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   Friday, October 19, 2018
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No less than a coup
By Sudhirendar Sharma

In the revised and updated edition of "Big Business, Poor Peoples", John Madeley tells us how big corporates have used their might to influence international negotiations to sway government policies; and the poor of developing countries are paying the price.

The apparently indisputable virtue of choice is one of the founding principles of market economy - a belief that seems empowering to most consumers. In reality, the 'choice' is just a façade. With most of what we consume largely controlled and supplied by big business - in many cases supported by government subsidies - our choices reflect an apology of options that are socially engineered by the corporations to allure the unsuspecting consumers. And in many cases, most of what we consume is either not good for us or for the environment we live in.

What is not good for people is rewarding for the big businesses though! One estimate suggests that the biggest 500 transnational corporations (TNCs) control about 70 per cent of the world trade, 80 per cent of foreign investment and about 30 per cent of the world GDP. As if this is not enough, only ten companies control half of the seed market; five control 90 per cent of the international grain trade; 85 per cent sales of pesticides are controlled by six big companies; and one such Monsanto controls 91 per cent of the global market of genetically modified products.       One estimate suggests that the biggest 500 transnational corporations (TNCs) control about 70 per cent of the world trade, 80 per cent of foreign investment and about 30 per cent of the world GDP.

Big Business Poor Peoples aims to shake the readers with such startling revelations. It is a comprehensive, in-depth exposé of all that the TNCs have been engaged into - from producing food to trading it and from bottling water to selling it. Author John Madeley has been appalled by the way this predominance has been achieved, despite many governments being wary of it. TNCs weave a compelling magic of curing all ills - offering economic cure for unemployment, providing foreign exchange to service debt and upgrading public institutions for better performance.

The magic is an illusion, but is seemingly compelling as the international financial institutions and aid agencies extend legitimacy to TNCs. Madeley notes that not only are corporations powerful but have considerable knowledge of producing goods and services, and are often in a position to mislead vulnerable ministers and officials who make policy. In practice, the corporations are strong enough to write their own rules, so much so that the governments often end up defending the very corporations that are exploiting their country.

From manipulating genes to drawing patents, manufacturing goods to trading consumables, running hotels to controlling tourism and producing power to regulating distribution -- transnational corporations capitalize on the inefficient and resource-poor public sector in most developing countries. No wonder, the big corporations make a big sales pitch in developing countries, financing millions of salesmen and saleswomen to go around selling drugs (banned in their respective countries) to doctors and pharmacies, and dreadful chemicals to farmers.

Madeley dispels any notion that big businesses are doing 'good' to the people. Conversely, millions of people live in wretched conditions side-by-side with those who enjoy unprecedented prosperity on account of the free market disposition. According to UNICEF, "A new face of apartheid seems to be spreading across the globe", as growth-rate tumbles in the developing countries from a high of 3 per cent between 1960 and 1980 to only about 1.5 per cent during 1980 and 2000. Globalization and privatization has indeed wrecked poor countries.       In 2005, development assistance from developed to developing countries totaled US$ 106.8 billion, according to the OECD. Against this the developing countries paid the developed world US$ 513 billion, almost five times as much.

Sample this! In 2005, development assistance from developed to developing countries totaled US$ 106.8 billion, according to the Organization for Economic Cooperation and Development (OECD). Against this the developing countries paid the developed world US$ 513 billion, almost five times as much. While development assistance has forced developing countries to remain ridden in perpetual debt, transnational corporations have done the rest - by sucking the knowledge and resources out of the poor.

      John Madeley is a best-selling author, journalist and broadcaster, specialising in economic and social development issues, notably international trade, transnational corporations, food and agriculture, aid and human rights.

Big Business Poor Peoples provides comprehensive data and details on the modus operandi of transnational corporations, which is both intriguing and shocking. Plant genetic resources and knowledge appropriated by transnational corporations from farmers in the South has been estimated to be worth US$ 4.5 billion a year. But the South receives patented seeds and genetically modified plant material in return, that too on royalty. The US patent on 'basmati' will eventually force some 250,000 farmers growing basmati to pay for growing their traditional crop.

Packed with explosive information, Big Business Poor Peoples remains timely, troubling and ultimately essential reading for the discerning Western consumer, keen to make real changes while they still have a choice. In the developing countries, people have started resisting the exploitation by the big businesses. In an interesting law suit, Nicaraguan farm workers won US$ 3.2 million in compensatory damages in 2007 from Dole, a pesticide transnational company. The workers alleged they had been rendered sterile by the pesticide DBCP.

From Kerala to Costa Rica and from Ghana to Guatemala, communities have started resenting the unlawful usurping of resources by big corporations. Madeley is convinced that grassroots economic activities are a key factor in resisting multinational corporate encroachment. Farmers who produce milk to replace imported brands, consumers in richer countries who buy equitably produced merchandise, shareholder activism and the development of civil society ties are all necessary means of developing resistance to multinational corporate power.

Yet, Madeley is no blind optimist. Conditions are indeed grim and getting worse. He finishes his balanced, but short treatment of this vast topic by suggesting that large multinationals are inherently incompatible with just and ecologically sound societies. All of this money circulating around the globe is reorganizing and intensifying transnational structures, linking the most brutal land-owning class of the South with the most powerful corporations of the North. Like so many analyses of corporate power, Big Business Poor Peoples leaves readers aware of the difficult tasks ahead. There is no room for complacency.

Author and researcher in the field of environment and development for over two decades, John Madeley has emerged as a prominent critic of capitalist neo-liberalism. Authoritative and highly readable, it is a must read for all those who are committed to ending this bloodless takeover of the developing world.

Big Business, Poor Peoples*
How Transnational Corporations Damage the World's Poor (Second Edition)
John Madeley
Zed Books, 2009, Paperback Price £ 16.99/ $ 30.95

* Updated edition of a best-selling title, with a new chapter and material on climate change and responses to it.

Sudhirendar Sharma  |  sudhirendarsharma@gmail.com

Dr Sudhirendar Sharma is an environmentalist and development analyst based in New Delhi. Formerly with the World Bank, Dr Sharma is an expert on water, a keen observer on climate change dynamics, and a critic of the contemporary development processes.

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 Other Articles in Global Development
Corruption Watch

The bad news is that corruption has not only sustained but has grown in size and stature in the country. With scams being a regular feature, seventy per cent respondents in a survey have rightfully opined that corruption has continued to increase in India. One in every two interviewed admit having paid a bribe for availing public services during last one year. Transparency International's latest survey reveals that the political parties top the chart for the most corrupt public institutions, followed by police force and legislatures. No wonder, India continues to make new records on the global corruption arena!

The shocking revelation is that the health and education sectors haven't remained untouched by this phenomenon. With 5th and 6th positions respectively for these sectors on the public perception chart on corruption, corruption has crept insidiously into these sectors of hope for the masses. With bureaucracy being fourth in the list of corrupt institutions in the country, corruption seems to have been non-formally institutionalized with little hope if public services would ever be effective in the country. With economic growth having literally institutionalized corruption, are we now expecting corrupt to be socially responsible - a different CSR.

Poor. Who?

Not giving 'aid' to India is one thing but calling it 'rich' is quite another. If one in three of the world's malnourished children live in India, what does average daily income of $3 indicate? It perhaps means that there is a relative decline in poverty - people are 'less poor' than what they used to be in the past. But having crossed the World Bank arbitrary threshold of $2 a day does not absolve the 'developed' countries of their obligation to part with 0.7 per cent of their Gross National Income in development aid. Should this three-decade old figure not be revised?  

An interesting debate in UK's House of Commons delved on future of development assistance by the British Government. While prioritizing limited resources has been a concern, there has been no denying the fact that development aid must be guided towards tangible gains over a short period of time to start with. There are difficult choices for elected governments to make - should they invest in long-term primary education or in short-term university scholarships? Which of these will bring gains and trigger long-term transformation in the society. As politicians continue to be divided on the matter, poverty persists!!   

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