Editor’s Note SUPERFICIALLY viewed, the global economy appears there are higher returns to be had elsewhere. to be in great shape. Last year, global gross domestic When such a reversal takes place, the impact on product (GDP) growth was at its strongest since 2011, the economy of the host developing country can be at 3.8%. Despite some headwinds, most pundits expect devastating. The collapse of prices, the fall in the value it to register a respectable growth rate this year. Even of the national currency and the crippling of economic those who concede that US President Donald Trump’s activity because of the climate of uncertainty will trade war is bound to have a dampening effect on growth debilitate the country’s economy. And in a globalised as a result of the climate of uncertainty it engenders are world, where developing-country economies are already still hopeful that it will still be a good year, even if not integrated into the global system, the impact cannot be quite as good as the last. confined to a single country. The turmoil in financial However, such a sanguine view appears to ignore markets will send shockwaves throughout the global some of the underlying fragilities that render the global economy and may well plunge the world into a financial economy more vulnerable than may seem apparent. Many crisis. developing countries are deeply in debt and the situation Developing countries experienced a foretaste of is reminiscent of the 1980s, which have gone down in this sort of shock impact recently. Western investors and history as ‘the lost decade’. There are 119 countries speculators, taking advantage of the low interest rates around the world in dire financial straits, weighed down imposed by their banks, have been using such loans for by massive debt, says a report published by debt relief speculation on stocks and properties in the South. advocates Jubilee Germany and the Catholic aid However, when fears grew that the US Federal Reserve organisation Misereor. Their coffers are empty, the threat was about to raise interest rates, there was a rush for the of bankruptcy looms large. exits. Thus in May foreign investors pulled $12.3 billion Many of these countries are still highly dependent from emerging-market economies – the largest outflow on commodities to sustain their economies. since November 2016. And in just the one week after Unfortunately, since 2014, prices of commodities have the Federal Reserve announced an interest rate hike in been falling. To add to their woes, the value of their June, foreign investors pulled about $5.5 billion out of currencies is also falling, thus whittling any prospect of emerging markets. extricating themselves from their dire predicament. All this should serve as a red alert to developing Though the pundits are reluctant to admit it, the countries on the dangers of liberalising their financial truth is that the global economy is confronted with a sector and making their economies vulnerable to such debt crisis. Thanks to the opposition of the US and some external shocks. Instead, they should seriously consider other industrialised countries, moves to establish a the measures they should take to avoid being dragged multilateral legal framework for sovereign debt into the next financial maelstrom. restructuring to meet such contingencies have made little In our cover story for this issue, we draw attention headway. to the reemergence of global debt. Although it is true However, an even greater threat looms ahead. Some that many developed countries are also wallowing in debt, indebted countries like Jordan and Argentina have turned our primary concern is the plight of the developing to the International Monetary Fund (IMF) for financial countries as they have few options. In the circumstances, assistance and the economic programme which the Fund it is incumbent upon civil society groups to revive the has imposed as a condition for its loans involves campaign to compel the US and other recalcitrant deregulation of the borrower country’s economy, opening developed countries to end their opposition to up its markets to trade and capital, shrinking the state establishing a multilateral legal framework for sovereign and privatising its enterprises. The downsizing of the debt restructuring. state entails savage cuts in public spending and the As for the more serious danger of a financial crisis, resulting regime of austerity has sparked off protests, the only panacea is the establishment of a new financial strikes and revolt in these countries. architecture to replace the current non-system. On this Under the thrall of neoliberalism, the dominant issue, resistance is bound to be fierce as there are many ideology of the West, many other developing countries vested groups profiting from the current financial which were not under the tutelage of the IMF have disorder. However, memories of the 2008 financial crisis adopted a similar agenda of deregulation, liberalisation have not faded into oblivion. Hence a sustained mass and privatisation of their economies. campaign which enlists the many in the West who By opening up their markets indiscriminately and suffered and continue to suffer its consequences in permitting free entry and exit of capital, developing alliance with the people can be a formidable force on countries are courting economic instability. Capital this issue. In the meanwhile, developing countries should inflows may have a temporary buoyant effect on a institute some capital control measures to protect their country’s economy by pushing up the value of the economies. domestic currency and the prices of assets such as stocks and real estate. But any such gains are ephemeral as such – The Editors capital is speculative and will take flight en masse when Visit the Third World Network website at: www.twn.my THIRD WORLD RESURGENCE No 329/330 Third World RESURGENCE www.twn.my No 329/330 2018 ISSN 0128-357X A protest in Buenos Aires against Argentina’s loan agreement with the IMF. As countries across the South grapple with the problem of onerous debt burdens, the even larger threat of a global financial crisis looms. 12 ECOLOGY decade after – Anis 43 The day the US became an Chowdhury and Jomo empire – Charles Pierson 2 US investment spurs land Kwame Sundaram 45 The US Air Force’s strange theft, deforestation in Brazil, 16 The new debt crisis – Jürgen love for the new B-21 say experts – Alicia Prager Kaiser bomber – William J Astore and Flávia Milhorance 21 Credit agency says some 48 No, AMLO is not Mexico’s 6 The anti-Sterlite protests in African countries’ debt Trump – Richard Seymour India: How copper came a worrying – Paul Redfern cropper 22 The return of a housing HUMAN RIGHTS bubble – CP Chandrasekhar 51 Threats to journalists are now and Jayati Ghosh HEALTH & SAFETY omnipresent – Nava Thakuria 24 The IMF is back in Argen- 8 40 years after the Alma Ata tina – interview with Eric WOMEN Declaration, let’s remember Toussaint that health care is a global 26 Jordan: ‘Do you know who 52 Beyond suffrage: Indonesian right – Matthew Bramall governs us? The damned women’s activism – Devi Monetary Fund’ – Sara Asmarani ECONOMICS Ababneh 31 IMF to muddle through crisis VIEWPOINT 10 South Africa’s original ‘state again? – Yilmaz Akyüz 54 Looking at the World Cup capture’ – Sampie 34 Debt justice prevails: Bel- Terreblanche through Galeano’s eyes – gian vulture funds law Joel Sronce survives challenge – Bodo COVER Ellmers and Antonio TRIBUTE Gambini The Global Economy: From 57 A portrait of Felicia Langer debt crisis to financial crisis? WORLD AFFAIRS – Faiza Rady 12 Warnings of a new global 36 Myths of the Six-Day War – POETRY financial crisis – Martin Ilan Pappé Khor 40 No way home – Nara 60 Twenty years later – 14 Global economy vulnerable a Milanich Jibanananda Das THIRD WORLD RESURGENCE is pub- THIRD WORLD RESURGENCE is pub- Publisher and Chief Editor: S.M. lished by the Third World Network, an in- lished monthly by Third World Network, 131 Mohamed Idris; Managing Editor: Chee ternational network of groups and individu- Jalan Macalister, 10400 Penang, Malaysia. Yoke Ling; Editors: T Rajamoorthy, Lean als involved in efforts to bring about a Tel: 60-4-2266728 Fax: 60-4-2264505. Ka-Min, Evelyne Hong; Contributing Edi- greater articulation of the needs and rights Email: [email protected] tors: Roberto Bissio (Uruguay), Charles of peoples in the Third World; a fair distri- Printed by Jutaprint, No. 2, Solok Sungai Abugre (Ghana); Staff: Linda Ooi (Design), bution of world resources; and forms of de- Pinang 3, 11600 Penang, Malaysia. Lim Jee Yuan (Art Consultant), Lim Beng velopment which are ecologically sustain- Cover Design: Lim Jee Yuan able and fulfil human needs. Copyright © Third World Network Tuan (Marketing), Yap Bing Nyi (Editorial) E C O L O G Y US investment spurs land theft, deforestation in Brazil, say experts During the global financial crisis of 2007-08, international investment firms, when faced with turbulent financial markets, increasingly turned towards rural farmland speculation in developing nations, regarding it as a relatively safe asset. This investigation reveals one example, showing how international financial capital is used to adversely impact the people and forests of Brazil. Alicia Prager and Flávia Milhorance Alicia Prager EDJARSSON Cardoso places fold- ers full of documents – some more than 20 years old – on the pool table of a dimly lit bar in the rural Brazil- ian town of Riachão das Neves. With him stand seven other men who wish to prove their right to use farmland, a place they called home, stolen from them all those years ago. One by one, all of them were driven off the land where they once grew their food. After changing own- ership for decades, today that prop- erty belongs to a Brazilian subsidiary Gradually, small farmers were driven off the land they occupied via threats of vio- of Harvard University’s endowment lence and intimidation.