Uniting for progress

THE idea of a real Islamic Commonwealth or common Market has always appealed to Muslims all over the world. Although religion is a common bond among the 57 member states of the Organization of Islamic Conference (OIC), there are several roadblocks or missing links for effective and adequate economic cooperation between them.

But they have always longed for such a common market, particularly after the European Community, now European Union, became a thriving reality and the number of its member states eventually rose to 25 with the joining of the eastern European states.

But no substantial or sustained efforts have been made by the OIC member states to realize their common market dream. There are too many political differences between them or their rulers and active conflicts in some cases. Nor enough efforts have been made to forge greater unity among Muslim states. On a lesser scale and at the political level, the Arab League was able to make a small headway but then broke down.

And the OIC founded 36 years ago has made little progress politically or economically. And the Islamic Development Bank, the financial wing of the OIC, created to promote economic cooperation between Muslim states, has maintained a low-key profile and has been promoting trade between the member countries. Only recently it financed some development projects. The OIC’s extraordinary summit at Makkah has now come up with a ten-year action plan and proposed the establishment of an Islamic free trade area (IFTA) for member states. It has not specified within what period is the IFTA to be accomplished and made effective. That has to be achieved in several stages with specific target dates for each stage. That cannot be completed in 10 or 15 years as the history of the European common market, which has a common currency in euro as well, shows.

Projecting an idea, however desirable or alluring, is one thing and making it a reality another particularly when 57 countries from three continents are involved. A great deal of study has to be undertaken and real homework done before positive steps are taken on the ground to materialize it.

The summit stressed the importance of fighting poverty, unemployment and disease by creating a special fund through the Islamic Development Bank. No targets were set nor plan period specified. But the funds should be large enough to undertake the extensive task and rich states like Saudi Arabia, which will earn about 163 billion dollars from oil this year, should contribute to the fund generously. If they don’t and instead make token contributions, the campaign to fight poverty will have only partial success. Poverty in the Muslim states of Africa, Pakistan Indonesia, etc., has to be effectively tackled over a period of time. What about the very poor Muslims in non-Muslim states like India and in non-Muslim majority African states?

The summit has called for increasing the capital of the Islamic Development Bank, but has not specified a figure nor the period by which the increase is to be achieved. Normally the quotas of each member barring the LDCs among them should be fixed by the OIC. It should determine the share of the GDP of each country which is to be contributed to bolster the strength of the IDB. No such concrete step has been taken.

President Musharraf wanted a financial contribution from members of 0.01 per cent of the GDP of the member states or at least 0.005 per cent to create an OIC fund which is imperative for achieving the objectives of development within the Muslim world.

Such a fund is essential if the OIC is to be truly active and effective and these are the best of times for taking an action as world oil prices have hit their peak and the oil states have vast surplus funds. Saudi Arabia for example expects oil revenues of $163 billion this year which will be a 22-year record. Its current account surplus will be $101 billion this year, while its foreign exchange reserve is $141 billion.

Kuwait and the UAE have large oil revenues and can spare enough for the OIC fund suggested by President Musharraf, but there was no concrete response to his appeal for contributions to the new fund, although his suggestion was accepted in principle by many leaders. Several OIC leaders want the Makkah summit to be a landmark in the organization’s history and make a beginning for the socio-economic emancipation and scientific, technological advancement.

It can become a landmark in the history of the Muslim world if the profusion of pious words is followed by concrete and sustained measures including an increase in the volume of trade between the Muslim countries to 20 per cent from the current 13 per cent.

The foundation stone for a new headquarters for the 36-year-old bloc has been laid in Jeddah. But the OIC needs far more than a new building complex to make a leap forward in the fast changing world and make its presence felt all around. The reform of the OIC should start now. It is not enough to appoint a committee of eminent persons, as done during the last Kuala Lumpur summit for the regeneration of OIC. And a lot more homework needs to be done in great detail. A number of study groups have to be set up to examine all aspects of cooperation among Muslim countries and the reasons for its inadequacy in the past for long, and also the state of relationship between the Muslim countries and the non-Muslim world.

Why did the Arab league fail or achieve so little in uniting the Arabs? What could make the UAE, a federation of emirates, a success while other such federations have failed in the Muslim world? What it that holds up an adequate volume of trade between Muslim countries and restricts it to a low 13 per cent? Why are Muslim states educationally and scientifically backward, while Islamic societies made tremendous headway in that direction in the past. The OIC had enough of such reports from relevant committees set up earlier, which can be refreshed and made more relevant.

Then the executive committee will have to provide the requisite funds to make such reports a success. The kind of OIC suggested by President Musharraf is imperative and it should not be a token 0.005 per cent of the GDP but eventually at least one per cent of the affluent countries to build the new structure of the organization. He has suggested that the LDC countries be exempted from such a contribution.

The summit has done well to propose the setting up of an independent Islamic human rights institution to monitor the rights situation in the OIC countries. The rising terrorism in Muslim states is often caused by the absence of human rights as well as an excess of poverty there. Denial of human rights in Muslim countries is also exercised by authoritarian rulers with their excesses and atrocities committed by their administrative machinery, particularly its intelligence wing. If poverty is reduced and the authoritarian excesses come down, there may be less terrorism in many Muslim states.

When other countries including the US are forming trading blocs and promoting regional organizations, the Muslim countries cannot remain in isolation, distrustful of each other. Instead they have to come together for the common good of a fourth of the world’s population and greater glory of Islam. Some times progress and development are held up in Muslim states because of internal differences like the dispute over the Kalabagh dam in Pakistan and the development priorities in Sudan.

The Muslim rulers have to recognize the rights of the people of various regions in their countries and do justice to them. From human rights to individuals and regional rights of the people and the promotion of the democratic process as a whole are essential for the development and integration of the Muslim world. True democracies seldom come in conflict with neighbours, but authoritarian rulers do. Hence the future of the Islamic world is linked with the future of democracy and liberal government in these countries.

Misuse of taxpayers’ money

NEVER underestimate the self-pity of the ruling classes. Since Labour took office in 1997 the Confederation of British Industry has been engaged in one long whinge. It doesn’t matter that our taxes are among the lowest and our regulations among the weakest in the developed world.

It doesn’t matter that the rich are richer than they have ever been. The CBI is the monster with a thousand stomachs that will never be satisfied. In the submission it made to the chancellor’s pre-budget report, it demanded that the government spend less on everything except business. The state should cut its planned spending on health, social security and local authorities, and use some of the savings to protect and enhance its “support and advisory services for trade and businesses”.

The higher-education budget should be used to supply free research for corporations. The regional development agencies should “expand their activities to support more extensive business-to-business networking and collaboration”. Further road taxes should be abandoned, and the climate-change levy “should be frozen”, but the government should help businesses by building more roads and airports. This is what the CBI means by free enterprise.

I mention it to provide some context for the extraordinary revelations published by the Guardian last week. Felicity Lawrence used the Freedom of Information Act to discover who has been receiving the EU’s farm subsidies. The biggest beneficiaries, she found, were not farmers but food manufacturers. In 2003 and 2004, a sugar company was given 227 million pound of taxpayers’ money. A multinational was paid by the consumers to export milk: I wouldn’t be surprised if this includes its ever-popular sales of powdered milk to the Third World. An airline-catering company took half a million pounds from tax-payers for the little sachets of milk and sugar it puts on passengers’ food trays: because they leave British airspace, they qualify for export subsidies.

An airline received a farm subsidy for “rural restructuring”: turning part of the Dutch countryside into a runway. Some pharmaceutical, oil and tobacco companies have been given millions of pounds of farm subsidies, and at least one of them (Eton) doesn’t even know why.

The British government can’t be blamed for this. Tony Blair has been trying for years to cut the money handed out under the common agricultural policy (CAP), and for years has been thwarted, principally by France and Germany. At the European summit this week, France and Germany will doubtless ensure that nothing changes until at least 2013, undermining everything they claim to be striving for at the simultaneous trade talks in Hong Kong. But what bothers our government is not that the poor are giving to the rich, but that the CAP represents an unnecessary drain on state resources. How do I know? Because when Britain provides its own agricultural aid, the same thing happens.

Last week the research organisation SpinWatch published a report on the outcome of the government’s Curry commission, which was supposed to help farmers recover from the foot and mouth epidemic. When the commission released its findings in January 2002, it claimed that the measures would help to reconnect farmers with their market, reconnect food production “with a healthy and attractive countryside” and reconnect consumers “with what they eat and where it has come from”. The government put aside 500 million pound to make this happen, then used the money to make sure it didn’t.

It spent 2.3 million pound on setting up the Food Chain Centre, which would “help build more effective and efficient supply chains”. The centre is run by the Institute of Grocery Distribution, a research group working for the food manufacturers and superstores. All but one of the IGD’s board of trustees come from companies that could be accused of helping to break the connections between farmers and the market, the market and the countryside, and consumers and the food they eat. The Food Chain Centre helps companies to reduce their costs and enhance their profits, and we pay for it.

A further 1.4 million pound has gone to the Cereals Industry Forum, which is run by the food industry’s big lobby groups. The government has given 6.8 million pound to the Red Meat Industry Forum, which, among other public services, has been helping Tesco to find cheaper ways of producing pork sausages. So it goes on. But when the National Association of Farmers’ Markets, which did exactly what the Curry commission recommended, applied for 150,000 pound from the government, it was told to get lost. It collapsed soon afterwards. Doubtless the money had already been spent on helping Tesco find new ways of destroying its competitors.

There is nothing unusual about these handouts for private companies. In his book Perverse Subsidies, published in 2001, Professor Norman Myers estimates that when you add the direct payments US corporations receive to the wider costs they oblige society to carry, you come up with a figure of $2.6 trillion, or roughly five times as much as the profits they make. As well as the $362 billion the OECD countries were paying for farming when his book was published (or rather, as we have seen, for activities masquerading as farming) they were shelling out about $71 billion on fossil fuels and nuclear power and a staggering $1.1 trillion on road transport. Worldwide, governments pay companies $25 billion a year to destroy the Earth’s fisheries, and $14 billion to wreck our forests.

The energy policy bill the Bush administration drove through Congress this summer handed a further $2.9 billion to the coal industry, $4.3 billion to nuclear power and $1.5 billion to oil and gas firms. According to the Democratic congressman Henry Waxman, the oil subsidy “was mysteriously inserted in the final energy legislation after the legislation was closed to further amendment ... Obviously, it would be a serious abuse to secretly slip [in] such a costly and controversial provision.”

Most of the money, he discovered, would be administered by “a private consortium located in the district of majority leader Tom DeLay ... The leading contender for this contract appears to be the Research Partnership to Secure Energy for America consortium”, whose board members include Marathon Oil and Halliburton. “There is no conceivable rationale for this extraordinary largesse. The oil and gas industry is reporting record income and profits ... the net income of the top oil companies will total $230 billion in 2005.”

It would be tempting to hold Bush responsible for this, but the oil firms were scooping up taxpayers’ money long before they put their robot in the White House: Myers reports that between 1993 and mid-1996 “American oil and gas companies gave $10.3 million to political campaigns and received tax breaks worth $4 billion”.

This week the rich countries gathering for the World Trade Organisation meeting in Hong Kong will tell the poor ones to open their economies to the free market. But the free market does not exist. In every nation the corporations hold out their begging bowls and tax-payers line up to fill them. We are the ragged-trousered philanthropists of the 21st century, the comparatively poor obliged to sponsor the rich. —Dawn/Guardian Service

WTO: corporations vs common man

MOST people struggling with their daily lives are not even aware of the sixth WTO ministerial in Hong Kong. But their fate hinges on it. While the developing world is indeed suffering economic crisis because of reasons ranging from the familiar debt trap to short-sighted policies, the EU and the US have their own economic crises too. Accustomed to easy agricultural subsidies that total around a billion dollars a day, they now face stiff worldwide resistance to their dumping practices. The subsidies enable them to undercut or sell to poorer countries at prices even lower than the latter’s negligible cost of production, thus ruining the lives and economies of most South countries.

The fact is that if their agricultural subsidies were taken away from them, the EU and US may be able to feed themselves, but would not be able to produce for export. A study conducted by the independent Institute for Agriculture and Trade Policy in America found that the US has been dumping five agricultural commodities in the world market: corn, wheat, soybeans, rice and cotton. The developing countries lose over $40 billion in agricultural export income every year because of EU and US subsidies and protectionism.

The ministerial, the WTO’s highest decision-making body led by trade ministers, has now evolved into a global standoff between the industrialized countries and the South, and between multinational corporations and two-thirds of the world’s people impacted by WTO.

The long-winded jargon of the WTO agreement makes it incomprehensible even to the educated. With no effort on WTO’s and most governments’ part to disseminate or debate it with the public, it took half a decade or more for it to dawn on most South country governments that they had been taken for a ride. Pakistan was among those countries that finally took some sort of stand rather late in the day.

Much of the credit goes to activists and academics of independent civil society organizations both in the North and the South for reducing the wordy rigmarole to its essence — which is so outrageous in its demands that it becomes understandable why it had to be camouflaged in verbosity.

For, it is not only the ordinary people of the developing countries being hit. The WTO agreement started with under a thousand pages of small print; today it runs into some 30,000 pages. What has incensed anti-WTO protesters most is the newly-invented concept of the ‘right’ to enter any foreign country, even if not needed, unwanted and uninvited, to invest and market there, and export and profit from there, all the while cutting down jobs and raising prices.

It is not enough for WTO that foreign investment is already allowed almost anywhere in the world, albeit with some conditions to protect the local citizens and enterprises, and especially food security. But the idea that foreign investors be treated under the same rules that were hitherto reserved for local business and industry was unheard of in the history of commerce, until the corporations thought it up as the “Most Favoured Nation” principle.

Since such investment is mostly a one-way traffic with richer, mainly northern, companies investing in poorer countries, there is no way that local companies can compete even in the local market or source credit to the same degree to be able to do so.

Then there is the agreement on Trade-Related Intellectual Property Rights (Trips), the key feature of which any peasant will understand with incredulity, once explained. In the 15,000 years of recorded agriculture that has existed, the millions of species in nature have never been considered anyone’s personal or company property. Farmers have always crossed different varieties of plants experimentally to obtain the best for subsequent planting, a long and slow process that took decades or generations.

It was through this ongoing process, without artificial means, that farmers effected changes in plants with improved genetic combinations. Today, there is not a single crop in the world used by humans that has not benefited from thousands of years of intervention by thousands or millions of anonymous farmers. But now, by simply juggling a gene or two in the laboratory, seed corporations claim to have ‘created’ something new and unique, and claim exclusive property rights to its use through patenting as conveniently defined by Trips, available to others only at a price. Corporations have already encroached on basmati, neem and turmeric.

Of course, small farmers do not have to use patented seeds having always used their own saved seeds. However, government policies favouring big farmers drove so many hundreds of millions of peasants into penury and off their lands, they could no longer continually re-grow from saved seeds. Commercial seed is now increasingly monopolized by multinational seed corporations, invariably requiring expensive accompanying inputs.

Most small farmers also tend to grow cash crops exclusively, although they could easily ensure food security by having part of their land fulfil their household food needs — as all big Pakistani farmers do, who do not want to eat hybrid seed produce. As hybrids covered more and more acreage, the thousands of displaced varieties began to go extinct. Consequently, local farmers are left only with patented seeds and inputs which the poor can’t afford. So they join the mass of migration to the urban areas while their land is swallowed up by agro-business or big farmers.

Today each cultivated food comes from only one or a few seed varieties. Soon, if the corporations are allowed to have their way, there may be just one or two seed varieties for every grown food item in the world, under patent, for which everyone will have to pay an additional price every time they eat. Or starve.

An inhuman example of monopolist power was the denial of low-cost generic versions of patented medicines even though Trips does allow production and export by others under compulsory licensing. But the drug companies want it all for themselves at their price. For example, South Africa imports cheap generic versions of Aids drugs from India, produced at a fraction of the corporate price.

It is either that or letting millions of Aids patients die, but the US pharmaceutical industry couldn’t care less. One drug for extreme mental stress is produced in a neighbouring country at one-fortieth the price that it is sold at by a multinational in Pakistan.

Corporations want minimum market access for each individual agricultural product they wish to export. At the same time, they want developing countries to reduce and phase out their domestic and export subsidies — although the EU and America refuse to reduce theirs. Many developing countries cannot even afford to give much or any; but given half a chance they may be able to in the future.

As if these problems were not enough, the General Agreement on Trade in Services (GATS) is on the agenda. Having exhausted all other areas of investment, WTO now seeks a final frontier in the services sector, mainly public services that have been traditionally the responsibility of governments to ensure essentials for survival or for a minimum standard of living accessible to all citizens.

Most public services require enormous infrastructure and investment for which no single investor or consortium would be forthcoming, especially since the consumer price has to be low and affordable, and the service provided on a non-profit basis or subsidized if need be. But because the world spends over a trillion dollars annually on water, twice that much on education, and $3.5 trillion on health care, it spells lucrative opportunities for corporations.

There are other areas as well covering the entire economy, such as telecommunications, utilities, tourism, public transportation, railway services, and other commercial services, much of which Pakistan offered up even before it was asked. To mop up what’s left, there is the demand for “Non-Agricultural Market Access” or NAMA, which applies to processed or manufactured goods.

Already the EU and the US together account for over half the world’s exports and imports of manufactures. What they get from developing countries is mostly semi-processed raw materials or assembly of finished goods, the key components of which are imported. The companies performing these tasks are either sub-contractors or subsidiaries of multinationals.

There is no such understanding as ‘transfer of technology” anymore. So, South industries that are still a long way from comprehensive production would not be able to develop further. Not everything non-agricultural is entirely non-agricultural either.

Higher (cost) education

THERE are few surer ways to increase the gap between rich and poor than by making higher education more expensive. Yet American Congress is poised to do just that. Current budget plans would deal federal student loan programmes their most painful setback since their inception, limiting the opportunities for those at the lower end of the economic spectrum to build a better life.

The House last month voted to slash funding for federal student loan programmes by $14.3 billion, reversing decades of expansion that have helped open the country’s most expensive universities to poor and middle-class students. The House’s cuts would add about $5,800 to the average $17,500 student loan debt, according to the Congressional Budget Office.

The cuts couldn’t come at a worse time. According to the nonprofit College Board, average tuition and fees at public universities have surged 40 per cent over the last five years. The median family income has crept up just 16 per cent over that period. And early this year, the US Department of Education tweaked its eligibility formula for Pell Grants, an assistance programme for low-income students. That eliminated aid to more than 80,000 students and reduced awards to about 1.5 million others.

To compensate, many students have increasingly turned to generous federal student loans to pay for their education. About two-thirds of college students graduate with some debt.

Part of a larger package to rein in federal spending by $55 billion, the House’s plan would tack higher fees and interest rates onto student loans. It would also restrict students’ ability to refinance their loans to take advantage of lower interest rates. The Senate’s plan is also painful but more sensible than the House’s.

— Los Angeles Times