodied in legally effective laws, contracts and licenses.”

The report is more than just about water privatization. It normalizes transnational corporations as providers of public service and goods, and it introduces the concept of foreign corporations suing governments.

By 2006, the vast majority of World Bank loans for water were conditional on privatization of the water system.

Euphemisms: Euphemisms for privatization include “private sector participation” and “public-private partnerships.” In all cases, the contracts include the cutting off of services to people who cannot pay for the “product.” If the corporation is unable to make a profit, the community has no recourse, while the corporation can, and regularly does, leave the community. In many cases, the agreement between the Bank, the water corporation and the country in question is secret, the terms not accessible to citizens.

The Appearance of a Consensus: By convincing the ruling class, both in the North and the South, often through its Water Policy Capacity Building Program, the World Bank has given the appearance of a worldwide consensus on the privatization of water, even in the face of massive citizen resistance. The diagnostic of this “consensus” is that debt and poverty are not the cause of the South’s water shortages. Rather, inefficient and corrupt governments have failed to reflect the true cost of water, thereby protecting it, a situation which has led to a culture of wastefulness among the masses. The poor lack access to water because of the irresponsibility of their government. The World Bank is on an ethical mission of poverty alleviation, ecological sustainability, and social justice. Foreign firms are willing to help floundering public agencies meet the Bank’s targets. Corporations are charitable trusts offering a helping hand, technology transfers and expertise. Capitalism will do for the South what the South cannot do for itself because its governments are mired in arrested development and corruption. Thus is the self-righteous mantra of the Bank – a cloak which enables it to refuse, with a clear conscience, the demands of poor countries seeking funding for public, not private, water services. Where persuasion fails, there is always the conditionality – accept one of the major water corporations, or go without funding.

During the Ten Years after the Asian financial Crisis of 1997:

1997: At the height of the “Asian Tiger” crisis, Malaysia defies the IMF by imposing controls on capital flows.

2003: Thailand pays off its debt to the IMF.

2006: Argentina and Brazil pay off their debt to the IMF. Bolivia announces that it will let expire its standing loan agreement with the IMF.

2007: Venezuela withdraws from the World Bank and the IMF. Bolivia and Nicaragua withdraw from the International Centre for Settlement of Investment Disputes (ICSID). Ecuador withdraws from arbitration by the ICSID for disputes pertaining to investments in extractive industry (natural resources, such as oil, gas and minerals). Indonesia declares that it will pay off its debt to the IMF by 2008. The Philippines begins refraining from contracting new loans from the IMF.

On December 9, 2007, Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela sign the founding charter of the Banco del Sur (Bank of the South) to be managed by Latin American countries, and begin with a capital of $7 billion.

The context of this capital amount is as follows:

2005 billion U.S. dollars

World Bank Total lending 25

For development . . . . . . 6

For water . . . . . . . . . . . 3

IMF Total lending 11

“Useable resources” 252

Global trade in goods and services 9,100

Foreign exchange transactions* 693,500

_________________________

* In international markets. These exchanges reflect speculative activity. (See also the present document, under Conclusions, Money speaks, No. 1, Foreign Exchange Transaction, Table 1).

(Barlow 2007, pp. 36-43, 52-57, 61-63 and 329. Wikipedia “World Bank Group” 2008, pp. 1-3. Wikipedia “Bretton Woods System” 2008, p. 1. Independent 2007, p. 1. Bilaterals.org 2007, p. 1. Bank Information Center 2007, p. 1. Klein 2007a, pp. 21, 194, 203-205 and 577. Klein 2007b. Bello 1999, p. 2. Bello 2007, pp. 1-7. Engler 2008, pp. 1-4. Bretton Woods Project 2007 p. 2. World Bank 2003-2007, p. 1. World Bank 2007c, pp. 1 and 2. Schaefer and Kim 2007, pp. 1-4).

(See the present document under Vehicles of Control, Publically-supported Institutions, No. 4, The World Water Council, World Water Forums).

(See the present document under Disaster Capitalism, Water Privatization – Part of a comprehensive Plan).

(See the present document under Disaster Capitalism, The Shock Doctrine – Examples: No. 1, Chile; No. 2, Brazil; No. 3, Uruguay; No. 4, Argentina; No. 6, Bolivia; No. 11, The “Asian Tigers”; and No. 12, Central America).

(In the present section, compare “Total Lending,” with “During the Ten Years after the Asian financial Crisis of 1997,” 2007).

2. The Water and Sanitation Program of the World Bank and the United Nations Development Programme (WSP, World Bank/UNDP): The Water and Sanitation Program of the World Bank and the UNDP is a multi-donor partnership of the World Bank, based in the World Bank headquarters, Washington, D.C., and maintaining four regional offices worldwide. The Program works directly with local and national governments in 27 countries:

“to effect the regulatory and structural changes needed for broad water and sanitation reform . . . [and promote] greater private sector involvement in the water sector [as a pre-condition to funding].

In 1979, the Water and Sanitation Program, began as a cooperative effort of the World Bank and the UNDP to provide low level water technologies, such as hand pumps and latrines, to developing countries.

By 1990, the goal of the Program had changed to the development of effective strategies to “mobilize communities to help themselves.”

By 1992, “supply-side thinking” (providing technology and services) had been replaced by “demand-side thinking” (seeking ways to provide services only on demand – demand being measured as the ability to pay for services).

In 2006, the Program was the recipient of a US$30,000,000 grant from the Bill and Melinda Gates Foundation.

As of 2007, international donors included Australia, Austria, Belgium, Canada, Denmark, France, the Bill and Melinda Gates Foundation, Ireland, Luxembourg, Netherlands, Norway, Sweden, Switzerland, United Kingdom, United States, the United Nations Development Programme, and the World Bank (Barlow 2007, p. 48. World Bank 2007a, pp. 1-2. World Bank 2007b, p. 1).

3. The Global Water Partnership of the World Bank, the United Nations Development Programme and the Government of Sweden (GWP, World Bank/UNDP/Sweden): Founded in 1996 by the World Bank, the UNDP and the Swedish International Development Cooperation Agency, the Global Water Partnership has branches throughout the world, and operates as a clearing house and alliance-building instrument for governments, the private sector and civil society. It focuses on water resources planning and management.

The Partnership promotes global water management based on the principles declared at the 1992 United Nations International Conference on Water and the Environment, in Dublin, South Africa. At that Conference, water was determined to have an economic value, scarcity of it being due to wastage, and the solution to this wastage, users’ fees (See the present document under Vehicles of Control, Publically-supported Institutions, No. 6, the United Nations, Item b. The UN International Conference on Water and the Environment).

In 2003, the Partnership issued a report entitled, “Financing Water for All,” which recommended using public funds to guarantee profits to private water companies operating in areas where they were meeting local resistance.

Financial supporters of the Global Water Partnership include Canada, Denmark, the European Commission, Finland, France, Germany, Greece, the Netherlands, Norway, Sweden, Switzerland, United Kingdom, and the United States (Barlow 2007, p. 49. Wikipedia “Global Water Partnership” 2008, p. 1. World Bank 2004, p. 1. See the present document under Vehicles of Control, Publically-supported Institutions, No. 4, World Water Council).

4. The World Water Council, sponsored by the World Bank and the United Nations (WWC/World Bank/UN): The World Water Council is sponsored by the World Bank and the United Nations, although its primary support comes from membership fees, with some additional support from its host city, Marseilles, France. It was established in 1996, with headquarters in Marseilles. The Council calls itself an “international water policy think tank,” but in fact, it promotes private water delivery to governments around the world.

The Council’s membership of more than 300 is dominated by the private sector, representing both the water and other sectors, such as private water operators, engineering, construction, hydropower, dams, irrigation, infrastructure, wastewater treatment, desalination, investment banks and public affairs consultants. Among its members are The International Water Resources Association, with its 400 corporate members in 130 countries; and Price Waterhouse Coopers, a global management-consulting firm with 150,000 staff operating in 152 countries.

The World Water Council, together with the Global Water Partnership, is a major vehicle for the corporate takeover the world’s water. Its president, Loic Fauchon, is president of Groupe des Eaux de Marseille, owned by Suez and Veolia, and its vice-president, Rene Coulomb, is a senior director at Suez. A past vice-president, Benito Braga, had been president of the International Water Resources Association, and Director of the National Water Agency (ANA) of Brazil, charged by the Brazilian government to:

“Collect . . . revenues obtained by charging for the use of water resources in the federal domain.”

In his 2004 book, Water charges – paying for the commons in Brazil, Braga writes:

“The decision to establish water charges, is ultimately a political decision. Implementing a simple equation that everybody understands and accepts, so as to start charging, is the key to success.”

World Water Forums: The Council’s “flagship product,” are its world forums which it has sponsored every three years since 1997:

1997: The First World Water Forum, Marrakech, Morocco.

“ . . . to recognize the basic human need to have access to clean water and sanitation, to establish an effective mechanism for management of shared waters, to support and preserve ecosystems, to encourage the efficient use of water . . .” (Emphasis mine).

2000: The Second World Water Forum, The Hague, The Netherlands (5,700 participants, 120 Ministers).

2003: The Third World Water Forum, Kyoto, Japan.

(24,000 participants, 130 Ministers).

2006: The Fourth World Water Forum, Mexico City, Mexico.

(20,000 participants).

2009: The Fifth World Water Forum, Istanbul, Turkey (planned).

The Council provides a venue through which, with the blessing of the United Nations and the development agencies of the industrialized countries, the private sector can advance its corporate interests in the name of “poverty alleviation” and “sustainable development.”

(Barlow 2007, p. 50. World Water Council 2008a, pp. 1-3. Hall 2006b, p. 15. Wikipedia “World Water Council” 2008, p. 1. Brazil, National Water Agency 2002, p. 16. Inter-American Development Bank 2007, p. 2. Forum, Science and Innovation for Sustainable Development 2005, p. 1).

(See the present document under Vehicles of Control, Publically-supported Institutions, No.1, The World Bank, In 2000 (The First Water Forum), in 2003 (The Second Water Forum), and in 2006 (The Fourth Water Forum).

(See the present document under Vehicles of Control, Publically-supported Institutions, No. 3, The Global Water Partnership).

5. The Public-private Infrastructure Advisory Facility of the World Bank and the Government of the United Kingdom (PPIAF, World Bank/UK): Founded in 1999 by the World Bank and the Department for International Development of the United Kingdom, the Public-private Infrastructure Advisory Facility is a multi-donor technical assistance facility:

“helping developing countries improve the quality of their infrastructure through private sector involvement.”

The Facility provides grants to help developing countries explore public-private partnerships in the areas of financing, ownership, operation, rehabilitation, maintenance and management of such infrastructure services as roads, ports, airports, railways, electricity, telecommunications, solid waste, water and sewage, and gas transmission and distribution.

Consultants to developing countries promote “water reform” – which consists of the changes in domestic policy, legislation and regulations required, in order to secure support from the World Bank.

The Facility promotes the use of aid money to give contracts to private water corporations.

In a 2000 memo to the British government, the Facility explains how:

“governments will have to change their role, . . . no longer directly providing water services but mastering the new business of fostering competition among private providers.”

By November 2006, the Facility had funded pro-privatization water projects, worth a total of US$19 million, in 37 countries. It was being severely criticized for lack of transparency, ideologically-based policies, rejection of public sector options, the quashing of legitimate dissent, and in general, for imposing on the global South, the interests of consulting firms and water corporations in the global North.

In a December 2006 report, entitled “The Challenge of reducing non-revenue Water in Developing Countries – how the private Sector can help,” written by the World Bank but funded by the Facility, the authors point out:

“Unbilled authorized consumption includes water used by the utility for operational purposes, water used for fire-fighting, and water provided for free to certain consumer groups . . . Non-revenue water requires a range of skilled staff, including managers and professional engineers at one end of the spectrum right through to street crews, technicians and plumbers at the other. Non-revenue water reduction, in its broadest sense, is not taught at universities or technical colleges, nor in many of the water industry training institutions around the world . . . Addressing this issue will require both an acceptance of the widespread challenges and consequences associated with non-revenue water, and then the development of appropriate training materials, methods and institutions. A major initiative is required to build such capacity” (Emphasis mine).

As of 2007, donors to the Facility included the Asian Development Bank, Canada, the European Commission, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, United Kingdom, United States and the World Bank. (Norway withdrew from the Facility in late 2007).

(Barlow 2007, pp. 47-48. Public-private Infrastructure Advisory Facility undated, p. 1. World Bank 2006, pp. 3, 10, 16 and 25-26. World Development Movement of Great Britain 2007, pp. 2-3. Open letter to donors contributing to the Public-private Infrastructure Advisory Facility 2007, pp. 1-7).

6. The United Nations:

a. 1979: The Water and Sanitation Program of the World Bank and the United Nations Development Programme (WSP, World Bank/UNDP): The Water and Sanitation Program began as a joint endeavor of the World Bank and the United Nations Development Programme. Within a decade, the goal of the program had changed from the provision of low level technologies to the requirement that communities pay for services rendered (See the present document under Vehicles of Control, Publically-supported Institutions, No. 2, the Water and Sanitation Program) .

b. 1992: The United Nations International Conference on Water and the Environment: The United Nations International Conference on Water and the Environment, in Dublin, South Africa, which was attended by government officials and representatives of non-governmental organizations (NGO’s) from about 100 countries, marks the first time that in any UN forum or publication, water is characterized as an economic good. Attendees declare that water has an “economic value” in all its “competing uses,” and should be recognized as an “economic good.” The masses of the population waste it because they do not have to pay for it, and this waste must be curbed by means of a user fee (Barlow 2007, pp. 43-44. First Asia-Pacific Water Summit 2007, p. 3. See the present document under Vehicles of Control, Publically-supported Institutions, No. 3, the Global Water Partnership).

c. 1996: The Global Water Partnership of the World Bank, the United Nations Development Programme and the Government of Sweden (GWP, World Bank/UNDP/Sweden): The Global Water Partnership of the World Bank, the United Nations Development Programme, and the government of Sweden, is founded, to operate as a clearing house and alliance-building instrument for governments, the private sector and civil society. The Partnership promotes global water resources planning and management based on the principles declared at the 1992 United Nations International Conference on Water and the Environment, in Dublin, South Africa (See the present document under Vehicles of Control, Publically-supported Institutions, No. 3, The Global Water Partnership).

d. 2000: The United Nations Global Compact: The United Nations Global Compact is launched by the UN Secretary-general, Kofi Annan (Secretary-general 1997-2006). The Compact is aimed at encouraging the adoption by corporations of voluntary standards regarding human rights and the environment. Annan affirms the commitment of the UN to “free trade and open global markets” – but admits to reporters that the UN has no enforcement power. The world’s two largest water companies, Suez (previously Lyonnaise des Eaux) and Veolia (previously Vivendi), are charter members of the Compact (Barlow 2007, pp. 37 and 44).

e. August 2002: United Nations World Summit on sustainable Development (UNWSSD): The UN World Summit on sustainable Development is held in Johannesburg, South Africa. Water and sanitation, and the profit-making opportunities they present, dominate the summit. The World Water Council (WWC) and the World Business Council for Sustainable Development (WBCSD) play prominent roles. DeBeers (“Water is forever”), Coca-Cola, McDonald’s and BMW are official corporate sponsors. The issue for water companies is whether private-public partnerships will be endorsed by the U.N. as a delivery model in the achievement of the U.N. Millennium Development Goals (Barlow 2007, pp. 54-56).

f. October 14, 2002: Agreement – The United Nations Educational, Social and Cultural Organization (UNESCO) and Suez: An agreement between the United Nations Educational, Social and Cultural Organization, and the world’s largest water corporation, Suez, proclaims the formation of a new “public-private partnership.” Suez will provide expert advice and financial help (US$400,000 for the first three years) to help in:

i. The rehabilitation of the Volga-Caspian basin.

ii. The activities of the International Institute for Infrastructural Hydraulic and Environmental Engineering (IHE). The Institute is a leading international teaching and research institute on water, financed by the government of the Netherlands, and located at the University of Technology, in Delft, Netherlands. It is henceforth to be known as the UNESCO-IHE Institute for Water Education, and serve as UNESCO’s international institute for water education.

iii. The Financing of the UNESCO Interdisciplinary Chair in Sustainable Water Resources Management. The Chair was established by UNESCO in 1998, and is based at the Hassania School of Public Works, Casablanca, Morocco. The holder of the chair from 1998 to 2006, was Dr. Houria Tazi Sadeq (Barlow 2007, p. 44. UNESCO 2002, pp. 1-2. Suez 2003, pp. 1-2. IHE 2002, p. 11. UNESCO-Morocco 2005, p. 1. Hall and Hoedmann 2006a, p. 8. World Water Council 2008b, p. 2).

g. October 29, 2002: The UNESCO International Colloquium on the legal Aspects of Water Services, within the Framework of a Politic of sustainable Development. A Colloquium on the legal aspects of water services, is held at the UNESCO offices, in Paris, France. It is sponsored by Suez and Veolia, the world’s two largest water corporations. It is organized by the Academie de l’Eau (the Academy of Water), established in 1993 as an organ of the French Ministry of the Environment, and based in Nanterre Cedex, a suburb of Paris. The report of the Colloquium, entitled “Proposals for new legal Rules in Water Supply and Sanitation,” carries four logos – those of UNESCO, the Academie de L’Eau, Suez and Veolia (Barlow 2007, p. 44. Actualities francaises, 2002, p. 5. Academie de l’Eau 2007, p. 1. Hall and Hoedmann 2006a, p. 9).

h. 2003: The UNESCO-IHE Institute for Water Education: The UNESCO-IHE Institute for Water Education, Delft, Netherlands, accepts an unspecified amount of money from Suez to:

i. Finance a professorship of “Public-Private Partnerships (PPP)” to focus on:

“aspects related to the management and business administration of private utilities.”

ii. Contribute directly to the design and teaching of courses, and to the supervision and financing of students:

“[Both UNESCO-IHE and Suez will] identify opportunities to involve experts of the Suez group as guest lecturers in the educational programmes of UNESCO-IHE . . . [This is] an innovative and challenging partnership for water education and research” (Barlow 2007, p. 44. Hall and Hoedmann 2006a, pp. 7- 8. See the present document under Vehicles of Control, No. 6, The United Nations, Item f, October 14, 2002, Item ii, The activities of the IHE).

i. 2004: The United Nations Secretary-general’s Advisory Board on Water and Sanitation: United Nations Secretary-general, Kofi Annan, establishes an Advisory Board on Water and Sanitation, to both advise him and galvanize action on water and sanitation issues. The Board is chaired by His Royal Highness, the Prince of the Netherlands. Gerard Payen, who from 2002 to 2003, was Senior Executive Vice-president of Suez for “Global Water Issues,” is a Board member (Barlow 2007, p. 44. United Nations Secretary-general 2004, p. 2. United Nations Secretary-general Advisory Board 2007, p. 1. Hall and Hoedmann 2006a, p. 4. See the present document under Vehicles of Control, Private Institutions, No. 2, The International Federation of Private Water Operators).

7. The World Trade Organization (WTO): The World Trade Organization, founded in 1995, administers international trade agreements among its 150 member-countries.

i. The General Agreement on Tariffs and Trade (GATT): The General Agreement on Tariffs and Trade defines water as a “good,” and thus subject to the rule prohibiting export controls and eliminating quantitative restrictions on imports and exports.

ii. The General Agreement on Trade in Services (GATS): The General Agreement on Trade in Services forbids member-governments from maintaining public control over service sectors, and even from favoring the delivery of services by agencies not-for-profit. The rules allow private competition in sectors once controlled exclusively by governments. Already included in the Agreement are many types of water services, such as environmental services, wastewater treatment, purification systems, the construction of water pipes, groundwater assessment, irrigation, and water transport services.

The WTO proposes to include drinking water in the Agreement.

8. The United States Agency for International development (USAID): The United States Agency for International Development openly supports private water delivery in the global South, and funds numerous private water projects in Africa, India and Latin America.

In 2002, USAID finances a report by the American consultancy firm PADCO, pointing to the benefits of privatization of water services.

That same year, a new organization, “Partners in Africa for Water and Sanitation,” launched by private water companies to promote the privatization of water and sanitation services in South Africa, Nigeria and Uganda, uses the report to convince local politicians to accept privatization. In this situation, therefore, both USAID and PADCO are pursuing their own interests rather than help clarify the arguments for and against the public and private ownership of water services.

PADCO is an international development consulting firm with headquarters in Washington, D.C., and offices around the world. It implements programs for USAID, the World Bank, the Asian Development Bank, and both bilateral and multi-lateral donors.

PADCO is part of the AECOM Technology Corporation, the parent company of a consortium of major architecture and engineering firms. The Consortium provides professional technical and management support services for the “built environment” to a broad range of “markets” in the areas of transportation, facilities and the environment. It serves governments and commercial clients in more than 60 countries. As of 2007, it had 30,000 employees, was managing projects worth $30,000,000,000 ($30 billion), and had revenues of $3.4 billion.

On May 10, 2007, AECOM announced an initial public offering of 35,150,000 shares of common stock at $20.00 per share on the New York Stock Exchange (trading under the symbol “ACM”) (Barlow 2007, pp. 48-49. PADCO 2007, pp. 1-2. AECOM 2007, p. 1. EDGAR-Online 2007, pp. 1-2).

Private Institutions

1. the world Business Council for Sustainable Development (WBCSD): Formed in 1992, the World Business Council for Sustainable Development (WBCSD) is a corporate lobby network of 180 corporations and 55 business councils, the latter both national and regional. The Council opposes international rules on global business transactions.

In 1992, at the Earth Summit in Rio de Janeiro, the Council, working with the International Chamber of Commerce, was successful in having all references to mandatory environmental regulations eliminated from the Agenda, and having the emphasis placed instead on corporate “self-regulation.”

In 1997, the Council formed a “Water Working Group” with representatives from the fields of finance, equipment, water, mining, metals, oil, gas, food and beverage.

In 2002, at the World Summit on Sustainable Development, in Johannesburg, South Africa, the Council’s “Water Working Group” released a paper, “Water for the Poor,” which called for the accelerated privatization of services and full-cost recovery for private providers of water:

“Providing water services to the poor presents a business opportunity. New pipes, pumps, measurements and monitoring devices, and billing and record keeping systems, will be required to modernize and expand water infrastructure . . . This program has the possibility of creating huge employment and sales opportunities for large and small businesses alike.”

In 2006, the Council published Business in the world of water, a series of future scenarios in which businesses are challenged on their “global fitness in the marketplace” in a water-deprived world.

2. The International Federation of Private Water Operators (AquaFed): The International Federation of Private Water Operators is a lobby group established by the big European water utilities, in 2005, and based in Brussels, Belgium, at the Rond Point Schuman (the heart of the European Union quarter), opposite the European Commission headquarters. AquaFed maintains a second office in Paris.

AquaFed specifically seeks to influence the decisions of the European Union, which already has adopted the position that water is not a right but a “primary human need.”

AquaFed aims to:

“connect international organizations [such as the United Nations, the World Bank, and the European Union] with private sector providers of water and wastewater services.”

The Federation claims a membership of:

“over 200 water and wastewater service providers of various sizes, from 38 countries.”

However, by May 13, 2008, the Federation still had not provided the identity of these 200 service providers, having claimed, in 2006, that:

“The Federation is young and the membership is not stabilized yet.”

In addition to these “200 members,” the Federation lists on its website (last updated May 13, 2008):

1. Four “National Members” (national trade organizations):

a. The Water Partnership Council, USA.

b. The National Association of Sanitary Services Operators, Chile (ANDESS).

c. The Association of Private Water Operators, Uganda.

d. The Professional Federation of Water Enterprises, France.

2. Fifteen “Company Members” (companies who are members). Of these, three are a Suez subsidiaries, and three, Veolia subsidiaries.

The president of AquaFed is Gerard Payen who, from 2002 to 2003, was Senior Executive Vice-president of Suez, for “Global Water Issues,” and who has been a member of the United Nations Advisory Board on Water and Sanitation, since its founding by Secretary-general Kofi Annan, in 2004. Jack Moss, Senior Water Adviser at Suez, represents AquaFed at international meetings. Thomas van Wayenberge, a highly placed official at AquaFed, is also from Suez.

Veolia’s website provides a link the AquaFed website, but none of the other major private water companies, such as Thames Water (after Suez and Veolia, the world’s third largest water multinational), Biwater, Saur, Severn Trent, refer to AquaFed on their website. In fact, Thames Water has publically confirmed that it has not joined.

The secrecy as to membership, sources of funding, structure of governance, and structure of accountability, together with the affiliation of highly-placed personnel in AquaFed with the water companies Suez and Veolia, and the lack of mention of Aquafed on the websites of major private water companies, has led Olivier Hoedmann, of Corporate Observatory Europe (CEO), to conclude that AquaFed may be a front organization for Suez and Veolia – that is, represent only Suez, Veolia and their subsidiaries.

Barlow, whose book, Blue covenant, was published in 2007, suggests that United Water is a member. United Water, however, is a subsidiary of Suez.

(Barlow 2007, p. 51. AquaFed 2008, pp. 1-3. Hall and Hoedmann 2006a, pp. 1-4. Hall and Hoedmann 2006b, pp. 1-3. Center for Media and Democracy 2008, pp. 1-3. Water Partnership Council 2007, pp. 1-2. United Water undated, pp. 1-2. See the present document under Vehicles of Control, Publically-supported Institutions, No. 6, The United Nations, Item i. The United Nations Secretary-general Advisory Board for Water and Sanitation).

Non-governmental Organizations (NGO’s)

Prominent environmental non-governmental organizations work within the established global institutions, including the World Bank and the World Water Council.

Examples are:

1. WaterAid: WaterAid was founded by the British water companies. It is based in London and provides water services in Africa and Asia.

2. Freshwater Action Network (FAN): Fresh Water Action Network is a global network of environmental and community groups which explore a “dialogue” between civil society and the World Bank.

3. The World Wildlife Fund (WWF): The World Wildlife Fund is one of the world’s largest conservation groups.

4. Green Cross International: Green Cross International is an environmental and education organization, founded, in 1993, by former Soviet leader, Mikhail Gorbachev. The organization works with the World Water Council to promote a United Nations convention on the right to water which would, however, endorse the private financing of water projects (Barlow 2007, pp. 51-52. Wikipedia “Green Cross International” 2008, p. 1).

disaster capitalism

Water Privatization – Part of a comprehensive Plan: Water is but one sector in national economies which are being fully privatized. Despite strong resistance from the public, and an abysmal history of human rights violations, the movement for the privatization of water, has made progress in the 50 years since Milton Friedman first expressed his equation of “participatory democracy” with the “free market,” at the Chicago School of Economics, in the 1950’s:

“[In the free market], each man can vote, as it were, for the color of tie he wants” (Klein 2007a, p. 63. Klein 2007b).

By the time Friedman died, in 2006, “pure capitalism” had been introduced in every corner of the globe, its advance enabled by political suppression and torture.

The triad enabling the spread of corporate power has been recently detailed by Naomi Klein, in her book, The shock doctrine (2007). Klein describes the force toward privatization as thriving on disaster and the exploitation of people’s temporarily increased vulnerability, in order to enforce, in rapid succession, policies which under normal circumstances would have met insuperable resistance. When resistance does occur, torture (state terror) provides the necessary submission of the population.

The three components of “disaster capitalism” (also known as “crisis capitalism,” the “shock doctrine,” “the Washington Consensus,” or “neoliberalism”) consist of:

1. A Crisis: The crisis usually comes in the form of a disaster, either naturally-occurring, or not so naturally-occurring (as in New Orleans where the dilapidation of the levees was at fault, not the hurricane), or even induced (as were the 9/11 attacks in the United States).

2. Economic “Shock Treatment” (“Shock Therapy”): After the disaster, the rapid transformation of the economy is enforced, taking advantage of the temporary disorientation of the population.

3. Torture for Resisters: State terror is used for those who insist on visualizing another world than one run on the profit motive.

The result is a wide and widening gap between rich and poor, a decrease in civil rights, and governments offering minimal help for the people. Corporations are in control. The country is a corporate country.

The Shock Doctrine – Examples:

1. Chile, 1973: By 1973, Chile has enjoyed 160 years of peaceful democratic rule, the past 41 uninterrupted. President Salvador Allende Gossens, elected in 1970, has nationalized industries, including the U.S.-owned copper multinational corporations, and has instituted extensive land reforms.

But on September 11, 1973, Chile becomes the first laboratory for “los Chicago Boys,” as were known the students who had gone through Milton Friedman’s program, at the Department of Economics of the University of Chicago – a program supported by the U.S. government.

General Augusto Pinochet Ugarte stages a spectacularly dramatic and violent coup, killing Allende, imprisoning his inner circle, and executing and torturing thousands, in Santiago’s two football stadiums, the Chile Stadium and the National Stadium. In the days that follow, about 13,500 civilians are imprisoned, many of them tortured. In total, 80,000 would be imprisoned, and 3,200 “disappeared” or executed.

Pinochet’s political shock would immediately (and conveniently) be followed by two other types of shocks:

* The rapid transformation of the Chilean economy – the privatization of services (including banks and public schools, health services, electricity and water), a 10 percent cut in social spending, an increase in military spending, tax cuts, and free trade (de-regulation in the interest of corporations, the elimination of price controls, the opening up of Chile’s borders to foreign imports, and acceptance of new forms of speculative finance).

* Systematic torture to “facilitate the adjustment” to the capitalist makeover.

By 1974, inflation has reached 375 percent annually, almost twice the highest level under Allende.

Chile has become a corporatist state – governed by an alliance between a repressive government, the military and large corporations, all three sources of power aiming to increase their share of the national wealth by undermining the fourth source of power – unionized workers (Barlow 2007, p. 108. Klein 2007a, pp. 11, 72-75, 77, 87, 90-94, 96 and 418. Klein 2007b. See the present document under Vehicles of Control, Publically-supported Institutions, No. 1, The World Bank, In 1989).

2. Brazil, 1973: The period 1964-1985 would be known in Brazil as “Los anos de chumbo” (the lead years). Those years begin in April 1964, with a military coup d’état which deposes President Joao Goulart, president since 1961, and highly popular with the people, as shown by a plebiscite in January 1963.

President Goulart was an economic nationalist, committed to land re-distribution, higher salaries, and the re-investment into the Brazilian economy, of a percentage of the profits made by foreign corporations.

Five dictatorships follow – General Humberto Castelo Branco (1964-1967), Marshall Artur da Costa e Silva (1967-1969), General Emilio Garrastazu Medici (1969-1974), General Ernesto Geisel (1974-1979), and General Joao Figueiredo (1979-1985). Political parties are dissolved (1965), a new constitution is written (1967) and then suspended (1968), Congress and state legislatures are “recessed” (1968), civil rights, such as that of habeas corpus, are suspended (1968), a stage of siege is declared (1968), censorship is imposed (1968), and emergency decrees are proclaimed.

The political cleansing of dissidents, supported by the United States, is brutal, and includes political assassinations, disappearances, systematic torture and the use of death squads.

“Import-substitution” and “export expansion” increases economic growth rates. For the first time since the early 1950’s, Brazil opens its borders to oil exploration by foreign companies.

In 1973, at the height of the suppression, Milton Friedman, guru of the Chicago School of Economics, visits the country, and declares Brazil’s economic experiment “a miracle” [Klein 2007a, p. 106. Klein 2007b. Wikipedia “History of Brazil (1964-1985)” 2008, pp. 1-9].

3. Uruguay, 1974: In February 1973, President Juan Maria Bordaberry, who has been elected the year before, perpetrates a quasi-coup by making an agreement with the military (the Boisso Lanza Pact) which guarantees the military an advisory role in all governmental political decisions.

In June 1973, at the instigation of the military, Bordaberry dissolves the General Assembly, and empowers both the military and the police to take any measure necessary to ensure normal public services.

Bordaberry is now a de facto dictator. He completely “reforms” both the country’s commercial policy and tax system, and remakes the country into a model of the Chicago School of Economics theories.

Repression is intense. Political organizations are banned. Freedom of association is severely restricted, and the press is censured. Thousands are murdered, kidnapped, imprisoned and tortured.

By 1974, only one year after the coup, Uruguay’s previously egalitarian society is unrecognizable. Real wages have dropped by 28 percent, and for the first time in history, scavengers roam the streets of Montevideo [Klein 2007a, pp. 106-107 and 200. Klein 2007b. United States Government, Library of Congress undated, pp. 1-2. See the present document under “Crises (of any Type) Welcome,” 1993, John Williamson].

4. Argentina, 1976: In 1976, as Argentina is suffering from an inflation rate of 300 percent annually, the military, led by Commander-in-Chief of the Army, General Jorge Videla, stages a coup d’état, seizing power from Isabel Peron, and immediately declaring a “Proceso de Reorganisation Nacional” (Process of National Reorganization).

Videla dissolves the parliament, proclaims martial law, places all legislative power in a nine-member military commission, fills all important government posts with military personnel, and rules by decree. Civil courts are closed, political parties are outlawed, and the right to form trade unions is suspended. Strikes are banned, and both union leaders and their supporters are labeled “subversivos” (subversives).

The coup represents a revolt of the elites – a counter-revolution against 40 years of gains by Argentina’s workers. Jose Martinez de Hoz, a member of Argentina’s landed gentry, becomes Minister of the Economy. Martinez is past-president of the Sociedad Rural (the Cattle-ranchers’ Association) and past-board member of several multinational corporations, including Pan American Airways and ITT.

The junta’s economic policies are a windfall for landowners and cattle ranchers. The regime deregulates the price of meat, and the subsequent 700 percent rise in cost leads to record profits. Food prices soar. Employers are allowed to fire workers at will. Restrictions on foreign ownership are lifted, and the regime sells off hundreds of state companies. The privatization of social security, and the country’s oil reserves would follow in time.

A 31-page advertising supplement, produced by the public relations giant Burson-Marsteller, and published in Business Week, attracts foreign investment:

“Few governments in history have been as encouraging to private investment . . . We are in a true social revolution, and we seek partners. We are unburdening ourselves of statism, and believe firmly in the all-important role of the private sector.”

Within a year, wages loose 40 percent of their value, factories are closed, and poverty spirals. Farmers in the land reform movement, and trade unionists are particularly targeted. During Argentina’s “Dirty War” (1976-1983), an estimated 30,000 people would be “disappeared” – 81 percent of them between the ages of 16 and 30 (Klein 2007a, pp. 11, 107-110 and 135-136. Klein 2007b. Time 1977, p. 1. Wikipedia “Jorge Rafael Videla” 2008, p. 1. Moreorless 2007, pp. 1-13).

5. United Kingdom, 1982: In 1982, Argentina’s junta government, led by General Leopoldo Galtieri, invades the Falkland (Malvinas) Islands, small islands off the coast of Argentina, under British colonial rule since 1833. British Prime Minister Margaret Thatcher (Prime Minister 1979-1990), unpopular in the polls, brushes off attempts at reconciliation, and seeks only glorious victory for the British Empire. The battle lasts 11 weeks, with a combined death toll of 910 – ending, indeed, with victory for the U.K.

Thatcher rides the wave of her new popularity to launch a corporatist revolution, hitherto impossible in a democratic society. When, in 1984, the coal miners go on strike, Thatcher casts the standoff as a continuation of the war with Argentina, and she calls for a similarly brutal resolve:

“We had to fight the enemy without, in the Falklands, and now we have to fight the enemy within, which is much more difficult, but [it is an enemy which is] just as dangerous to liberty.”

With workers now labeled “the enemy within,” emergency measures and repression make Thatcher look tough and decisive rather than cruel and regressive. Using severe repression, she finally wins the confrontation in 1985. Some 966 workers are fired. Britain’s most powerful union has been dealt a devastating setback.

During the period 1984-1988, Thatcher’s government privatizes, among others state-owned enterprises, British Telecom, British Gas, British Airways, the British Airport Authority, and British Steel. It sells its shares in British Petroleum (Klein 2007a, pp. 12, 165 and 170-174. Klein 2007b. Wikipedia “Margaret Thatcher” 2008, p. 1. Moreorless 2007, p. 6).

6. Bolivia, 1985: In 1985, after a close vote and his final selection by the Congress, Victor Paz Estenssoro, a former elected president (in office 1952-1956 and 1960-1964) becomes again president of Bolivia.

Under the guise of curbing inflation, however, within 17 days of his accession to power, Estenssoro’s personally-appointed team calls for the elimination of food subsidies, the canceling of almost all price controls, a 300 percent raise in the price of oil, a one-year freeze in government wages, deep cuts in government spending, the down-sizing of state companies, and the opening up of Bolivia’s borders to unrestricted imports.

The entire plan is presented as a single executive decree, D.S. 21060, containing 220 separate laws, and covering every aspect of economic life in the country. “Voodoo politics,” John Williamson would call it.

Within two years, and after twice having had recourse to a “state of siege,” inflation is reduced from 14,000 to 10 percent annually. However, unemployment has risen from 20 to 28 percent, the state mining corporation have been down-sized from 28,000 to 6,000 employees, and real wages have dropped 40 percent. Bolivia’s poor have become coca growers – exports of illegal drugs now generating more income for the country than its all legal exports combined [Klein 2007a, pp. 174, 177-178, 182-188, 190-191, 195 and 563. Klein 2007b. See the present document under “Crises (of any Type) Welcome,” 1993, John Williamson].

7. Poland, 1989: In 1988, after a land-slide victory at the polls, Solidarity, headed by Lech Walesa, takes power, Walesa declaring prophetically:

“To our misfortune, we have won!”

The economy is on the point of collapse. The country’s debt is $40 billion, inflation is 600 percent annually, and food shortages are severe.

In 1989, Prime Minister Tadeusz Mazowiecki (after first fainting) announces the government’s plans:

“The privatization of state industry, the creation of a stock exchange and capital markets, a convertible currency, a shift from heavy industry to the production of consumer goods, and budget cuts.”

Solidarity’s dream of a cooperatively-run economy has ended, as leaders have become convinced that relief from the Communist debt and the immediate stabilization of the currency take priority. The International Monetary Fund (IMF) gives a $1 billion to stabilize the currency – conditional on Solidarity’s acceptance of “shock therapy.”

The experience of Poland would demonstrate that a chaotic political transition can provide the opportunity to impose an unpopular agenda (Klein 2007a, pp. 220, 226-227, 320 and 322-323. Klein 2007b).

8. The People’s Republic of China, 1989: In 1989, a pro-democracy movement explodes in Beijing, with mass protests and sit-ins in Tiananmen Square. The demonstrators demand democracy, and many are opposed to the government’s moves toward unregulated capitalism.

China’s de facto leader, Deng Xiaoping, has been pushing to expand the reach of the market, with wage and price deregulation. This is especially the case in the areas he has designated as “Special Economic Zones,” where he has made sure that conditions are attractive for foreign investment. Deng has resisted calls for elections and civil liberties on the basis that social stability is needed for effective economic progress.

Facing the Tiananmen Square demonstrations, Deng Xiaoping declares martial law. The tanks of the People’s Liberation Army roll into the protestors, shooting indiscriminately into the crowds. Beating and torture become systematic. Deaths number between 1,000 and 2,600. The tortured number more than 7,000. After the initial violence, repression continues with further killings, arrests and torture, controlled coverage of the events in the domestic press, and restriction of access to the foreign press.

Deng declares:

“[Those were] the dregs of society. . . This was a test, and we passed . . . Perhaps this bad thing will enable us to go ahead with reform and the open-door policy at a more steady, better, ever faster pace . . . There is nothing wrong with the four cardinal principles [of economic reform – agriculture, industry, science and technology, and the military]. If there is anything amiss, it is that these principles have not been thoroughly implemented.”

The events in Tiananmen Square pave the way for a radical transformation of the economy. Within three years, China is open to foreign investment, with “Special Export Zones” dotting the whole country. China has become the sweatshop of the world, the favorite location for the contract factories of virtually every multinational corporation.

No country offers more lucrative conditions – low taxes and tariffs, corruptible officials, and a plentiful, low-wage work force fearing violent reprisals, should they demand decent salaries or the most basic workplace protections. Workers as an organized political force have been eliminated (Klein 2007a, pp. 11, 232 and 237-240. Klein 2007b. Wikipedia “Deng Xiaoping” 2008, pp. 1-9).

9. Russia, 1993: In 1991, Boris Yeltsin, President of the Soviet Republic of Russia, forms an alliance with two other Soviet republics, thereby abruptly dissolving the Soviet Union, and forcing the resignation of its leader, Mikhail Gorbachev. The abolition of their country, the Soviet Union, is a powerful shock to the Russian people.

At Yeltsin’s request, the Russian parliament gives him one year of absolute power to solve the country’s economic crisis. Foreign aid is desperately needed. Yeltsin’s sudden price deregulation, free-trade policies, and rapid privatization of the country’s 225,000 state-owned companies, takes the country by surprise.

Confrontations with parliament begin in early 1993, when parliament votes to repeal Yeltsin’s special powers, and Yeltsin restores his imperial powers by declaring a state of emergency. Then, Yeltsin announces that the constitution is abolished and parliament dissolved. The parliament votes to impeach him, and Yeltsin orders his troops to surround the parliament building, cutting off its electricity, heat and telephone lines. Having doubled military salaries, Yeltsin then abandons negotiations, and orders the military to surround the parliament with thousands of troops, barbed wire and water cannons, and refuse passage to anyone. Finally, in October, Yeltsin orders the army to storm the parliament and set it on fire.

Russia is now under dictatorial rule. Yeltsin dissolves elected bodies, and suspends both the Constitution and the Constitutional Court. Tanks patrol the streets, a curfew is in effect, and the press faces pervasive censorship.

The way has been cleared for huge budget cuts, the removal of price controls on basic food items, including bread, and privatization at an even faster pace than before the crisis.

Within one year, money has lost its value (wiping out the life savings of millions), subsidies have been eliminated (leaving millions without pay for months), average consumption has dropped by 40 percent, and one third of the population has fallen to below the poverty line. In 1993, Russia had no millionaires. By 2003, it would have 17 billionaires.

In 1996, Privatization Minister Anatoly Chubais, declares:

“In order to have a democracy in society, there must be a dictatorship in power” (Klein 2007a, pp. 277-293. Klein 2007b).

10. South Africa, 1994: In 1962, when Nelson Mandela is arrested, socialism rides high in the Third World. By 1989, when he is released, socialist revolutions have or are being extinguished. In Bolivia, the revolutionary Che Guevara has been murdered (1967); in Chile, socialist President Salvador Allende has been killed in a coup (1973); In Mozambique, President and liberation hero, Samora Machel, has died in a mysterious airplane crash (1986); and in China, the pro-democracy movement has been crushed in Tiananmen Square (1989). The Soviet Union would soon collapse (1991). “Free market” is the orthodoxy of the day.

Mandela’s plan is to bring democracy and wealth re-distribution to South Africa, and, in 1994, when the African National Congress (ANC) sweeps him to the presidency, that dream seems within reach.

But the dream is not to be realized. During Mandela’s negotiations with the Government, 1990-1994, the ANC is duped – “taken off guard," in the words of Vishnu Padayachee, an ANC economist. In alliance with the World Bank and the IMF, the National Party spins and lays down a web of economic rules which would constrain and even asphyxiate the leaders of the ANC, whom they knew would win the next elections.

The economic aspects of the negotiations have a lower profile, and are less dramatic than the political aspects. They are for the most part delegated by Mandela to Thabo Mbeki, later to succeed Mandela as president (1999- present).

The strategy of the National Party, headed by President Frederik de Klerk, is two-pronged:

a. Insist that critical aspects of the economy, such as trade policy or control over a central bank, are merely “technical,” “administrative” issues.

b. Convince the ANC that decisions regarding these “technical”/“administrative” issues should be made by “impartial experts” at the General Agreement on Tariffs and Trade (GATT, the precursor to the World Trade Organization) and the International Monetary Fund (IMF).

The Nationalist Party’s maneuvers are successful, and permit the use of a wide range of policy tools, such as international trade agreements, constitutional law innovations, and structural adjustment programs, to restrict drastically the economic power of the new government, even as it would maintain political power (Klein 2007, pp. 249-261 and 271-273. Wikipedia “Frederik Willem de Klerk” 2008, p. 1).

An economic Prison: Politically, South Africans have the voting right, majority rule, and civil liberties. Economically, they are bound by rules enforced by the threat of capital flight from the country (with an accompanying currency crash), and cuts to foreign aid.

The restrictions imposed on the ANC include:

a. Central Bank: A clause in South Africa’s new constitution which provides independence for its Reserve Bank (central bank). The Bank is an autonomous entity within the South African state.

b. The Printing of Money: Not possible. This is the sole prerogative of the Reserve Bank.

c. Currency Control: Not possible. Currency control, to guard against wild speculation, would violate a $850 million agreement with the IMF, signed just before the 1994 elections.

d. Raising the minimum Wage: Not possible. The $850 million agreement with the IMF stipulates “wage restraint.”

e. Decreasing Unemployment: Not possible. A GATT provision makes it illegal to subsidize auto plants and textile factories.

f. Land Re-distribution: Not possible. A clause in the constitution protects all private property.

g. Water for free: Not possible. The World Bank makes private-sector partnerships the norm of service.

h. Public Housing and Electrification of Townships: Not possible. There is no money. The government is servicing a massive debt.

i. AIDS Drugs free to Patients: Not possible. This would violate a World Trade Organization (WTO) rule on intellectual property rights for drugs. In 1994, the ANC joined the WTO, without public debate, assuming that the institution was but a continuation of the GATT.

The Results: After their election, the ANC leaders realize the extent of their economic prison – and opt to accept their restricted power. Concurrently bowing to the dominant international logic, they begin to pursue foreign investors – in the hope that the new wealth which these investors would create, might trickle down to South Africa’s poor.

For South Africa (with a population of 39 million, 90 percent of which are black), the results are:

* By 2006, 70 percent of the land is still be in the hands of whites (who represent 10 percent of the population).

* By 2006, the banks, mines and “monopoly industry” which Mandela pledged to nationalize, remain in the hands of whites.

* From 1994 to 2006, the number of people living on less than $1 a day doubles – from 2 to 4 million.

* From 1991 to 2002, the unemployment rate for blacks more than doubles – from 23 to 48 percent.

* From 1994 to 2004, the number of people evicted from farms approximates one million.

* From 1994 to 2006, the number of shantytown dwellers rises by 50 percent – from 17 to 25 percent.

* From 1994 to 2004, although 9 million people are connected to water, 10 million are disconnected because of inability to pay their water bill.

* From 1994 to 2004, millions of people are cut off from newly connected electricity because of inability to pay the bill.

* From 1994 to 2003, 40 percent of newly connected telephone lines have been disconnected.

* From 1994 to 2005, the average life expectancy decreases by 14 years – from 65 to 51 years (Barlow 2007, p. 117. Klein 2007a, pp. 260, 271-272 and 622-623. Klein 2007b. Louw 1997, p. 1. ICONS Project 2008, p. 2).

11. The “Asian Tigers,” 1997: In the late 1980’s and early 1990’s, the gross domestic products of Indonesia, Malaysia, Thailand, and South Korea are growing at rates of between 8 and 12 percent. Incomes are soaring, health is improving, poverty is falling, universal literacy is achieved, education is strong, and, since 1967, recessions have been either mild or non-existent. Financial markets are holding these countries up as paragons of economic vitality, the most robust success stories of (corporate) “globalization,” hailing them as the “Asian Tigers,” “Asia’s emerging markets,” “Asia’s miracle economies.”

The Legalization of speculative Investment: In 1995, the newly-created World Trade Organization (WTO), and the International Monetary Fund (IMF) put heavy pressure on the “Asian Tigers” to open their economies, demanding:

a. The end of protectionist laws which bar foreigners from owning either land or national firms.

b. The privatization of public sectors, especially energy and transportation.

c. The opening of national borders to all foreign imports.

d. The liberalization of the financial sector – the elimination of restrictions on capital flows, so as to allow speculative paper investment and trading in currencies.

The “Asian Tigers” refuse the first three demands but give in on the fourth – thereby planting the seeds of their own later calamity. The reason for the “Asian Tigers’” acceptance of the liberalization of their financial and capital markets, is not the need for funds. Their own savings rates are 30 percent or more. The reason is international pressure, including pressure from the United States, mostly channeled through the WTO and the IMF.

The Crisis: The economic depression which overtakes the “Asian Tigers” in 1997, is not brought about by any change in their own economies. It is the consequence of a sudden, devastating short-term capital flight from the country – the very type of speculative investment which they legalized in the mid-1990’s.

The Fall: The problem begins on July 2, 1997, when a rumor spreads that Thailand does not have enough dollars to back up its currency. The market panics and capital flees the country. Banks call in their loans, and the real estate boom collapses. The value of the currency crashes and the country falls into a deep depression.

Mutual fund investment brokers have marketed the “Asian Tigers” as one unit. The fate of one is, therefore tied to the fate of all of them.

In an attempt to maintain the value of their currencies, “Asian Tiger” governments drain their reserve banks, thereby turning the original fear of insolvency into a reality – the countries are indeed going broke, and the market responds with increased panic.

In 1997, the per capita gross domestic product (GDP) of the “Asian Tigers” falls by the following percentages:

Indonesia 42 percent

Malaysia 19 “

South Korea 19 “

Thailand 21 “

A Cure at hand but not forthcoming: A quick, decisive, stabilization loan, either by the IMF (the world body created precisely to prevent such crashes) or the United States, would help. None is forthcoming. On the contrary, many well-known financial figures openly express the view that the “Asian Tigers” should not be helped. The market should be left to correct itself – meaning that the crisis presents the opportunity to force the “Tigers” into lifting the remaining protectionist barriers to their economies.

Jay Pelosky, emerging-market strategist at the global financial services firm, Morgan Stanley, speaking in 1998, is forthright:

“What we need now in Asia is more bad news. Bad news is needed to keep stimulating the adjustment process.”

What Pelosky means is that if the crisis is left to worsen, all foreign currency will be drained from the countries, and nationally-owned companies will be forced to either close down or accept their being sold to Western firms – both beneficial outcomes for Morgan Stanley.

“I would like to see closure of companies and asset sales . . . Asset sales are very difficult. Typically owners do not want to sell unless they are forced to. Therefore, we need more bad news to continue to put the pressure on these corporates to sell their companies.”

Michel Camdessus, Managing Director of the IMF, takes the crisis in stride:

“Economic models are not eternal. There are times when they are useful and other times . . . [when] they become outdated and must be abandoned.”

The IMF responds – with a List of Demands: After five months of inaction and an ever-worsening crisis, toward the end of the year, the IMF does enter into negotiation with the ailing governments of Thailand, Indonesia, and South Korea, which are desperate for foreign currency in order to pay their massive debts. Malaysia, with a relatively small debt, is able to resist.

Stanley Fischer, in charge of the talks on the IMF side, declares:

“You can’t force a country to ask you for help. It has to ask. But when it’s out of money, it hasn’t got many places to turn.”

In return for loans, the IMF imposes on each country a “structural adjustment package” – an example of what, in 1989, World Bank and IMF advisor, economist John Williamson, called the “Washington Consensus,” and what, in the early 1990’s, Harvard economist Jeffrey Sachs, declared was “shock therapy”:

a. The elimination of all laws protecting trade and investment.

b. Large cutbacks in government expenditures.

c. Low social spending.

d. The privatization of basic services.

e. The independence of central banks from the government.

f. “Flexible” workforces.

g. An absolute free trade regime.

The Results: Indonesia has to make a total of 140 “adjustments,” including cutting food subsidies. In 1998, Jakarta privatizes its water, without public consultation or bidding. South Korea has to lift its law protecting workers against mass layoffs. Thailand has to allow foreigners ownership of large stakes in its banks.

The new laws are not passed democratically. In South Korea, the four main candidates in the upcoming presidential election, each have to commit in writing that, should he be elected, he would honor the agreement with the IMF. In Thailand, the government has to declare four emergency decrees in order to pass the laws.

Blaming the Victims: While visiting Thailand, in 1999, U.S. Secretary of State, Madeleine Albright, scolds the Thai public for turning to prostitution and the “dead end of drugs.” Albright apparently sees no connection between the fact that so many Thai girls are being forced into the sex trade, and the austerity policies for which, on the same trip, she expresses her “strong support.”

Albright’s comment is the equivalent of expressions of displeasure by Milton Friedman regarding the human rights violations of Augosto Pinochet or Deng Xioaping – while at the same time, praising their bold embrace of economic shock therapy (Barlow 2007, p. 113. Klein 2007a, pp. 12 and 332-353. Klein 2007b. Stiglitz 2000, pp. 1-10. Ambrose 1998, pp. 1-3. Wikipedia “1997 Asian financial Crisis” 2008, pp. 2-5 and 10. Bello 1999, pp. 1-4. Bello 2007, pp. 1-7).

12. Central America, 1998: In October 1998, Hurricane Mitch, at the time the 4^th most intense Atlantic hurricane in recorded history, with sustained winds of 180 miles per hour, kills 11,000, leaving 8,000 still missing by the end of the year, and causing damages estimated at $6 billion.

Help from the World Bank and the International Monetary Fund (IMF) comes, but at a price.

Honduras: (Deaths: 7,000. Damages, $3.8 billions). President Carlos Roberto Flores declares that the Hurricane has destroyed 50 years of progress in the country. However, during the following two months, the Honduran Congress:

a. Passes laws which allow the privatization of airports, seaports and highways.

b. Fast-tracks plans to privatize the state telephone company, the national electric company, and parts of the water sector.

c. Overturns progressive land-reform laws, making it easier for foreigners to buy and sell property.

d. Passes an industry-drafted mining law which lowers environmental standards, and facilitates the eviction of people from homes standing in the way of new mines (Barlow 2007, pp. 500 and 654).

Nicaragua: (Deaths: 3,800. Damages, $1 billion). President Arnoldo Aleman announces plans to sell off the country’s telephone system, its electric company, and its petroleum sector.

In July 1999, the Wall Street Journal reports:

“The World Bank and the International Monetary Fund [have] thrown their weight behind the [telecom] sale, making it a condition for the release of roughly $47 million in aid annually over three years, and linking it to about $4.4 billion in foreign-debt relief for Nicaragua.”

Guatemala: (Deaths: 268. Damages, $0.75 billion). President Alvaro Arzu Irigoyen announces plans to sell off the national telephone system (Klein 2007a, pp. 500-510, and 654. Klein 2007b. Wikipedia “Hurricane Mitch” 2008, pp. 1 and 4. Wikipedia “Alvaro Arzu” 2008, p. 1).

13. The United States, 2001: On September 10, 2001, speaking at the Pentagon, Defense Secretary Donald Rumsfeld, a disciple of Milton Friedman and a corporate man himself, announces what would later be known as a “sweeping transformation” of the military:

* The replacement of many full-time troops by cheaper, temporary soldiers from the Army Reserve and the National Guard.

* The contracting out to private companies of such core duties of the military as high-risk chauffeuring, the housing, catering, and health care of soldiers, and prisoner interrogation.

Rumsfeld’s move follows the principles of the corporatist administration of President George W. Bush – the hollowing out of government, and the taking over of its functions by the private sector.

Rumsfeld’s announcement comes the day before the 9/11 attacks on the World Trade Center and the Pentagon, and his “war” on the Pentagon receives next to no coverage. The country is in a state of shock, unable to defend itself – “disaster capitalism” is at work.

Within weeks, taking advantage of the mass disorientation and the sense of peril in the aftermath of the attacks, President George W. Bush creates a new framework for his corporate agenda. He:

* Dramatically increases the powers of the executive branch with regards to policing, surveillance, detention, and war.

* Outsources to the private sector, the newly-enhanced, and now richly-funded functions of security, invasion, occupation, and reconstruction. These functions are now to be performed for a profit.

Although the stated goal is to “fight terrorism,” the effect is the creation of a new sector of the economy concerned with homeland security, privatized war and disaster reconstruction. There is no need to sell off public companies already in existence. Bush’s “War on Terror” is privatized from its beginning – and limited by neither time, space, nor target.

In February 2007, the New York Times observes:

“Without a public debate or formal policy decision, contractors have become a virtual fourth branch of government” (Klein 2007a, pp. 340-341, 377-378, 387 and 481-482. Klein 2007b).

14. Iraq, 2003:

First, a “Shock and Awe” military invasion of Iraq by the U.S. and a few allies, designed to:

“Control the adversary’s will, perceptions, and understanding, and literally make [him] impotent to act or react.”

Next, radical economic changes – while the country is still in flames. Within four months, U.S. Chief Envoy, L. Paul Bremer, enforces a classic Chicago School “shock therapy” program:

a. Mass Privatization: The privatization of Iraq’s 200 state-owned companies which produce the staples of the Iraqi diet and the raw materials for the country’s industry.

b. A dramatically down-sized government: The firing of 500,00 state workers, most of them soldiers, but also doctors, nurses, teachers and engineers.

c. Favorable Terms for Corporations: Iraq’s corporate tax rate of 45 percent is reduced to a flat rate of 15 percent.

d. Complete Free Trade: Foreign investors are allowed to:

i. Own 100 percent of Iraqi assets.

ii. Take out of the country 100 percent of the profits they make in Iraq.

iii. Not re-invest part of their profits in Iraq.

iv. Not pay any taxes on their investments.

v. Be free of any health or work safety regulation for any product.

vi. Sign leases and contracts which last for 40 years, and then are eligible for renewal (saddling future elected governments with deals signed by their occupiers).

e. Deregulation: The opening of the country’s borders to unrestricted imports.

When resistance ensues, U.S. Secretary of Defense, Donald Rumsfeld takes the war from the streets into the jails, rounding up resisters for systematic torture (Klein 2007a, pp. 9, 436 and 444-445. Klein 2007b).

15. Sri Lanka, 2004: After the devastating tsunami of 2004, a parallel version of the same sequence of events happens in Sri Lanka. Foreign investors and international lenders use the atmosphere of panic to make the entire, beautiful coastline of the Island available to entrepreneurs, who promptly fill it with large resorts – blocking hundreds of thousands of fishing people from re-building their villages near the water.

Four days after the tsunami, President Chandrika Kumaratunga presents, and parliament passes, a bill opening the country’s water sector to privatization. Eight months previously, Kumaratunga was elected on an anti-privatization, anti-neoliberalism platform. “Voodoo politics,” John Williamson would call it.

President Kumaratunga declares:

“In a cruel twist of fate, nature has presented Sri Lanka with a unique opportunity, and out of this great tragedy [the country] will come a world-class tourism destination” (Emphasis mine. Klein 2007, p. 9).

Hotel rooms would be $800 a night or more (Barlow 1007, p. 116. Klein 2007a, pp. 9, 20 and 500-501. Klein 2007b. People’s Daily Online 2005, p. 1).

16. New Orleans, United States, 2005: The sequence of a catastrophic event followed immediately by an orchestrated raid on the public sphere, and expressions of “exciting market opportunities,” is repeated in New Orleans.

Hurricane Katrina is not a “Category V” when it hits New Orleans. The cause of the disaster is not nature, but the neglect of the levees protecting the City, and the lack of planning for the evacuation of the population – both of these the purposeful neglect of neoliberal policies.

Within three weeks after the hurricane, among many policy changes made under the guise of “hurricane relief,” President George W. Bush announces:

a. The suspension in the area of the Davis-Bacon laws, requiring federal contractors to pay a living wage. (Eventually, the labor standards would be reinstated, but largely ignored by contractors).

b. The declaring of the area, a flat-tax “free-enterprise zone.”

c. The declaring of the entire region, an “economic competitiveness zone” (with comprehensive tax incentives and the waiving of regulations).

d. His own championing of the repeal of environmental regulations on the Gulf Coast.

During in the months after the storm, President Bush’s refusal to accept the funding of public sector salaries with emergency funds, forces the City, which has lost its tax base, to fire 3,000 public workers, including 16 planning staff.

In contrast to the glacial pace at which the levees and the electricity grid are repaired, the auctioning off of New Orleans’ school system takes place with military speed and precision. Within 19 months, while most of the City’s poor residents are in exile, privately-run charter schools almost completely replace New Orleans’ public school system – the City’s 123 public schools are reduced to a mere 4, and its 7 charter schools are expanded to 31. All 4,700 members of the New Orleans Teachers Union are fired. Some of the younger teachers would be re-hired by the charter schools, at reduced salaries. Most would not be.

The American Enterprise Institute enthuses:

“Katrina accomplished in a day . . . what Louisiana school reformers couldn’t do after years of trying.”

Almost two years after the storm, Charity Hospital, the emergency room of the poor, is still closed.

Joseph Canizaro, a prominent New Orleans land developer, expresses:

“I think we have a clean sheet to start again. And with that clean sheet, we have some very big opportunities.”

Richard Baker, New Orleans Republican Congressman, tells a group of lobbyists:

“We finally cleaned up public housing in New Orleans. We couldn’t do it, but God did”

(Klein 2007a, pp. 4, 6, 518 and 523-524. Klein 2007b).

crises (of any type) welcome

The Desire for a Crisis: Expressions of the welcome opportunities which crises provide abound. Examples include:

1982, Milton Friedman: In the Preface to his book, Capitalism and freedom (1962/1982), Milton Friedman, professor of Economics at the University of Chicago, summarizes his view of the potential of crises to stimulate “reform”:

“Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function – to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable (Emphasis mine. Klein 2007a, pp. 174 and 613. Klein 2007b).

1985, Guillermo Bedregal: In 1985, Guillermo Bedregal, Bolivia’s Minister of Planning, while presiding over the drafting by his emergency team, of the economic shock to be applied to Bolivia, responds to the prediction of Fernando Prado, the youngest member of group, “They are going to kill us!”:

“We have to be like the pilot of Hiroshima. When he dropped the atomic bomb, he didn’t know what he was doing, but when he saw the smoke, he said, ‘Oops, Sorry!’ And that’s exactly what we have to do, launch the measures and then, ‘Oops, sorry!’” (Emphasis mine. Klein 2007a, p. 184).

1993, John Williamson: In 1994, the book, The political economy of policy reform, edited by John Williamson, is published. It is the report of a “by invitation only” international conference of neoliberal economists, hosted by Williamson in January 1993. During the conference, Williamson presented, for the first time openly, his “crisis hypothesis” of economic “reforms” – the idea of actively creating a serious crisis so as to provide the conditions for a radical economic make-over of a country.

In Chapter 12, “The Political Conditions for Economic Reform,” written by Stephan Haggard and John Williamson, the authors consider two conditions helpful for bringing about reform:

1. A Crisis: First, a crisis is needed:

“Policy reforms [may] emerge in response to crisis. Crises have the effect of shocking countries out of traditional policy patterns, disorganizing the interest groups that typically veto policy reform, and generating pressure for politicians to change policies that can be seen to have failed . . . One could . . . cite . . . Uruguay in 1973, or Bolivia in 1985.”

“In extreme cases, such as Poland in 1989, the crisis of the “ancien regime” may be so profound as to create an opening for . . . “extraordinary politics” – a widespread willingness to suspend the usual political roles.”

“In the 1960’s . . . reform efforts in Spain . . . were undertaken as soon as a government with sufficient political strength to divert effort from the task of consolidating democracy had come to power.”

“These worst of times give rise to the best of opportunities for those who understand the need for fundamental economic reform.”

Following his logic, Williamson suggests that if crises have often played a critical role in stimulating reform, then fabricated crises should be considered:

“One will have to ask whether it could conceivably make sense to think of deliberately provoking a crisis so as to remove the political logjam to reform. For example, it has sometimes been suggested, in Brazil, that it would be worthwhile stoking up a hyper-inflation so as to scare everyone into accepting those changes . . .”

“ Presumably, no one with historical foresight would have advocated, in the mid-1930’s, that Germany or Japan go to war in order to get the benefits of the super-growth that followed their defeat. But could a lesser crisis have served the same function? Is it possible to conceive of a pseudo-crisis that could serve the same positive function without the cost of a real crisis?”

2. External “Help”: Then, external pressure forces “reforms”:

“A second economic condition for successful reform . . . is strong external support, both in the form of intellectual help, and in the form of (conditional) foreign aid” (Emphasis mine. Klein 2007a, pp. 213, 320, 322-323, and 630. Klein 2007b. Haggard and Williamson 1994, pp. 562 and 564-565).

1995, Michael Bruno: In a lecture to the International Economic Association, in Tunis, in 1995 (later published by the World Bank as a paper), Michael Bruno, Chief Economist for Development at the World Bank, echoes John Williamson two years earlier. Bruno tells his audience of 500 economists from 68 countries:

“[There is a growing consensus about] the idea that a large enough crisis may shock otherwise reluctant policy-makers into instituting productivity-enhancing reforms . . . [Latin America is] a prime example of seemingly beneficial deep crises . . . [In Argentina, for example, President Carlos Menem is doing a fine job] of taking advantage of the emergency atmosphere [to push through deep privatization]”.

“I have emphasized one major theme – the political economy of deep crises tends to yield radical reforms with positive outcomes.”

[International agencies need to do more than just take advantage of existing economic crises to push through the Washington Consensus. They need to cut off aid pre-emptively to make those crises worse]:

“An adverse shock, such as a drop in government revenue or in external transfers, may actually increase welfare because it shortens the delay [before reforms are adopted]. The notion that ‘things have to get worse before they can get better’ emerges naturally . . . In fact, a high-inflation crisis may leave a country better off than it if had muddled along through less severe crises.”

“Indeed, as the crisis deepens the government may gradually wither away. This development has a positive outcome – namely, at the time of reform, the power of entrenched groups may have been weakened, and a leader who opts for the long-run solution over short-term expediency may win support for reform” (Emphasis mine. Klein 2007a, pp. 327-328).

Only a few years earlier, Chicago School economists were emphasizing that a hyper-inflation crisis could create the conditions for which “shock therapy” would be required. Now, a chief economist at the World Bank, an institution at the time funded by 178 countries, and whose mandate is to rebuild and strengthen struggling economies, is advocating the creation of failed states (Klein 2007a, p. 328).

1997, Zbigniew Brzezinski: Zbigniew Brzezinski, former United States National Security Council Advisor (1977-1981), in his book, The grand chessboard B American primacy and its geo-strategic imperatives, points to the opportunities provided by a “sudden threat.” In his case, the beneficial effects are political, the acquisition of control by the United States over oil-rich Central Asia.

A[in 1941, the public was willing to support] America’s engagement in World War II largely because of the shock effect of the Japanese attack on Pearl Harbor.@

AThe pursuit of power is not a goal that commands population passion, except in conditions of a sudden threat or challenge to the public’s sense of domestic well-being . . . [such as] a truly massive and widely perceived direct external threat@ (Emphasis mine. Griffin 2006, pp. 100-101 and 221, summarized in Hall 2006a, p. 12).

2005: Richard Armitage: In late 2005, after his resignation earlier that year as Deputy Secretary of State, a post he had held for 4 years (March 23, 2001-February 22, 2005), Richard Armitage, articulates the guiding assumption of the economic shock in Iraq:

“[Iraqis would be so stunned by U.S. firepower, and so relieved to be rid of Saddam] that they could be easily marshaled from point A to point B.”

Armitage then states his conclusion as to why events in Iraq have not gone as planned:

“The humane way in which the coalition fought the war, actually has led to a situation where it is more difficult to get people to come together, not less. In Germany and Japan [after the Second World War], the population was exhausted and deeply shocked by what had happened, but in Iraq, it’s been the opposite. A very rapid victory over enemy forces has meant we’ve not had the cowed population we had in Japan and Germany . . . The U.S. is dealing with an Iraqi population that is un-shocked and un-awed” (Emphasis mine. Klein 2007a, pp. 457, 472, 648 and 650. Klein 2007b. Wikipedia “Richard Armitage” 2008, pp. 2-3).

Conclusions

Money speaks

We are encouraged to continue to do so, but it seems no longer useful to think of humanity as divided into political entities, called countries. If money is power, and it is in today’s world, then it is more useful to think of humanity as stratified into layers according to the possession of money.

Trends which lead to this more useful way of conceptualizing humanity, and its present trajectory, include:

1. Foreign exchange TRANSACTIONS: Foreign exchange transactions in international markets reflect speculative financial activity. They have the power to destroy national economies overnight. The movements of speculative capital overwhelms by much the regulatory capacity of national and multilateral authorities.

The “Asian Tigers” Crisis: The “Asian Tigers” crisis of 1997 is an example of the cataclysm which can occur when speculative capital stampedes out of a domestic economy at cyber-speed. The value of the national currency plunges, and a deep, unrelenting economic depression sets in. In Thailand, one million people dropped to below the poverty line in a few weeks.

Despite the different paths which the countries have taken to lever themselves out of the crisis, the economies of the “Tigers” are irrevocably weakened and scarred. Their growth rates are still lower than prior to the crisis. They have more poverty and greater inequality, and consequently more social instability than before. This translates into more emigration, family desertion, and divorce. South Korea’s rate of suicide is still one of the highest among developed countries.

More financial Crises to come: The world has seen more than 100 financial crises since the mid-1970’s. A recent example is the bankruptcy of Argentina, in 2002. Today’s markets are bigger than they were in the mid-1970’s. Hedge funds, which now number 9,500, are more free-wheeling than then. Private equity funds now buy firms, re-structure them, and sell them at a profit. Future financial crises seem inevitable.

The Growth of finance Capital: The explosive growth of finance capital has its roots in the over-capacity of the global economy, and a consequent slowdown in global investment. (Parts of the global economy, such as investments in China and the United States do not follow this slowing trend). The general global economic stagnation motivates capitalists to invest, not in productive, but rather in speculative activity, in order to squeeze more value out of value which has already been created.

Derivatives, for instance, represent the financialization and trading of risk related to an asset. The risk can be anything from the pace of carbon trading, to the rate of Internet broadband connections, to weather predictions.

The driving force behind the growth of our present global corporate system (“globalization”) is not productive capital in the Marxian sense, but rather money seeking more money. In 2000, 80 percent of “free capital flows” across national borders, were not invested in any productive enterprise, but rather in short-term exploitation of margins and the takeover of vulnerable assets, without commitment to any productive function (McMurtry 2002, summarized in Hall 2008, pp. 2, 4, 15 and 29).

The Size of finance Capital: The amount of global speculative (finance) capital which circulates in financial markets is stupefying. In 2005, globally, the stock of “core financial assets” was $140,000 billion – held mostly by commercial banks but also by non-bank financial operators, hedge funds, and private equity investors.

Speculative activity overwhelms trade as way to make a profit. Yearly, the volume of foreign exchange transactions in international markets is $693,500 billion, while the value of international trade in goods and services is but $9,100 billion – 1.3 percent of total foreign exchange transactions (Bello 2007, pp. 1-7).

Table 1 summarizes the financial value of global speculative exchanges, and global trade in goods and services.

Table 1: Value of global financial Activities, 2005^(a)

Global Finance Indicator billion dollars Percent of total economic Activity

__________________________________________________________________

Stock of “core financial assets” 140,000 -

__________________________________________________________________

Speculative activity (annual) 693,500 99

Trade in goods and services (annual) 9,100 1^(b)

Total economic Activity 702,600 100

__________________________________________________________________

^(a) Bello 2007, p. 2. (See also the present document under Vehicles of Control, Publically-supported Institutions, No. 1, The World Bank, During the Ten Years after the Asian financial Crisis of 1997).

^(b)In the mid-1990’s, one third of world trade consisted of transactions between various units of the same corporation.

2. a market-value frame of reference: The frame of reference which humanity uses today is based on market-value – that is, on the assumption that cost and price are final value coordinates. Money, its investment and its products, are ends in themselves. The growth of a domestic economy [usually measured as its gross domestic product (GDP) or gross national product (GNP)] is the objective. The focus is money, not the experience of living in that economy.

In this frame of reference, junk-foods, images of repetitive violence, luxury cars, military weapons, the manufacture of waste, accidents, disasters, divorce, litigation, all help the economy grow – which is good, because economic growth is the objective.

In contrast, the life-value frame of reference assumes that an economy serves the lives of its members. Money, its investment and its products, are instrumental to human beings and social policies. The focus is on those alternatives which are most likely to satisfy vital life needs, and thereby enable a more comprehensive expression and enjoyment of life, both for the individual and the collective.

The market-value frame of reference results from three major trends, deeply rooted in Western civilization, and now being incorporated into thinking worldwide. These trends are:

a. Scientism and its Technology: Scientism is the assumption that science is the source of all knowledge. Since scientism does not regard any knowledge as arising from life itself (life being neither repeatable nor predictable), its material representation (technology) is also not friendly to life and its needs.

b. Exclusive Property: We conceptualize property, including money property, as being the exclusive property of its owner, even to the exclusion of the producer of the good which enabled the money accumulation. This type of exclusionary possession, even in the case when possession is not grounded in either work or recompense, is blind to the needs of life – the needs of the poor. The privatization of water, for example, is a violent offense against both nature and all members of a community.

c. The “free Market”: The myth is that financial transactions occur (or should occur) in a “free market.” But today’s global transactions are not free. Those without money cannot choose to buy. In 1998, the world’s 300 largest corporations controlled 98 percent of all foreign direct investment, and 60 percent of all land cultivated for export (McMurtry 2002, summarized in Hall 2008, pp. 2, 4,15 and 29).

3. DISPOSABLE HUMANS: The web of financial activity which envelops the world, benefits at most one third of the world’s people – the financial elites in both the “developed” and the “developing” countries. Two-thirds of humanity (the lowest 20 percent on the economic ladder in the rich countries, and the lowest 80 percent on the economic ladder in the poor countries), are either left out, marginalized, degraded or killed by the ever-tightening web.

By the mid-1990’s, of the 100 largest economies in the word, 51 were corporations – only 49 were countries.

Corporations are not in the business of providing succor to the poor – in water or anything else. Their mandate is to turn raw material into marketable commodities, while externalizing as much of the cost of production as possible onto the public. For many transnational corporations today, the production of commodities is but a side endeavor, a public face, while the main source of money accumulation is speculation, money leveraging, and credit creation. Neither is world trade an adequate reflection of productive economic activity. In the mid-1990’s, one third of world trade consisted of transactions between various units of the same corporation.

The Rich and the Poor:

* In 2002, the “high income” countries, with a total population of 941.2 million, had a combined gross domestic product (GDP) of US$25,767,900 million – an average of $27,378 per person.

* In 2007, the United States, with a population of 302.2 million, had a GDP of $13,794,000 million (accounting for 26 percent of the gross world product) – an average of $45,645 per person.

* In 2002, the “low income” countries, with a total population of 2,560.8 million, had a combined GDP of $1,123,900 million – an average of $439 per person.

* In 2000, 1,100 million people, mostly in poor countries, had no access to safe water.

Telecommunication giants, such as AT&T and GTE are not bringing the world “closer together.” In 1995, the largest eight telecommunication firms had sales of $290 million. That same year, 90 percent of the world’s people were living in a household unconnected to a telephone line (United Nations Development Programme 2004, pp. 154 and 187. United Nations Development Programme 2003, p. 103. Population Reference Bureau 2007, p. 2. Wikipedia “United States” 2008, pp. 2, 15 and 18. Corporate Watch 2000, pp. 1- 5).

A CORPORATE WORLD

Until we can extricate ourselves from valuing everything in terms of money instead of in terms of the life which it should serve, we will remain in the cage of a corporate world, where competitiveness demands growth at any price.

Having saturated traditional domestic markets, corporations are now expanding into:

* New markets (such as in “developing” countries).

* Destructive endeavors (war, now heavily privatized, as in Iraq).

* Reconstructive endeavors (as in New Orleans and Iraq).

* Security markets (as long as the “War on Terror” keeps us sufficiently afraid).

* New financial instruments (such as derivatives).

* The biological world (through genetic engineering and the patenting of new plant, animal and human “life forms”) (Noble 1997/1999, summarized in Hall 2004a, p. 20).

* The human consciousness (through invasive, tenacious and relentless advertizing in order to turn us into “consumers” of commodities) (Jhally 2007).

* Nature and the environment [through the privatization of the commons, as is the case for water, and (with carbon trading) air].

* “Technologies of transcendence,” such as atomic energy, space exploration, artificial intelligence, artificial life, nanotechnology, and robotics (Noble 1997/1999, summarized in Hall 2004a, pp. 13-17. McKibben 2003, summarized in Hall 2004b, pp. 5-6).

The primary driving force behind the expansion into all these new areas, is not to help the poor. The primary driving force is to make a profit.

Until we realize that we live in a world where corporations are invading every area of our lives, without ethics or any particular concern for life, and without concern for those who cannot pay, but with a strong mandate to make a profit, life in general, and our lives in particular, will be diminished and degraded.

And so

corporate profits soar

while countries lurch from disaster to disaster,

and

the rich grab the Earth’s water

while the poor and Nature do without.

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2008b. “Alliance Maghreb Machrek pour l’Eau – Almae, Morocco.”

http://worldwatercouncil.org/index. Accessed July 18, 1008.

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