This is a remarkable work, decades in the making. Perkins is the real deal, an economist who worked for international consortia to pillage the third world. The modus operandi was to perform economic analysis of target nations that indicated a rate of growth far in excess of any real possibility in order to justify offering those nations huge loans, loans they were never expected to be able to repay. The point of this was twofold. First, the money loaned would find its way right back into the pocket of American corporations, because it would be used for major construction projects, roads, dams, electrification projects. The economic benefits would never accrue as predicted, so the host country would be saddled with crushing debt and then be forced by entities like the IMF to slash and burn domestic social services in order to make interest payments. The benefits of the “development” would go to the elite of the host nations, at the expense of the lower classes. In fact, he offers data showing that poverty increased over the term of such foreign investment. Local elites were essentially bribed to go along, and they in turn acted as enforcers for the American elite that was pushing the product.
John Perkins began as a Peace Corps volunteer in Ecuador. He managed rather well with this experience and was recruited by a corporate type into the MAIN corporation, the actor in most of the hit man activity. In fact the title was not a case of advocacy hyperbole. The people in this line of work actually refer to each other and themselves as Economic Hit Men, or EHM’s.
I learned several things in reading this. First was that conquest via excessive indebtedness was a conscious policy, with the short term profitability of development by Bechtel or equivalent being icing on the cake of overall domination.
I learned about SAMA, or the Saudi Arabia Money-Laundering Affair. Perkins talks about several of the leaders he came to know, Trujillo in Panama, Jaime Roldos in Ecuador, other leaders of less-than-presidential caliber.
My job…was to forecast the effects of investing billions of dollars in a country. Specifically, I would produce studies that projected economic growth twenty to twenty five years into the future and that evaluated the impacts of various projects. For example, if a decision was made to lend a country $1 billion to persuade its leaders not to align with the Soviet union, I would compare the benefits of investing that money in power plants with the benefits of investing in a new national railroad network or a telecommunications system. Or I might be told that the country was being offered the opportunity to receive a modern electric utility system, and it would be up to me to demonstrate that such a system would result in sufficient economic growth to justify the loan. The critical factor, in every case, was gross national product. The project that resulted in the highest average annual growth of GNP won. If only one project was under consideration, I would need to demonstrate that developing it would bring superior benefits to the GNP.
The unspoken aspect of every one of these projects was that they were intended to create large profits for the contractors, and to make a handful of wealthy and influential families in the receiving countries very happy, while assuring the long-term financial dependence and therefore political loyalty of governments around the world. The larger the loan, the better. The fact that the debt burden placed on a country would deprive its poorest citizens of health, education and other social services for decades to come was not taken into consideration.
…talked about the deceptive nature of GNP. For instance, the growth of GNP may result even when it profits only one person, such as an individual who owns a utility company, and even if the majority of the population is burdened with debt. The rich get richer and the poor grow poorer. Yet from a statistical standpoint, this is recorded as economic progress.
…Over the years, I’ve repeatedly heard comments like, “If they’re going to burn the U.S. flag and demonstrate against our embassy, why don’t we just get out of their damn country and let them wallow in their own poverty?”
People who say such things often hold diplomas certifying that they are well educated. However, these people have no clue that the main reason we establish embassies around the world is to serve our own interests, which during the last half of the twentieth century meant turning the American republic into a global empire. Despite credentials, such people are as uneducated as those eighteenth century colonists who believed that Indians fighting to defend their lands were servants of the devil.
[quoting his teacher Claudine] “We’re in a small, exclusive club,” she said. “We’re paid—well paid—to cheat countries around the globe out of billions of dollars. A large part of your job is to encourage world leaders to become part of a vast network that promotes U.S. commercial interests. In the end, those leaders become ensnared in a web of debt that ensures their loyalty. We can draw on them whenever we desire—to satisfy our political, economic, or military needs. In turn, these leaders bolster their political position by bringing industrial parks, power plants, and airports to their people. Meanwhile, the owners of U.S. engineering and construction companies become very wealthy.
[The source of the Boogey man image appears to be Indonesia. Apparently there were pirates from a place called Bugi.] …the infamous Bugi pirates, who still sailed the seas of the archipelago, and who had so terrorized early European sailors that they returned home to warn their children, “Behave yourselves or the Bugimen will get you.”
..I knew enough history to know that suppliers who are exploited long enough will rebel. I had only to return to the American Revolution and Tom Paine for a model. I recalled that Britain justified its taxes by claiming that England was providing aid to the colonies in the form of military protection against the French and the Indians. The colonists had a very different interpretation.
What Paine offered to his countrymen in the brilliant Common Sense was the soul that my young Indonesian friends had referred to—an idea, a faith in the justice of a higher power, and a religion of freedom and equality that was diametrically opposed to the British monarchy and its elitist class systems. What Muslims offered was similar: faith in a higher power, and a belief that developed countries have no right to subjugate and exploit the rest of the world. Like colonial Minutemen, Muslims were threatening to fight for their rights, and like the British in the 1770s, we classified such actions as terrorism.
Panama was part of Columbia when the French engineer Ferdinand de Lesseps, who directed construction f the Suez Canal, decided to build a canal through the Central American isthmus, to connect the Atlantic and Pacific Oceans. Beginning in 1881, the French undertook a mammoth effort that met with one catastrophe after another. Finally, in 1889, the project ended in financial disaster—but it had inspired a dream in Theodore Roosevelt. During the first years of the twentieth century, the United States demanded that Colombia sign a treaty turning the isthmus over to a North American consortium. Colombia refused.
In 1903, President Roosevelt sent in the U.S. warship Nashville. U.S. soldiers landed, seized and killed a popular local militia commander, and declared Panama an independent nation. A puppet government was installed and the first Canal Treaty was signed; it established an American zone on both sides of the future waterway, legalized U.S. military intervention, and gave Washington virtual control over this newly formed “independent” nation.
…the treaty was not signed by a single Panamanian.
P 72 – re Guatemala
United Fruit Company had been [Guatemala’s] equivalent to the Panama Canal. Founded in the late 1800s, United Fruit soon grew into one of the most powerful forces in Central America. During the early 1950s, reform candidate Jacobo Arbenz was elected president of Guatemala in an election hailed all over the hemisphere as a model of the democratic process. At the time, less than 3 percent pf Guatemalans owned 70 percent of the land. Arbenz promised to help the poor dig their way out of starvation, and after his election he implemented a comprehensive land reform program…United Fruit launched a major public relations campaign in the United States, aimed at convincing the American public and congress that Arbenz was part of a Russian plot and that Guatemala was a Soviet satellite. In 1954, the CIA orchestrated a coup. American pilots bombed Guatemala city and the democratically elected Arbenz was overthrown, replaced by Colonel Carlos Castillo Armas, a ruthless, right-wing dictator.
Thje new government owed everything to United Fruit. By way of thanks, the government reversed the land reform process, abolished taxes on the interest and dividends paid to foreign investors, eliminated the secret ballot, and jailed thousands of its critics. Anyone who dared to speak out against Castillo was persecuted.
[Torrijos then asks Perkins] “Do you know who owns United Fruit?”
“Zapata Oil, George Bush’s company—our UN ambassador.”