As the power of transnational corporations expands, income and wealth disparities are threatening societies.
The people are angry. In Turkey, Brazil, and most recently again, Egypt, thousands have taken to the streets to voice their anger and frustration at the lack of social and economic justice. Political and economic elites, working in tandem, have managed to neutralise the aspirations of ordinary people, in part spurring the disenfranchisement driving the protests.
Whether it is the removal of subsidies protecting the poor against inflation and price shocks in Egypt, or the enormous cost of hosting high profile sporting events in Brazil at the expense of social services, or government plans to commercialise a beloved public park in the heart of Istanbul, the headlong embrace of neoliberal economic policies by governments is likely to cause further dissatisfaction and unrest across the globe.
Neo-liberalism, using a dictionary definition, as a “modern politico-economic theory favouring free trade, privatisation, minimal government intervention, reduced public expenditure on social services etc.,” reduces the responsibility of the state while promoting privatisation to favour those with access to resources and influence. It is playing havoc with the lives and livelihoods of ordinary people.
Despite mainstream perceptions, the sad reality is that free markets don’t automatically regulate themselves nor do they naturally respect individual or community rights. In Indonesia, people are choking from fires set by agricultural companies to clear forests to allow mammoth palm oil plantations to flourish. In the United States, popular demands for effective gun control are being blocked by congressmen bankrolled by the arms industry. In Ethiopia, thousands have been displaced through forced villagisation programmes to make way for agricultural companies that want to make land more “productive.” In Spain and inGreece, public property such as hospitals and airports are being sold to private players to make the economy more “nimble.” In the UK, frustration is mounting about tax evasion by transnational corporations whose turnover exceeds the GDP of many countries, while the average citizen continues to dutifully pay their fair share of taxes.
Around the globe, people are getting increasingly frustrated by governments going out of their way to ensure an enabling environment for big business while making drastic cuts in public spending on social welfare. This is fuelling alienation among electorates, spurring protests. Of great concern, is that those seeking to expose the nexus between governments and big business are being subjected to various forms of persecution with state complicity.
In Cambodia, land rights activists opposing official plans to forcibly acquire land for big companies have been subjected to brutal attacks by security forces and lengthy prison terms. In Honduras, peasant farmers’ groups involved in land disputes with companies have been subjected to murderous attacks. InIndia, peaceful activists ideologically opposed to the government’s economic policy have been charged under draconian laws of being members of outlawed terrorist organisations. In Canada, non-profit groups opposed to the conservative government’s policy of loosening environmental restrictions to enable extraction of oil and gas from ecologically sensitive zones have been subjected to surveillance and funding cuts, while being accused of being obstructive of the country’s economic development.
Widening income inequality
Worryingly, while the power of transnational corporations has expanded exponentially, income and wealth disparities are threatening to tear societies apart. The World Economic Forum’s 2013 annual survey of global risks identifies severe income disparity as a key concern likely to manifest itself over the next decade. The International Monetary Fund’s Managing Director has admitted that the top 0.5 percent of the globe’s population holds 35 per cent of its wealth. Civil society group, Oxfam estimated that in 2012, the world’s top 100 billionaires earned enough money to end poverty four times over. CIVICUS, the global civil society alliance has argued in its annual report that the discourse on inequality is becoming commonplace with the 1 percent vs the 99 percent meme entering the mainstream.
But despite the grave warnings from civil society, governments and financial institutions continue to spin arguments about the need to privatise services when they should be focusing on how to make the public sector fit for purpose. Shockingly, during a global economic downturn, political leaders and captains of industry have together managed to subject ordinary people to double jeopardy: having to pay taxes to the state and then having to fork out profit-adjusted higher costs for privatised health, education, public transport, telecommunications, road works, electricity, water supply and so on. These services are indeed governments’ responsibility to provide as part of the social contract between citizens and the state.
In the past, the political and economic elite have erroneously sought to deride the occupy movements, indignados and anti-corruption protestors as fringe elements without clear vision or majority support. But with greater numbers of people taking to the streets to voice their dissatisfaction against corruption, environmental degradation and top down austerity policies, decision makers have a reality check staring them in the face. But will they right the ship on neo-liberal economic policies when they are privately profiting from it? Perhaps citizen action will help answer that.
Mandeep Tiwana is a lawyer specialising in human rights and civil society issues and the Head of Policy and Advocacy at CIVICUS, the global civil society alliance.