The Guardian September 6, 2000


by Anna Pha

* 1.2 billion people live on less than $1 a day
* 880 million people have no access to health care
* 1.3 billion people have no access to clean water
* 2.6 billion people without sanitation
* 850 million people are illiterate
* 50% of the world's population survive on 6% of world income
* the assets of the 3 richest people exceed the GDP of 48 less developed 

By any standards the system is not working. And what is even more alarming, 
the situation continues to deteriorate. The policies of the International 
Monetary Fund (IMF) and the World Bank (WB) have resulted in unprecedented 
deindustrialisation, unemployment, poverty, famine, insecurity, death, wars 
and environmental destruction.

The IMF and WB, controlled by the governments of the richest nations acting 
on behalf of the largest and most powerful transnational corporations 
(TNCs), are the most destructive institutions in the world today.

It is not surprising that millions of people are taking to the streets and 
joining protests against these institutions and their partners in crime, 
the World Trade Organisation (WTO), NAFTA, the EU and other regional 

Power and wealth of TNCs

The economic rationalist (neoliberal) policies enforced by the WTO, IMF and 
World Bank have facilitated the rapid growth of TNCs. Heightened global 
competition has resulted in thousands of mergers and takeovers, and the 
domination of industries by monopolies.

While there are an estimated 60,000 TNCs (excluding financial institutions) 
with around 500,000 subsidiaries around the world, 15 per cent of their 
assets are held by the top 100 TNCs. (World Investment Report 1999 

These TNCs are shaping a new emerging world economy through their 
domination of trade, internationalisation of production and rapidly growing 
global investments.

Whether it be cars, biscuits, coffee, soft drink, airlines, water, 
electricity, film, TV, newspapers, steel, construction, legal services, 
accounting, banking, stockbroking or whatever  the tendency is for around 
five to ten TNCs to have a monopoly over that sector.

The top 100 corporations hold between them an estimated $4212 billion in 
assets  the same amount as the combined GDPs of the 140 lowest income 

The TNCs exert considerable powers over governments as they protect their 
interests and have governments do their bidding.

Nigeria, for example, has a GDP of $36.4 billion, compared with Shell Oil's 
assets of $115 billion. No wonder the Nigerian military were at the service 
of Shell against the Ogoni people whose land and oil Shell took over.

Financial conglomerates

The most powerful and almighty of all the TNCs are the financial 
conglomerates. These are the corporations that the IMF took directions from 
during the financial crisis in Asia.

The Chase-Manhattan Bank, for example, is one of the world's top five 
financial services firms with clients in 180 countries.

It profits from corporate lending; housing loans; credit cards; investment 
management; trading on the currency, futures, debt and other markets; loan 
syndications; issuing of bonds; consultancies; advice on mergers and 
acquisitions; and other services for corporations and governments.

It can make or break governments and businesses, turf people out of their 
homes or off their farms.

According to its 1999 annual report, the Bank's global services division is 
the "largest global custodian, with $5.6 trillion in assets under custody 

The value of assets under its control is 14 times the size of Australia's 
Gross Domestic Product (the annual total of all income from wages, 
investments and profits) of around $400 billion. It is even larger than the 
GDP of Japan  the second largest economy in the world.

And the amount of assets under its control keep growing as do its profits -
- an operating profit of $5.4 billion in 1999.


The more governments deregulate the financial sector  float currencies, 
leave it to the market to determine interest rates, remove restrictions on 
foreign investments and takeovers, sell off public institutions  the 
larger and more powerful these financial conglomerates become.

Every takeover or merger means rationalisations and thousands of job losses 
and attacks on wages and conditions and in many instances an attempt to 
deunionise workplaces.

Media magnates

Another area where TNCs exert considerable power, as well as make huge 
profits, is in the media. Australia has produced two of the world's leading 
media magnates  Kerry Packer and Rupert Murdoch.

Packer controls Publishing and Broadcasting Ltd and Consolidated Press 
Holdings. This empire includes Nine Network, 97 magazines, and interests in 
Crown Casino, Foxtel, telecommunications and internet services.

He is not short of a quid on the tables, with a net personal worth of $8.2 
billion (up from $5.2 billion in 1998) according to Business Review 
Weekly's Rich 200 list.

He has been accumulating wealth at a vast rate, around $4 million a day 
over the last 12 months  enough to more than fund a few hospitals and 

With his TV network and publications he is in a powerful position to 
influence public opinion and governments. Needless to say he is no 
progressive or darling of the workers.

Seed monopoly

One of the most dangerous areas of monopoly control is the global seed 
industry. Five companies control 75 per cent of the global commercial 
vegetable seed market.

Farmers around the world are now facing a WTO-enforced monopoly over seeds, 
with plants included in the GATT agreement on intellectual property rights 

These corporations are a law unto themselves. They patent seed varieties 
and develop hybrid (sterile seeds which will not produce new crops) and 
other genetically modified seeds that lead to a dependency on other 
chemical products and prevent or outlaw farmers from collecting and 
planting seeds.

They produce seed varieties to make profits, not with the aim of the 
world's people having enough to eat or better tasting and more nutritious 

For example, Seminis (a subsidiary of Mexico-based Sava), is the world's 
largest vegetable seed corporation, and controls 40 per cent of the US 
vegetable seed market. It has a presence in 120 countries.

Seminis has 79 patents issued for genetically engineered seed varieties, 
and is seeking patents in relation to most common staple vegetable 

In June this year, Seminis announced that it would eliminate 2,000 
varieties (25% of its product line) of seed as a cost-cutting measure.

No consultation. Never mind the poor farmers or starving millions in 
Africa, Asia or Latin America. Profits are what counts.

Never mind the importance of biodiversity, of varieties adapted to regional 
climates, with resistance to local pests and diseases.

The Rural Advancement Foundation International (RAFI) reports that of the 
nearly 5,000 non-hybrid vegetable varieties available in 1981 mail-order 
catalogues, 88 per cent had been dropped by 1998.

Third World guinea pigs

Another seed transnational, the UK-based AstraZeneca, has done a deal with 
the European inventors of a publicly funded, genetically modified, Vitamin-
A fortified rice.

The "golden rice" (it has a yellowish tinge) will be made freely available 
to poor Third World farmers.

Because of high rice consumption, the consequences could be serious if 
there have been any changes in the nutrient or toxicant content of the 

"Asian farmers get (unproven) GM rice and AstraZeneca gets the `gold'", 
RAFI points out. (

Government support

Whether it be the financial institutions, the media, seed corporations, the 
oil or mining companies, the additional powers and freedoms TNCs gain 
through the enforcement of IMF and WB conditions and policies, the 
sovereignty of nation states and powers of elected governments are being 
eaten away.

While governments are withdrawing from many areas, the state still plays an 
important role in suppressing struggle and resistance to these policies.

The state and private police and military are available to protect TNC 
interests and their powers of intervention are being increased as witnessed 
in the "shoot to kill" legislation before Parliament.

Military repression

When political persuasion and economic coercion have failed, there is 
always the military solution.

When government leaders speak of "collective defence and security", they 
mean the protection of the interests of TNCs and of the capitalist system. 
They do not mean the security of the people without food, shelter, jobs, 
health services or drinking water.

NATO's new strategic doctrine, adopted in April 1999, extends its range of 
military actions to preventing conflicts, managing crises and operations in 
response to crises on a global basis.

According to NATO, these crises might take the form of "ethnic and 
religious disputes", "political disorder", "economic decline", or 
"violations of human rights"  practically any excuse will be found for 

They are preparing in advance, anticipating that today's struggles against 
the IMF and WB will continue to grow as people around the world reject and 
resist the scorched earth policies and demand an end to their suffering and 

NATO will co-operate with the UN when suitable, or act without its consent. 
NATO carried out an illegal war against Yugoslavia, without approval from 
the United Nations Organisation.

It signals an ever greater militarisation of international relations and 
the undermining of international law  what amounts to a political, 
economic and military dictatorship of the TNCs.

There is an alternative

We need policies which replace the IMF and WB with bodies which deal with 
trade, foreign investment, environmental, migration and other international 
questions under the auspices of a democratised United Nations.

At the same time the sovereignty of nation states needs to be preserved, 
with international agreements and treaties being based on mutual agreement 
and benefit.

The contradictions between the drive for profits and the needs of people 
and the environment can only be resolved by the public ownership and 
democratic running of industry and services, including financial services, 
in the interests of the people.

Governments need to resume their powers and controls over key economic 
matters such as currency, interest rates and investment.

Then, big enterprises would become the servants, not masters, of the 

The building of political alliances against the evil empire of the TNCs, 
with the involvement of trade unions, political parties, environmental and 
other community organisations as witnessed in Seattle, Melbourne and 
Prague, is an important step forward in the struggle for a genuine people's 

*All dollars are US dollars unless otherwise stated.

Back to index page