This
paper is going to define and explain neo liberal ideology; it will outline the
main feature of the ideology. The essay will look at a brief history of the
ideology and then analyse the impact of the ideology on Least Developed
Countries (LDCs). According to the United Nations LDCs are countries which
exhibit the lowest indicators of socio-economic development, with lowest human
development index ratings of all the countries. (Wikipedia). In addition the
United Nation Office of the High Representative for the least Developed
Countries , land locked Developing Countries and small island developing states
(UN-OHRLLS ) explained that LDCs socio –economic development is characterized weak
human and institutional capacities, low and unequally distributed income and
scarcity of domestic financial resources. LDCs are constrained by political
instability internal and external conflicts. In addition LDCs rely on a handful
of primary commodities for as major export and fiscal earning. (www.unohrrlls.org/en/ldc/25)
In short these countries are the poorest of the world. Currently 49 countries are
under the LDCs, 34 are African, 14 Asian and the Pacific and 1 Latin American.
Africa LDCs including Zambia, Angola, Benin, and Burundi among others, in Asia
there is Bangladesh, Cambodia, and Myanmar and in Haiti is the only country
which is an LDC in Latin America and the Caribbean. (www.unohrrlls.org/en/ldc/25. The
characteristics of these countries is important in explain the impact of
neo-liberalism ideology to their socio-economic survival. For the purposes of
this paper LDCs will include less
developed countries the so called third
world nations like Zimbabwe, DRC , Botswana among others.
Neo-liberalism
is term which became prominent in the 1980s, scholars generally agree that it
was a phenomenon which saw a resuscitation of classical liberal thinking after
its demise due to state based developmental thinking. Scholars like Simon
Clarke dates neo-liberalism foundation to Adam Smith and his famous Wealth of
the Nation in 1776. He argues that Smith laid the foundations of neo-liberalism
with his argument that free exchange was a transaction from which both parties
necessarily benefited, since nobody would voluntarily engage in an exchange
from which they would emerge worse off. (Clarke 2005). Liberalism embraced the
notion that one man for himself and God for us all, the theory was premised on
the assumption that each man pursues his interests and thus free trade should
be the order of the day. The State was
to protect rights to property and leave the invisible hand (market forces) to
determine economies. Thorsen and Lie
contrary to the above assertion argues that neoliberalism could
therefore scarcely be understood as the recovery of a lost tradition of liberal,
political thought. It is an ideology different from, and often opposed to, what
is more commonly described as liberalism. (Thorsen and Lie 2006). He argues the
term liberalism is a generic term which is problematic in that it has passed in
different times to mean different things. He argued on the basis of the
difference between the views of classical liberals and modern liberals on the
involvement of the state. He thus argues that neoliberalism is a revision of
the classical liberalism not a mere revival of liberalism. For the purposes of
this essay Thorsen and Clarke differ in terms of semantics however
neoliberalism is a new and revised classical liberalism.
The
point of difference between Classical liberalism and the Neoliberalism is the
involvement of the state. Classical liberalists like Adam Smith paradigmatic
shift from development thinking was premised on the failure of the state during
Merchandist era to achieve economic growth hence his views that the state’s
role should minimal and should be relegated to protection of property and
restoring public order as the night watchmen. Laissez faire policy was the main
feature of classical liberalism which stated that states were too parasitic too
is involved in the economies, the state should not interfere with the market only
market forces of demand and supply will lead to more freedom, prosperity and
real democracy. (Thorsen and Lie 2006)
Contrary
to Classical liberalist notion mentioned above neoliberalists argued that the
state had a role to play in the economy which is to provide enabling
environment for market thus by erecting infrastructure such as roads, providing education and primary
health care. . According to Friedman the duty of the state was defence, law and
order, the provision of public works that private enterprise does not find
profitable to provide and lastly the protection from members of community who
were regarded as not responsible. Peter Bauer argued that the state was to
provide basic health and education and manage fiscal system thus taxation and
spending system. http://www.hwd.wales.gov.uk
. Harvey
cited that the role the state was limited to being a preserve the institutional
framework of free market, guarantee the quality and integrity of money through
its defence, police and legal structures and where there was no market it was
the role of the state to provide infrastructure. (Harvey 2005). Their
explanation argued that government interference will distort the balance of
supply and demand and that regular giving aid would upset the price of goods
and supply of labour. Clarke sees neoliberalism emerging from the failures of
Keynesian State Model which had unseated liberalism after the Second World War
, it had argued that market failures had caused the war hence state
intervention was necessary in market regulations. (Clarke 2006). The cold war
and the US war on Vietnam coupled by a recession led to a demise of Keynesian
model of development and this rekindled neoliberalism in the 1980s. Clarke
states what was seen as a mark of the abject failure of Keynesianism was
acclaimed as a positive virtue by neoliberals, who reasserted the traditional
liberal dogma of the purgative powers of the market amid the recession of the
early 1980s, a reassertion that appeared to be justified by the subsequently
resumed expansion of global capital on the basis of the further liberalisation
of the world market. (Clarke 2006).
Neoliberalism
is an ideology that was embraced by ‘special-interest power’ groups like the
International Monetary Fund, World Bank and World Trade Organisation. (Todaro
and Smith 2003). Martinez cites that around the world, neo-liberalism has been
imposed by powerful financial institutions like the International Monetary Fund
(IMF), the World Bank and the Inter-American Development Bank. (Martinez and Garcia 2000). The IMF and World Bank provide financial assistance
to countries seeking them, but they apply a neoliberal economic ideology or
agenda as a precondition to receiving the money. These financial institutions
prescribed Structural Adjustments Programmes (SAPS) on third world countries. J.
Sniegocki
highlighted that two of the main embodiments of neoliberal principles have been
“structural adjustment “policies and “free trade” agreements. (Sniegocki 2008).
SAPS puts strong emphasis on production for export (rather than production to
directly meet local needs), decreased governmental spending (which has often
led to decreased investment in areas such as health and
education),privatization of government enterprises (which has often led to
higher prices and reduced access for poor consumers), reduced regulations on
the activities of multinational corporations, the elimination of policies
protecting small farmers, currency devaluation, increased interest rates, and
related measures. (Sniegocki 2008:323.). It will be naive to assess the impact
of neoliberalism without looking at impact of SAPS on LDCs.
Neoliberal thinking
prescription of SAPS is and has been disastrous to LDCs socially and
economically. Rolling back of government on health and education impacted LDCs
negatively. McMurtry claimed
that in Africa an estimated 500,000 more children died from the imposed
restructuring of their countries’ economies to ensure increased flows of money
to external banks, while spending on health care declined by 50 per cent and on
education by 25 per cent since these structural adjustment programs began. (McMurtry 1998). Oxfam International
estimates that, in the Philippines alone, IMF-imposed cuts in preventative
medicine resulted in 29,000 deaths from malaria and 90,000 in the number of
untreated tuberculosis cases. (Brecher
1999). In Zimbabwe, the civil society made the following observations the removal of subsidies and cost recovery in education and health
sectors, resulted in swelling numbers of children out of school, people dying
of curable diseases in their homes and women giving birth at home or in scotch
carts on their way to health centers. Civil society also contended that several
health indicators deteriorated. Participation in prenatal services declined;
maternal death and mortality rates of babies. Wages of health personnel
declined since 1990 resulting in a mass exodus of qualified staff, low morale
and general discontent. Hospitals faced critical drugs and equipment shortages;
they faced congestion at casualty departments and mortuaries. The quality of
health care deteriorated at most hospitals. (Dhliwayo 2001).
The microeconomic
and macroeconomic impacts of Foreign Direct Investments (FDI) and the
Multinational Companies on LDCs need to be looked in light of neoliberalism
thinking. Neoliberalism can be said to be a ‘market led development’. (Söderberg 2002).
Neoliberals argue that opening the market would attract foreign direct
investments, which will lead to the following macro impacts such as technology
transfer through increased cooperation. Gaur (2012:6) pointed out the
developing economies which are capital starved can take advantage of the
available technological spill overs to improve upon their competitiveness.
Walton
and Seddon assert that neo liberal thinking maximize the role of the market and
minimize the interventionist role the state. (Walton and Seddon 1994). Liberal authors admit that opening up for FDIs may
lead to adjustment costs in the beginning. The domestic market has to adjust to
international demands and foreign competition. According to Prof E Epstein neo
liberals strongly believes:
TNCs and FDI... will contribute significantly to the development process
by (a) bringing in financial resources; (b) creating jobs; (c) transferring
technology; (d) increasing exports by raising efficiency and enhancing
marketing opportunities;(e) increasing the tax base; and, (f) increasing the
availability, and reduce the costs of public utilities, consumption goods and
investment goods, both in the short and in the long run. (www.twnside.org.)
Gaur points out that not all
TNC are into manufacturing of goods but some TNCs engage in non-production
functions like accounting, engineering, marketing, etc. these are high valued
activities that promote manufacturing competitiveness and local capabilities
for example TNC Limited which specialize in creating websites and marketing.
However it should be noted that the domestic market suffers from
competition from Transnational Companies (TNC). While neoliberal’s scholars
like Kono (1997) argues that competition with TNC will lead to efficiency and
growth. Growth through FDIs mainly benefits the people who are directly or
indirectly employed in the TNC, and their families. Soderberg (2002) argues
that in Zambia, FDIs mainly benefits the people who are directly or indirectly
employed in the TNC, and their families. According to the World Investment report (1999),
TNCs might "crowd out" more dynamically productive local businesses that
cannot compete with TNCs for labour, finance and/or markets. Therefore opening
up to TNCs without some support or protection for domestic firms may be
unwarranted. (www.twnside.org). In
Zimbabwe opening of markets led to the closure of companies like David
Whitehead due to the cheap importation of textiles and clothes. S Carter
observed the influxes of imported goods of perceived superior quality are
eroding local manufacturer’s market shares. Imported products have often got
demonstrable superiority over local products due to the lack of investment of
local manufacturers. www.sba.muohio.edu.
Below is a table of other small companies that closed in 1996 due to excessive
competition from cheap importations.
|
Name of Enterprise
|
Date of closure
|
Workers who lost jobs
|
|
G and D Shoes
|
January 1996 2000
|
2000
|
|
Bulawayo Clothing
|
March 1996
|
1200
|
|
WS Craster Clothing
|
June 1996
|
950
|
|
Fashion Industrial
Holding
|
July 1996
|
2000
|
Source: UNDP/UNCTAD Country
(Zimbabwe) Assessment Report 1996
However while the TNCs have out competes the host
industries, the consumers enjoyed reduced prices of goods. In addition the
goods are of better quality in some cases. It is in this context that
liberalism has in some cases beneficial to the consumers.
African countries cannot compete with Developed countries because of the weak infrastructure of developing countries. Most
Third World countries cannot compete in terms of
exporting in that they are landlocked countries it is expensive for them to export. Trade
liberalization efforts cannot yield results in an environment marked by the
weak infrastructure that exists in a number of African countries. High
transport costs, the inefficiency of logistical services to international trade
and weaknesses in support services shape the export performances of the African
economies (Limao and Venables, 2001). Transport costs for landlocked countries
are 200 per cent higher compared with those at the nearest port. Also, handling
costs at African ports are markedly
higher than those in developed countries. Thus, weak transport infrastructure
and poor support and logistical services negatively affect the export
performance of African countries, heavily reducing the impact of the reforms
undertaken.( Hammouda and Jallab 2007)
The Neoliberal
thinking of “free trade” brings unfair competition to local companies. TNCs
such as Grafax ,Olam and Cargill have led to the demise of local cotton
companies such as Cottoco. These foreign cotton mechanists acquire loans at low
interests rates from their countries while Cottoco receives these loans at a
high interest rate. While Cottoco a parastal is forced by the government to
give inputs to farmers, these companies are exempted to do so. To repay the
loan Cottoco has to buy cotton at a low price unlike the merchant companies.
The farmers are forced to side market their produce to the merchant companies.
The parastatal is struggling to achieve around 58 000 metric tonnes in Zimbabwe
as a whole which Gokwe South as a district managed to achieve last year. (From an interview which the writer of this
essay held with a management employee from Cottoco 24/8/13)
TNCs and MNCs
have a tendency of employing the management from their parent countries thus
perpetrating inequality. Workers from the host nation are paid according to the
local standards while the management are paid according to International
standards. In addition MNC employ indigenous people on contract basis hence
giving them no prospects of pensions. MNCs only develop the area they are
working on such as constructing roads for their benefits for example Natural
Export Company in Mutoko, Zimbabwe. According to the Financial Gazette of 23
April 2010, Mutoko council filed a case against the company for non payment of
development levies of US $68 540 , the paper further states that the company
export companies were willing to pay US$400 per unit against US $1000 per unit
that had been resolved by the Mutoko council. (The Financial Gazette of 23
April 2010). These MNCs in most cases are there to enrich themselves on the
expense of the locals.
Thirlwall (2012) observed that trade liberalisation a component of neloliberalism did
not raise the growth of exports, but raised the growth of imports more, thereby
worsening the balance of trade as a percent of GDP and the trade-off between
growth and the balance of payments. These insights have been
codified in the principle of comparative advantage which, in turn, leads to the
neo- liberal prescription that countries should specialize in the production
and export of those commodities in whose production they enjoy a comparative
advantage. Oyejide noted that a
major plank of this view rests on the idea that the structure of trade of the
developing countries and the underlying dynamics of the world economy imply
that the gains from active participation in international trade are biased
against the developing countries because their patterns of specialization fail
to bring about significant dynamic and growth-inducing effects and they tend to
specialize in those goods and sectors in which linkages with the rest of the
economy are tenuous and weak. (Oyejide
2003). Smith seems to concur with assertion he observed that developed countries grow rich by selling
capital-intensive (thus cheap) products for a high price and buying
labor-intensive (thus expensive) products for a low price. This imbalance of
trade expands the gap between rich and poor. The wealthy sell products to be
consumed, not tools to produce. This maintains the monopolization of the tools
of production, and assures a continued market for the product. [Such control of
tools of production is a strategy of a mercantilist process. (Smith 1994). It
should be noted that most LDCs do not have the capacity to surpass the rate of
imports with their export capacities. Below is a table and graph which shows
the exports and imports of African countries in 2010.
Third World is struggling to export except Nigeria which is
exporting crude oil. However Nigeria unemployment rate in 2010 was 4.3% against
a population of 155 million. While the export industry through trade
liberalisation has managed to create employment, 70% people live below the
poverty dictum line. (CIA FACT SHEET 2010).
Neoliberalisation thinking encourages the exploitation of LDCs through
unequal exchange of goods. For
example a vast majority of developing countries depend on commodities as a main
source of revenue. Primary commodities account for about half of the export
revenues of developing countries and many developing countries continue to rely
heavily on one or two primary commodities for the bulk of their export
earnings. (Tan 2002). Laidlaw observed that more than 50 developing countries depend on three or fewer commodities
for over half of their export earnings. Twenty countries are dependent on
commodities for over 90 percent of their total foreign exchange earnings.
(Laidlaw 2001)Most LDCs are producers of primary goods such as mining products such as
oil, gold, copper , iron ore and petroleum and agricultural products such as cotton,
sugar , coffee, cotton, sugar, and lumber. Below is a table
which shows the share of developing countries in merchandise export. It can be deduced from the table that the
manufacturing and value additions capacity of developing countries is weak.
However the strength of most developing countries is exporting primary
commodities which usually fetch the least price on the world market.
Share of Developing
countries in world merchandise exports , 1973-1995 ( % based)
|
|
1973
|
1980
|
1985
|
1990
|
1995
|
|
Agricultural
products
|
27
|
28
|
29
|
25
|
26 1/2
|
|
Mining
Products
|
55
|
64
|
49 1/2
|
50
|
47 1/2
|
|
Fuels
|
68 1/2
|
72
|
54 1/2
|
60
|
57
|
|
Manufactures
|
7
|
10
|
13
|
15 1/2
|
20
|
|
Total
merchandise
|
19
|
28
|
23
|
21 1/2
|
22 1/2
|
However
developed countries tend to benefit more than LDCs, in that they import cheap
raw materials from developing countries, then export expensive value added
goods back to the LDCs. Robbins cited a
country that exports raw or unprocessed materials may gain currency for their
sale, but they lose it if they import processed goods. The reason is that
processed goods—goods that require additional labor—are more costly. Thus a
country that exports lumber but does not have the capacity to process it must
then re-import it in the form of finished lumber products, at a cost that is
greater than the price it received for the raw product. The country that
processes the materials gets the added revenue contributed by its laborers. (Robbins
1999, p 95)
Foreign Direct
Investment has led some foreign nations into increased debts. According Ibrahim
the flows of international capital to underdeveloped economies have not
stimulated the process of economic growth and development because such flows
are mainly in the form of official development finance, export credits,
international bank loans, and bond issues with short term maturity, which
serves the purpose of facilitating the import dependent behaviour of the
underdeveloped economies, rather than trigger a process of domestic production
that could evolve into industrialization process. (Ibrahim 2004).
According to King Neo liberalism is an ideological position based
on strong beliefs of the general good by following the principles of free
market and open competition, limited state intervention and welfare,
individualistic self-interest, rational utility-maximization, and comparative
advantage in free trade. (King 1987). Jajati K Pattnaik observed that
globalisation is an instrument used to spread neo-liberalism. According to
Pattnaik globalisation espouses the diffusion of knowledge and technology
stretching de-territorialised economic growth. (Pattnaik 2008). John Sniegocki
argues that neo-liberalism is synonymous with globalisation. However scholars like Hutton & A. Gidden sees the economic growth as destructive.
He asserted that ‘The main mantra of globalisation is “international
competitiveness”. In the context of the environment this translates into the
largest corporations competing for the natural resources that the people of the
Third World need for their survival … Globalisation and liberalised trade and
investment create growth through the destruction of the environment and local
sustainable lifestyles. They therefore create poverty instead of removing it.’ (
Hutton & A. Giddens eds (2001) )
Another component of neoliberal has been global free
trade agreements such as the General Agreement on
Tariffs and Trade (which led to the creation of the World Trade Organization
[WTO]), regional agreements such as the North American and Central American
free trade agreements (NAFTA and CAFTA), and a variety of bilateral agreements.
Common features of these treaties include measures to reduce or eliminate
tariffs and other “barriers” to trade, deregulation of investments and other
capital flows, and increased protection of intellectual property rights such as
corporate patents. The negative consequences of free trade to Third World
Nations have been harm of small farmers. According Sniegocki,
‘free
trade requires the elimination of tariffs that had previously protected them;
small farmers in the Third World are forced to compete with the often highly
subsidized products of First World agribusiness.’ (Sniegocki 2008, pp 325).
In Mexico for example it was estimated that two million farmers were displaced
since they implemented NFTA and this explains the migration of Mexicans to the
United States of America .(http://www.globalpolicy.org/globaliz/econ/2003/11unfairtrade.pdf).
In addition the loss of farm lands there is loss of cultural and spiritual
heritage which is rooted in the land. In Greece the European Union policies on agricultural
policies liberalisation and free trade led thousands of small and medium
farmers out of their traditional occupation. (Sullivian 2004) In Greece
unemployment level reached 12 per cent and the number of people below poverty
25 per cent in 2003. India while ninety-five farmers committed suicide in 1988
[in Punjab, India], there was a 10-fold increase by 1999 with 986 farmers
committing suicide. [In Karnataka, India] more than 500 farmers have killed
themselves since 1995. (Sullivian 2004) These suicides were protest against
foreign competition and loss of land to foreign capitalists and TNCs.
Neoliberal policies have impacted LDCs negatively; in terms of food
security hence it would be naive to prescribe them as wholly developmental.
United Nation Development Programme (UNDP) reported in 1996 that Africa a once food
surplus continent was reduced into food deficit. (UNDP-HDR 1996). In addition
E. Vivas observed that ‘countries of the South that until forty years ago
were self-sufficient and even had agricultural surpluses amounting to billions
of dollars today have become fully dependent on
the international market and import an average of $11,000 million in
food annually ... in the 1960s, for example, Africa exported $1,300 million in
food, today the continent imports 25% of its food’ www.internationalviewpoint.org.
According Malawi faced chronic food shortages because of the failures of the
IMF/World Bank policies in Malawi’s agricultural sector, supported by the
bilateral aid donors, (OWUSU &
NG'AMBI 2002).Haiti was forced to apply a series of structural
adjustment programmes and trade liberalization with the reduction of tariffs
protecting the production of crops, including rice. This opening allowed the
indiscriminate entry of subsidized US rice sold far below the
price at which local farmers could produce it. This resulted in loss of
work for the peasantry and do date Haiti imports rice. www.internationalviewpoint.org.
Many developing countries, especially LDCs, which are traditionally
food-exporters, have become net food-importers over the past 20 years. Recent
data for 2006 show that, on average, 20 per cent of the LDCs food consumption
is imported, and in some countries the share is much higher (in Lesotho 67%,
Gambia82%, Mauritania 32%, Malawi 31%, for example). (UNCTAD 2008).While in
developed countries they are combating obesity many third world countries are
fighting malnutrition.
Food crises as mentioned above have led most LDCs into receiving
Genetically Modified Foods as food handouts or aid and importation of
biotechnology. It is believed that biotechnology affects the environment through loss
of biodiversity, especially on natural food chains and the emergence of more
aggressive pathogen populations. Health risks include the possible occurrence
of undesirable toxic by-products in the crop, the transmission of antibiotic
resistances (used as marker genes) to micro-organisms of human digestion and
unknown allergic reactions by food consumers. (Virchow 1999).
Those who support free trade argues that openness to trade will signal
commitment to outward-looking, market-oriented policies and enhance trading
opportunities thereby attracting foreign investor’s intent on taking advantage
of the new trading opportunities. (Dupasquier and Osakwe 2005). To validate this claim they point to Taiwan, Singapole
and South Korea.
Neoliberal thinking buttress
American hegemony on the world. Embracing liberal thinking is embracing being
Americanised. Neoliberalism thinking has a created a new form of imprealism
which colonies economies rather than states. The former head of State of
America in 2001 George Bush to his Congress remarked:
America has a window of opportunity to extend and secure our
present peace by promoting a distinctly American
internationalism. We will work with our allies and friends to be a force
for good and a champion of freedom. We will work for free markets, free
trade and freedom from oppression. Nations making progress toward freedom
will find America is their friend. www.comms.dcu/ie/cm117/neoliberal.ppt
Friedman and Buer
asserts that the production,
distribution and trade of goods and services are best left to private (profit
making) rather than public (government owned and regulated) organisations. http://www.hwd.wales.gov.uk.
Neoliberals believe that privatization of state enterprises would bring
efficiency and attract FDI. Neoliberalism has benefited America and other
developed countries than developing countries. There has been large consumerism
for American products such as Pepsi, Nike, Fubu and McDonalds etc. American
programmes movies and music dominates the internet and Satellite Cable. It
should be noted according to 2013 Index of economic freedoms the United States
is ranked number 10 with 76% liberalization meaning that it uses its influence
to lure other countries into liberalization while it protects its market. www.heritage.org.
Neoliberal thoughts of free trade have negative
impact on environmental sustainability. Most MNCs emit hazardous chemicals into
Third World countries. In effect, such neo-liberal policies are likely to
expand industrialization (causing environmental pollution); globalize
consumerism (encouraging consumption of environmentally hazardous products);
multiply the emission of CO2 and CFCs (worsening the greenhouse effect and
ozone layer depletion);Overexploit natural resources (depleting non renewable
resources); increase the number of urban poor and rural landless (forcing them
to build more slums and clear more forests); and, thus, threaten the
realization of sustainable development objectives. (Hague 1999)These benefits
do not tally with chemicals dumped in the LDCs. An examination of a wide
range of regions from the Amazon Basin to northern Saskatchewan, to tropical
rain forests of the Amazon, to the remote state of Borneo in Malaysia, to
sub-Saharan Africa and Southeast Asia, reveals that the exploitation of natural
resources, including energy production, timber harvesting, mineral extraction,
oil exploration, hydro-electric and other mega-industrial projects by MNCs and
host governments, has caused significant damages. These damages include
dislocation and decimation of numerous indigenous communities and their entire
ways of life. (Adeola 2001 p 41). Below is a graph to show the
amounts of toxic worst that are emitted in the third world countries under the guise
of free trade and neoliberal globalization (the spreading the neoliberal
thinking globally.) by MNCs and developed countries. The table below shows that
while toxic waste is increasing; the outputs per capita is declining; meaning
that the damage surpasses the gains.
Transnational toxic waste schemes
and CO2 emission in selected developing countries, 1980-1996
|
Country
|
Proposed Toxic Waste 1989-94
|
Place of Origin
|
CO2
Emissions (million metric tons)
|
|
Metric tons
|
Per Capita
|
|
1980
|
1996
|
1980
|
1996
|
|
Argentina
|
10,000 tons/month (sewage sludge)
|
U.S.
|
107.5
|
129.9
|
3.8
|
3.7
|
|
Bangladesh
|
60,000 tons/month (municipal waste)
|
US
|
7.6
|
23.0
|
0.1
|
0.2
|
|
Colombia
|
million tons/month (incinerator ash)
|
UK/US
|
39.8
|
65.3
|
1.4
|
1.7
|
|
Nigeria
|
Unspecified volume
|
UK
|
68.1
|
83.3
|
1.0
|
0.7
|
|
Papua New Guinea
|
600,000 metric tons/mo. (toxic waste)
|
MNC
|
1.8
|
2.4
|
0.6
|
0.5
|
|
Venezuela
|
40,000 tons of sewage sludge/year
|
MNC
|
89.6
|
144.5
|
5.9
|
6.5
|
Source: “Environmental
Injustice and Human Rights Abuse:The States, MNCs, and Repression of Minority
Groups in the World System” 2001
Supporters of neoliberalism
argue that issues of environment sustainability should not be prioritised
because host nations need to combat poverty first before they try sustaining
the environment. J. Noberg cited that ‘A
country that is very poor is too preoccupied with lifting itself out of poverty
to bother about the environment at all. Countries usually begin protecting
their natural resources when they can afford to do so. When they grow richer,
they start to regulate effluent emissions, and when they have still more
resources they also begin regulating air quality’. (Noberg 2003 pp. 225-6). Scholars like A. Moran are even
blunt in their approach; he suggests that endangered species should exported
for the benefit of human development than preserving. He states:
Restraint to trade in endangered species has done a
great deal to prevent the use and hence harvesting and protection of wild
animals. The rhino and the elephant are dangerous creatures that destroy
village crops unless their ownership is vested and the villagers can harvest
them and otherwise gain, for example by protecting them for tourism. Similarly,
such issues are present in Australia where we foolishly prevent the export of
parrots and other wildlife which transforms them into vermin competing for
fodder and water rather
than the incubator for a new farming industry. http://www.ipa.org.au/Speechesandsubmssns/amglobenv.html
It should be noted that the above assertion is parochial, myopic
and destructive. There is need to ensure that the environment is preserved for
long term benefits rather than destroy it for short term benefits. Devastation
of the land has led to climate change and global warning.
Economic growth under the contemporary neo-liberal model does not appear
to be solving unemployment (although much is done in the name of job creation).
Trends indicate that the neo-liberal model (and the way it is being
implemented) is creating a global trend towards ‘jobless growth’.
Trans-national corporations control over 33% of the world’s productive assets,
but as they tend to focus on capital intensive industries, they employ only
about 5% of the global workforce. In South Africa unemployment rose 2.3 million
to 4.2 million from 1995-2002 (Southern African Regional Environmental
Education Programme 2006, p 5). It
should be noted that unemployment coupled with minimized state intervention
creates absolute poverty. Below is a table reflecting the growth of poverty due
to concepts neo- liberal thinking. Neoliberal principles are against aid and
handouts hence government is rolled back from supplying subsidized services
such food, health and education. This has detrimental effects on the poor
through malnutrition and squalid living conditions.
The positive effects of globalization on
productivity are also thanks to the transfer of advanced technologies and to
the opportunities that developing countries can obtain from the flow of FDI,
for example computers, cellphones and state of art equipment. However some of
the technology is counter reproductive in that they sometimes lend people
jobless. As machinery comes to LDCs new technologies replace manpower leading
to retrenchment and more poverty. For example the introduction of the prepaid
metres by ZEDTC will mean metre readers will be laid off.
Neoliberal
thinking and globilisation has some positive impact on LDCs such as
proliferation medicine through Doctors without Borders. However the neoliberal
thinking put emphasis on patents and intellectual rights. This means that
certain drugs will be protected by patents and intellectual property rights which makes it
difficult for the poor to access these drugs because huge sums of money is
required to access them.
In
conclusion neoliberalism thinking has negative consequences to LCDs to a
greater extent. This paper has demonstrated that neoliberalism concepts such as
market liberalism negatively affects domestic industries, environmental
sustainability, exploit host countries employees, causes poverty, hunger and
further more proliferation of GMOs which have adverse implications on health.
This paper also observed that American culture and hegemony is exported at the
expense of LDCs. The writer has also linked IMF and World Bank prescription of
SAPS to LDCs as part of following neoliberalism dictates and its effects to
LDCs. However neoliberalism thinking allows consumers to enjoy cheap and
quality goods, acquire certain services such as medicine through oragnisations
like Doctors without borders. Trade liberalism sees trickling of new
technologies however the paradox is that such technologies has positive and
negative effects as pointed out in the essay.
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