“Every man has a right to a decent life before any individual has a surplus above his needs.” Julius Nyerere.
The material gap between the rich countries of the world and the poor countries of the world has never been wider, and the trend is for it to get worse, not better. Less than a quarter of the world’s people earns three quarters of the world’s income. Half the people in the world earn less than NZ$50.00 a year.
At the present growth rates, many countries will never catch up to the rich because their rates are slower. Even the poor countries with faster rates could take centuries - it would take Pakistan over 17 centuries to catch up to the United States.
What caused the gap? Is it that some nations have more energy, drive, and will to achieve? Research answers no, people in the poor world are just as quick to seize opportunities and just as ambitious. We are not the deserving rich - they are not the undeserving poor.
One reason why the rich countries became so rich is that they had the chance to organise the world around them to suit their needs. The same chances, such as surplus land and large potential markets, do not exist today for the poor countries to follow the same path of development.
Imperialism and colonialism prevented the emergence in many countries of the conditions necessary for economic development. Not only did these forces help create an initial inequality, they then worked to widen the gap. British industry in the 19th century was protected from Indian competition by 75 per cent duty on imports. Even today, rich countries still tend to protect themselves from competition from the poor.
Other contributing factors to the wealth gap have been
Yet another factor is the control over the use of technology which is tightly held by the rich countries.
Aid and investment policies of the rich countries have often benefited the givers more than the receivers. The benefit for the receivers has been further offset by a brain drain from the poor countries to the rich. The present trade policies of the rich countries are also nearly the mirror image of what they would be if the gap were to be narrowed.
Up to now, much aid from the rich has been for political or strategic reasons - to provide a bulwark against the further spread of communism or to enable docile poor countries to maintain large armed forces. Short-term benefit for the giver conflicted with the needs of long-term development for the receiver.
Distribution of aid has been most uneven. The poor countries which got the most were already half way up the ladder and, within countries, progress has been weighted in favour of the rich. So the one per cent aid target is by no means a cure-all and can indeed do more harm than good. This is no excuse however for doing nothing at all or for reducing aid.
Yet aid from the rich countries is being reduced. Over the past decade it has steadily declined and gifts of food have declined from eight million tons to seven million tons in the same period. Meanwhile the amount of grain eaten by animals in the rich world is greater than the total amount eaten by the people of India and China put together.
Internal policies of our government are based on eliminating poverty and inequality. External policies should be based on the same sets of values. It is, essenstially a “question of will".
The late Secretary-General of the United Nations, U Thant, said that development will never be realised “unless it is rooted in the hearts and minds of millions of citizens everywhere . . . unless it can win their sustained support’.
It is possible that if we continue to ignore these problems in the hope that they will go away (which they won't) events will take a more violent turn. “If it is difficult to awaken the masses, it is also difficult to calm them down when once awakened. They cannot all be killed or imprisoned forever.”
Surely it would be better to help evolve a just world order and a stable world economy. The process of widening the gap has now acquired its own momentum. Forces built into present economic mechanisms will divide the world in the future at an accelerating rate. this trend can only be halted by deliberate, positive policies.
New Zealand should support an international tax on the national incomes of rich countries, graded according to their ability to pay, to create conditions in poor countries which promote self-sustained development and which compensate for the uneven incidence of world resources and development opportunities.
The world is the marketplace for giant companies with the money, technology and know-how to reach into every corner of the globe. Their vast resources put them beyond the control of any one nation. Yet they dominate the economies of many developing countries and their business decisions affect millions.
The top ten of these “multi-nationals” have higher incomes than more than 80 individual countries. It is likely that in 25 years, 300 monopolies will control 60 per cent of the world market. The trend is for more and more goods and services to be controlled by fewer companies.
These giants operate accordifig to what is most profitable for them, not on the basis of an individual country’s need. So profits are repatriated, not ploughed back to finance housing, clinics or schools in the host countries. Yet the host countries offer cheap non-unionised labour, tax holidays and even ready-built factories in return for the benefits they believe foreign investment will bring.
Countries which try to" control these huge enterprises must contend with the companies’ political influence as well (for example, the downfall of the Allende Government in Chile because it challenged United States business interests).
Multi-national corporations have an unprecedented ability to transfer technology, capital and management skills rapidly across international frontiers on reprehensible terms and conditions.
Many features of their operation resemble the inter- national traffic in drugs. A giant corporation “exploits the weakness or the ignorance of the buyer; it attempts to get the customer ‘hooked’ on the product (by letting him establish markets and acquire experience); it uses monopoly control of supply; it uses debt as a means of exerting control; it often depends on the corruption of government officials; and the profits it makes resemble those of illegal traffic rather than those of legitimate trade.”
The Values Party disapproves of international traffic in technology by means of package deals, which force poor countries to buy more than they want, pay more than they expect, and get less than they anticipate. These deals often “lock-in” poor countries to buying other over-priced technologies from the same source, or to obtaining raw materials, machinery, repairs and spare parts from an expensive source. The vendors in such deals are often in a supremely strong bargaining position and can stipulate what products their customer may manufacture, in what quantities he may produce them, at what prices he may sell them, and to what uses he may put them. Thus a feudal relationship of lord and vassal develops.
The Values Party also disapproves of the system of “transfer accounting” which is now standard practice with many multi-national companies. By means of this system as many channels of payment as possible are established so that it is virtually impossible for a poor country to police all these channels or impose limits on them. Thus the vendors can avoid paying taxes on large slices of their profits by inflating prices of raw materials, or raising charges for overheads and “research costs’.
Even more blatant than over-pricing is the strategic non-use of patents in poor countries. The giant patent- holder thereby prevents local or other firms from starting production, for example of cheap anti-biotics, which thus influences enormously the price of health in a developing country.
Big companies can use pressure and bargaining power even against countries as powerful as Britain so it is not difficult to imagine the pressure they can bring to bear and the “bargains” they can strike with poor underdeveloped countries.
Take one example - the group Hoffman La Roche. They reacted in 1973 to price-cuts announced by the British Government with threats to block certain exports to Commonwealth countries, to transfer facilities for manufacturing out of Britain, and to site new research investments outside of Britain. The same company a few years earlier sold two products to Colombia: the over-pricing on the first (librium) was 6478 per cent and on the second (valium) was 6155 per cent.
Economists estimate that the poor countries pay between $4,000 million and $9,000 million a year in “invisible” payments for technology to giant companies.
The proposed United Nations Charter of Economic Rights and Duties would have the effect of legalising nationalisation.