An alternative to capitalism ?

Yesterday, in this editorial page we had a socialist oriented economist Dr. Mervyn D. de Silva, former Advisor to the Ministry of Planning and Ex- SLFP MP in an article titled ‘ Globalising and Pauperising the Third World Masses” saying ‘......... after more than 50 years of so- called development Aid, loans and grants, conditionalities etc. surfeit of western originated strategies such as..... poverty alleviation,... what is the net result ? The net result is that the industrialised world with 20 per cent of the world’s population has a share of 73.8 percent(US $ 8 trillion) of the global domestic product or wealth, whereas the Third World with 80 percent of the world’s population has only 21.3 percent (US$ 5 trillion) of the total global domestic product.

Dr. De Silva argued that First World nations and their financial institutions had never intended and therefore never planned to assist Third World nations in the integral development of these countries simply because their own economic systems and financial network systems were calculated and fine tuned to keep these countries poor.

Today, on this page we publish the address of US President Bill Clinton to the Annual Meeting of the International Monetary Fund and the World Bank where he says: ‘A half century ago a visionary generation of leaders gathered at Bretton Woods to build a new economy to serve the citizens of every nation... (they) built a platform of prosperity that has lasted down to the present day.

Economic freedom and political liberty have spread across the globe. Since 1945, global trade has grown 15 fold. Since 1970 alone infant mortality in the poorest countries is down by 40 percent. Access to safe drinking water has tripled. Life expectancy has increased dramatically. Even now despite the difficulties of recent days, per capita incomes in Korea and Thailand are 60 percent higher than they were a decade ago. A truly global market economy had lifted the lives of billions of people’.

Who is right ? Third World economist Dr. de Silva or the President of the world’s richest and most powerful nation, Bill Clinton ? The irony of it is that both are right. The powerful western nations have a stranglehold on the world economy and there are billions of poor people in the Third World who cannot have a square meal a day. Yet, it is undeniable that in the past fifty years living conditions of poor nations have increased dramatically as witnessed in the drop in mortality rates, increased food production, dramatic rise in living standards of East Asian countries, although they re now facing a financial crisis.

Dr. de Silva sees a First World conspiracy against the Third world to make the poor, poorer. The UN, World Bank, IMF and the WTO(World Trade Organisation) are the instruments of these rich nations which they use to their advantage as against the poor nations, he contends. On the other hand President Clinton sees globalisation, free trade, the proposals of the IMF and the World Bank to reform the global financial system as an answer to raising poverty levels and the financial crisis of East Asian nations.

Whether a First World conspiracy exists or not,what other alternative is there today but to follow the prescriptions ordered by the affluent nations and international financial institutions? Dr. de Silva has called for ‘a ferocious commitment to socialist and economic justice, democratic and egalitarian or more pointedly socialist values’.and a ‘stern and uncompromising change of heart’. This is wishful thinking. The hope for the poor of the world lies in their ability to pull themselves out of their mire through the system that exists today. The law of the jungle prevails in more sophisticated forms in the jungle of capitalism and the maxim of Charles Darwin, ‘The struggle for existence and the survival of the fittest’, holds.

Despite the financial crises that beset the East Asian nations, there is no doubt that they will recover and in a few years their citizens will enjoy the prosperity that still defies South Asians. The fact that they are now a vital cog of the world economy is evident from the fact that their financial crises have caused a global crisis and they cannot be ignored.

The massive financial inputs now being made by the IMF including the decision to pump in 17$ (US) billion at this week’s annual meeting of the IMF/ World Bank is proof that they cannot be ignored today as negligible quantities such as the South Asian nations.

It will be worthwhile recalling that at a time when capitalism and foreign investments were dirty words of in the Non Aligned lexicon,these counries unabashedly took to it.