Friday, September 7, 2012

IFI's and the Slummification of the Global South

Much of the great rural to urban migrations which have produced the shanty towns and ghetto complexes in the regions of the 'undeveloped' South have occurred, in the main, over the past thirty years and are related to capital interests working their way through the international financial institutions (IMF, World Bank etc) to effect domestic policy changes conducive to their own interests. There is nothing inherently wrong with this if you subscribe to the notion that open borders and a liberalized investment environment are in themselves a generally positive step forward - which is what they are depicted to be in the standard neoliberal literature.

The truth of the matter is that where rural customary land rights prevail there is a flexible semi-proletarianization in place with workers seasonally shifting to urban areas - setting up stalls, selling meats etc then moving back for harvest times. Each area has its own trends and peculiarities of course, but what has been happening to a great extent is that the policy recommendations from the IFI's - which need to be adhered to in the real world due to balance of payments support - have shifted support mechanisms (subsidies for seed, fertiliser, various inputs) away from the small farmer, detaching them from the soil and diverting their labour into the urban centres. It may be added also that the concentration of capital seen in the vertical integration of agribusiness has ensured that heavily subsidised Western agro-produce such as rice, corn, or cotton often devastates local producers who simply can't compete with that model's cost competitiveness.

They are then alienated from the land and wind up in the low-skill Export Processing Zones or else further populate the slum areas. What is happening today in the 'Third World' - particularly through the WTO mechanisms - is that developing country governments are trying to seek protective measures to allow them nurture their own industries rather then being bullied into accepting a 'free' market low barrier investment regime which tends to monopolize resources in favour of the blue chip multinational interests. State-led (often corrupt) market based solutions to land allotments are then carried out to the highest bidder often amidst countering claims among indigenous of land entitlement owing to their customary usage.

Looking at the number of investments China has today for grain production in the Middle East and Central Africa for instance - we may ask whether all of that land is uncontested, very unlikely. The question is one of timing because once the land gets flogged off and gets 'raised into the public sphere' i.e becomes private property - a powder keg of future social unrest has been created - the Phillipines, India, Mexico, Kenya, Uganda - the many landless people's movements in Latin America have all been effected in one form or another by this phenomenon.

With the shanty businesses operating in the informal sector usually the capital simply can't be raised to secure proper trading premises and institute a licensing regime - the real problems in these places is long term strategy; nurturing strong domestic industries, developing a viable tertiary sector that processes it's own raw materials instead of exporting them abroad. 'Capital' as it is presently constituted militates against all these developments because 'it' is dictating to policy makers rather than the other way round. This is unsustainable and in no-one's interest in the long run.

To ameliorate the rough conditions of living within the often slummified zones of the export regions, 'First World' companies who have outsourced manufacturing and have thus profitably contributed to the 'race to the bottom' should be hit by an internationally negotiated 'development tax' that secures a minimum standard of socially desirable improvements - schools, community centres, proper sanitation and policing.

It is indefensible to leave progressive policy planning to host governments with a long and shoddy record of human rights protection; proper development in these regions, which secures basic standards of living should be part and parcel of the initial arrangement to commence business and should be enforced by suitable UN mechanisms, such as an expanded International Labour Organisation.

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