Are trade agreements and foreign aid scams to control developing countries?
It would appear democracy is an illusion
I recently watched Aaron Bastani from Novara Media interview Matt Kennard from Declassified UK. The video is entitled Corporations Control our Governments: Here’s How. If you’ve not already watched the video, you really should because it’s eye opening to say the least.
Now you might think as a leftist you understand how corporate control works, but if anything, the situation is worse than you realise because much of what’s going on takes place behind closed doors.
During the interview, Kennard discusses topics from his latest book Silent Coup: How Corporations Overthrew Democracy such as international trade agreements and foreign aid, explaining both are basically a reworking of colonialism.
During the collapse of the British Empire, corporations were concerned they could no longer exert power over former colonies and needed a framework to continue exploiting them. They introduced the Investor State Dispute Settlement system (ISDS) - which is so unknown it doesn’t have its own Wikipedia page - to tie former colonies to draconian rules that come with a ten year sunset clause.
Kennard explained:
“It sounds like tinfoil hat stuff, but it’s all there in black and white in the archives in places like the World Bank and IMF…
“So essentially they wanted to create a supranational system whereby they could bypass rebellious peoples in liberated countries in the developing world. So they set about the task [of creating the] Investor State dispute Settlement system (ISDS).
“This is a shadow legal system whereby multinational corporations can sue states for enacting policies they don’t like that infringe on their ‘investor rights’.
“What this means is corporations can sue countries for huge amounts of money, billions often, for enacting policies like not allowing a company an environmental permit to dig for gold.
Anything a corporation doesn’t like that a government does, they can potentially sue for.”
Yes, the ISDS system was explicitly set up so that countries don’t have control over their own resources. It’s starting to sound like democracy is a mirage, isn’t it?
If your democratically-elected government can’t even do things like raise the minimum wage without the risk of being sued by corporations, you don’t have true democracy. In a functioning democracy, the people have ultimate power, but under the ISDS system, the ultimate power lies with multinational corporations. Another way of looking at this is global poverty and inequality are by design.
If a country pulls out of an ISDS agreement, the west has ten years to get a pro-imperialist government in power before the sunset clause expires. This explains why our governments are so fond of foreign coups and why so many countries are kept under the thumb.
Even anti-imperialist governments in places like Bolivia have been forced to capitulate to the draconian rules because the alternative is their international assets get seized and their credit lines are pulled. You will be unsurprised to hear the British embassy illegally lobbied on behalf of one corporation (Rurelec) when it sued the Bolivian government.
Colonialism never ended, it just evolved. Even South Africa, which we are told escaped apartheid, is still effectively under colonial rule because its hands are so tightly bound by this system.
ISDS agreements are so absurd that corporations can sue governments for things like refusing a mining licence to a multinational corporation due to environmental concerns.
Kennard pointed out that Honduras is getting sued for $11 billion (38% of its GDP) for refusing to build a Special Economic Zone (think freeport on steroids). I could not find anything online about this case, other than a preposterous defence of the legal action on the website of the US-based “investors” Honduras Próspera Inc.
Such cases take place behind closed doors at the International Centre for Settlement of Investment Disputes (ICSID) so the world is not even aware they are taking place.
Suing governments is so lucrative it has become an industry in itself with companies set up specifically to finance legal action in return for a cut of the compensation.
Countries are basically being extorted into doing the wrong thing for their people because if they stand their ground, the economic consequences can be dire.
As bilaterals.org puts it:
“Under the ISDS mechanism, states never win. At best, they simply avoid losing and are let off with all or a part of legal fees, which is a huge sum already. States can also settle the dispute with the investor and pay a part of the demanded sum and/or withdraw the measure targeted by the corporation.”
Remember how western governments told you socialism doesn’t work? Well, they’ve set up the world economy to make it as hard as possible for it to succeed. For example, Bolivia was forced to pay huge compensation sums to corporations after nationalising its industries, including $357 million to Pan American Energy. No wonder so many countries surrender to capitalism, most could not afford to take the hit.
One phrase you’ve probably heard quite often is “we are bringing XXX nation back into the fold” or “in from the cold” or “they have rejoined the international community”.
What this means is they’ve been forced to sign an ISDS agreement in the hope of ending the economic warfare imposed by the west, but in reality, they’ve capitulated and sold out their country, often unknowingly. Many countries do not realise the full extent of these agreements until it’s too late because they were presented as “diplomatic goodwill”.
One of the defences of western imperialism is that we pay large sums of money in foreign aid, however, the majority of aid would appear to be a scam.
Kenan Malik in The Guardian wrote:
“As a system, foreign aid is a fraud and does nothing for inequality.
"The five poorest countries in the world, measured by GDP per capita, are the Democratic Republic of Congo, Mozambique, Uganda, Tajikistan and Haiti.
“One might imagine, then, that these countries are among the top recipients of UK aid. Wrong. The main beneficiaries are, in fact, Pakistan, Syria, Ethiopia, Nigeria and Afghanistan. Not one of the five poorest countries is among the top 10 recipients of British aid.”
The reason is simple: we are not trying to provide aid, we are trying to get a return on investment. If we did not, foreign aid would probably not even exist.
Matt Kennard went around the world visiting countries to see the “aid” for himself, and time and again he found that “aid” was building five star hotels and gated communities for rich foreigners or was subsiding multinational corporations. Only a small portion of the money was going to the kind of projects you would expect. Kennard goes into much more detail in the interview and obviously much more detail again in the book which I’ve not yet read (it’s on its way).
It should not be a surprise that our government is not helping foreigners, given its reluctance to help our own people. I don’t know about you, but I don’t want corporations to have more power and I certainly don’t want them to be subsidised by “foreign aid”. The whole idea of the “free market” is a lie.
The west is angry that developing nations are looking at alternative economic systems like BRICS to escape the tentacles of western imperialism. Perhaps it should ask itself why so many countries are desperate to escape, but, of course, it already knows the answer.
This is exactly why Tories (!!!) are for giving 0.7% of our GDP in foreign aid, because it is an investment, not a gift. British corporations are given the money as aid, they use it to invest in projects where they are likely to lose money because of a change in govt who will likely cancel the project, because it isn't good for their country. That corporation then sue via the ISDS court & get a massive pay out. The company has used our money to get into the ISDS scam. Oh and they give some of that money to the Tory Party.
Germany was sued by a Swedish firm about 9 years ago under this same provision. Germen firms also tried to sue the German govt but the ISDS rules only allow for foreign corporations to sue. The whole thing is a scam!
The Grayzone also does some pretty good work from time to time on describing the work that 'aid' agencies like USAID does to carry out the modern brand of colonialism. Especially when it comes to using that aid money to fund what looks like 'grassroots' democratic/liberal movements in and around 'official enemy' states. That's not to say that people with real, personal discontent with the way in which their societies are run are not involved within such movements, or that these societies are actually democratic. However, I feel that it can be very easy for movements like these to be 'piggy-backed' upon by external geopolitical/corporate interests and their cut-out agencies, like the aforementioned USAID, amongst others.
Great read nonetheless, thank you for your work!