Wednesday, February 28, 2007

Shanghai surprise

Yesterday the Shanghai stock exchange dropped 9 per cent in a single day, apparently setting off a worldwide round of selling as panicked investors sought safe instruments. Wall Street had its biggest fall since September 11, the TSE had its worst day in a year, and several 'emerging' exchanges, in Brazil, Turkey and Russia suffered big drops.

The Shanghai surprise clearly shows the herd mentality of global finance. Shanghai is an exchange which is largely domestic, with limited global participation. The drop was a demonstration of how the market is increasingly dictating policy: there were rumours that the government was going to place restrictions on some of the practices around the buying, selling and taxing of transactions, and in order to prevent this, the market collectively dropped, demonstrating who is in charge of policy (the fact that many big investors are Party people is not unimportant here). In any event, the drop in Shanghai was almost exactly the same as the previous day's rise--so the net effect was profits for some, with limited losses for others.

Why then did this largely domestic event spread? The answer lies in the vulnerability of the world economy. The US is dangerously imbalanced, both externally, in terms of its current account deficit and economic exposure to political events in oil producers, and internally, in terms of its budgetary deficit and the share of profits in total income. This vulnerability is what worries global finance capital. The possibility of a recession in the US has already been raised by Alan Greenspan, and global markets still respect him. A recession in the US will hurt the slow recovery in the European Union, and particularly Germany and France, and this has the possibility of spreading to other EU members. In short, the world economy, dominated as it is by finance capital, is vulnerable, because, simply put, the economy is not leading the market, and has not been for a long time indeed. Market finance is leading, but its fictitious character means that the global economy is being led by shadows and light. In shadows and light, the possibility of a bumpy ride for the real economy is strong. This year should be an interesting one as finance and productive capital struggle to exert dominance over the global economy and global development.

Tuesday, February 27, 2007

slow food

I went to a very interesting event yesterday, organized by Slow Food Toronto, which sought to bring together slow food practitioners in the food services industry, slow food distributors, and slow food producers. It was principally a networking event, in a city where, according to the moderator, the debate over food and locality is more strongly developed than in any other city in North America.

Several things were striking about the event. First, there was a clear recognition that economics matters. Simply put, the premium on a piece of craft-raised meat is 30 per cent, which means the ability to 'buy in'--literally--to this movement is a function of income. This was not what the participants wanted, but they recognized it as a reality--as they also realized that the bulk of the audience did not reflect the diversity of a city like Toronto. Second, the participants realized--although some did not voice it--that in promoting slow food and local food production systems, a principle opponent was corporate agriculture, whether it is the 'standardized differentiation' of modern post Fordist industrial agriculture, or 'big organic', a label that the participants were particularly eager to use. There is a clear tension in the food system, between those that promote local systems of production and provisioning, and those that seek to deepen processes of global integration and the corporate food regime. How that tension plays out, in the everyday, is far from clear, as corporate food producers are more than happy to co-opt--as the experience of big organic, many of which were, at one time, small organic, make clear. Thirdly, as Phil McMichael has noted, so well, the members of this food movement do not realize that they are part of a global movement that is trying to reclaim control over the system governing food production and provisioning, a movement that is led, currently, by Via Campesina, and which takes, as its point of entry into the global politics of resistance to corporate agriculture, 'food sovereignty'.

These are interesting times. It is striking how many of the contradictions of globalization revolve around food: poverty and inequality being expressed in not having enough to eat, in a world that produces more than enough for all; the industrialization of food demonstrating how commodification extends, even when it is at the expense of human health in the North, in the form, particularly, of the northern obesity crisis; the way in which biotechnologies are developed so as to cement further corporate control over the global food system; climate change being witnessed in food production crises in the South, with the possibility that this will deepen, massively, in the next half century; and emerging from this, the possibility of conflict and, indeed, an end to progress, if--and yes, this is a big if--if agriculture, globally, were to collapse. It has happened before, and it could happen again. In other words, how we, as individuals, position ourselves within our own systems of food provisioning expresses our relationship to many of these contradictions, our own way of trying to navigate the choppy waters of globalization.

Of course, people at the meeting yesterday did not all see this, in all its fullness. But many did. They are well aware that redefining our relationship with the dominant system of food provisioning is an act against the corporate control of the food system, and indeed, current forms of globalization. What they are not aware of, I thought, was the extent to which this is truly a global movement.

Friday, February 23, 2007

new times for the agrarian question?

I was very pleased this morning to walk into my local Indigo! bookstore and see, on the shelves, half a dozen copies of Promised Land: Competing Visions of Agrarian Reform, edited by Peter Rosset, Raj Patel and Michael Courville. This book, along with Reclaiming the Land, edited by Sam Moyo and Paris Yeros, and my own volume, Land, Poverty and Livelihoods in an Era of Globalization, co-edited with Jun Borras and Cris Kay, indicate that within both activist and advocacy groups as well as within academic circles in international development studies, land reform is most definitely back.

It is back, though, in a vastly different context. In the heyday of state-led land reform, in the 1950s and 1960s, land reform was about trying to promote national development and poverty alleviation. Today, in the era of market-led land reform, globalization has meant that land reform is about promoting agricultural commodification and agro-exports, the integration of peasant farmers into buyer-driven global agro-commodity chains, and their effective reconfiguration as little more than sub-contracted piece workers that own or control a small piece of land but who do not own or control their own means of subsistence, tied as it is, through contract farming, to agro-food TNCs. It is in this context that the dispossession of farmers in the South has become such an important issue. Unlike previous episodes of land reform, which were about building markets, development and capitalism, the current conjuncture is one dominated by dispossession.

I have been struck recently as to how different people can arrive at the same conclusion, even if separated by time and space. In the late 1990s Farshad Araghi cogently argued that the current period was witnessing peasant displacement through dispossession as, prefiguring the powerful arguments of Mike Davis in Planet of Slums, the increasing capital intensity of agriculture in the South, as a consequence of 25 years of debt-induced structural adjustment programmes, have led to the expulsion of rural populations from the land and their enforced migration to the cities. This is the new reserve army of labour, increasing casualized, insecure, footloose, and often hungry. I have seen them, in Ho Chi Minh City, in Peshawar, in Suva, in Nairobi, and beyond. More recently, David Harvey, in The New Imperialism, has termed this 'accumulation by dispossesion', as corporate profitability is increasing predicated upon massive rural displacement to the slums of megacities in the South. In our own recent book, Jun, Cris and I termed this 'neo-liberal re-enclosure', as the admittedly limited gains from land reform over the period between 1945 to 1975--often gains ceded to preclude peasant revolutionary movements--are rolled back under the guise of neo-liberal structural adjustment policies. These policies made it increasingly harder for poor farmers to make a living, even as they made it easier for agro-food TNCs to seek to organize their activities on a global scale, in partnership, at times with peasant farmers, but also, at times, in partnership with capitalist farmers, feudal landlords, plantations, and comprador elites and states in the South. Different times indeed.

Dispossession is the dominant agrarian issue of our time, and it is this issue which has given rise to resistance in the South, in the form of the Via Campesina and its various constituent elements--most notably the MST, but a host of other movements as well. Via Campesina seeks food sovereignty, and here, in this call, lies the basis of a global alternative to industrialized agriculture and a buyer-driven agro-food commodity chain, for it is in this call that a possible alliance between producers in the South (and the North) and consumers in the North might be made. As I had to remind my (often pessimistic) students a month ago, similar alliances were witnessed within the US in the early 1970s. They can be built. However, it is up to us to build them.

Thursday, February 22, 2007

the British scale-down in Iraq

On 21 February 2007 the UK government announced that it was cutting 1600 troops from Iraq. Anthony Cordesman of the Center for Strategic and International Studies hit the nail right on the head when he was quoted in the Financial Times as saying that 'the British cuts...simply reflect the political reality that the British "lost" the south more than a year ago'. As the Washington-based Institute for Near East Policy noted in a recent report, 'the deep south is factionalised, lawless, ruled as a kleptocracy, and subject to militia primacy'.

Iraq is in the midst of a bloody civil war that was, in effect, created by the US and its 'coalition of the willing'. Just as was the case 40 years ago in Vietnam, the US intervention was to create a political and economic system that did not exist on the ground, and which moreover took several centuries to come to maturation in the US itself and (some of) its coalition partners. The US, as in Vietnam, is engaged in a mission where the local population often has to be destroyed, in order to be saved. In this light, it is not surprising that there are widespread human rights abuses and extra-judicial executions by coalition forces, by the Iraqi security services, and by the militias. That these are less common than they were under Saddam Hussein misses the point entirely. Life in Sadr City is probably the closest place to living in hell on this planet, and, as a result of this war, things will only get is simply not possible to see a situation under which they might get better. When the US does withdraw, which will, no doubt, start to occur early in the next Administration, the Iraqis will be left to fend for themselves. An immediate withdrawal now will lead to a massive upsurge in violence as Shia and Sunni militias seek control of territory, of resources, and of political patronage. A replacement force--under UN auspices?--which I once thought might work is now unlikely to work, even if its personnel were drawn predominantly from Islamic nations within the UN system and if that force was 3 times the size of the current US operation.

All in all, in the name of fighting a non-existent enemy, the US has created the biggest recruitment center for global jihadists on the planet. It has only cost it US$1 billion a week to do this. When anyone turns around and says the world does not have the resources to provide children with sanitation and water, don't believe it. The world chooses to spend its money on death, not life.

Tuesday, February 20, 2007

microfinance and international development

The Cato Institute, a right-of-center US think tank with close ties to certain members of the Bush Administration, has made an intervention in thinking about microfinance. Microfinance, as members of the international development community know, is the provision of very small loans to people with usually little or no credit history, so that they can tide themselves over during shortfalls in cash flow or, hopefully, invest in productive micro-entrepreneurial activity. Loans are often made to individual women, but women have to be members of a group, that acts as a discipline to enforce repayment of the loan. Repayment rates are impressive, and returns on equity have increasingly start to attract transnational finance capital--companies such as Citigroup. The titular founder of the global microfinance movement, Dr Mohammed Yunnus, the creator of the Grameen Bank in Bangladesh, won this year's Nobel Peace Prize. Dr Yunnus believes that access to finance is a fundamental human right. Microfinance has been, for a long time, seen as a 'magic bullet' in international development, capable of energizing growth with equity across the poor countries of the world.

It might be surprising, then, to learn that the Cato Institute has a very low opinion of microfinance. What was even more surprising to me, though, was the extent to which I agreed with many of the criticisms of the Cato Institute. The Institute argues that most people are not entrepreneurs, and so the idea that microfinance can be used to build viable micro-enterprises is unlikely. Cato also notes that microfinance has played a very small role in the creation of actual businesses in the South, as it is often used for smoothing cash flow problems rather than investing in productive activity. It stresses the heavy subsidies paid out to support microfinance, which sustain the supposedly good returns on equity. Finally, Cato argues that growth should come first, and then credit, with growth funding profits that can be reinvested back into enterprises.

Where Cato misses some of the story is the relationship between microfinance, poverty elimination and the development of capitalism in contemporary poor countries. Most microfinance does not reach the poorest; rather, it reaches the so-called 'near-poor' who are more creditworthy than the poor. These people are often rural, and in a transition from a subsistence mode of life towards a far more market-oriented, coercively competitive existence. In other words, microfinance can allow people that are being to accumulate some assets, to improve their standard of living, to further accumulate. This is not a poverty-elimination strategy, though, because the bulk of the resources do not reach the poorest of the poor. In this sense, then, microfinance is, in effect, no different than the state-led financial revolution in the poor countries of the South in the 1960s--a means of building capitalism, not eliminating poverty.

Cato is therefore wrong that growth needs to come first. As microfinance can support accumulation, it can support growth. The problem, in this as in so many areas of international development, is one of distribution. Poor people don't have the means to access the finance they need. They rely on moneylenders, who are often their patrons, or on more traditional localized means of allocating finance, such as rotating savings and credit associations. These resources are indeed used to smooth cash shortfalls. Poor people do want to invest; but to invest, they need assets that they do not have--land, tools, animals, access to work. Distribution is the key to engendering growth that has the capacity to eliminate poverty. Growth is very, very important, but on its on, growth, the building of markets, the creation of trade and exchange, is a way of building inequality-generating processes. Some magic bullet.

Monday, February 19, 2007

are we living under a corporate food regime?

Harriet Friedmann's most influential intervention in the political economy of agrarian change has been her concept of the 'food regime'. Derived from the work of the French regulationist school of political economy, food regime analysis tries to understand the governing principles underpinning the world food system. Friedmann's thinking has undergone changes over time; currently, she notes that there was a 'colonial-(settler) diasporic' food regime from the 1870s to the First World War; turbulence between the wars; and a 'mercantilist' food regime from 1945 to the early 1970s.

A question that one of my students put to me, a few months ago, then, is whether we are now living under a 'new' food regime. At the time, I was not sure; but having read some of Friedmann's more recent work, and, very importantly, the work of Philip McMichael, who has an outstanding depth of understanding of the contemporary global food system, as well as having considered, more peripherally, issues around food sovereignty, organic agriculture and the Slow Food Movement, I think I am coming around to the position that we do indeed now live within a coherent, if not contradictory, 'corporate food regime'.

The corporate food regime remains, as did the first and second food regimes, supply driven, in the sense that food production, rather than consumption, lies at its core. However, where the corporate food regime differs from previous food regimes is the role of global capital, and its organizational form, the agro-food transnational corporation, in structuring the coherence of the regime. The agro-food TNC may operate directly in food production, or indirectly control food production through its control of food inputs (seeds, fertilizer, pesticides, or water) or food markets. Thus, we are talking about companies such as Wal-Mart, Carrefour, Tesco, Cargill, Monsanto, Pioneer, and the like. These companies want to buy food cheaply, to which they then 'add value', selling into monopsonistic markets, in order to generate, in absolute terms, greater profitability. Competition is intense between these firms, but not over rates of profit, as over absolute amounts of money. In order to add value, these companies seek to control the commodity chain in an effective manner, a manner that does not require actual ownership of the chain, or ownership of aspects of it. The agro-food TNC instead is able to 'regulate' the operation of the food commodity chain through its market power, so that markets operate to enhance its ability to extract surplus-value at critical points in the chain.

The agro-food commodity chain is thus not vertically integrated; and this can give the corporate food regime an appearance of disorder. Such is not, however, the case. The industrialization of food that was carried out under the mercantilist phase of global food development is carried through to its logical conclusion under the corporate food regime, with food increasingly in the North being consumed as a consequence of the cultural construction of capitalist consumer society. Foods are assembled in such a way that consumers really don't understand where the product comes from; they consume the food because of advertising, which allows capital to realize the surplus value that is created in the production process.

The corporate food regime is, critically, supported by neoconservative states in the North and, vitally, the World Trade Organization which, in the name of global free trade, is reconfiguring food production in the South as peasants become little more than sub-contracted petty commodity producers enmeshed within a corporate food regime over which they have no control. The food regime thus has a coherence, as a result of 25 years of structural adjustment in agriculture, the opening up of agriculture under the rubric of 'globalization', and the ability to undermine resistance in the North and the South by pushing producers into an ongoing crisis of social reproduction.

The corporate food regime is intricately connected to ecological unsustainability and demonstrates the inherent ecological contraditions of late capitalism. It produces crisis in the name of profit, degradation in the name of choice, and biohazards in the name of efficiency.

Sunday, February 18, 2007

welcome to Haroon's devlog!

For more than 20 years, I have been researching, teaching, advising--living--issues surrounding what is now known as 'international development', but which were, back then, known, at best, as 'development studies'. Why? There are several reasons.

I was always interested in international issues. Although my age means that my 'experience' of the Vietnam War--or what the Vietnamese call 'the American War'--was what I learned from the television news, it was always there, and I always knew it was wrong. I will never forget Richard Nixon claiming that the US had no plans to invade Cambodia--and then invading it, the final act in a tragedy that would produce, as a direct result of US intervention, the killing fields. I always read newsmagazines, and was a regular reader, at a young age, of The Globe and Mail, whose Latin America correspondent, Oakland Ross, now with the Toronto Star, opened me up to a broader view of the world. In my late teens and early twenties I knew several people that had taken part in Canada World Youth, and this, for all of them, changed their global outlook, making them realise that they occupied a small corner of a diverse, complicated and contradictory world. The music I listened to was very aware of what was going on, at 'home' (in this case, the UK) and 'abroad'. It was a revolutionary time--not just Vietnam, but Angola, Mozambique, Nicaragua, Zimbabwe, and my music was plugged in to those times--the Jam, the Clash, the Gang of Four. The Clash's 'Sandinista', a hugely ambitious, flawed, but ultimately triumphant double album that was unfortunately released as a triple (!) took me around the world, to places that I already knew, was aware of, and wanted to make others aware of as well.

Later, I did a lot of global travelling, financed on the back of silver service waiting, the most lucrative job I have ever had, and all along the way, in North Africa, in South Asia, in East Asia, in Southeast Asia, I wanted to know more, to better understand the world I was seeing back then, and knew, all along, that I would continue to see. As part of those travels, I spent a lot of time with my father's family, in urban and rural Pakistan, and this threw up, for me, a host of specific issues, relating to economics, culture and society.

By the time I finally went to university, I did not know I would end up as I did, but, in retrospect, it does not come as a surprise--rather, it is a logical outcome of my history. By the time I actually started my studies, I had learned a lot, and had a lot of very specific experiences and questions for which I wanted guidance. I still do.

Blog Archive