World on Fire - Brownstein, Michael [11]
Today’s global economy did not appear overnight, but to a large extent represents the triumph of five decades of American foreign policy. After the Second World War, and consciously to promote capitalism and contain Communism, America drove the creation of the World Bank, the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development, and the free trade organization, GATT. In the 1960s the U.S. Agency for International Development and private organizations like the Ford Foundation poured millions into “modernization” projects aimed at bringing economic and legal progress to the developing world through the export of capitalist institutions. With the collapse of the former Soviet Union in 1989, capitalism was seen around the world as triumphant and inexorable. In the developing countries of Africa, Asia, and Latin America, the IMF and World Bank pushed through privatization programs and foreign investment and trade liberalization by conditioning desperately needed loans on these market reforms.
As of the late nineties, more than eighty developing and post-socialist countries were privatizing. Pro-market tax codes, investment codes, and securities laws, often drafted by American lawyers and academics, proliferated from Peru to Bulgaria to Vietnam. By 1996, Kazakhstan alone had adopted over 130 market-friendly laws. In Argentina, President Carlos Menem passed a flurry of pro-capitalism laws on an “emergency” basis. Stock exchanges—some hand-operated—appeared everywhere, including in Mozambique and Swaziland.
4
In the new millennium, globalization and the worldwide spread of free markets continue to accelerate, with America at the helm. At the same time it is now possible to look back and begin to assess what the economic impact of globalization has been, not just in the United States, but around the world. As the next four chapters will show, the disturbing reality is that global markets, even if marginally “lifting all boats,” have consistently intensified the extraordinary economic dominance of certain “outsider” minorities, fueling virulent ethnic envy and hatred among the impoverished majorities around them.
CHAPTER 1
Rubies and Rice Paddies
Chinese Minority Dominance
in Southeast Asia
In Burma,*tattoos are traditionally used to protect against snakebite. In 1930 and again in 1938, enraged Burmans applied these tattoos to achieve invulnerability against bullets and then proceeded to slaughter Indians in an orgy of violence. Even monks were said to have participated. At the time, Indians, along with British colonialists, were a starkly economically dominant ethnic minority in Burma and the object of mass antipathy. Killing Indians was an act simultaneously of revenge and nationalist pride among a long-downtrodden people. As a contemporary observer put it, “The average Burman on the street felt that at least once he had proved his superiority over the Indian.”
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Today there is only a small community of Indians left in Burma. Hundreds of thousands fled in the sixties, in response to another wave of ethnic violence. But a new market-dominant minority has taken their place, far wealthier than the Indians ever were.
Markets, Junta Style, and the Chinese Takeover
Burma has one of the most repugnant military governments in the world—the State Law and Order Restoration Council, or SLORC,** which seized power in September 1988 after gunning down thousands of unarmed demonstrators. SLORC held multiparty elections in 1990, but then refused to honor the landslide victory of 1991 Nobel Peace laureate Aung San Suu Kyi, placing her instead under house arrest and earning the widespread hatred of the Burmese people.
2
From its inception, SLORC has been aggressively pro-market. Reversing three decades of disastrous, socialist central planning, SLORC in 1989 launched “the Burmese way to capitalism.” Apart from enriching corrupt SLORC generals, who are all ethnic Burmans,