The Group of 20 Vultures
By Daniel Elombah
We are the ‘vultures, nestling lovingly together after feasting on a corpse. We picked the eyes of a swollen corpse in a water-logged trench and ate the things in its bowel. Full gorged they chose their roost... keeping the hollowed remnant in easy range of cold telescopic eyes... In every germ of that kindred love is lodged the perpetuity of evil’. - Chinua Achebe
We are gathered in London like vultures, ‘nestling lovingly together after feasting on a corpse’. We would dine and wine with the queen. Have our balls, share jokes, wild laughter and anecdotes. The mismatch between the gravity of the current global situation and the limited awareness among us of how much needs to be done is not lost on you.
Should you feel any enthusiasm about the prospects for our having any meaningful achievement where we further contribute to global warming by flying into Heathrow airport, driving in our dozens of Limousines with hundreds of security apparatchik?
What began as the unwinding of complex financial services companies has eaten deep and turned into a scary spectre of Armageddon? Yea, we know you believe this crisis resulted from our massive failure of governance, the failure to see the wood for the trees; the failure to take appropriate action.
Don’t worry, at these moments of great uncertainty and rapid change, old alliances and old antagonisms collapse. Whether from the developed or developing world, at our meeting at our London, we share a common commitment to the existing financial and economic order.
We will save the world - "stabilise financial markets", "reform and strengthen the global financial and economic system", and "put the global economy on track for sustainable growth".
Tell me something new! Do you think we would easily break with the orthodoxy of the last decades - even though it has now brought the world to the most severe crisis you have ever known?
In our naiveté we believed the financial markets are ‘rational and self-correcting’. To our dismay we discovered it’s merely an “exaggerated faith” in the global banking regulation. “Market discipline of individual banking strategies” is a mirage.
Quote - “in addition to the economic and environmental imbalances that lie at the heart of the crisis, there is a political imbalance, which is represented in all the major international institutions whose representation is skewed towards the old powers”.
Why must the very poor co-exist with the extremely wealthy? Must poverty accompany riches? A few meters from the white house are the extremely poor of Washington DC. The beauty of Rio de Janeiro overlooks one of the world’s worst slums. “A third of the global poor now reside in India”- The World Bank.
Income inequality in India, Mexico and China is increasing, yet they are now supposedly one of us; the G20 Vultures. Yes, extreme wealth is built on extreme human misery.
Poor African countries were being pursued by international hedge-fund creditors seeking to turn a profit on old debt they had bought at a discount. Where is the international action to protect Africans from these “vulture funds” whose pursuit of highly indebted countries was “nothing short of scandalous”. We “picked the eyes of a swollen corpse in a water-logged trench and ate the things in its bowel”.
In 1945 after the Great War, we sat around huge mahogany tables at Breton wood and fashioned the next world order. We first had our Marshall plan and then imposed economic policies on the global south that seriously jeopardise the future of the planet. We called it the Washington consensus; you call it the IMF orthodoxy.
And what does the consensus say? To obtain loans, the developing countries must ‘dismantle trade barriers, privatise key sectors of the economy, reduce the role of the state, remove all exchange restrictions and adopt an export-led model of development’.
Yet when these turn to the IMF in search of debt relief, we still peddle the same tired recipes. The fund in November 2008 for the Seychelles is conditional on economic reforms including the removal of all exchange restrictions and the floating of the rupee.
The results? “As many as 53 million more people will be sucked into poverty this year”; The destruction of the means of livelihood of billions of people in the “third world”; hundreds of thousands of peasant families, practising environmentally and socially sustainable mixed farming, being driven off the land.
In Mexico, peasants, have been unable to compete with cheap imports from the United States of industrially produced maize. In Argentina and Paraguay, small farmers, have been forced to make way for huge Soya plantations. Yes, we pauperized the poor.
Yet when Iceland wanted same loans, they got them before you could finish spelling l-o-a-n.
Quote - “The London summit is dedicated to taking concrete actions to protect the poor and vulnerable: to support free trade, promote investment and reform the international financial institutions…support the creation financing facility for the vulnerable managed by the World Bank and a global vulnerability monitor led by the UN to manage the impact of the crisis and increase international accountability to the poorest people in the poorest countries.”- David Milliband
Yet like we did in the 19 th century, we still swoop down scanvegously, buy up arable lands in Africa and Asia to grow food crops. The Saudis spent $1.3bn in land in Indonesia, largely for rice monocropping for our cash crop needs. They are also looking for similar deals in Pakistan, Sudan and Ethiopia.
Doesn’t it profoundly shock you to see very poor developing countries, which are failing adequately to feed their own people, allowing us rich foreigners to come into your land to produce food for export, even when you don’t have enough to eat?
We are not talking morality here for “we don’t do God”. What does it matter if in the process we thereby endanger the universe? We replaced your traditional model with industrial agriculture which is heavily dependent on fertilisers, pesticides and farm machinery, and does far more damage to the local ecosystem and to the global climate than your traditional farming systems it is displacing.
Don’t worry we have got the Amazon rainforest and all those thick forests in Indonesia. That was what we thought, except that today, the same Amazon was proving more vulnerable to climate change than we had previously thought. So what?
Who is that fool that told the US government to divert a large part of its maize production into biofuels; to use Sugarcane to produce ethanol instead of sugar? Why were they surprised when food prices skyrocketed? As usual the poor suffer more because we forced many poor developing countries to dismantle tariffs and other tools that they had previously used to protect local food production. Millions went hungry as a result.
While many of our commodity prices have fallen in the early months of 2009, the local food prices in most sub-Saharan African countries are still higher today than they were a year ago. See what I mean?
Is there an immutable law that says you should all engage in a massive exodus from the rural areas onward to the cities? Who says the poor countries must be deprived of their brains to maintain our pampered living? We stole your nurses, doctors, engineers and scientists so we can live better life. What does it matter if you are left to die out? You call it, ‘brain drain’; we call it ‘brain gain’!
Quote - “the £6 trillion promised by governments to bail out banks would be enough to end extreme global poverty for 50 years. Diverting a ‘tiny fraction’ (about £405billion) of this money could make a ‘massive difference’ to the worlds poor by providing safety nets and health services’ - Oxfam
Hundreds of thousands of families living in shanty-towns would leap at the chance to return to the land, provided they received adequate financial and technical support. Their environmentally friendly way of mixed farming would help to cool the planet. Together with more local food systems and a return to peasant farming, it could eliminate as much as 40% of all greenhouse gases. But who cares? Full gorged they chose their roost... keeping the hollowed remnant in easy range of cold telescopic eyes
Don’t blame us, blame the ‘masters of the universe’- the new vultures! They moved into new areas in a relentless sales and investment spree. Their investment in commodities futures rose from $5 billion in 2000 to $175 billion in 2007- Creating financial instruments whose risk profiles were not properly understood; financial innovations of little or no value.
‘We could never predict what our actions would lead to; for every action, there is an equal and opposite reaction’.
New fanciful words entered everyday parlance: sub-prime mortgage explosion; credit crunch; Quantitative Investment Strategy; Leveraging; derivative financial instruments; securitised products; toxic assets; Counter cyclical capital buffers! Private equity where there is nothing equitable in their dealings.
Hedge fund? A hedge or hedgerow is a line of closely spaced shrubs and tree species, planted and trained in such a way as to form a barrier or to mark the boundary of an area.
Bonus schemes got fanciful names: Option plans; mandatory bonus; bonus deferred plans; co-investment plans; share match plans; restricted stocks; forfeitable shares; conditional share award.
They have enjoyed their years of prosperity, assuming their salaries will increase year in and year out. Assuming their bonuses (bonus plans that are not properly documented and whose employer enforcement rights are so unclear) will grow ever large. They became addicted to wealth; celebrating their massive awards in bottles of Dom Perignon.
Shylocks! They forgot the fundamental purpose of banking - achieving global prosperity. One called itself Goldman Sachs. Pray which Gold-man ever dresses in sackcloth? Citibank; is it for only the urbanites? Lehman Brothers; leave that one, it’s dead! Fannie Mae and Freddie Mac; lol, what a scrappy name! AIG; too big for its pants!
For every major company that hit the headlines, thousands of smaller businesses will simply vanish; Innocent bystanders that neither adopted rash business models nor over-reached themselves. They might have been sceptical of the boom, yet they have discovered the carpet pulled from under their feet.
Who worries about them? Their employees might be devastated when they lose their jobs; their supplies might be left unpaid; their owners might lose everything; they might be caught in a vicious circle; their owners might go bankrupt; yet they remain below the radar, their passing unmourned!
You blame everyone else but yourself. Yet the truth is the financial chaos is not only a ‘massive failure of governance’, it is everyone’s failure; from board of directors to risk managers to the shop-aholics, we all shared the common commitment to the existing financial and economic order. “In every germ of that kindred love is lodged the perpetuity of evil”.
We were all part of a culture where everything is measured by money; we all worshiped money and sex- greed is good! It’s a religion. What else, fame. Everybody wants to be a celebrity, it’s a sad culture, we lived in frenzy, work all the time and make money to buy things to impress our peers.
We pay our footballers more than we do our engineers and doctors; our actresses more than our nuclear scientist and teachers; and our news presenters more than our molecular biologists and nurses. Everyone is measured by what they have, living without God.
Celebrate the end of an era. Shock is never easy; you must change your lifestyles
What began as the problem for the financial services companies has eaten deep into every sector. Today’s events are now only imperfectly predictable and uncontrollable. The severity of the recession means we feel a sense of doom and gloom. But what can we do? We are powerless.
We are gathered in London like vultures. Far from wishing to challenge the status quo, our main and only wish is to get a better deal for our countries. “Don’t worry we will save the world”, "stabilise financial markets", "reform and strengthen the global financial and economic system", and "put the global economy on track for sustainable growth", “take concrete steps to protect the poor and vulnerable”, “support free trade, promote investment and reform the international financial institutions”.
Hah! The very blandness and predictability of those words loudly declare the absence of any new vision.
At the end of the day, the only agreement we might reach would be our “distaste of tax havens” for nothing appeals to us as the possibility of a cartel that can impose its policies by disciplining those that cheat us out of taxes.
Out in the street are more reasonable voices, it would be one that will be heard in the streets among the protesters rather than in the G20 meeting itself; where we are busy “nestling lovingly together after feasting on a corpse”.
“ WALL STREET GOT DRUNK, AND WE ARE ALL SUFFERING FROM THE HANGOVER”; WE ARE ALL VICTIMS!