Free-trade development strategies designed by the International Monetary Fund (IMF) and the World Bank have devastated poor countries and left their farmers worse off, a British aid group said in a report released Monday. The hard-line policies of liberalization and privatization, backed by Britain and other Western governments, have led to a suicide "epidemic" among Indian farmers and inflicted terrible social costs in other developing countries, Christian Aid said. In its report, the London-based group urged Prime Minister Tony Blair to use Britain's temporary presidency of the G8 group of leading industrial countries and, from July, of the European Union to "bring about a radical change of direction" in development policy.
"It is a scandal that the British government has backed policies and pumped British taxpayers' money into schemes which have contributed to poor Indian farmers killing themselves and Indian workers being laid off in huge numbers," Christian Aid director Daleep Mukarji said in a statement.
Three case studies in the report illustrate the costs of what the group termed the "free market credo": in India, the crop farmers are driven to suicidal despair; in Ghana, it has crushed poultry producers and threatened democratic institutions; and in Jamaica sugar cane production has plummeted, sending women into drug-running and prostitution.
When the IMF and World Bank stepped in to help India in 1991, they encouraged the government to devalue the rupee in a bid to boost exports, while farmers were told to produce cash crops for export, like cotton and sugar, at the expense of staple crops like rice and wheat.
But the move pushed farmers into debt, as they borrowed money to pay for seeds, fertilisers, pesticides, water and power while state subsidies on fertilisers and other needed products were cut.
Meanwhile, liberal banking reforms meant that interest rates grew unchecked, making it harder to get loans and easier to have property seized when farmers could not pay back debts.
Emphasis on exports, of both cash crops and staple foods, led to a sharp decline in food stocks for domestic consumption and increased hunger at home, Christian Aid said.
Furthermore, under IMF-inspired measures, India gradually withdrew measures protecting its market from cheap, subsidised foreign palm oil, which in turn caused the crash of India's production of oilseed.
"So debt rises, heaping misery on poor farmers to such an extent that many take WHAT THEY SEE AS THE ONLY WAY OUT: suicide," the report concluded.
In the state of Andhra Pradesh suicide rose from 200 in 1999 to 2,115 last year, with nearly 4,400 suicides recorded since 1998, according to a survey quoted by the group.
Britain played its part in worsening the farmers' plight, investing massively in Andhra Pradesh's development and hiring the right-wing free-market Adam Smith Institute to help privatise state-run corporations, it said.
Christian Aid also pointed to the state of "gradual collapse" of the poultry industry in Ghana, where, under IMF pressure, the finance minister overturned a law in March that had tried to protect the sector by increasing duties on imports of chicken and rice.
Jamaica, the non-governmental organisation said, also faces a crisis as its agricultural sector continues to slide without any other industry providing sufficient job replacements.
Christian Aid warned that even more layoffs are to come as European trade reforms come into effect that will see prices for Jamaican sugar - its main export - cut by 37 percent by 2008.
Christian Aid called on Baler's government to bar British aid from being tied to development policies focused on liberalization and privatization, saying its link to the crises detailed in the report was "a source of regret and shame".
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