Corporations Are Not Humans : Not Even Close ---Episode 31

                                                IF THE POOR MATTERED

Properly understood, development is a process by which people increase their human, institutional, and technical capacities to produce the goods and services needed to achieve sustainable improvements in their quality of life using the resources available to them. Many of us call such a process people-centered development, not only because it benefits people but also because it is centered in people. It is especially important to involve the poor and excluded, thus allowing them to meet their own needs through their own productive efforts. A small amount of help from abroad can be very useful in a people-centered development process, but too much funding can prevent real development and even break down the existing capabilities of a people to sustain themselves.
   Let's reduce the problem to its basics. Poverty --- generally defined as a lack of money is the problem --- the lack of access to adequate food, clothing, shelter, and other essentials of a decent life.  This simple fact suggests a people - centered alternative to both the import-substitution and export-led development models that were considered to be the only available choices in early development debates : pursuing policies that create opportunities for people who are experiencing deprivation to produce the things that they need to have a better life. 
   This is, in many respects, what Japan, Korea, and Taiwan did. Each made significant investments to achieve a high level of adult literacy and basic education, carried out radical land reform to create a thriving rural economy based on small-farm production, and supported the development of rural industries that produced things needed by small farm families. These became the foundation of larger industries. The development of these countries was equity-led, not export-led ---contrary to the historical revisionism of corporate libertarians. Only after these countries had developed broad-based domestic economies did they become major exporters in the international economy.
   From the standpoint of transnational corporate capital and the World Bank, a people-centered development strategy presents a major problem. Since it creates very little demand for imports, it also creates little demand for foreign loans. Furthermore, it favors local ownership of assets and thus provides few investment opportunities for global corporations.
   Foreign aid, even grant aid, becomes actively antidevelopmental when the proceeds are used to build dependence on imported technology and experts, encourage import-dependent consumer lifestyles, fund waste and corruption, displace domestically produced products with imports, and drive millions of people from the lands and waters on which they depend for their livelihoods---all of which are common outcomes of World Bank projects and structural adjustment programs.
   In addition, there is evidence that most Bank projects are failures, even by the Bank's own narrowly defined economic criteria. In 1992, an internal Bank study team headed by Willi Wapenhans published a report, "Effective Implementation : Key to Development Impact," which concluded that 38 percent of Bank-funded projects completed in 1991 were failures at the time of completion. The study found that twelve of twenty-five projects rated as successful when completed eventually turned out to be failures. If only half of the 62 percent of projects rated successful at completion in 1991 eventually achieved their projected returns, then less than a third of all bank projects will have provided sufficient economic return to justify the original investment. However, failures or not, the loan must be repaid in scarce foreign exchange. The Bank bears no liability for its own errors.

If measured by contributions to improving the lives of people or strengthening the institutions of democratic governance, the World Bank and the IMF have been disastrous failures, imposing n enormous burden on the world's poor and seriously impeding their development. In terms of fulfilling the mandates set for them by their original architects ---advancing economic globalization under the domination of the economically powerful --- they both have been resounding successes. Together, the Bank and the IMF have helped build powerful political constituencies aligned with corporate libertarianism, weakened the democratic accountability of Southern governments, usurped the functions of democratically elected official, and removed most consequential legal and institutional barriers to the recolonization of Southern economies by transnational corporations.