Tikkun Magazine

Tikkun Magazine, January/February 2005

The Air We Breathe...

By Noreena Hertz

There is yet more for us to fear. The burden that debt puts upon the developing world endangers us all in an even more fundamental way. It threatens the air we breathe, the food we eat, the survival of our species. It poses a threat to our very planet.

The world's fish stocks are facing collapse, great apes are facing extinction, toxic shrimps are being found in many waters. Sugar maple yields are falling, ocean levels are rising, coral reefs, rain forests and mangrove wetlands are disappearing. Insurance loss claims in America due to natural disasters are already spiraling out of control (claims between 1990 and 2000 were equal to those of the previous thirty years combined) and costs of global warming are expected to reach $300 billion a year in coming decades. All this and much more can be linked to debt.

How so? First, in order to generate the requisite foreign exchange they need to service their debts, developing countries tend to exploit whatever natural resources they have. The more debts they have, the more they exploit. Clear links can be made, for example, between levels of debt and rates of deforestation. And deforestation is a key driver of global warming—25 percent of global greenhouse gas emissions are due to changes in land use, principally deforestation, most of which is taking place in the developing world—and global warming is a key driver of climate change.

At the same time, the opening up of forests and woodlands to industrial logging companies, a move increasingly favored in order to meet the privatization requirements of the IMF, itself creates serious problems. Since industrial loggers have moved in, hordes of people have been drawn to the hitherto inaccessible forests of Central and West Africa in search of work. In order to survive, these people are killing off pigs, elephants, chimpanzees, and gorillas at an unprecedented rate. If today's rates of slaughter persist, not only will indigenous forest people no longer have a secure source of food, these species will be extinct within the next twenty years.

Second, countries devastated by debt simply cannot afford to act in an environmentally responsible way. They can't afford to replant their forests if they raze them, so the world loses its carbon sinks; they can't afford to put money into environmental preservation schemes when they are facing more immediate problems—health crises, unemployment, social unrest, etc. And so environmental degradation persists. There has been a 50 percent reduction in funds for environmental preservation in the Amazon, for example, since the 1980s, when structural adjustment programs were first put in place. And even if a country does have environmental protection legislation, it cannot afford to enforce it—the Democratic Republic of Congo has some of the most sophisticated environmental protections in the world but cannot find the money to pay the policemen to administer them. In the Philippines, where the government sold off all official vehicles in order to meet IMF-imposed budgetary constraints, you have the bizarre situation of forestry officials being forced to beg rides from the very loggers they are supposed to be controlling! The upshot? More exploitation, more environmental risk.

Third, the pressure of servicing debt in poverty-stricken countries inspires short-termist behavior. The world's poorest countries—Ghana, Gambia, Honduras, Nicaragua—are selling off their fishing rights, for example, to fleets from the world's richest, in part to repay their debts. Never mind the fact that these rich countries have already over-fished their own seas, and are clearly hell-bent on exporting their over-fishing practices to new waters. Never mind that, as a consequence, the developing countries are seeing the livelihoods of their own local fishing communities being destroyed, unable to compete with big commercial fleets. And never mind the fact that if developing-world countries continue to sell off their fishing rights at the current rates, the world's entire fish stock will collapse. This isn't scaremongering. In the past fifty years, the world's mechanized fishing fleets have already managed to wipe out nine-tenths of the world's biggest and most economically important species of fish, including swordfish, cod, halibut, and tuna. Just think what could happen if such fleets are able to trawl unregulated in developing-world waters.

Fourth, loans are very often provided for clearly environmentally damaging projects. Remember the PoloNoreste Project in Brazil, the 930-mile road built through the Amazon, financed by the World Bank in order to create new rural settlements and ease urban congestion—which resulted in widespread deforestation, the dislocation of indigenous peoples, and the loss of many endangered species. More recently, we have seen mangrove wetlands, the saltwater equivalents of the rain forests, being destroyed in Thailand, Indonesia, Ecuador, Bangladesh, Nigeria, Ghana, Malawi, and elsewhere, as World Bank financed shrimp farms are built on these sites. Shrimp farms are now the primary cause of mangrove and wetland destruction in the tropics. Hundreds of millions of dollars are being lent by the World Bank for projects which, on top of contributing to global warming, not only are proving incapable of generating the foreign exchange they were supposed to create (which should, of course, have been obvious: with so many countries being lent money to set up such farms all at the same time, there was an immediate global glut of shrimps, and their price plummeted), but are also threatening local food security. In Asia, for example, over half the shrimp farms that were set up are, because of the glut, now abandoned, which has led to a significant drop in the availability of food, as land formerly used for crop growing now lies fallow. Having been salinated for the shrimps to flourish, it is now unsuitable for other use. Furthermore, the products are all too often toxic, as shrimp growers pump their products with chemicals so as to maximize yields. Thai, Pakistani, Vietnamese, and Indonesian prawns have all been found to contain traces of the cancer-causing antibiotic nitrofuran, and in 2002 several of Britain's leading food retailers were asked by the Food Standards Authority to withdraw various Asian prawns from their shelves because they contained not only this illegal chemical but also pesticides deemed dangerous by the World Health Organization.

Export credit agencies are also guilty in this environmentally unsound lending equation. They are responsible, as we have seen, for financing most dams and thermal power plants in developing countries and several have done serious damage. The Rihand mega-power plant in India, for example, financed by export credits provided by Western governments so that their big corporations—in this case NEI and GEC—could profit, had to be cooled with water from the Rihand Lake, thus raising the lake's temperature and changing the ecology. The power plant was also fed with coal from the Singrauli strip mine, one of the last habitats for the Bengal tiger.

U.S. export credit agencies OPIC and Ex-Im are currently in litigation, charged with having provided over $32 billion in loans and insurance over the past ten years for the building of oil fields and coal-fired power projects in developing countries. It is claimed by the cities of Boulder and Oakland—which in conjunction with Friends of the Earth and Greenpeace have brought the case to bear—that the loans will lead directly to climate change, and as a result will diminish U.S. drinking water supplies, increase the risk of salt water contamination in groundwater aquifers, overwhelm sewage systems, and aggravate respiratory illnesses. In the case of Oakland, climate change already puts its airport at risk: given that it was built on a former wetland at about ten feet above sea level, it is now susceptible to flooding from the extreme tides that accompany global warming.

And remember, the United States' export credit agencies are more environmentally sound than almost all of their counterparts! Of course, blaming the developing world for the destruction of the developed world's environment is in some ways pretty rich. If anything, the developed world owes an ecological debt to the developing world: carbon dioxide emissions from the rich world currently far exceed those from the poor. The commitment of the 1992 UN Framework Convention on Climate Change, under which developed countries were supposed to reduce emissions, remains largely unfulfilled. Both America and Russia have refused to ratify the Kyoto Protocol. And frighteningly little change is expected on the emissions front, especially given that the United States alone accounts for 21 percent of total world emissions and that the Bush administration is hell-bent on downplaying the impact on global warming.

But by lending money for projects it knows are environmentally unsound, and by making poor countries deprioritize the environment and sell off their natural resources in order to meet IMF conditions, the rich world once again shoots itself in the foot. This is a case not of developed-world myopia, but of developed-world blindness.

The security threat we face, if we continue to ravage our environment at current rates, is going to make even Osama bin Laden look pretty tame. In a recent report, the Pentagon announced that global warming is now a greater threat than terrorism. The latest scientific research predicts that water, dry land, and energy resources will become increasingly scarce and increasingly fought over within our lifetime; and that civil wars and regional conflicts will grow as tens of millions of people displaced by floods, droughts, cyclones, and rising sea levels will pour across borders and huddled refugee camps, leaving disease, misery, and anger in their wake. Millions are likely to starve as climate changes take hold; ill-configured World Bank funded monoculture projects and the depletion of the oceans are likely to cause the collapse of food production in countries that already have severely undernourished populations. Those who survive will find sustenance in their rage. Disease could spread, as rising temperatures are anticipated to lead to increased incidences of insect-borne illnesses such as malaria and dengue fever, illnesses against which our borders no longer provide barriers. Species after species are projected to become extinct—already 24 percent of mammals are threatened with extinction thanks to logging, forest clearing, and over-fishing practices: an extraordinary rate of extinction even compared with the ice ages. With each death, the number of possible medical cures drops, and our fragile and complex ecosystem will be further irreversibly damaged.

The Cree Indians warn that "after the last tree has been cut down; after the last river has been poisoned; after the last fish has been caught, only then will you find that money cannot be eaten." We are approaching that last tree, last river, last fish. The debt threat is real and it faces us now. Countries weighed down by unmanageable debt burdens are already sicker, poorer, more economically unstable, more politically volatile, more fractured than they would otherwise be. Their environments are more ravaged. Confidence in their leaders is already increasingly weakened as more and more people ask whether it is to them or their bankers that their loyalties lie.

And in this ever globalizing world of ours, what is "theirs" fast becomes "ours"—their sicknesses become our sicknesses, their despair our despair, their damage our damage, their dysfunctionality, the dysfunctionality of us all. We will never be able to build walls high enough to keep angry beggar armies out. No amount of "shock" or "awe" will be sufficient to dispel the ever growing hordes of the disgruntled and disenfranchised. Paper surgical masks will be unable to protect us from the spread of diseases that respect no borders. No number of herbicide-spraying sorties will stop poor, dispossessed farmers from growing drugs. Our environment will be irrevocably damaged by the environmentally damaging decisions taken by others many thousands of miles away. Our economies will be threatened by the game of chicken that Wall Street and the leaders of the developing world so often play.

Excerpted from The Debt Threat. Printed by arrangement with Harper Collins Publishers, [c]2004. All rights reserved. Noreena Hertz is the Associate Director for the Centre for International Business at Cambridge University. She is one of the world's leading experts on economic globalization, and her work has been published in the Washington Post, the New Statesman, the Observer and the Guardian. She holds an MBA from Wharton and a Ph.D. from Cambridge University.

Source Citation

Hertz, Noreena. 2005. The air we breathe... Tikkun 20(1):21.

tags: International Monetary Fund, Toxic Environments