 Indonesian urban poor scramble for food coupons |
by HAZEL CROFT
"HAPPIER DAYS Are Here Again" ran a recent headline in the bosses' newspaper, the Financial Times. The financial and economic crisis "seems to be over", the International Monetary Fund claimed last month. "Economic optimism is surging," a poll of financial institutions by Merril Lynch reported.
Commentators point to booming stock markets, especially in the United States, as an indicator that the worst of the financial and economic crisis which swept the globe last year is over. While bosses and top economists slap each other on the back half the world's population has been plunged into desperate poverty. In the poorest parts of the world, such as sub-Saharan Africa, increases in life expectancy have been "wiped out" in countries which are crippled by debt repayments to Western banks. Those in countries in the Far East, where people were told by bosses and bankers that their lives would be relatively secure, have seen all their hopes for the future smashed.
Three years ago Tony Blair held up the Far East Asian "tiger" countries as "model economies". Now absolute poverty in the Far Eastern countries has doubled. In Indonesia alone up to 130 million people now live below the poverty line, existing on less than $1 a day. Millions have been thrown out of work. People with no welfare to fall back on have had to sell their meagre possessions just to scrape together enough food to survive.
"The chain reaction of financial crisis that burned through East Asia and Russia and shook Brazil has pushed millions back into poverty," says Joseph Stiglitz, deputy director and chief economist at the World Bank. He says the poor face "a lost decade" as the impact of the crisis reverberates across the globe.
The World Bank puts it like this: "The financial crisis which began in Asia in 1997 has now tempered...expectations and could reverse the gains of many people who had previously migrated from poverty to the ranks of the middle class. Hunger and malnutrition are becoming more prevalent-infectious diseases are surging. It is likely to have many dimensions-falling incomes, rising absolute poverty and malnutrition, declining public services, threats to educational and health status."
People's suffering is set to get even worse, with levels of poverty in the Far East predicted to increase by another 40 percent. The lives of people in Russia and Eastern Europe have also been shattered by the impact of the global crisis. It is just ten years since the collapse of the Stalinist regimes. Nearly every Western politician and commentator told us the triumph of the market would bring prosperity to all. Instead there has been a human catastrophe of mammoth proportions.
A staggering 100 million children in Eastern Europe are in danger from war, poverty and disease, according to UNICEF. A recent UNICEF report concluded, "This is the most complex and challenging social, economic and humanitarian crisis in European history since World War Two." In Russia alone 66 million people-four out of ten Russians-are somehow managing to survive living on less than $1 a day.
Even the World Bank admits, "In Eastern Europe and the countries of the former Soviet Union, millions of people have seen their living standards deteriorate sharply during their difficult move towards establishing modern market economies. In 1989, about 14 million people in the former Soviet Union were living under the poverty line. By the mid-1990s, that number was about 147 million, or about one person in three."
Even in the US and Western Europe, which escaped the worst of the crisis, workers and the poor have seen few benefits. There are 18 million unemployed in the European Union countries. In Britain there is news of devastating job losses every week. Even if the economic pundits are right and we are seeing a recovery, only a tiny few at the top are seeing the "happier times".
The system which has produced the horror of war in the Balkans is the same system which has reduced so many people to desperate poverty. Capitalism has created great swathes of human misery and wasted lives across the world.
 A SCENE from biblical times? No. Brazilian miners at work today |
BOSSES, BANKERS and financial institutions have held Latin America up as a success story for capitalism in recent years. But a new United Nations report admits that any improvements in poverty levels are now likely to go into reverse because of recession in Brazil.
Some 200 million people in Latin America currently live below the poverty line-exactly the same number as in 1990. In Venezuela poverty levels have risen by 8 percent and in Mexico by 4 percent. The UN says a single year of recession would be enough to wipe out nearly all the gains of the last four or five years.
IS THE crisis really over? Economic commentators base their hopes on the rise in the world's stock markets and economic boom in the United States. But this is a superficial analysis which looks at the rise and fall of the stock markets rather than the crisis in the real economy.
Behind the headlines about "happier times" many commentators are rather more cautious. "Hold the champagne", the Economist magazine urged bosses in April, after gloating about economic recovery. "It is less certain that this recovery will prove sustainable." As one commentator put it in Newsweek magazine last week, "The present reality is that most economies are getting worse, not better. Growth is slowing in Europe and China. Japan's recession is deepening. So is Latin America's."
No one can predict exactly what will happen next. But we do know that crisis and instability are built into the capitalist system. The mad pursuit of profit leads employers to rush to invest in areas where they think they can make a quick fortune. But the lack of planning in the system means that markets become saturated, the bosses' profits are hit and the system tips into crisis. That creates the obscene spectacle of a "crisis of overproduction" in a world where millions of people can not even meet their daily needs to survive.
As the Financial Times puts it, "There will be more manias, more panics and more crashes." And the people who will suffer-in the US, Europe and the poorer countries-are not the bosses and financiers, but the poor and the working class.