By Reihana Mohideen
The ADB has just held its annual board meeting in Manila
accompanied by much publicity and fanfare about ‘sustainable and socially
inclusive development’. A key framework document presented is entitled How Can Asia Respond to Global Economic
Crisis and Transformation. The paper was prepared by a team of ADB
technocrats and other leading gurus of neoliberal economic dogma such as
Jeffrey Sachs. There are some key underlying themes that ran through the
document, reflected in the major conference sessions:
(i)
How can Asia continue to buffer itself from the
economic crisis in the Eurozone and the US, the impact of which it has (admittedly)
weathered to-date, but whose future prospects are extremely unpredictable?
(ii)
The decline of the European and US economies
also provide ‘opportunities’ for Asia to take advantage of, i.e. to save global
capitalism and become the leading force in ‘a global economic architecture that
has been dramatically altered by the global financial crisis of 2008’.
(iii)
The need to ‘mitigate’ political ‘instability’, due
to rising inequality, i.e. to have the bulk of Asia’s population, the working
class and poor, ‘buy in’ to this Asian-capitalist renaissance, through socially
‘inclusive’ and environmentally sustainable development.
The essential proposition is that there is an opportunity
for Asia to lead a newly reconstructed system of global capitalism, with some
provisos: if Asia doesn’t also go
down with the US and Europe in what the document describes as a “‘perfect storm
collapse”, if the environmental
crisis doesn’t upset the grand plan and if
the struggle of the masses suffering under the exploitation of neoliberalism’s
‘deepened and accelerated’ structural reforms (that the document calls for) is
held in check. And how do they get the ‘buy in’ of the masses for this new
capitalist world led by Asia? Through some vague notion of ‘social inclusion’ that
has now become the latest fad in the neoliberal capitalist development agenda.
The paper presents three possible scenarios for 2012:
(i)
a
recession confined to the eurozone, with the economy contracting
3.9% for 2012, with US economic growth slowing to 1.6% in 2012,
(ii)
a deep recession in the eurozone that drags the
US economy into
technical recession, contracting 0.1% in 2012,
(iii)
a renewed global crisis where output in both the
eurozone and US fall
to
2009 troughs.
According to the document in any of the three scenarios Asia’s
economic growth will fall, ranging from a drop of 0.2 to 3.7 percentage points.
The contributors admit that the impact could be far worse, as the past four
episodes of US and Eurozone recessions show an increasing impact on Asia,
including on China’s growth where GDP declined to 8.9% in the fourth quarter of
2011. And they also admit that they haven’t looked at the possibility of the
‘worst case’ scenario, to which their model simulations don’t apply – the
collapse of global financial institutions much worse than the case of the
Lehman Brothers collapse, a tumble of the Euro, a rise in Japan’s yen borrowing
rates, a big drop in China’s GDP and a ‘dramatic credit squeeze’.
So how should Asia respond and prepare itself? The prescriptions
include ‘crisis prevention mechanisms’, to complement the IMF’s ‘liquidity
support facilities’. These are the IMF bail-out schemes that are wreaking havoc
in Europe and which are being used as monstrous weapons of neoliberalism to
cudgel the working classes in Greece, Spain, Portugal and the UK (to name but a
few examples) and to strip them and the welfare state bare of the last remnants
of protective cover. Is this an example of the ‘inclusive growth’ that these Asian
leaders of global capitalism envisage for us? A mechanism for ‘accelerated and
deepened structural adjustment’ is not a recipe for inclusive growth, on the
contrary it’s a menacing plan for the ‘accelerated and deepened’ exploitation
of the Asian masses.
One of the prescriptions for going beyond economic risk
mitigation and in pursuit of the renaissance of a global capitalism led by Asia
is what the document describes as ‘rebalancing and changing trade patterns’.
The big push is to massively increase Asian investments in Africa. Africa, we
are told (in box highlights), is the new frontier, ‘a main source of global
growth in the future’, with a ‘huge potential in minerals, agriculture, and
hydrocarbon development’ and potential for investment in infrastructure, with a
population of around 1 billion people. According to Jeffrey Sachs Africa could
absorb around $100 billion annually in
infrastructure investments and Asian investments to date (around $29 billion in
2010, according to ADB figures) should be ratcheted up in the coming years to around
$50 billion. What is essentially being proposed here, it seems, is a renewed
colonisation of poor Africa, this time, by Asian capitalism. To become a global capitalist power, after
all, cannot be achieved without the economic exploitation of the ‘peripheries’ based
on that age-old formula of exploitation of natural resources and cheap
labor – in this instance that of Africa’s.
And what are the prescriptions for socially ‘inclusive
growth’? Apart from vague formulations for developing ‘human capital’,
‘financial inclusiveness’ , and the need to ‘comprehensively reassess the
entire development paradigm’, there’s nothing especially prescriptive in the
recommendations on how to lift hundreds of millions of poor Asians out of
poverty. Even more scant are the proposals on achieving environmentally sustainable
development, although ‘natural’ disasters are identified as a significant risk
in the risk and vulnerabilities analysis of the Asian region.
Ultimately these Asian leaders of global capitalism and
their ‘experts’ continue to peddle more of the same medicine of neoliberalism,
‘accelerated and deepened’ in the years to come. The paucity of ideas is
astonishing. This great Asian-led
capitalist renaissance will be built on the blood, sweat and tears of the Asian
masses as it has been to-date, who continue to be some of the poorest and most
brutally exploited and oppressed women and men in the world today.
Marx predicted over 150 years ago that the bourgeoisie was
no longer revolutionary. This is the
greatest challenge faced by those attempting to renew capitalism today, Asian
style, with a socially inclusive and environmentally sustainable ‘face’. There
is no revolutionary or even reforming bourgeoisie whose interests coincide with
‘socially inclusive and sustainable development’ or which can ‘comprehensively reassess’
let alone implement, an alternative ‘development paradigm’. The bourgeoisie in
Asia is thoroughly subservient to the existing global capitalist order. In many
Asian countries its interests are completely tied to the most backward and even
semi-feudal vestiges of under-developed capitalism with its most exploitative
and oppressive features, such as the tenancy-system linked to land ownership,
and usury. It’s intent on clawing its way to the top, to some rarefied space
where the imperialist rulers reside, at the expense of destroying its own
society. To paraphrase Arundathi Roy, like a tiger that has begun to eat its
own limbs.
In any case not all Asian countries are in the same boat.
There’s no Asian ‘level playing field’. The prospect of an Asian-led global
capitalism clearly entices sections in China and India, and possibly the
stronger economies in ASEAN, who might be able to better protect themselves
from the economic storms coming in from the West. But the bourgeoisie in
countries such as the Philippines are completely tied to the interests of the
US and are terrified by this new ‘global economic architecture’. Their response
has been to cling even more frantically to the coat tails of their ‘big
brother’ the US, as seen by the tensions between the Philippines and China
around the disputed Spratly Islands. While China and India may have arrived at
that stage of exporting capital to the African continent, there is little or no
possibility of capitalists from the Philippines investing in African
infrastructure any time in the foreseeable future.
A fleeting look at Asian society shows how far removed we
are from this ‘socially inclusive’ capitalist nirvana. Young Asians today are beggared by mass unemployment.
According to latest ILO figures one in five young people in the labour force
are unemployed in Indonesia and Sri Lanka and around one in six in the
Philippines. Young women tend to be particularly disadvantaged. The gender gap
in youth unemployment was 1.1 percentage points higher for females than males
in Pakistan, 1.8 percentage points in Indonesia, 2.8 percentage points in the
Philippines and an alarming 11.7 percentage points in Sri Lanka. And youth
unemployment could continue to rise in 2012. As for those working, an estimated
666 million workers in Asia and the Pacific (or two in five of the region’s
workers) are estimated to be living on less than US$2 per day. The highest
working poverty rates were in South Asia at more than 67 per cent. The
situation could continue to deteriorate in 2012.
The only agency that is capable of ‘comprehensively
reassessing’ the existing capitalist economic ‘architecture’ and re-imagining and
reconstructing a new ‘socially inclusive and sustainable’ alternative system
are the working and poor masses of Asia, who struggle to rise up to this
challenge as they continue to fight in their millions, every day, against the
neoliberal destruction of their lives and communities.
