Jamaica Gleaner Online TODAY'S ISSUE
Apr 23, 1999



Governments in crisis

John Rapley

JAMAICANS MAY be forgiven for feeling supremely disadvantaged this week, what with gas price demonstrations having shut down the country. In fact the country enjoys good company. This past week there were also nationwide strikes in Bangladesh and Romania, Canada's largest city was shut down by a transportation strike and workers in South Korea started bringing their country to a standstill with an escalating strike.

The common thread running through these protests appears to be a growing resistance to the demands of neoliberal policies. Neoliberalism, with its focus on efficiency and minimal state intervention, helped to restore growth to much of the global economy over the last couple of decades, so its achievements should not be denied. But its achievement came at a cost.

Retrenching states left millions of people outside the distribution networks of the post-war period, while widening patterns of income distribution caused many to feel betrayed by their political leaders. In good times, the anger was muted by prosperity increases. Yet the anger was building. And when economic bubbles started bursting, anger spilled onto the streets.

Relatively small provocations proved to be the straws that broke the camels' backs. In Indonesia last year, it was when the government raised cooking oil prices that riots which eventually toppled the government broke out. All in all, since the crash of the Thai bhat in the summer of 1997, there has been a wave of reaction against governments around the world, ranging from the organised opposition seen in some of the East Asian countries to the increased crime seen in hitherto law-abiding societies like Argentina and China. Thus, as reprehensible as the looters among us are, their behaviour is to be expected: as the evidence from elsewhere bears out, when people feel they have been left to their own devices, they will use whatever devices they have at their disposal to get ahead.

Since the beginning of this year alone, there have been nationwide strikes in Colombia and Ecuador. Doctors in the Dominican Republic stopped working over unpaid wages and teachers in Haiti rioted over pay. Ford suspended operations at its Brazil plant because workers sacked before Christmas had returned to occupy it. Rioting in Indonesia, prompted by resentment over the uneven distribution of economic gains between ethnic groups, continues without let. In Nicaragua and Mexico, students have rioted over attempts by governments to increase their fees. Nor have such outbursts been confined to poor countries. In Germany, Israel, Canada and Britain, increased labour militancy has forced governments to back down with their proposed budget measures.

Which boxes governments into a corner. Neoliberal policies require them to restrain public spending in order to maintain the macroeconomic stability in which they have invested their political capital. Angry citizens, however, are forcing governments to spend more. If they are to avoid raising their debt, which would drive up interest rates at a time when the global economy is in fragile condition, governments must raise taxes. But given that income distribution has widened so greatly in the neoliberal age, why not tax the rich a bit more?

The answer is that globalisation, neoliberalism's twin, has been an imperfect process. Political elites have, for varying reasons, globalised financial markets. Labour markets, among others, remain closed. Taxing the rich can drive investment to safe havens. Taxing labour through consumption taxes, as is being tried in Jamaica as elsewhere, will not drive labour out of the country.

But it may, as is happening, drive people to rebellion. The world may not be teetering on the brink of a revolutionary wave, but it appears that governments around the world are facing crises brought on by the travails

of the world economy. It seems likely, therefore, that governments will not be able to muddle through these problems on their own. They will, first, have to look to international solutions to the problems that have been caused by imperfect globalisation. They will, second and most important, need to ponder the possibility that neoliberalism has reached an impasse.

While the looting and thievery of recent days represent the acts of a minority, it may still not be too much to say that it also represents the tip of an iceberg of anger. And it may yet sink the ship of an unwary captain.

  • John Rapley is a Senior Lecturer in the Department of Government, UWI, Mona.

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