APEC: what it is and how to fight it
By Dick Nichols
[This is the edited text of a talk to the Slam APEC conference in Manila in November.]
APEC brings out all the greed of Australian big business. Multinational mining companies like BHP, CRA-RTZ and Western Mining drool about the profits to be made by pushing rural communities off their land in Mindanao and employing mining workers on miserable wages; Telstra's executives dream about selling a mobile phone to everyone in Thailand.
Capitalism and its governments are serving up the same boring, deadly diet to us all: privatisation of state-owned industry, dismantling of whatever welfare system labour has managed to win, crushing of unions — all in the name of making us all better able to compete with each other.
For the poorer countries, that means a world of free-trade zones and export-producing sweatshops. For the imperialist powers, it means driving down conditions of life and work that we had long come to regard as our right.
Workers in all countries are being told to work harder in order to compete against one another. Take the words of the Asian Development Bank on the Philippines economy:
"Minimum wage legislation has ... hindered employment growth. The resultant overpricing of unskilled labour has not helped to promote labour-absorbing economic activity, particularly in the modern sector. Wage deregulation and structural reforms that encourage labour-intensive growth could contribute significantly to increasing employment."
Translation: If workers didn't ask for such high wages, there would be more jobs. In Australia, this means trying to break down what is left of our strong industrial unions by spreading a system of workplace-by-workplace bargaining; here it means trying to prevent you from overcoming the fragmentation of your unions.
You get an idea of how criminal and stupid this argument is when you look at last year's landmark International Labour Organisation report on world unemployment. The ILO found that there were 800 million people in the world who were unemployed or underemployed. According to the thinking I've just quoted, that's 800 million people who are demanding too high a wage — including the workers on Negros, where the minimum wage is around 100 pesos a day.
APEC means more of this pressure — a freer hand for capital to pressure and intimidate labour across the entire Asia-Pacific region. Like NAFTA and the European Union, it aims to bring into direct competition workers who have different levels of productivity. The least productive will perish, as they have in Mexico, where the NAFTA agreement is allowing cheaper US food imports to destroy thousands of small family farms.
APEC's final form is a very long way from being settled. But the one specific undertaking of importance by the APEC countries — to eliminate all tariffs for the advanced industrial countries by 2010 and for the developing economies by 2020 — points in that direction: the least productive will be sacrificed.
Already countries like the Philippines are involved in a bidding war to attract multinational capital. Multinational capital rules the roost more than it ever has. IBM, Toyota, Royal Dutch Shell, Ford, Exxon and General Motors are all larger than the entire Philippines economy, with GM 2.5 times as large. We all know the pressure that can be put on governments to achieve the "investment conditions" pleasing to these giants.
In all the main industries, there now exists a single world market. Each market is dominated by a limited number of multinational giants which still compete amongst each other, but also combine to carry out research and development and to exclude new entrants. These firms have the power to dictate the conditions on which they will invest in the Third World.
This is the basic form that the concentration of capital takes today: it's the shape of imperialism in today's world.
The slowdown in growth and profit rates in the advanced capitalist countries from the late 1960s both forced the worlds's big firms to restructure their operations and drove capitalist governments to implement austerity.
Now we are living through a period of slower growth on a world scale, even though growth rates in South-East Asia are much higher than the average. There is no chance that South-East Asian growth rates of 8-12% can become general because the system as a whole suffers from insufficient demand, and there is no easy way for the capitalist system to solve this problem.
Higher wages would increase demand, but increased wages undermine competitiveness. Increased consumer credit can boost demand, but the level of debt across the world after 40 years of applying this technique means that there is little room left to increase credit. Consumers, industries and entire nations have never been so burdened with debt.
So, even though austerity programs have succeeded in partially restoring profit rates for the big corporations, demand lags behind the productive capacity of the economy. That means that there's huge excess capacity. And this increases the ability of multinational capital to force concessions from the economies of the Third World. Their message is: "We can always go elsewhere".
There will be some growth. Some economies or regions will "get lucky". The trick is to convince the peoples of the developing world that they can get lucky, so long as they follow the recipe of the World Bank, the International Monetary Fund and organisations like NAFTA and APEC.
Their basic argument is the old claim that if tariff barriers are eliminated, the least efficient producers will go, and the resources they are presently using will be used in areas where they can produce other goods more efficiently.
In South-East Asia, this will help the economic "miracle" which began with South Korea, Taiwan, Hong Kong and Singapore to spread to the "second league" economies — the Philippines, Malaysia, Thailand and Indonesia. And with the Philippines now enjoying 6-8% growth, after years of total stagnation and even contraction, isn't the pay-off, the "take-off" finally coming?
What would need to happen in the Philippines for a South Korean-style "miracle" to take place and for one year of 6% growth to convert into year-after-year of 8-12% growth?
The first requirement would be that imperialism actually wants economic growth, that it's prepared or obliged to create future competitors for its own industries.
In the South Korean case, as a bulwark against the North, the US provided up to 70% of the country's inflow of foreign capital in the form of outright grants: it was as if South Korea was an item on the US budget.
It trained and organised the Korean Central Intelligence Agency as the core of a brutal authoritarian state that would organise growth by enforcing a 58-hour week, keeping wage increases well below the growth in productivity.
The US also allowed the South Korean government to introduce a parody of socialist planning which was the complete opposite of the deregulationist model being urged by the IMF and the World Bank: a system of state-assigned market quotas to each big firm; credit and foreign loans totally under the control of the state bank; and massive export subsidies, 100% interest rate subsidies on foreign loans and tax exemptions. It was an economy run like the army, what Waldon Bello accurately calls "command capitalism".
Such a brutal system can produce growth, but at what cost! Firstly, the gains from growth usually go to the capitalist rich and their hangers-on, with some "trickle down" to the new middle classes. In Mexico the growth model of the 1970s and 1980s produced 17 Mexican billionaires. In Chile between 1980 and 1992, while national output was growing at 5.1% a year, income to workers in manufacturing fell 0.3% every year; only 18% of the value workers added came back to them in wages. (In the Philippines, the equivalent figure was 26% and in Australia 35%.)
Now there are tens of countries elbowing each other to be the next South Korea or Taiwan, in a period when world growth is slower than in 1950-75 and shows no sign of picking up.
Finally , there's no guarantee that economies following this model won't be smashed by a financial crisis of the kind that massacred the Mexican economy in December 1994.
Mexico had done everything asked of it by the IMF and World Bank, and yet, once the speculators decided that there were better gains to be had elsewhere, the currency crashed, living standards were as much as halved overnight, and the government had to give its foreign creditors total control over its petrol revenue.
The Philippines, Malaysia, Indonesia and Thailand all depend as much as Mexico did (and does) on foreign capital, a lot of it short term and speculative.
This whole situation is all the more appalling because it doesn't have to be. UN and World Bank documents calculate that for $40 billion a year over the next 10 years, basic medical care could be given to everyone, the most serious forms of malnutrition eliminated, infant mortality and adult illiteracy cut in half and family services provided to all those who want them.
Against this, every year debt repayments to the imperialist banks from the Third World amount to $170 billion, and world military budgets amount to $US850 billion.
These figures confirm that if the financial, educational and physical resources of the world were in the hands of the majority and not the rich and parasitic few, we could move rapidly to the solution of the dreadful problems of poverty, underdevelopment and environmental destruction that plague our planet.
That's the solution: the world's working people democratically running society and the economy, making the decisions that are presently the property of the boards of the multinational companies and banks.
But that state of affairs is still a long way off: we've a long way to go in building the working-class and popular organisations that can bring it about. In the meantime, and as a step along the path to that future, we have to work out how to oppose APEC. What alternative should we be proposing in its place?
It's not easy to say straight off. That's because, unlike the EEC and NAFTA, APEC is still a shapeless mess. There are no institutions like the European Parliament, no great book of rules (like those governing NAFTA trade), just this commitment (and that's not total) to free trade and meetings like the one we're protesting against here.
APEC is a battleground of conflicting interests.
The US wants to use APEC to wrest economic leadership in markets where Japanese capital is well out in front.
The Japanese want to use it to defend their position and strengthen the ties that already bind development in the "tigers" and most of the rest of South-East Asia to Japanese technology and know-how.
The small imperialist powers like Australia and New Zealand are all for an APEC free market because they dream of prising open closed agricultural markets.
For the newly industrialising economies, the hope of growth and development lies in marrying misery-level wages to multinational technology.
It's not surprising, then, that — behind all the official smiles and handshakes — APEC is the scene of numerous overlapping quarrels. There are opportunities galore for the thieves to fall out.
Of the three trading blocs — NAFTA, Europe and APEC — APEC is the shakiest. However, the workers' and peoples' movements of the region shouldn't be waiting for it to fall apart from its own contradictions, or for it to get more organised; we should be giving it as big a push as we can manage.
In opposing APEC, there are a number of false paths to be avoided. The first is that of arguing for a purely nationalist alternative, of withdrawing into a national development model that aims for total self-sufficiency.
In today's highly integrated world economy, that usually means choosing the less efficient over the more efficient, the fourth and fifth rate over the first rate. Our approach should be to have the best that humanity has produced in all fields available for all.
The national capitalist road to development, based on import substitution, tariffs and trying to establish a large range of industries in each and every nation, has failed.
That's why the IMF and World Bank export specialisation model has been adopted by country after country, even where it has not been forced on them and even in countries that began with strong anti-imperialist credentials. The tasks of liberation and democracy that still confront the majority of humanity in the Third World can't be achieved via a national capitalist model of development.
Of course, this doesn't mean that we should abandon the defence of existing industries, accept privatisation and tariff reductions without a fight and just go along with all the rest of their plans.
It means that, instead of just defending this or that industry as it is, we fight for a workers and farmers' development, one that stresses services to the community and alternative production. And where we cannot stop industry closures and destruction, we must fight for state-funded compensation and retraining schemes for the workers affected.
In an imperialist country like Australia it's our revolutionary duty to oppose the nationalist response to APEC's "liberalisation" agenda, because that means falling in with those who yearn for a white racist enclave separated from Asia, where "we" (whoever "we" are) keep out all those people who are supposed to be a threat to Australian living standards and jobs. This trend is common across the whole advanced capitalist world, where a frightened working class can often be sucked into blaming the problems of the system on migrants, refugees and people from other countries.
The second false path is to get lured into the APEC-building process. If what happened with the European Community and NAFTA is anything to go by, sooner or later there will be plenty of money put on the table for union officials and academics and advisers to develop labour's "input" into APEC. In Australia, I'm sure unions will be invited by big business to help fight Malaysia and Singapore's opposition to having any "social" or environmental clauses in trade agreements.
Of course, we can't be indifferent to these issues, and I understand that your resolutions will propose a basic set of workers' rights to be fought for in all APEC agreements. Equally, as APEC takes shape we have to build protest movements against many future concrete features APEC will acquire. But seeing APEC as somehow an opportunity for labour would be at best a diversion and at worst a surrender.
Our starting point should be building the solidarity of labour against the regional collaboration of capital and its governments. Against the capitalist principle of competition, we must counterpose the socialist principle of collaboration.
If we did that job better, it would already be a blow to APEC because it would reduce the blackmailing power of the capitalists. Regional solidarity means:
- Much more support from the Australian trade union and labour movement to the new unions in the region, especially in the Philippines and Indonesia. We have to get to the stage of regional industrial action in support of each other, even if this can only be symbolic at the moment.
- Setting up the structures that will enable us to carry out region-wide campaigns. We in Australia, for instance, could demand that a certain percentage of the wealth of Imelda Marcos and other rich Filipinos that is invested in Australia be used to pay off some of the Philippines' foreign interest burden.
We also need to build a region-wide network of labour solidarity, so that whenever any union or unionist suffers persecution, governments know there will be a response across the region.
- In the imperialist countries, we have to campaign for an increase in aid (which has been cut back year after year as a percentage of GDP) and for an end to the tight conditions that are imposed on the countries receiving it.
There is no alternative capitalist model of development in which the workers, peasants and poor don't pay the price. The motor forces of development — investment in technology and new machinery and in the education and training of the people — are best mobilised by a people that is in control of its own economic and social destiny.
That means revolutionary struggle for power, here in the Philippines and in all the countries of the region. It means leading the vast new working class that capitalism in creating in South-East Asia to an awareness of its strength. And it means a socialist renaissance as the basis on which to fight APEC and all other schemes of capitalist oppression.
[Dick Nichols is national spokesperson on industrial matters for the Democratic Socialist Party.]