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Serve the Poor, Not Just the Rich

Globalization means taking everyone's needs, including debt relief, into consideration.

September 28, 1998|JIM DeHARPPORTE | Jim DeHarpporte is Southeast Asia regional director for the Catholic Relief Services

As world leaders gather to try to prevent a further economic meltdown and the possibility of a world recession, Americans worry about a further fall in our stock prices. We know about the crises in Indonesia, South Korea and Russia, and we fear what might happen in Japan unless it makes the reforms that the experts tell us are necessary. But for millions of Asians, the crash is already a reality.

The latest figures from the United Nations and the Indonesian government show that the number of people living below the poverty line in Indonesia has risen from 27 million to 80 million in a matter of months. More than 4 million children have dropped out of Indonesia's schools or failed to re-register this fall. These dire statistics reflect the dramatic reversal of economic fortunes in this nation of 200 million people.

This has led many in Asia to question more deeply the assumptions we so readily accept in the West. Increasingly, it is perceived that the international financial system favors the rich and is designed in such a way that the poor bear most of the burden and pay the price of irresponsible governments and lenders. It is a commonly held view that the international economic system and Western economic theories send the bill to the poor for their failures. Why shouldn't the international lenders bear some of the burdens of the bad debt they helped create? Why should the International Monetary Fund bail out the rich? And why should the poor be asked to make up for the mistakes made by others' bad judgment?

Globalization is increasingly seen by many in the developing world as nothing more than a new form of colonialism and imperialism by the West. You can argue that open markets and trade are good. Free trade may work in theory and in some circumstances, but the results are often detrimental to the poor. Even in the U.S., we have anti-monopoly laws and subsidies for our farmers. Should not the call for free markets recognize the need for consideration of local conditions and encourage the adjustments and fine tuning needed before an open market is imposed?

Earlier this month, the 10th Congress of the Assn. of Major Religious Superiors in Southeast Asia concluded: "Globalized capitalism, as pursued by most of the governments of Southeast Asia in collaboration with international conglomerates and other financial trade institutions, is a mode of development that favors the rich. It has been relativising our national economies and depriving our peoples of a meaningful say in what has been happening to them. We are no longer people but expendable commodities, cheap labor to be used or discarded as profit requires. . . . Globalized capitalism is thus destroying the authentic cultural values of our region and the religious values that bind families together." As millions fall into poverty, there is blame, rightly or wrongly, on the IMF and increasingly on the United States, as the sole remaining superpower and chief shareholder in the IMF. Unless we recognize the shortcomings of capitalism and the need for adjustments, the gap between rich and poor will continue to grow ever larger. Deepening levels of poverty will add to the polarization that is already taking place. Terrorists will find increasing sympathy for their outbursts against the West. Our island of prosperity will be turned into a fortress.

In a recent article in the Economist, Jeffrey Sachs of the Harvard Institute of International Development argues for a new paradigm. Rich and poor nations must sit down together and find a way forward--a way in which everyone benefits since everyone would have a stake in the system. He calls for an end to the debt crisis by simply canceling most of the debt owed by the poorest countries. He also calls for a restructuring of foreign aid to be targeted at international public goods neglected by the private market, such as the fight against malaria and other diseases common in the developing world.

His proposals are bold and perhaps idealistic, but we do need to find a solution rather than just assessing blame. We need to recognize the realities and limitations of the capitalist system and the enormous imbalance in the world due to the differences in financial, material and human resources and political systems, and strive for a system that serves the poor and not just the rich. We Americans are always calling for a "level playing field" in our dealings overseas; we need to recognize that a large part of the world doesn't even own the pair of shoes needed to play.

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