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Modern-day Battle for Souls: Large-Scale Economic Development in Poor Countries

Modern-day Battle for Souls

There is nothing new under the sun – doubly so for developing nations. The admixture of government, religion, and business has been at the foundation of societal structures in developing nations since colonial times. The twentieth century brought another element – the non-governmental organisation or NGO – into the mix. But what is still missing (for the most part) after 500 years? The local and indigenous populations that everyone claims to be there to support.

Starting in the fifteenth century’s “Age of Discovery” and throughout the early period of colonisation there was a highly competitive race between Europeans to claim new territories for their kings and queens, and to bring Christianity to the souls of the people living there. Companies were formed early on to exploit the resources found in the new lands; kingdoms became increasingly powerful with growing territories and natural resources; and the Church in Rome acquired millions of new followers. Meanwhile territorial conflicts, some escalating to outright war, were waged between the would-be imperial powers of the time – Spain, Portugal, the Netherlands, France and England – in order to gain wealth and achieve dominance. Those who lost the most were the indigenous peoples whose land was taken and whose populations were decimated.

Five centuries later a similar conflict has emerged, most of it taking place in the former colonies. But this time the interests of the main actors are not so clear, and for most of them allegiances can easily shift. The sixteenth century battles were about the control of new territories and the people inhabiting them. It is not so clear-cut these days. At the heart of the modern-day disputes there are conflicting views on the very meaning of development: what are the best interests of the people who are most affected by development? Who legitimately represents these people’s interests? This new battle for resources and souls is taking place in countries such as the Philippines, Mozambique, Papua New Guinea, Kyrgyzstan, Ghana, and most of Latin America, where opposition to development, especially resource-extraction projects, is escalating. This opposition is often supported by non-governmental organisations (NGOs), a 20th century addition to the mix of government, corporation and Church. The most recent example of opposition to a development project is the May 2013 shut down of the Kumtor mine in Kyrgyzstan. Protesters demanding the nationalisation of the mine blockaded the access road and cut power supplies to the mine owned by Centerra Gold Group, a Canadian company. After a visit to the site by Kyrgyzstan’s Prime Minister, the government issued a statement explaining it is now negotiating with the mine owners over the creation of a new company which would be registered in Kyrgyzstan.

At a glance the current development power-play has clearly-defined roles: the foreign corporation establishes an operation that will generate a profit while providing economic growth in the region; the NGOs and religious leaders defend the affected people against the potentially negative effects the project may have on their health, land or traditions; and the government seeks what is best for the country as a whole, balancing the interests of various regions and sectors of society. On the surface these roles are not necessarily conflictual, and in fact, there are cases where these various sectors of society cooperate to everyone’s benefit. Unfortunately, such examples are rare. Things are often more complicated, and upon closer analysis, it is selfinterest which appears to be fuelling most conflicts. Instead of collaboration, the common scenario usually has governments, corporations, international NGOs, and churches (especially in Latin America) pitted against one another and using local populations as pawns in their strategies to advance their own interests while they claim to work for the welfare of these populations.

The official positions of the various actors are often similar. Most agree that development projects should be sustainable, avoid environmental degradation, and benefit the greatest possible number of people, especially locally. The question is just how sustainable and equitable? This seems to be where the pro- and anti-development division occurs. Companies and governments are usually satisfied with a commitment for projects to meet all national regulations and international standards on social and environmental sustainability, but NGOs and religious groups often do not trust corporations and governments to respect laws and regulations, or to follow through on their commitments. The issue gets more complicated when practice differs from official positions, and actions are motivated by vested interests that are obscured by and different from each group’s stated aims.

Corporations bring massive investment, thousands of jobs, and pay millions of dollars in royalties and taxes to some of the poorest countries in the world. In order to continue investing, corporations must produce a profit for the investors who own their shares. Without profit there is no investment, and no development. However, profit is not the only goal, and most large international corporations have adopted well-thought-out sustainability policies. A good example is consumer product giant Unilever’s Sustainable Living Plan, which includes the goal of sourcing 100% of its agricultural raw materials sustainably by 2020. At the end of 2012 it was on target, having achieved 36% sustainability in its sourcing of these materials. Nevertheless, international corporations have a chequered track record in the developing world. Shell in the Niger delta, Nike in South and Southeast Asia, and Chevron/Texaco in Ecuador are only the worst and most famous examples. Things are improving, but companies are still engaging in irresponsible practices. These are usually aimed at reducing costs and/or increasing profits in order to attract investors, but they are becoming increasingly reprehensible in the eyes of both consumers and investors. The argument that these corporations are providing badly needed jobs and prosperity has become unacceptable to people in rich and poor countries alike.

Development NGOs have established many projects that have benefited millions in the world’s poorest countries. They promoted sustainable development before it was fashionable. NGOs publicised cases of corporate negligence in developing countries, and helped increase awareness of the responsibility consumers have in developed countries. However, development NGOs rely on funding from individuals, organisations and governments. Every job in an NGO is dependent on a steady inflow of donations. Many NGOs clearly position themselves as anti-business and exploit that sentiment among their targeted donors. They portray profit as evil, and inevitably at odds with the interests of the poor in developing countries. Economic and industrial development are painted as only destructive and harmful, something they must protect people from. Even though they often purport to tell people “the truth” NGOs are as likely to misinform the public as is any other actor in development. While they denounce corporations’ actions as being tainted by the profit motive, and government actions being driven by political agendas, NGOs’ actions are just as likely to be motivated by the “donation motive.”

In places like the Philippines and Latin America, the Roman Catholic Church has held a very powerful position ever since the earliest days of European colonisation. In these countries the Church provided schools, hospitals and social services long before any government ever did. However, even though in recent decades it has gradually rebranded itself as representing the interests of the poor, the Church has a long history of siding with the rich and powerful, often supporting dictatorships that violently repressed any attempts at democracy. Paradoxically, as the Church claims to work to improve the lives of the poor, its position is often anti-development. In many Latin American countries the Church organises or supports campaigns against development projects. In one case, the Church keeps financing research aimed at proving that a particular mine is detrimental to the health of the local people, even though after years of operation and extensive testing no negative impact has been demonstrated by anyone. Some observers note that the Church must oppose development because improved economic factors inevitably result in increased levels of education and access to information, which usually causes a great loss of power and influence for the Church, as demonstrated in much of Western Europe and North America in the past century.

The rule of law in many developing countries is at best tenuous, and corruption plagues poor countries on every continent. Governments in these countries often lack the resources and/or the will to adopt necessary regulations or enforce existing ones to ensure that development projects benefit local populations as much as they should, and to protect the environment and the health of the people living near the projects. For a long time governments in developing countries were absolutely pro-development, and allowed foreign corporations full access to their countries’ resources without imposing the type of conditions considered essential today. Agreements with foreign companies often benefited the decision-makers in government, and any opposition to projects was swiftly and violently quashed by the police or the military. Thankfully, this situation has changed, but as democracy established itself in most of the developing world, government decisions have become increasingly motivated by potential gains at the ballot box instead of what is best for the country’s long-term prosperity (a problem common to all democracies). Analysts have cited political motives in Argentina’s 2012 nationalisation of Repsol subsidiary YPF, and in the May 2013 Chilean government’s shut down of Barrick Gold’s $8.5 billion mine project, high in the Andes.

In short, governments are increasingly responding to protests, with an eye on their next elections. In Latin America and the Philippines, the Church is intent on retaining its members as countries inexorably develop and modernise. Many NGOs have become anti-business in their claim to be the true protectors of the poor and powerless. And while corporations offer jobs and economic growth, at times they cut corners in social and environmental sustainability in search of the profits that will drive their share price up. The view of economic development in poor countries as a modern battle for souls may be seen as cynical, and to be sure, most of the people working in the Church, NGOs, government and corporations are sincere and well-intentioned. However, it is hard not to deny the fundamental interests each group brings to the conflicts surrounding development projects, and while the situation is improving, it is still mostly the local people who lose out by either being denied economic opportunities, or by having their rights trampled on or the environment they live in degraded. This appears to be the history of the world.

This post is also available in: Inglese Spagnolo

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