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23 April 2001
No. 120

In this issue:
    Trade and Hunger
  2. NEWS in Brief
    East Timor - UN Spending on Themselves
    Korea - Food crisis worsens after horror winter
    Indonesia - The Military Gathers Strength
    Malaysia - Suhakam report outlines govt’s human rights flaws
    IMF/WB - Fictitious Debt Reduction for the Highly Indebted Poor Countries
  3. Urgent APPEALS


1. FEATURE - top


[Here we offer some extracts from a new survey examining the relationship between trade and food security, poverty and the environment. "Trade and Hunger" distills the findings from 27 impact assessments on the effects of trade liberalisation from 39 countries in Africa, Asia, Latin America and Eastern Europe. The consistent conclusion from these studies is that so-called 'free trade" as promoted by the World Trade Organisation benefits only the rich, while making the poor more vulnerable to food insecurity]

Trade liberalisation (the removal or reduction of barriers to international trade in goods and services) has become a global prescription for the world's continued economic growth and universal prosperity. But accumulating evidence on the relationship between trade liberalisation and food security and poverty suggests that there will be more losers than winners. This study examines this liberalisation under the World Trade Organisation's (WTO) Agreement on Agriculture (AoA) signed in 1994; under World Bank/International Monetary Fund-imposed structural adjustment programs (SAPs), which have been going on since 1980 (and which led to widespread liberalisation of the economies of most developing countries well before 1994), and under regional free trade agreements.

Under SAPs and AoA, developing countries have to make significant changes in their food and agriculture policies. They are obliged to open up their economies to cheap food imports and to reduce and severely limit support for their farmers. Most SAPs require more sweeping liberalisation measures than are required under the AoA, and also demand related measures such as privatisation of state-run enterprises, the elimination of subsidies and price controls, and the abolition of marketing boards. By contrast, the AoA centres on trade liberalisation measures it calls, for examples, on member countries of the WTO to reduce tariffs on food imports by 24% over a ten-year period. The 48 least developed countries are excluded from this and from other reduction commitments. The AoA - a deal largely stitched up by the United States (US) and the European Union (EU) under pressure from business corporations - tightens the screw of structural adjustment. Oxfam has referred to the AoA as an "act of fraud" that will give rise to increased competition from imports and intensify rural poverty and destroy smallholder livelihoods. And unlike SAPs, the AoA is binding on member countries of the WTO, which number some 137 as of July 2000.

According to the study, trade liberalisation is failing the poor in a number of different ways:

1) Cheap imports

The majority of people in developing countries belong to farming families. Most farmers are small-scale, with at best a few hectares of land and sometimes much less. The problems for these farmers caused by cheap imports, made possible by trade liberalisation, come across in most of the case studies. Cheap imports originate from both developed countries (especially the US and the EU and also from developing countries (imports of sugar into the Philippines from Thailand, for example).

Competition from cheap imports is putting farmers in developing countries out of business. Such imports are coming both through commercial channels and through dumping -food sold below the cost of production to dispose of surpluses, and usually cheaper than commercial imports and more damaging. Ghana provides just one of many examples of how food imports have demoralised small-scale farmers. Having produced corn, rice, soybeans, rabbit, sheep and goats, the farmers cannot obtain economic prices for them, even in village markets. Their produce cannot compete with cheaper imports. Domestic food production is threatened as the agricultural sector is placed in jeopardy.

The studies show that liberalisation has led to an increase in the prices of farm inputs, causing huge problems for small farmers. Forced to pay more for their inputs, they are often receiving less for their produce when they come to sell. In economic terms, trade liberalisation appears to have worsened the terms of trade between outputs and inputs. Harvested food prices have not always fallen. According to the studies, higher food prices as the result of trade liberalisation would appear to be the exception.

Consumers may appear to gain from cheap food imports. But they only do so if they have the money to buy, which many people in developing countries don't have. And cheap food imports damage the livelihoods of small-scale farmers and also the countries' most basic economic sector - its food-producing sector. Also, if trade liberalisation gives more power to monopolies, consumers eventually stand to pay higher prices.

2) More priority for export crops

Trade liberalisation means more food imports; often it reduces the priority that governments give to their food crop sector, while increasing the priority they accord to crops for export. Many of the studies show that trade liberalisation has led to more land and resources being devoted to export crops and less to domestic food production. In Benin, for example, government incentives led to an increase in land under cotton; cotton exports have increased to the detriment of food production and food security.

Although governments are generally according more priority to the export crop sector, this does not necessarily mean that farmers are receiving better prices for these crops. World prices for many are declining - as witnessed in case studies on Kenya, Sierra Leone and Uganda. As traders, and not government bodies, are mostly buying these crops, the price they offer the farmer will be related, in some degree, to the world price. But the power of the traders may mean that the price to farmers is far below the world price.

3) Transnational corporations (TNCs)

Trade liberalisation is proving very beneficial to large entities such as TNCs - as seen in the studies on India, Philippines, Uruguay and Cambodia. But it is not just proving beneficial to them, it also appears to be helping them at the expense of the poor. The Food and Agriculture Organisation (FAQ) notes that the process is leading to the concentrations of farms "in a wide cross-section of countries" and to the marginalisation of small producers, adding to unemployment and poverty. In Mexico, the winners from trade liberalisation are concentrated in the country's fruit and vegetable growing areas where production is predominantly on large-scale, irrigated farms. There is a "dramatic increase in investment in these areas, with large farms or firms leasing land". This finding is consistent with an emerging global pattern of increased profits for transnational corporations at the expense of poorer producers.

4) Landlessness

In Cambodia, more land has been bought and sold, leaving farmers with not enough or no land. Ten years since the adoption of the liberal market economy in 1989, it is estimated that 10-15% of the country's farmers are landless and that land is being concentrated in fewer hands. The top 10% of the population own 33% of cultivated land while the bottom 20% own less than 4% of cultivated land.

5) Women

The studies on Kenya, Ghana, Uganda, Zimbabwe, Mexico, Jamaica and the Philippines all show how trade liberalisation is impacting heavily on women and accentuating gender inequality. In Uganda, liberalisation may mean that the local parastatal depot is closed down, and producers have to go out of the village to a local market to sell their produce. Failing to do this will oblige them to sell their produce to village grader who will benefit at their expense. Women are often faced with a very heavy workload which gives them little time to go to the local market to sell their produce. If they sell their produce in the village, they will get lower prices.

Women, who produce 60-75% of food in most African countries, have been affected disproportionately by the elimination of subsidies, the drying up of credit and the surge of food import as a result of trade liberalisation. Women have the responsibility for putting food on the family table; but prices of farm inputs have risen under liberalisation, and incomes of farming families have come under serious pressure. As a result, many have been forced to cut back on the quality and frequency of their meals. Life in Zimbabwe, notes one study, is becoming a nightmare, with everyone in the family crying out for food.

In Mexico, male labour migration increases the workload on women and children, who are often withdrawn from school. There has been a sharp increase in the frequency with which women are forced to migrate in search of work as day labourers: they now comprise one third of this workforce. "To the extent that liberalisation accelerates these trends, it will exacerbate problems of inequality and rural poverty "notes the Mexican case study.

Trade liberalisation can have positive effects --by enabling rural women to engage in micro and small enterprises in Kenya, for example. But the studies indicate that the negative effects far outweigh the positive.

6) Unemployment

There are no world-wide figures as to how many people have lost their jobs as a result of trade liberalisation over the last 20 years. In Mexico, 700,000 - 800,000 livelihoods will be lost as corn prices fall, representing 15% of the economically active population in agriculture. In India, the jobs of 3 million edible oil processors were lost. In Sri Lanka, 300,000 jobs were lost following the drop in production of onions and potatoes. Globally, it would not be unreasonable to estimate a figure of at least 30 million jobs lost in developing countries because of trade liberalisation and related factors.

7) Environment

The cultivation of cash crops for export imposes considerable environmental costs. In the Philippines (and numerous other countries), the extensive use of agrochemicals in export-crop production has increased soil degradation and the loss of biodiversity. Liberalisation encourages producers to abandon traditional and ecologically sound agricultural practices in favour of export monocropping. Also, the encouragement of agri-based exports in special development zones creates massive colonisation of critical watersheds and the depletion of water resources in irrigated areas, previously planted to food crops.

8) Government services

Under SAPs, liberalisation goes hand in hand with a reduction in government support for farmers, such as investment in agricultural research and extension, controlled pricing and marketing, and subsidies on Inputs. Governments withdraw and leave people to the free play of economic forces. People with money may survive, but the poor are left stranded. The Philippines is probably typical in that insufficient state support for services such as irrigation, post-harvest facilities and farm-to-market roads has meant that small-scale farmers are unable to improve productivity levels or get their products to market at prices that cover costs.

9) Self-sufficiency and sovereignty

The negative impact of trade liberalisation on food self-sufficiency, let alone food sovereignty, comes across in many of the studies. The effect of free trade on India's edible oils sector is startling. Tariff reductions allowing massive imports turned India from being self-sufficient in edible oils to being the world's largest importer in a mere five years.

10) Traders gain

In a number of countries, the liberalisation of' markets has increase participation by private firms and individuals in the trade of food commodities, unlike in the past when public institutions dominated the trade. In theory, this could lead to increased employment opportunities, which would be a positive move. But this does not seem to he happening. Liberalisation has certainly increased the number and power of traders. In Uganda, for example, traders have "invaded" whole villages and used their bargaining power and the need of farmers for cash (to buy inputs for example), to buy harested crops at low prices. This puts more pressure on farmers and endangers household food security.

11) Migration

When trade barriers are lowered, many small-scale farmers are unable to compete with cheaper imports and leave their land to head for the cities and towns, adding to pressures on urban services.

12) Indirect effects

A number of studies show how changes in economic sectors, other than agriculture, have an impact on food security. In Kenya, the liberalisation of textiles and footwear has led to imports flooding the domestic market. "This has led to a drastic decline in the production of cotton and, as a result, a loss of income to cotton producers, exacerbating the problem of food insecurity for most households in rural and urban areas," says one study. In the Philippines, financial liberalisation has resulted in higher interest rates, lower investments, and higher costs for food inventories and stockpiling. These effects foster instability in the market for staple foods and threaten the food entitlements of the poor.


As the author of the Thailand study says, "Many of us have been saying for a long time that unchecked, liberalised global trade is a disaster waiting to happen. No one listened. Now it's happened." Small-scale farmers are bearing the brunt of this disaster. But consumers too are vulnerable. In free trade theory, production will allocate to where costs are low and consumers - poor as well as rich - will benefit from low prices. The reality is more complicated, however. If trade liberalisation gives more power to monopolies, then consumers eventually stand to lose.

Much of the trade liberalisation of the last two decades has been based on the hope that agricultural production in developing countries will switch to high-value crops for export, enabling them to import food. But trade liberalisation in Sierra Leone did not lead to the hoped-for benefits from exports of cocoa on coffee. Ethiopia and Bangladesh have experienced problems in trying to meet food security needs through exports. Agriculture is the main source of livelihood for hundreds of millions of people in developing countries. If small-scale farmers are out-competed without an alternative source of livelihood, the availability of cheap imports is no help. Governments seem to be misled or pressurised to subscribe to trade liberalisation, or to do it too quickly, without adequate preparation.

Trade liberalisation is only one factor exacerbating problems for the poor in many countries. The studies often reveal the interaction of factors that affect food security, such as privatisation; domestic, economic, and financial policies; and the incidence of HIV/ AIDS. As the study on Thailand points out, "the mess isn't simple"; devastating weather patterns, massive unemployment, the need to earn foreign exchange "to hail out an unbelievably irresponsible private sector" are all factors. But these studies indicate that trade-based food security for the poor is - at least for the time being - more a mirage than a fact.

Yet liberalisation is a policy choice, it is not inevitable. A fundamental review of the dominating policy paradigm is needed, and at the very least, WTO rules need to be changed so that developing countries can provide domestic support and other regulations to protect the livelihoods of smallholders and promote food security.

"Trade and Hunger - an overview of case studies on the impact of trade liberalisation on food security" was compiled by John Madeley for Church of Sweden Aid, Diakonia, Forum Syd, the Swedish Society for Nature Conservation and the Program of Global Studies.


2. NEWS in Brief - top


United Nations Spending on Themselves!

[A letter from Brian Walker - head of the international Rescue Committee operation in Dili, East Timor, shows how the UN reconstruction work in the territory is grossly inefficient and corrupt, when compared to the operational costs. Further, the UN policies and lifestyles are becoming so affluent, that the East Timorese themselves are finding it difficult to afford living in their own country. During the month of November and Thanksgiving in the US Brian Walker mused on the thought that East Timor has little cause for giving thanks. He gives some figures querying if they are sound monetary policy.]

The World Bank was pledged US$156 million in December 1999. Then again in June the World Bank was pledged an additional US$48 million. To date the World Bank should have been given US$204 million. As of October 2000 the World Bank has received US$68 million in contributions from these pledges. Between December 1999 and October 2000 the World Bank has spent US$15 million. The pledges are made by national governments, like the USA, Japan, England etc. Why these government promise to give money for the reconstruction of East Timor and then not release the funds is a mystery.

But more importantly, why doesn't the World Bank spend the money they have received, on the reconstruction of East Timor? The United Nations Transitional Authority for East Timor (UNTEAT has a completely separate pot of money for the reconstruction of East Timor, and between Dec. 1999 and June 30, 2000 the following amounts have been spent:
US$99 million - Peace Keeping Forces (9,000 troops).
US$85 million - Civic administration (2000 international & 1000 national employees).
US$23 million - Accommodation and Premises for UN Civil Administration.
US$2.9 million - Infrastructure Rehabilitation (roads, electric, water, schools etc.

In seven months the UN spent US$204.9 million and less than $3 million of that was for the long-term repair and rehabilitation of the nation they are mandated to assist. All the rest of the money was spent of themselves, over 90 cents in the dollar.

From October 1999 to September 30th 2000 a group of 30 non-govern-mental organisations (CARE, Save the Children. IRC, Catholic Relief Services, World Vision and 25 more) brought US$44 million dollars to East Timor for development. On the first of October 2000, every penny has been spent. We have invested more money into East Timor than the World Bank and have put more money into water supplies, health and educational services, agricultural production and housing construction than the UN. All of this money has come from the small donations of people around the world. All of this money has come from people who have been watching late night TV and have seen those hungry kids with flies crawling around their faces. Unfortunately, these same 30 private organisations have only been able to raise US$9 million dollars for 2001. But the year is young and our work speaks for itself.

I am concerned that we will have breaks in available funds for our programmes. If this happens local staff will have to be terminated, that means families will be harmed. The real tragedy of the number I have given you, is not just that the World Bank and the UN are grossly inefficient and corrupt in their management, but their lifestyles have ruptured the local economy to the point where the Timorese cannot afford to live in their own country.

The United Nations should continue to be a centre for international debate and political discussion. But he UN should not be managing projects, running programmes or leading underdeveloped country governments.

[Source: Pacific News Bulletin]


Food crisis worsens after horror winter

North Korea is facing another spring and summer of serious food shortages, with the government-run public distribution system already relying on international aid and alternative foods, a UN official said yesterday.

"It will be another difficult year for Koreans in the DPRK [North Korea], who are emerging from the most severe winter in 50 years," the director of the UN's World Food Programme (WFP) in North Korea, David Morton, said in Beijing.

"The public food distribution system exhausted last year's harvest as early as January, whereas last year the system distributed food up until June."

At present the system was depending on government-to-government aid from South Korea and had enough supply to distribute only a paltry 200 grams a day per person until next month, he said.

After that, many North Koreans would have to rely on foods such as ground cabbage stalks and edible plants mixed with grain while waiting for this year's harvest.

The WFP project in North Korea has been feeding about eight million people since the food crisis began in 1996. Six million of those are children aged between six months and 16 years.

"Malnutrition is not difficult to see and the nutrition of children could worsen this year despite having improved since the peak of the food shortages in 1996 and 1997," Mr Morton said.

North Korea's harvest last year was 1.8 million tonnes short of the county's lowest requirement of 4.8 million tonnes of grain, which is needed to feed the country's estimated 22 million people each year.

Mr Morton would not speculate about how many people had died due to the isolated Stalinist nation's five-year-long food shortage, saying "it is difficult to get hard data from the DPRK Government".

"There is no doubt that the harsh [winter] conditions, combined with poor health services, shortage of food and contaminated water have taken a toll and continue to take a toll on the people," he said. "We don't know how many precisely, but we think it is high, and unacceptably high."

The WFP has appealed for 810,000 tonnes of international aid, valued at US$306 million (HK$2.38 billion), to help the country overcome its difficulties this year, but only 57 per cent of the grain has so far been received.

Between 1995 and October 2000, a total of 1.9 million tonnes of food aid, valued at US$858 million, was donated to North Korea through the WFP.

Many countries, including South Korea, China and Japan, maintain bilateral aid programmes, while international non-governmental organisations are also providing food aid.

The UN is continuing to call on the Government to make efforts to rebuild its economy, which all but collapsed with the 1991 break-up of its traditional benefactor, the former Soviet Union.

Mr Morton said his agency was encouraged by announcements in Pyongyang at the beginning of the year that "there's a need now for new thinking and new ideas".

But he could offer no information on reports out of Seoul and Beijing that the Stalinist Government was preparing widespread economic reforms.

"We believe the industry, the basic economy has to recover to provide a solution to the humanitarian crisis that faces the country and the most critical thing to address here is the shortage of energy," he said.

Pyongyang, however, in talks with UN agencies, continues to cite a 1994 agreement to shut down its suspected nuclear weapons programme in exchange for two light-water nuclear power plants to be built by the United States, South Korea and Japan by 2003.

The delivery and building of the two plants are well behind schedule.

[Source: AFP]


The Military Gathers Strength

19 April 2001

As Jakarta is divided by politics and protest, the 297,000-member Armed Forces of Indonesia (TNI) is finding ways to coalesce and gather strength. After months of jockeying for power and purging opponents, senior officers appear to have settled on the distribution of power within the military.

Jakarta's civilian political figures are allowing the military to play an increased role in the country. One has called on politicians to let the military decide its restructuring. The best way to help the TNI "conduct its internal reforms [is] by not disturbing it," said the country's coordinating minister for political, social and security affairs, Susilo Bambang Yudhoyono, according to the Jakarta Post. Shortly afterward, Wahid's Cabinet granted the military greater leeway in putting down the rebellion in Aceh.

A quid pro quo is shaping up in Jakarta, as civilian politicians direct the military to solve problems in the provinces, hoping soldiers will not intervene in the tumultuous politics of the capital. For now, senior officers seem intent on avoiding politics.

But the military will not remain on the sidelines indefinitely. It is motivated by the desire to preserve the state in the face of a series of separatist movements. And in each of these rebellions, the military's conduct becomes fodder for criticism, which undermines Wahid's government.

Jakarta itself will likely prompt cries for military intervention later this year. The capital is torn by protests and calls to violence. The president is well on his way to impeachment hearings, which will rile his supporters. If the hearings are postponed, his opponents will riot. In August, the Parliament will convene in a full session, a time when political forces converge on Jakarta with supporters, protests and violence. The police will not be able to control the situation and the government will be forced to turn to the army.
Indonesia's military has struggled to define its role since the 1999 fall of former President Suharto.

Under Suharto, Indonesia's military wielded considerable political influence. In turn, the armed forces, which then included the police, served government interests by ensuring domestic stability and suppressing opposition and unrest.

But Suharto's replacement, B.J. Habibie, ordered the separation of the police from the military. The police would maintain internal security; the military would defend against external threats.

The police were unprepared to take over the role as the sole provider of internal state security. Difficulties posed by a lack of equipment and specialized training were further exacerbated by a rise in separatist, ethnic and religious violence as the heavy hand of the military lifted from society.

With the police incapable of dealing with the internal unrest and the political leadership immersed in power plays, the military sees little choice but to return to its former role: ensuring stability.

All along, top officers have sought legal approval for taking up the mantle of national security. Following a meeting of senior Indonesian army officers in Jakarta March 1, Gen. Endriartono Sutarto, the army's chief of staff, suggested in comments to the press that the police are not equipped to deal with internal security problems. He called for a "transitional regulation" to allow the army to be "proactive in maintaining security."

The proposals for such a legal framework have ranged far and wide. Susilo has suggested the military be given wide latitude to deal with a variety of threats, bringing nearly every issue under the military's purview.

Already, the government appears to be compromising with the military.

On March 12, the government announced it had officially declared the Free Aceh Movement a separatist organization, giving the military authority to quell acts of violence as well as shape policy and strategy.

Effectively, the compromise that civilians have brokered with the military creates a dual regime, one political and one military.

In the political regime, civilian political leaders are hoping they will be left alone to sort out Jakarta's jockeying for power. In the military regime, the outlying provinces, the military is allowed to quell unrest and devise policy.

The civilians and the generals want to keep the military out of politics, a nearly impossible task under the dual regime. Any move the military makes to deal with separatist actions, illegal migrants or rebellion will have political ramifications in the capital. Further, while the military controls the guns, the government controls the budget. The civilians can interfere with actions in the provinces by withholding funds over atrocities and human rights violations.

The military continues to shy away from taking sides in Jakarta's political wrangling. Although military leaders have emphasized their loyalty to President Wahid, they are quick to clarify the military will not take extraconstitutional action. But with the ongoing process of censuring Wahid, demonstrators and protestors are growing bolder - and more violent.

Ultimately, the separation of the political and military agendas will lead to increased competition between the military and civilian leadership as each seeks to promote its own agenda. While the political elite remain fractured, the military are pulling together to create a unified front. However reluctantly, the military will once again insert itself into Indonesia's politics, if only initially to ensure social stability.

[Source: Stratfor]


Suhakam report outlines govt’s human rights flaws

Leong Kar Yen

Government actions against fundamental human rights can no longer be acceptable by Malaysians, said the Human Rights Commission (Suhakam) in its maiden annual report for 2000, released in Kuala Lumpur today.

"The growth of a politically conscious Malaysian civil society has meant that government action that infringes the fundamental rights of its citizens is no longer unchallenged," said the report presented to Parliament this afternoon.

"The demand for a transparent and accountable government that respects human rights is a fundamental concern of Malaysian civil society today," it added in a chapter entitled ‘The State of Human Rights in Malaysia’.

The 63-page report, which is available to the public, also noted that as the Malaysian populace becomes more sophisticated politically, fulfillment of economic needs in no longer adequate.

"As Malaysia develops and its citizenry becomes better educated and more sophisticated, the demand for civil and political rights has become louder. For increasingly larger segments of Malaysian society, a full stomach is no longer enough," it stated.

Disproportionate violence

The report also addressed other issues such freedom of assembly, detention without trial, freedom of expression, right to a fair trial, the failure of the government to annul four proclamations of emergency, discriminatory laws against women and the ratification of international instruments.

On the issue of assemblies, the report states that though both the Universal Declaration of Human Rights (UDHR) and the Federal Constitution guarantee the right to assemble peacefully, "the Police Act requires that an application for a police permit be made" and that an amendment to the Act "empowers the police to break up large gatherings ... if they are deemed a threat to national security".

The report criticised these restrictions claiming that they infringed on a fundamental liberty with double standards being applied and police resorting to ‘disproportionate force and violence’ in breaking up gatherings.

On March 27, Suhakam concluded a four-month long inquiry into alleged police brutality during the opposition organised Nov 5 ‘100,000 People’s Gathering’ at the Kesas highway in Shah Alam. However, its findings will only be published in its 2001 annual report.

The current report also rapped the government for not taking any action despite repeated promises to review and amend the infamous Internal Security Act (ISA).

"It has been argued that the ISA, which was enacted in 1948 for the sole purpose of fighting the communist insurgency has outlived its purpose since the Malayan Communist Party laid down its arms in 1989," the report said.

Last Wednesday, the commission had issued a press statement condemning the arrest of seven reformasi activists under the ISA for allegedly planning to overthrow the government by ‘militant means’.

Underage girl

Suhakam’s report also stated that the Printing Presses and Publications Act (PPPA) and the Official Secrets Act restricted freedom of expression, particularly Section 8A(1) of the PPPA where government critics may be ‘silenced’ for ‘malicious publication false news’.

"Action taken under this Section included one case involving the printing of pamphlets which alleged official mishandling of a statutory rape case and another involving a report of alleged systematic abuse of migrant workers in detention," the report said.

In 1997 former DAP MP Lim Guan Eng was found guilty under the PPPA and the Sedition Act for distributing pamphlets alleging former Malacca chief minister Rahim Thamby Chik was involved with an underage girl.

Irene Fernandez of reform group Tenaganita was also charged under the PPPA for publishing a report that alleged that migrant workers were tortured and abused in the country’s detention camps for migrant workers in 1996.

The report said that Suhakam had also received complaints that applications for publishing permits or renewals were being denied by the Home Affairs Ministry, particularly those for publications belonging to the opposition.

Emergency declarations

On another matter, the report noted that since independence, the government has made four emergency declarations, including one during the May 13, 1969 incident, but none of have been revoked.

"This perpetual state of emergency enables the government to promulgate emergency regulations even though Parliament is sitting and the events that occasioned the states of emergency have come to pass," the report said.

Emergency proclamations permit the executive branch of government to pass laws that do not require parliamentary assent in the name of national security.

The reports also highlighted the fact that the Federal Constitution allows the foreign wives of Malaysian men to be easily naturalised but denies Malaysian women the right to confer citizenship on their foreign husbands.

Native rights

On the topic of Native Customary Rights, the report said that peninsular Orang Asli and the indigenous people of Sabah and Sarawak have complained of state-sanctioned erosion of their rights by such activities as logging, plantations, crop cultivation, construction of dams and other development projects.

"As presented to Suhakam, the main concern of the indigenous peoples is that their customary rights to land have been substantially eroded by the federal and state governments despite the protection provided for them in the Aboriginal People’s Act, the Land Ordinance of Sabah and the Sarawak Land Code," the report said.

The report, written in English, also covers the formation of Suhakam in April 2000 and its activities until the end of 2000. A Bahasa Malaysia version will be produced later.

Suhakam was created through the Human Rights Commission Act tabled in Parliament in 1999.

Its 13 commissioners are Musa Hitam (chairperson), Harun Hashim (deputy chairperson), Anuar Zainal Abidin, Mehrun Siraj, Zainah Anwar, Chiam Heng Keng, Mahadev Shankar, Hamdan Adnan, Simon Sipaun, Lee Lam Thye, K Pathmanaban, Mohammad Hirman Ritom Abdullah and Dr Salleh Mohd Nor.

The commission is divided into four working groups which include education, law reform, treaties and international instruments, and complaints and inquiries.

[Source: Malaysiakini]


Fictitious Debt Reduction for the Highly Indebted Poor Countries

by Eric Toussaint

At the end of April 2001 the Spring meeting of the IMF and the World Bank will be held in Washington. It is time to see what has actually been done in terms of debt reduction for the Highly Indebted Poor Countries.

In 1996, the World Bank, the IMF, the G7 and the "Club de Paris" launched an initiative to improve the capacity of what the Bretton Woods institutions have designated the Highly Indebted Poor Countries (HIPC) to effectively repay an unbearable debt. The debt burden had to be reduced to avoid persistant accumulation of debt arrears. Generosity had nothing to do with the creditors' decision. It was coldly calculated as the only way to maintain the flow of repayments. Thus it was that the G7, the IMF and the World Bank promised to cancel 80% of the HIPC debt. That was at the G7 Summit held in Lyon (France) in June 1996. Three years later, at another Summit held in Cologne (Germany) in June 1999, they announced an even greater debt reduction attaining 90% of the debt. This last figure was reached under pressure from a world media campaign demanding debt-cancellation for the poorest countries, known as the Jubilee 2000 Campaign. The World Bank and IMF initiative concerns 41 countries, a small minority of developing countries (the OECD records 187 developing countries - OECD, External Debt Statistics, 2000).

In 2001, five years after the much-trumpeted start of the HIPC, only a few countries have obtained an effective reduction of the sums to be repaid to service their external debt. Out of the 41 HIPC, a total of 22 countries (including 18 in Subsaharan Africa) are actually being considered since December 2000 as possible future beneficiaries of a reduction in their debt-servicing payments (IMF Bulletin, 15 January 2001). Despite repeated much-publicized announcements, the concrete results are so meagre that the Bretton Woods institutions and the governments of the leading industrial countries are finding it increasingly difficult to conceal the enormity of the swindle. The following figures and quotations illustrate the evolution of the debt stock of the 41 Highly Indebted Poor Countries selected for debt-reduction by the IMF and the World Bank:

In 1990, HIPC debt stock : 158.4 billion dollars;
In 1996, HIPC debt stock : 205.5 billion dollars;
In 1997, HIPC debt stock : 202.1 billion dollars;
In 1998, HIPC debt stock : 204.4 billion dollars;
In 1999, HIPC debt stock : 209.8 billion dollars;
In 2000, HIPC debt stock : 207.9 billion dollars;
In 2001, HIPC debt stock : 214.9 billion dollars;
(Source : IMF, World Economic Outlook,

Comments: Between 1990 and 1996, debt stock increased by 30%. In 1996, the G7, the IMF and the World Bank announced a cancellation of up to 80% but in practice, far from diminishing, the debt continued its upward curve and climbed a further 4.7% in five years.

Net negative transfer

In 1999, the HIPC repaid $1,680 million more than they received in the form of new loans (Source : World Bank, Global Development Finance, 2000). This means that they were subjected to a net negative transfer in favour of their creditors. Who is being generous towards whom? How dare anyone refer to the leading industrial countries as donor countries, and to the IMF and the World Bank as funding agencies, knowing that the poorest countries repay more than they receive in fresh loans?

Debt-servicing paid by the HIPC is on the rise

Between 1996 and 1999, according to the World Bank, the overall amount of debt-servicing payments from the HIPC increased by 25% (from $8,860 million in 1996 to $11,440 in 1999 - Source World Bank, GDF, 1999 and 2000).

According to the OECD, the HIPC debt towards the IMF and the World Bank, i.e. the multilateral debt, went from $70.7 billion in 1998 to $70.4 billion in 1999 (Source: OECD, External Debt Statistics, 1999 p.18; 2001, p.17). In short, it has barely decreased at all (less than 0.5%). Again, according to the OECD, the rest of the external debt of the HIPC (i.e. bilateral debt and private debt) only diminished by 6.6% over the period 1998-1999. This reduction is mainly attributable to France.

What does the future hold? The World Bank and the IMF shout loud and clear that the cancellations already announced for 22 countries represent a reduction of $34 billion spread over several years. Itıs mind-boggling. In reality, the World Bank and the IMF will not cancel debt. The directors of these institutions are lying shamelessly when they let it be understood that they are implementing cancellation. The multilateral debt will be repaid to the World Bank and the IMF sure enough, via a kitty called a "trust fund".

In the article "The activities and the control of the International Monetary Fund and the World Bank" that appeared in a National Assembly information bulletin (France) on 13/12/2000 MP Yves Tavernier explained how this fund works. The IMF's Annual Report 2000 and the document written by Yves Tavernier reveal that the total amount disbursed by the IMF between the beginning of the HIPC iniative in 1996 and 2000 is around $400 million, or less than the annual cost of paying about 2300 IMF employees ($451 million in 2001).

As for the sum disbursed by the World Bank, it is less than its annual profits, which are about $1,500 million. And let us not forget that what is disbursed by the World Bank and the IMF comes right back to them in the form of debt repayments. Indeed, what is paid out finds its way into the different trust funds whose object is to reimburse the HIPC debts to these very institutions, who never give up on money owing to them.

Reduction of the HIPC debt concerns only part of the bilateral debt. In this case, cancellations come from creditor States (usually within the Club de Paris coalition). Here again, there is foul play, since when the government of an industrialized country announces a cancellation, the amount concerned is systematically greatly exaggerated. The real cost of the cancellation usually represents 10% to 25% of the sum publicly quoted. For example, when Belgium announces that she is prepared to cancel $36 million of public debt owed by Vietnam (an HIPC country), the cost for the Belgian treasury is about 25% of that sum, i.e. about $9 million. That money is not destined for Vietnam, it is counted as expenditure incurred by Belgiumıs public finances to "buy back" a debt with the nominal value of $36 million. The equivalent of approximately $9 million is paid by the Belgian Ministry of Overseas Cooperation to the "Office de Ducroire", a public Belgian organization which insures Belgian exporters (just as the private organization Coface does in France). In the case of France, the latter insists that the HIPC repay the bilateral debt. Once the annual repayment has effectively been made by the HIPC, this sum is credited back to it in the form of a gift. It is thus inappropriate to call this a cancellation.

The OECD's last report devoted to the debt takes entirely the same stance as what has just been described: 'The HIPC initiative will not bring about a reduction in the value of the outstanding debt, as reductions will mainly take the form of interest repayment and gifts aimed at financing debt-servicing, and not direct reductions of the outstanding debt.' (OECD, op. cit. p.10).

The initiativeıs objective is slightly to reduce the burden on the finances of the poorest countries so that the debt system will live on. The HIPC are shackled to it. This enables the creditors to impose on HIPC governments policies which suit the interests of the leading industrial countries and their multinationals. The World Bank and the IMF are responsible for dictating these policies, along with the Club de Paris, within the framework of the Poverty Reduction and Growth Facilities (PRGF) and the Poverty Reduction Strategy Paper (PRSP), the new names for structural adjustment policies.

Acceptance of these policies by the HIPC constitutes a condition sine qua non dictated by the World Bank, the IMF and the Club de Paris in exchange for future repayment reductions and new adjustment credits. These specific policies (known in Bretton Woodsı jargon as "conditionalities") entail:
- acceleration of the privatization of services (water, electricity, telecommunications, public transport);
- privatization or closing down of public industrial firms where they exist;
- cancellation of subsidies for basic products (bread or other food staples);
- increased taxation of the poor through the generalization of VAT (at a single rate of 18%, as is the case in the Economic and Monetary Union of West Africa);
- abandoning customs protection (thus exposing local producers to competition with multinationals);
- liberalization of capital inflow and outflow (which usually results in massive capital outflow);
- privatization of land; recovery of costs for health, education.

The conditions are so draconian that in 2000, two countries selected by the World Bank and the IMF to be included in the 41 HIPC decided to decline the offer. They were Ghana and the Republic of Laos.

translated by Vicki Briault

(*) Eric Toussaint is president of the Brussels-based Committee for Cancellation of the Third World Debt (COCAD, CADTM in French) and author of "Your Money or Your Life: The Tyranny of Global Finance"

More info on the COCAD website:


3. RESOURCES Received - top

DAGA receives a lot of juournals, periodicals, newsletters and many other forms of printed resources from its network of Action Groups in Asia and around the world.  Please click on "Resources" in the left bar for an extended listing.


4. Urgent APPEAL - top


The following have been detained under Section 73(1) Internal Security Act:

- Mohd. Ezam Mohd. Noor, Youth Chief of the National Justice Party
- Tian Chua, Vice-president of the Naitonal Justice Party
- Haji Saari Sungip, Organising Chairperson of the April 14th. memorandum
- Hishamuddin Rais, social activist/film-maker
- Raja Petra Raja Kamaruddin, Free Anwar Campaign ( webmaster
- Dr Badrul Amin Baharom, Keadilan leader
- N Gobalakrishnan
- Abdul Ghani Haroon

Sect 71(1) ISA states that "Any police officer may without warrant arrest and detain pending enquiries any person in respect of whom he has reason to believe
- that there are grounds which would justify his detention under section 8; and
- that he has acted or is about to act or is likely to act in any manner prejudicial to the security of Malaysia or any part thereof or to maintenance of essential services therein or to the economic life thereof."

Sect 8. gives the power to order detention or restriction of persons.
"(i)If the Minister is satisfied that the detention of any person is necessary with a view to preventing him from acting in any manner prejudicial to the security of Malaysia or any part thereof or to the maintenance of essential services therein or the economic life thereof, he may make an order (hereinafter referred to as a detention order) directing that person be detained for any period not exceeding two years."


Since 1960, thousands of people including trade unionist, student leaders, labour activist, political activist, religious groups, academicians, NGO activist have been arrested under the ISA. The ISA has been consistently used against people who criticize the government and defend human rights. It has been the most convenient tool for the state to suppress opposition and open debate. The Act is an instrument maintained by the ruling government to control public life and civil society.

The ISA provides for preventative detention without trial for an indefinite period. The ISA violates fundamental rights and goes against the principles of justice and undermines the rule of law.

The ISA goes against the right of a person to defend himself in an open and fair trial. The person can be incarcerated up to 60 days of interrogation without access to lawyers. A person is presumed innocent till proven guilty but under the ISA the person is deemed guilty until she/he toes the line of the government of the day.

The ISA is immoral and cruel. It condones torture and humiliation. It is opposed by all major religions practiced in the world.

- Some of the detained were planning along with others to forward a formal complaint and memorandum to the Human Rights Commission (SUHAKAM) on April 14, 2001. This event and intention was made known to the public and several newspapers. The organizing committee had also notified the Commission of their intention to submit the memorandum on April 14th., the anniversary of Anwar's first sentencing. The date has since been described as Black 14.

- In the last two years, police also conducted similar arrest.
117 were arrested between 14th. and 17th. April 1999 (Anuar's sentencing)
54 people were arrested between 14th. and 15th. April 2000
All the above arrest was under the Criminal Procedure Code.


- Demand for the release of all those detained without condition. Express concern over their well-being.
- If those detained have violated any laws, charge them in an open and fair court.
- Condemn the use of ISA and call for the Government to repeal the ISA.
- Condemn the abuse and disrespect on freedom of assembly and expression.
- Call upon the Malaysian Human Rights Commission to intervene and restore democracy and human rights.


Ybhg Tan Sri Musa Hitam
Malaysia Human Rights Commission,
29th. Floor, Menara Tun Razak,
Jalan Raja Laut,
50350 Kuala Lumpur.
Fax- 603-26125620

Kofi Annan
Secretary general,
United Nations Room S-3800,
New York NY 10017
Fax: 1-212-963 4879/2155
Email :

Ms. Mary Robinson
Office of the UN High Commissioner for Human Rights
Palais des nations
8-14 avenue de la Paix,
CH 1211 Geneve,
Fax : (41) 229170213

Datuk Abdullah Ahmad Badawi
Home Minister of Malaysia
Jalan Dato Onn,
50502 Kuala Lumpur.
Tan Sri Norian Mai

Inspector General of Police,
Ibupejabat PDRM,
Bukit Aman,
50560 Kuala Lumpur
Fax 603-22731326




At the Dakar South-North Consultation last December 2000, participants agreed to declare the week of July 15 to 21 as a GLOBAL WEEK OF PROTEST AGAINST THE DEBT. The dates were chosen primarily because they are immediately precede the G8 Summit in Genoa, Italy. The following activities have are being planned for Genoa:

  • July 14-15 Convening of the fist meeting of the South-North Working Group on Illegitimate Debt. The formation of the Working Group on Illegitimate Debt is one of the resolutions of the Dakar Consultation.

  • July 17-19 Co-organization of a three-part Public Forum on Debt together with other networks and organizations.

  • Other events including the mobilizations on the 20th and 21st are also being planned.

It is hoped that the Global Week of Protest will also be marked by activities and mobilization in many countries in Asia, as well as activities and mobilizations in Genoa.

Please send your comments, reactions, enquiries and other information to: and



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