FW: [GRRN] Exporting Waste to the Third World

Okuzumi, Margaret (okuzumi@cepheid.com)
Thu, 20 May 1999 10:58:21 -0700

For more info and a copy of the memo that Larry Summers wrote, see "Larry
Summers' War Against the Earth", http://www.counterpunch.org/summers.html

It is a clear example of how free-market capitalist economic thinking has
created its own alienated world in which all consideration for human rights
or ecological sustainability is removed. It is frightening to think that
Larry Summers is going to our next U.S. Treasury Secretary unless people
launch a massive campaign to stop his appointment. I encourage all groups
and individuals to send a letter to the White House today. You can send
e-mail to president@whitehouse.gov


> -----Original Message-----
> From: RecycleWorlds [SMTP:anderson@msn.fullfeed.com]
> Sent: Tuesday, May 18, 1999 3:43 PM
> To: multiple recipients of
> Subject: [GRRN] Exporting Waste to the Third World
> FYI the following article from the May 18 listserve issue of CORP-FOCUS (I
> have no information as to the accuracy of the charge leveled by the
> article's authors, Mokhiber and Weissman, at Treasury Secretary designee
> Larry Summers) --
> "Just between you and me, shouldn't the World Bank be encouraging more
> migration of the dirty industries to the LDCs [least developed
> countries]?"
> So wrote Treasury Secretary-designee Lawrence Summers, then the chief
> economist at the World Bank, in a 1991 World Bank internal memorandum
> arguing for the transfer of waste and dirty industries from industrialized
> to developing countries.
> There's more: "I think the economic logic behind dumping a load of toxic
> waste in the lowest wage country is impeccable and we should face up to
> that. ... I've always thought that underpopulated countries in Africa are
> vastly underpolluted; their air quality is vastly inefficiently low
> compared to Los Angeles or Mexico City."
> After the memo was leaked, Summers apologized, saying it was intended to
> be ironic and that it was offered as a thought experiment. Later reports
> suggest that someone else actually wrote the memo, although Summers' name
> appeared on it.
> But here is the question that remains unanswered, and that should be atop
> the list of questions posed by the senators who have to confirm Summers'
> appointment to replace outgoing Treasury Secretary Robert Rubin: "Ironic
> or not, from your point of view, what was wrong with the logic of the
> memo?"
> The notion that poor countries should import pollution and waste is just
> an unsavory application of the economic theory of the U.S. Treasury
> Department, shared also by the International Monetary Fund (IMF) and, to a
> lesser extent, the World Bank.
> In this worldview, poor countries should exploit their "comparative
> advantage" of low wages, or access to natural resources, or lower
> environmental standards.
> While few countries have "developed" with this approach, it has proved
> very effective for companies like Nike, which has taken advantage of low
> wages throughout Asia, or even GM, which produces cars and trucks in
> Mexico with the same technology as in Michigan but with lower-wage
> workers. Makers of polluting technologies such as incinerators that are
> being phased out in industrialized countries have also benefited, because
> they are able to stay in business by selling to Third World countries.
> U.S. manufacturers that wanted to escape environmental regulations (like
> furniture makers who use toxic glues, solvents and paints) have
> capitalized by shifting from places like Los Angeles to Mexico. For a
> time, per Summers' suggestion, there was a thriving international trade in
> toxic waste, but that has largely been eradicated, thanks to environmental
> activists who helped get enacted a global treaty to ban hazardous waste
> exports from rich to poor countries (the United States has not signed).
> At the heart of the Treasury-IMF-Bank approach is the idea that developing
> countries should concentrate their effort on exports, rather than
> production for local needs. A related core idea is that countries should
> allow foreign capital to move into and out of the country without
> restraint.
> Those two policy prescriptions contributed in significant measure to the
> Asian economic crisis, which was precipitated by a sudden withdrawal of
> foreign capital from Asian markets, itself a result in part of
> over-investment in production for export.
> The solution of Summers, Rubin and Federal Reserve Chair Alan Greenspan
> (anointed the "Committee to Save the World" by Time Magazine) was for
> Asian countries to do more of the same (while making some internal
> financial reforms and shutting down or selling off bankrupt enterprises).
> Again, multinational corporations and foreign investors are doing well.
> U.S. firms like Fairchild Semiconductors, Hartford Life and GE Capital,
> for example, have made unprecedented purchases of Korean assets.
> The overall result of the Committee's global financial crisis management,
> according to most news accounts including the many beatifying Rubin
> following his retirement announcement, has been a steadying of the
> economic crisis. In fact, while stock prices are now rising in the Asian
> countries, so is unemployment and poverty.
> Unemployment in South Korea rose from a tiny 2.6 percent to more than 8
> percent and climbing. More is coming, according to IMF projections.
> Indonesia's economy shrunk by 15 percent in 1998. More than a half million
> Indonesian children have died from malnutrition since the crisis began.
> The country's poverty rate has soared to at least 40 percent.
> There is, too, massive environmental destruction stemming from the crisis
> -- a bleak fulfillment of sorts of the Summers memo's prescription. In
> Thailand, for example, devaluation and the export emphasis has led to more
> agricultural exports and the expansion of shrimp farming, which the Asian
> Development Bank says is causing "destruction of wetlands and increased
> salinity of rice lands." Illegal logging is leading to further erosion and
> deforestation.
> The trouble with Larry Summers and his memo is not that it was an
> aberration stemming from a lapse of good judgment. The trouble is that it
> wasn't.
> Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
> Reporter. Robert Weissman is editor of the Washington, D.C.-based
> Multinational Monitor. They are co-authors of Corporate Predators: The
> Hunt for MegaProfits and the Attack on Democracy (Common Courage Press,
> http://www.corporatepredators.org).
> (c) Russell Mokhiber and Robert Weissman
> Focus on the Corporation is a weekly column written by Russell Mokhiber
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