The New Rule of The World by John Pilger

Brief Summary

This documentary investigates the impact of globalisation, focusing on Indonesia as a case study. It highlights the growing disparity between the rich and poor, the exploitation of workers in developing countries, and the role of international institutions like the World Bank and IMF in perpetuating this system. The film also examines the historical context of globalisation in Indonesia, including the mass murder of the 1960s and the subsequent opening of the country to Western corporations.

  • Globalisation exacerbates inequality, with the wealthy benefiting at the expense of the poor.
  • Western corporations exploit cheap labour in developing countries, often under poor conditions.
  • International institutions like the World Bank and IMF contribute to debt and poverty in developing nations.
  • Historical events, such as the mass murder in Indonesia, have paved the way for globalisation.
  • Resistance to globalisation is growing worldwide, with people demanding a fairer and more democratic system.

The Brave New World

The documentary opens by contrasting the grand visions of industry leaders with the reality of a world where many are excluded. It highlights the protests against globalisation, noting that while the world has the capacity to create wealth and reduce poverty, the gap between rich and poor is vast. A small group of individuals and corporations control a significant portion of the world's economic activity, while famous brands exploit cheap labour in poor countries, sometimes bordering on slave labour. The film questions whether this is the global village promised or simply a continuation of old power structures, now run by multinational corporations and their backers.

Indonesia: Old Imperialism Meets the New

Indonesia, a country rich in natural resources, is presented as a prime example of where old imperialism meets the new. Despite its wealth, many Indonesians live in poverty. The country's history of colonisation by the Dutch has left a debt that remains unpaid. While globalisation is promoted as a force for unity and wealth distribution, the reality is that the poor are becoming poorer while the wealthy accumulate vast fortunes. A lavish wedding in Jakarta, attended by the Indonesian elite, is contrasted with the extreme poverty experienced by millions of Indonesians.

The Human Price of Globalisation

The documentary exposes the harsh realities of labour camps where workers who produce clothes for Western high streets live. These workers, often young, earn meagre wages, averaging around 72p a day, which is just over half a living wage. The dormitories are basic, with poor sanitation and no clean running water, leading to undernourishment and disease among the children. These conditions are similar to those in other parts of Asia, Africa, and Latin America, where famous brands are cheaply produced for Western markets.

Sweatshops and Codes of Conduct

The film goes inside factories in an economic processing zone, revealing the claustrophobic and frenzied working conditions. These factories, owned by Taiwanese and Korean contractors, employ cheap labour to produce goods for brands like Nike, Reebok, and Adidas. Posing as fashion buyers, the filmmakers secretly document the conditions, focusing on factories producing for Gap. Workers, mostly young women, work long hours in crowded conditions, with temperatures reaching 40°C. Some workers report working 24-hour shifts with minimal breaks. Despite Gap's code of conduct, which stipulates a maximum 60-hour working week and the right to refuse overtime, these standards are not effectively enforced in Indonesia due to government policies promoting cheap labour and high unemployment.

The Gap and Worker Exploitation

The documentary highlights the disparity between the price of clothing in Western stores and the wages paid to Indonesian workers. A pair of boxer shorts bought for £8 in a Gap store in Oxford Street translates to less than 4p for the Indonesian worker who made them. Similarly, a worker earns around 40p for running shoes that sell for £100. This is contrasted with the chief executive of Gap's earnings of over $5.5 million and the company's profits of $1.38 billion. To protect the workers, the factories investigated are not named, as speaking out can lead to victimisation and violence from anti-trade union forces. The Gap company declined an interview but stated that they employ a comprehensive factory monitoring program and prefer to work with manufacturers to fix problems.

Taking Action as Informed Consumers

The documentary encourages consumers to take action by asking retailers about the origins and production conditions of products. Writing to companies to demand assurances that workers are treated well and have the right to form trade unions is presented as a basic way to act as informed consumers.

The Secret History of Globalisation in Asia

Globalisation in Asia has a hidden history rooted in the mass murder of up to 1 million people in Indonesia in the mid-1960s, an event the West prefers to forget. Following General Sahar's seizure of power, aided by the United States and Britain, Indonesia's economy was redesigned in America, granting the West access to vast mineral wealth, markets, and cheap labour. This was described by President Nixon as "The Greatest Prize in Asia". General Sahar's value to Western business was his removal of Ahmed Sukarno, a nationalist who advocated for economic independence and kept Western corporations out of Indonesia.

Western Backing of General Sahar

Britain and the United States secretly supported General Sahar, with the American ambassador assuring him of US government sympathy and admiration. The CIA supplied a list of 5,000 opponents to be assassinated, and embassy officials tracked their murders. The British Ambassador recommended "a little shooting" as a preliminary to change. British warships escorted a Panamanian ship carrying Indonesian troops to Central Java to participate in the mass killings. The American press reported these events in terms of their economic advantage to the West, with Time magazine calling it "Vengeance with a smile" and others describing it as "a gleam of light in Asia".

The Corporate Takeover of Indonesia

In 1967, the Time Life Corporation sponsored a conference in Switzerland that planned the corporate takeover of Indonesia. Attended by powerful businessmen like David Rockefeller and representatives from major Western corporations, the conference laid out the conditions for investment in Indonesia. Indonesian leaders approved by General Sahar were also present. The conference went on for three days, with sectoral meetings hammering out policies acceptable to global investors. The foreign business community was aware that they were dealing with a corrupt dictatorship and a mass murderer.

British Arms and the Suharto Regime

Globalisation began in Britain in the 1980s under Margaret Thatcher, who dismantled manufacturing and invested in the arms industry. Indonesia became a significant British arms market, with General Sahar purchasing fighter aircraft, missiles, warships, and machine guns. Millions of pounds in export credits, paid by the British taxpayer, went to the dictator. Sahar was welcomed to London by the Queen, highlighting his importance as a business partner.

The World Bank and the IMF: Agents of the Richest Countries

The World Bank and the International Monetary Fund (IMF), based in Washington, D.C., are presented as agents of the richest countries, particularly the United States. Established after World War II to rebuild European economies, they later offered loans to poor countries on the condition that they privatise their economies and allow Western corporations access to their raw materials and markets. Debt is used as an instrument to implement policies in developing countries, creating a vicious cycle of poverty. The documentary contrasts Tanzania, a country with a gross national product of $2.2 billion shared among 25 million people, with Goldman Sachs, an investment firm with annual profits of $2.2 billion shared among 161 partners.

Socialism for the Rich, Capitalism for the Poor

The World Bank's system is described as "socialism for the rich and capitalism for the poor". The rich benefit from debt, cheap labour, and minimal taxes, while the poor lose jobs and public services to pay interest on debt owed to the World Bank. Internal documents reveal that up to a third of the World Bank's loans to General Sahar's dictatorship went into the pockets of his cronies and corrupt officials, amounting to around $8 billion.

The Asian Financial Crisis and Suharto's Downfall

Globalisation allows capital to be moved anywhere without warning. In 1998, short-term capital was suddenly withdrawn from Asia, crippling the Indonesian economy. The collapse of the Indonesian Rupiah significantly reduced labour costs for companies like Nike. With the economy in crisis and Indonesia on the brink of revolution, Sahar was forced to step down, having stolen an estimated $15 billion during his reign. He had handed out public utilities to his family and cronies, who controlled various sectors of the economy.

The World Bank's Role in Supporting Authoritarian Regimes

The World Bank, despite presenting itself as an economic development agency focused on poverty reduction, operated during the Cold War as an institution that distributed resources to authoritarian regimes supporting the West. This created the irony of the West defending democracy while upholding dictatorships like Indonesia. World Bank projects provided opportunities for Indonesian government officials to skim money, with an estimated $10 billion unaccounted for out of $30 billion loaned during Sahar's rule.

World Bank's Chief Economist Interview

Nicholas Stern, the chief economist of the World Bank, is interviewed about the loss or theft of almost 30% of World Bank loans to Indonesia. Stern dismisses the figure as a guess, despite internal reports estimating that 20-30% of the Indonesian government's development budget was diverted through informal payments. He acknowledges that the World Bank got things wrong in its analysis of the Indonesian economy and politics at the time.

The Impact of Debt and Privatisation

Globalisation creates debt, which leads to misery, unemployment, and privatisation. State enterprises are privatised, increasing costs for essential services like health and education. The money stolen by the Sahar family is being repaid by the Indonesian people. Every day, over a hundred million dollars is transferred in debt repayments from the poorest countries to the richest.

The Human Cost of IMF Policies

The poverty of Indonesian families is used to pay off the country's debt. Conditions of the IMF's latest loan include reductions in subsidies on fuel and food. A man's monthly wage of less than £40 is largely spent on medical treatment for his children, who suffer from a serious blood disorder. Rising prices mean he cannot afford the necessary drugs.

The Global Food Trade and Poverty

One American corporation dominates the world trade in food grains, while almost half the world's population attempts to live on less than $2 a day.

Debt Cancellation and Economic Policies

The documentary questions Nicholas Stern about calls for complete debt cancellation as a way to alleviate poverty. Stern argues that economic policies, education, and integration into the world economy are more important than debt cancellation. He believes that opening markets in industrialised countries to agricultural exports from poor countries is key to poverty reduction. Stern disputes the idea that debt is the greatest cause of poverty, arguing that debt is a normal way of borrowing for investment and that financial systems rely on debt.

Human Rights and Globalisation

The Human Rights Commission of the United Nations has stated that globalisation has caused global conditions of inequality and discrimination. Stern claims to be unaware of the evidence supporting this claim. He acknowledges that workers in third-world economic processing zones are vulnerable to exploitation due to unemployment. When questioned about the deaths in East Timor under the Sahar regime, Stern avoids directly answering whether the IMF spoke out against the regime. He claims that the IMF's insistence on removing corrupt practices in Indonesia weakened the regime.

The Impact of IMF Recommendations on Indonesian Workers

As recommended by the IMF, the Indonesian government has cut subsidies on oil, electricity, water, education, and agriculture. This means that workers have to pay more for essential services. People are reducing the quantity and quality of their food, leading to lower productivity due to poverty and fatigue.

Resistance to Globalisation

Thousands of protesters from around the world converged on Seattle to protest against the World Trade Organization. A growing movement against globalisation has been developing for years in Africa, Latin America, and Asia. Millions of ordinary people have protested against the power of the IMF and the World Bank, as well as the imposition of Western power. Protests have spread to Western countries, but coverage often focuses on violence rather than the economic policies being protested.

Propaganda and Violence

In the lead-up to May Day in London, the police and government orchestrated a propaganda campaign to alienate the public from the demonstrators by portraying them as violent and suppressing the issues they were protesting. Tony Blair dismisses the growing gap between rich and poor as a "spurious cause". On May Day, 6,000 police turned part of London's West End into a detention camp.

The World Trade Organization and Corporate Power

The World Trade Organization (WTO), based in Geneva, is described as an "embryo world government" that no one has voted for. Its policies make it illegal for governments to hinder the profits of big business, a concept known as "free trade". The documentary argues that while companies have globalised, regulations have not, leading to unfair rules for workers and the world's poor.

Taking Action and Challenging Corporate Power

The documentary encourages people to join the movement against globalisation. It highlights the success of a "ragged band of dissenters" in stopping the Multilateral Agreement on Investment, which would have allowed corporations to sue governments for removing laws they didn't like. People are starting to see through fabricated propaganda and withdraw their support from governments that only protect corporations.

Globalisation in Rich Countries

In rich countries like Britain, globalisation is well advanced, with the disastrous selling off of railways and the creeping privatisation of essential services. Despite a booming economy, one in five British children grows up in poverty, and the gap between rich and poor is widening.

Demanding a Fairer System

Millions of ordinary people worldwide are questioning why they have no say in decisions that cause hardship. They reject the idea that there is no alternative. The documentary asks why the World Bank, IMF, and WTO should not be abolished and replaced with democratic and accountable trade and development institutions. It also questions why debt that condemns nations like Indonesia to poverty and disease should not be cancelled.

Military Dominance and Commercial Interests

The documentary highlights a document from the United States Space Command stating that the globalisation of the world economy will continue with a widening gap between haves and have-nots, and that only military dominance will protect America's commercial interests. The documentary concludes by asking why people should accept these divisions and dangers, arguing that they are not inevitable and can be changed.

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0:01 the prophets of a Brave New World captains of industry have visions Grand and great designs but none have room for me they see a world where everyone is Rich and smart and Young but if I live to see such things too late for me they [Music] come in recent months more than a million people most of them young have

0:46 protested against a new economic order called globalization this represents one of the greatest popular movements since the 1960s surely never before has the human race enjoyed such amazing capacity to create wealth and reduce poverty yet never before has the gulf between rich and poor been so vast and inequality so widespread the facts of globalization are revealing a small group of powerful individuals are now richer than most of the population of Africa just 200 giant corporations dominate a quarter of the world's economic activity General Motors is now bigger than Denmark four is bigger than South

1:32 Africa unseen by Shoppers in the High Street the famous brands have almost everything from running shoes to baby clothes are now made in very poor countries with cheap labor at times bordering on a form of slave labor Tiger Woods the golfer is paid more money to promote Nike than most of the entire Workforce actually making Nike products here in Indonesia is this the global village we are told is our future or is it merely an old project that used to be run by the divine right of kings and is now run by the divine right of multinational corporations and by the financial institutions and governments that back

2:18 them this film is about these new rulers of the world and especially their impact on one country Indonesia Indonesia is where the old imperialism meets the new this is a country that should not be poor it's rich in almost everything mountains of copper and gold oil Timber and the skills and labor of its people

3:04 colonized by the Dutch in the 16th century Indonesia was plundered by the West for hundreds of years a debt that is yet to be paid back for

4:01 globalization is used by its Champions to suggest a coming together of people of all Races of all countries and it will relieve poverty it will distribute wealth what we've actually seeing is precisely the opposite processes in train that the poor are becoming markedly poorer while the very wealthy are becoming staggeringly wealthy and here are some of the staggeringly wealthy this is a wedding in Jakarta of the Indonesian Elite two merchant families are being united four years ago the World Bank called Indonesia a dynamic economic success a model pupil of the global

4:47 economy among the Versace dresses and diamonds are those who have reaped the benefits of the new Global freedoms Freedom to watch money make more money in this respect they could be any national [Music] ity outside this wedding there's another world in Indonesia as many as 70 million people live in extreme [Music] poverty we calculate that it would take an Indonesian worker like one of the waiters serving here 400 years to pay for this wedding reception

5:32 less than 5 miles away is the backyard of the global economy the side of the dynamic success you don't see this is a labor camp that's home to workers who make the clothes we buy in the high streets and shopping malls this is the human price paid for our fashionable trainers our smart shirts our jeans with a tag that says Made In Indonesia young people living here here who make the famous brands are paid on average the equivalent of 72 p a day about a dollar that's the legal minimum wage in Indonesia according to the Indonesian government it's just over half a living

6:17 wage the dormitories are made from breeze blocks and packing cases when it rains they flood there are open sewers and no clean running water many of the children are undernourished and prey to disease while I was filming here I caught Deni fever carried by the mosquitoes which infest these slums it kills children the conditions here are not very different from workers camps in other parts of Asia in Africa and Latin America where the famous brands are also made cheaply for lucrative Western markets

7:05 and this is where they work in what is called an economic processing Zone which means a vast area of sweat [Music] shops the factories may look modern but once you step inside you feel the claustrophobia of the workers the sheer frenzy of their production and you see their fatigue [Music] posing as fashion buyers we film secretly in this Factory the factories are owned by Taiwanese and Korean contractors who employ cheap labor to make the products of famous Brands such as Nike Reebok and

7:50 Adidas we looked at one Famous Brand Gap the working conditions we found are by no means the worst so you you you gap of course yeah you do lots of Gap and I mean the quality the quality control of Gap I think is excellent in the future we are we found more than a thousand mostly young women working crowded together under the glare of strip lighting in temperatures that can reach 40° Centigrade the only air conditioning is upstairs where the buses are working hours can vary and can be increased dramatic ially when an urgent export order has to be met we surveyed five factories regarded

8:36 as typical and I interviewed workers from all over Jakarta you work a 24-hour shift with just a couple of brakes and then 2 hours later you start another shift so in in effect you work a 36 hour shift [Music] are you given any choice what would happen if you refused to do this 24-hour

9:28 shift on these long 24-hour shifts do you recall what labels you were packing do any of the people from The Gap company ever visit your factory s do they ever ask you about or investigate the working conditions your working conditions what have they tell you to

10:19 say this is what the Gap company calls a code of conduct in response to criticism famous Global Brands like Gap have come up with these Cod codes they say the idea is to set standards and protect workers but how effectively is it enforced you have to come to Indonesia to really realize what codes of conduct means and that this is almost useless to exercise or to implement code of conduct here in this country because this government is always campaigning uh cheap labor here in Indonesia to attract the foreign investment and codes of conducts cannot do anything about that and

11:06 because uh ination workers is already very poor and the rate of unemployment here is very very high so that people will work whatever whatever kind of work they have or how many how much they paid they will still work the Gap company stipulates a maximum working week of 60 hours it says workers May refuse overtime without any threat of penalty are there people who do extraordinary shifts like much more than 12 hours even up to 24 hours

12:04 16 hours standing yeah is that common is the gap code of conduct displayed in the factory these boxer shorts were made in one of the factories we investigated before we left London we bought a pair at a Gap store in Oxford Street for

12:50 £8 out of that 8 an Indonesian worker gets less than 4 P it's the same for running shoes that sell here for £100 out of that1 a worker gets around 40 P that wouldn't even buy the laces last year the chief executive of Gap earned more than $5.5 million the profits of Gap were $1 1.38 billion doar

13:38 and this is typical of many companies in order to protect the workers in this film we have not named the factories we investigated in Indonesia as in other countries which have Sweatshop economies workers who speak out face the danger of victimization from contract and violence from anti-trade Union forces daari a Trade union leader was herself imprisoned and tortured codes of conduct must be monitored by trade unions How Could You monitor codes of conduct if trade unions is still weak if the Poli is surrounding the their activists and if they're facing repression whenever they

14:25 operate we asked the Gap company for an interview but they declined saying it was unfair not to identify the factories as they couldn't verify our evidence we sent them a list of questions and they supplied this statement Gap says it employs one of the most comprehensive Factory monitoring programs in their industry for some manufacturers our standards are too tough and we refuse to do business with them we prefer to work with them to fix the problem we can't force them to comply one of the things that that uh that we can do to take action and in support of uh better conditions for for people in developing countries is when

15:11 we buy anything ask a retailer where this product comes from under what conditions it's produced write to the company that made the product and say you want assurances that this comes from a factory that um treats its workers well that gives us workers rights to be able to to form trade unions Etc and these are are some very basic ways in which we can act as as informed consumers not afid not afraid of dirt but how I fear the things I do for lack of honest

16:08 globalization in Asia has a secret history the great sweat shops and Banks and luxury hotels in Indonesia were built on the mass murder of as many as 1 million people an episode the West would prefer to forget but many people here have not forgotten in recent years people all over the country have begun searching for the remains of loved ones murdered when General saharo seized power in the mid 1960s aided by the United States and

16:55 Britain until recently the truth of this episode has remained so secret that this is the only known photograph of the [Laughter] atrocities one day in early October 1965 a gang of thugs entered this school in Jakarta and Beat to Death the Headmaster he was suspected Ed of being a communist his murder was typical of the slaughter of more than a million people teachers students civil servants peasant Farmers described by the CIA as one of the worst

17:42 mass murders of the 20th century the origins of this terrible episode have been covered in mystery certainly it brought to power General Sahar but what is now merging is the extent to which he was secretly backed by the United States and Britain and by Western Business Leaders within a year of the bloodbath Indonesia's economy was effectively redesigned in America giving the West access to vast mineral wealth markets and cheap labor what President Nixon called The Greatest Prize in Asia to Western business the great value of General Sahar was that he succeeded in getting rid of the founder of modern Indonesia Ahmed s Koo a nationalist who

18:31 believed in economic independence for his people he kept the Great Western corporations out of Indonesia and through out their agents the World Bank and the international monetary fund it was only when one of his generals sahat seiz power that the door was open to Asia's Greatest Prize when the suat U regime came in after after the pooch they were able to make a lot of the fact that they were calling the IMF and the World Bank back in uh they were going to rescue them you see and and British propaganda in particular made a lot of this you know the IMF was was decent and it was going to bring order and and everything was

19:17 going to be lovely in the Indonesian garden and and as I say um a British Diplomat uh still alive has has said to me that was very much a part of the deal Britain and the United States secretly conspired to back General Sahar the American ambassador assured him that the US government is generally sympathetic with and admiring of what the Army is doing thousands were rounded up what was not known of the time was later revealed by American officials the CIA had supplied a list of 5,000 opponents to be assassinated and Embassy officials

20:03 ticked off their names as they were murdered the British Ambassador recommended a little shooting as an essential preliminary to effective change in the first few days the uh the British sources in particular purported not really to know what was going on of course they knew what was happening I mean there were bodies being washed up on the door of the British Consulate in suaya with bodies floating all over the malaka strait and so forth a man called Hadi broto leftenant Colonel or something want was anxious to take some troops indonisian troops from the east coast of Sumatra

20:48 from the Northeast Coast of samatra to um eastn Central Java so that they could take part in What We Now know was this terrible Holocaust really um he found a pananian ship and the ship sailed with troops down the malaka straight escorted by two British warships so the British were directly involved in as what you describe as as a holocaust well I I would count that some sort of involvement when CH the American Press reported these events not as a crime against humanity but in terms of their economic advantage to the West Time magazine called them Vengeance

21:36 with a smile and the West best news for years others described a gleam of light in Asia the seeds of globalization were planted in the bloodbath in 1967 the Tim Life Corporation sponsored a conference in Switzerland that planned the corporate takeover of Indonesia it was attended by the most powerful businessmen in the world such as David Rockefeller the Giants of Western capitalism were represented the oil companies the banks General Motors British Leland ICI British American Tobacco lemon Brothers American Express

22:25 Seamans across the table were Indonesian leaders approved by General Sahar for Western business it was the start of the g rush which later became known as globalization no one mentioned the killing of a million people I've never ever heard of a situation like this for any country where Global Capital essentially holds a meeting with State and hammers out the conditions of their own entry into the

23:12 country the conference went on for three days the first day was when the Indonesians spoke and essentially made their case they divided into five different sections on the second day sectoral meetings mining in one room Food Services Light Industry in another Banking and Finance in another Chase Manhattan was there and simultaneously they hammered out policies that were going to be acceptable to these Global Investors on a sector by sector basis um with each of the people going around the table saying this is what we need to see this this this and they basically designed the legal infrastructure for investment in Indonesia

24:02 was the foreign business Community here aware that they were dealing not just with a corrupt nepotistic dictatorship but also with a mass murderer that's a very general question um no it's quite specific actually I mean mass murder is mass murder and the the that the fact that many people have died in Indonesia in in in in unfortunate tragic circumstances um at the

24:50 uh directly or indirectly as a result of the previous regime um is hugely unfortunate it um whether if foreign investment had not been here that would have prevented in any way um those events um occurring nobody nobody has Perfect Vision on on what might have been globalization began in Britain in the 1980s when Margaret Thatcher dismantled much of manufacturing and poured millions of pounds into building up the arms industry Indonesia became an important

25:35 British arms market and general Sahar was sold everything lethal from fighter aircraft and missiles to warships and machine guns unknown to the British public millions of pounds went to the dictator in export credits in other words a large part of his arms bill was paid by the British taxpayer so important was Sahar as a business partner that the mass murderer was welcomed to London by the [Music] [Applause] [Music] queen who are the new rulers of the world their empire today is greater than

26:22 the British Empire ever was this is the center of this new Empire all within a square mile in Washington down the road from the White House and the US Treasury is the World Bank and the international monetary [Music] fund these two bodies are the Agents of the richest countries on Earth especially the United States the World Bank and the IMF were set up near the end of World War II to rebuild the economies of Europe later they began offering loans to poor countries but only if they privatize their economies and allowed Western

27:09 corporations free access to their raw materials and markets debt has really been used as an instrument um in order for the IMF and the world bank to get their policies um implemented in many developing countries and we're into a situation now where the poorest countries are in a cycle a vicious cycle of poverty they can't get out and the the kind of of debt cancellation that's been given still will not allow them to get out of those poverty traps not a question of debt forgiveness because actually many of the debts were incurred under pressure from the international institutions or were were given in

27:56 collusion with governments with weren't acting in the in the interest of their people let me ask you do you know the difference between Tanzania and Goldman Sachs Tanzania is a country that has a gross national product of $2.2 billion and shares it between 25 million people Goldman Sachs is an investment firm which has annual profits of $2.2 billion and shares them among 161 Partners that's the World we're living in now the World Bank says its aim is to help poor people promoting what it calls Global development it's an ingenious

28:43 system a kind of socialism for the rich and capitalism for the poor the rich get richer on running up debt cheap labor and paying as little tax as possible while the poor get poorer their jobs and public services are back in order to pay just the interest on debt owed by their governments to the World Bank here in Indonesia where most people are poor the handouts to the rich have been extraordinary to say the least internal documents of the World Bank confirm that up to a third of the bank's loans to the dictatorship of General Sahar went into the pockets of his cronies and corrupt officials that's around $8 billion

29:33 globalization means that Capital big money can be moved anywhere at any time without warning in 1998 short-term capital was suddenly pulled out of Asia crippling the miracle economy overnight when the Indonesian rupia collapsed from being roughly 2,500 rupia to the dollar to being what it is now 10,000 rupia to the dollar the costs to nikee for each Indonesian laborer was cut to 25% of what it had been and Nike got a great discount on Indonesian labor as a result and did not unilaterally raise Indonesian wages to the same standard they had been prior to the devaluation of the

30:18 [Applause] rupia with the economy collapsed and Indonesia on the verge of Revolution sahata was forced to step down having already stolen an estimated $15 billion during his reign of more than 30 years Sahar had handed out Public Utilities to his family in cronies they own most of the national power grid nothing was overlooked from TV stations to a monopoly on taxis driving from Jakarta airport you even paid a toll to sahar's [Music]

31:03 daughter these unfinished buildings are monuments to corruption on a scale unheard of in modern Asia to what the World Bank called The Miracle economy the bank presents itself as an economic development agency focused on the reduction of poverty but in fact the bank operated during the entire Cold War as an institution that distributed resources to mostly authoritarian regimes in the third world that supported the West in the Cold War so you had the irony of the West claiming that what they were defending in the Cold War was democracy and a certain vision of freedom but doing so by upholding dictatorships like Indonesia

31:50 around the world what they did was they had plenty of projects some of which surely were valuable many of which were not every one of these projects from the Indonesian government officials point of view was an opportunity to skim to live a luxurious life and the accumulated theft over the course of suharto's New Order roughly three decades was $10 billion that's unaccounted for um out of a total of about 30 billion that was loaned and when I said to the auditor general of the World Bank what if a a group of IND Indian citizens or even the government were to challenge the World Bank in the world Court over this loss of money the citizens who are

32:36 who bear the burden of this debt never got the money um why should it still sit on their shoulders to be repaid and his response was we would be bankrupted and I said why and he said because this has gone on the world over I went to Washington to interview the chief Economist of the World Bank Nicholas Stern I asked him to explain how almost 30% of world bank loans to Indonesia had been lost or stolen we simply don't know what that number is many times your own own internal report August 97 I quote we estimate that at least 20 to 30% of government of Indonesia development budget funds are diverted

33:23 through informal payments to government staff and politicians so that number was plucked out plucked out of the air lots of times we have to guess with numbers and the person who wrote that was guessing somebody comes somebody comes up with a number and it gets recycled but L of money it the I don't want to dismiss the issue it's just let's not get hung up on one figure which isn't a particularly hard no but I mean if if it's a third of what the World Bank has put into one country no then it's a serious it's a serious question the when you have uh a loan there's a lender and a borrower and uh they share the responsibility in some way there's there's a strong case that has been made by people have seen this evidence that the World Bank was duped by the Sahar

34:10 regime claiming that poverty had dropped to 30 million and in fact poverty was around 60 million let's talk about the harder figures the income poverty figures are always the most difficult ones to get your hands on but I think the literacy figures in the uh infant mortality figures are in this case probably more reliable and there was some progress during that 30-year period significant progress I mean cutting Literacy By half and so on that's a very important uh step forward so let's not lose sight of that in 97 the World Bank described this the economy under Sahar in a famous report is absolutely Dynamic doing everything right terrific brilliant you know by that time the whole Asian thing had already started to collapse uh it wasn't until this the following year that the World Bank for

34:57 the first time in 30 years had anything to say uh about a regime that um is guilty of mass murder why was there such a silence that seemed to a lot of people simply to be complicity with this murderous dictatorship I think if we look back on our analysis of the economy and the politics at the time we got a number of things wrong and uh we have to understand that we're going to get things wrong again not so many people uh called the uh Asian crisis before it happened we failed along with uh along with your job though you're you're you're all economists with fantastic

35:43 degrees and Brilliant backgrounds and and how can you get it that wrong we're going to get it wrong some of the time I think non-economists get it wrong a lot more often than economists but this isn't a precise game and uh uh there are going to be a number of occasions in the future where we get things wrong too so globalization creates debts and debts creates misery creates unemployment creates the crisis creates privatization a lot of States Enterprise being privatized so people will have to pay more to have an access for for instance like health education so it's not natural that's is not natural it's it's design so in effect the money stolen by the

36:32 Sahar family is being repaid Yeah by by us by the children every day more than aund million is transferred in debt repayments from the poorest countries on Earth to the richest [Music] the poverty of families like this is paying off Indonesia's huge debt the conditions of the imf's latest loan include a reduction in subsidies on

37:17 certain Fuel and food half this man's monthly wage of less than 40 goes on medical treatment for his children who suffer from from a serious blood disorder as prices go up he cannot even afford the special drugs that keep them [Music] alive the

38:08 [Music] for for

39:07 ald in the global economy one American corporation dominates the world trade in food grains while almost half the world's population like this family attempt to live on less than $2 a day [Applause] what do you say to those 17 million people who called for a complete and I repeat complete cancellation of debt as the only way to lift the huge number of poor people in the world out of poverty I'd say uh two things uh first

39:54 what will lift people out of poverty is not counseling their debt but what their What policies their countries pursue whether they educate poor people whether they give them health and so the question and then what sort of economies they try to run do they integrate them into the world economy or do they run corrupt economies those are the primary determinants of how well countries will do that is the answer to to how what determines whether people get out of poverty it can be done it has been done should we cancel the debt counseling debt is one way of giving resources to poor countries mhm what I'd like to see is a much greater flow of resources to poor countries I'd like to see the markets of the industrialized countries

40:39 opened so that these countries where people are poor and can produce agriculture are able to export that's what'll get them out of poverty the statement debt relief is the only thing that will get them out of poverty is wrong it would help uh provided it as a company by holding set of other measures but surely debt even in one's own life and especially a poor person's life is the greatest cause of real poverty no and and when you have a country devoting half its budget to paying off a debt when you have the poorest countries in the world sending out millions of dollars into the rich World um surely um as a priority that

41:26 debt has to uh that debt has to be either reliev substantially or go altogether doesn't that me that just seems common sense to me if I if I got that wrong yeah you've got it wrong oh let me explain okay uh first of all you are indebted and I am indebted and I would not be better off if I was somebody to come and cancel my debt because I'd never be able to borrow again and debt is a normal way of borrowing in order to do things purchase Goods invest uh when you don't have the resource ources and they'll generate an income and you'll repay so the notion that all debts should be canel is a bad One Financial systems operate on the basis of debt that is uh paid the Human Rights Commission of the United Nations in a very comprehensive report said and

42:13 I quote the institutions of globalization have yet to seriously address the issue of human rights in a democratic fashion globalization has caused Global conditions of inequality and discre mination what's your response to that I I simply can't respond because I have no idea where what the what evidence they're referring to human globalization has caused discrimination I thought it was the opposite I'd have thought that no they for instance they singled out workers in third world economic processing zones Again part of a a prescription may not be IMF prescription but certainly part of the the a global

42:58 prescription uh in which um it said um these workers were prey for exploitation and because unemployment for instance they mentioned Indonesia had been forced down by the so-called economic crisis of the late 90s their human rights were lost you know Indonesia grew as a result of integrating into the global economy from the 60s on and uh incomes in Indonesia Rose it was a dictatorship some of their rights were uh were suppressed and it was a very bad dictatorship excuse me Mr Fisher as you say some of their rights were oppressed a third of the population of East teamour died or were killed under the saharo regime what are you asking me

43:45 that question for do you think we supported the Zar regime don't be ridiculous well did you speak out against it did did your did your institution the IMF uh speak out the World Bank didn't the first time after 30 odd years and there the first time they spoke out was 1998 what did the IMF say about it when the IMF went into Indonesia it insisted on a removal of a host of Corrupt Practices that began to weaken that regime it was not an intended consequence but it was intended that we went in and helped remove the Corrupt Practices in a variety of Monopoly areas [Music]

44:30 and because now the government as recommended by the IMF has already cutting off a lot of subsidies not only oil and electricity but also water and education and subsidies and agriculture so it means that the workers if they have son or daughters they have to pay more if they want to put them put their children to school before of course people eat uh three meals a day but now uh they have to also make efficiency so they eat instead of three they eat twice a day and uh or they reduce the the

45:21 quality of the food so that's why maybe the level of productivity is getting getting lower because people are getting poor and getting tired and if you are tired you cannot work properly you know capitalism is don't count as it when it cost too much to build it at home you just build [Music] two years ago thousands of protesters from all over the world converged on the

46:07 American city of Seattle where the World Trade Organization was meeting this was news because it happened in America and yet throughout the world in Africa Latin America Asia a deeper movement against globalization has been growing for years but this is not considered news on every continent millions of ordinary people have protested against the power of the IMF and the World Bank and the imposition of Western power people have marched and petitioned against privatization against selling off their water against turning their Farms into

46:52 suppliers for the dinner tables of the rich now the protests have spread to Western countries from Seattle to Melbourne London to genua the coverage of these events follows a pattern it seems It's only news when there's violence even when the Great majority of the protesters are peaceful in contrast the violence of the economic policies they are protesting about is seldom news in the weeks and days leading up to MayDay in London the police and the government orchestrated a propaganda campaign the aim clearly was to alienate the public from the demonstrators by

47:38 representing them collectively as violent and by suppressing the very issues that have public support the limits of Tolerance are passed when protesters in the name of some spurious cause seek to inflict fear Terror violence and criminal damage on on our people and property to Tony Blair the rich getting richer and the poor getting poorer is a spurious cause when Mayday came 6,000 police turned part of London's West End into a giant detention cab I think the the issue of violence which we're constantly asked about is M

48:24 our main way in I think the the key to these things is actually getting Mass amounts of people involved because the media will put one one point of view across time and time again you know the Mindless hooligan side but when you think about the the the the mass redundancies the poverty the starvation the the literal raping of a country through through um through through third world debt and what have you you know that is violence on a huge scale it's genocide the newest ruler of the world is the World Trade Organization based in Geneva The Economist magazine calls it an embryo world government and yet no one has voted for it the effect of its policies make it

49:12 illegal for governments to hinder the profits of big business this is known as free trade if there's one feature about the global economy it's the companies have globalized but we haven't regulated the global compan companies and and that's the change that we've got to put into this International System if we're ever going to get rules that are farers to workers fairer to the world's poor fairer um to all of those who are affected by this International production system people can't stand by they can't be Spectators when we're faced with forces like this they join this movement and the movement starts to gather momentum already we've had some extraordinary successes um we um managed

49:57 to stop the implementation of a crazy um idea called the multilateral agreement on investment which would have allowed corporations to sue governments for the removal of any law which they didn't like now that was being promoted that idea by the 29 most powerful countries on Earth it was being promoted by all the major multinational corporations and all the big institutions such as the World Trade Organization and a ragged band of denters around the world managed to stop it we beat them and if we can beat that we can beat anything what is with the people is the fact that the corporations and the superow are using more and more fabricated propaganda people can now see

50:43 through the spin people know they cannot believe anymore what is said and the people are starting to withdraw their support they're starting to say no a government that only protects the P Pepsi and the Coke and the McDonald is not our government in rich countries like Britain globalization is well Advanced the disastrous selling off of the railways and the creeping privatization of everything from Health Care to air traffic control the financial Pages celebrate a booming economy yet one in five British children grows up in poverty there are almost 10 million Britain living in

51:29 poverty the gap between the rich and the rest gets wider and this is said to be a spurious cause all over the world millions of ordinary people are asking why they have no say in decisions that bring hardship to their lives they don't accept the view of President Bush and prime minister Blair that there's no other way in Britain the fact that only 25% of the electorate voted for the Blair government is part of this great unease why people ask should we accept a system of winners and losers A system that puts a dollar sign on every public service and almost every human value why

52:16 not abolish the World Bank and the IMF and the World Trade Organization and replace them with genuine trade and development institutions that are democratic accountable and why not cancel a debt that condemns Nations like Indonesia to poverty and disease these are dangerous times the one superpower left in the world has made its Ambitions clear this is a document of the United States space command it says the globalization of the world economy will continue with a widening between halves and Have Nots it says only military dominance will protect America's commercial interests why should we accept this why

53:02 should our children have to face these divisions and dangers none of them is god-given all of them can be changed

53:55 e

59:55 e e

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