by Sanjay Suri
(IPS) LONDON -- Free market policies have led to more than 4,000 farmers killing themselves in the state of Andhra Pradesh in India, says a report by the charity Christian Aid.
The report blames the 'reforms' of a hard-line liberalizing regime, "in part bankrolled by the UK government's Department for International Development (DFID)."
The report 'The damage done: Aid, death and dogma' says that unfettered free trade policies "have led to a crisis in Indian agriculture, spiraling rural debt and an epidemic of suicide among poor farmers."
"We are not saying this was a black and white cause and effect situation," John Mcghie from Christian Aid told IPS. "It is a complex situation arising from a 'reform' program undertaken by the (former chief minister of Andhra Pradesh Chandrababu) Naidu government with money and intellectual underpinning from DFID."
The British government support involved funding "the free market fundamentalist Adam Smith Institute to run a privatizing scheme that cost some 45,000 Indian public sector workers their jobs," Christian Aid said in a statement.
The Adam Smith Institute is a free market think tank based in Britain and the United States. The right-wing institute opposes the welfare state and supports a flat tax rate for rich and poor alike.
"This institute closed down or restructured 42 public sector enterprises," Mcghie said, leading to a loss of 45,000 jobs.
Some of these were enterprises such as the Andhra Pradesh Seed Development Corporation and the Andhra Pradesh Irrigation Development Corporation. "Such corporations provided a security net for small farmers," Mcghie said.
These developments "provoked a crisis of debt and a suicide epidemic that is going on even today," he said.
The Adam Smith Institute declined to comment to IPS on the Christian Aid report.
The report points to the devastating impact of unrestricted 'free' trade on poor people also in Ghana and Jamaica, and calls on the British government to end support for such policies.
In Jamaica the report says "increasing numbers of women have been driven to prostitution and drug smuggling by a continuing round of liberalization that has wrecked their employment opportunities."
In Ghana it says democratic institutions have been subverted by the demands of doctrinaire free market policies, where the International Monetary Fund (IMF), backed by the World Bank, effectively overturned a law to protect poor farmers.
The report highlights Andhra Pradesh as the place where British support to these policies has been most damaging.
"This report shows in stark detail the damage that is done to poor people when the dogma of so-called 'free' trade is pursued in the name of poverty relief," Dr Daleep Mukarji, director of Christian Aid said in a statement.
"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," he said.
The Christian Aid report also scrutinizes the last Labor government's recent 'U' turn on development policy and liberalization. Earlier this year, both DFID and the Africa Commission set up by Prime Minister Tony Blair said that countries should no longer be forced to liberalize and privatize in order to receive aid.
But the report makes clear that British development policy, along with that of the World Bank and the IMF, is still strongly based on liberalizing principles. Legislation is urgently required to turn Blair's rhetoric into reality, it says.
"Before the election, Tony Blair's government announced it had changed its mind on the benefits of enforced liberalization and privatization. This was welcomed," said Mukarji. "But as this report shows, basic policies and principles need to alter radically if such a change is to have a positive impact on poor people's lives."
Britain must use its position as chair of the G8 (the group of industrialized nations including the United States, Canada, Britain, Germany, France, Italy, Japan and Russia) and its presidency of the European Union (EU) in 2005 to push real reform through those bodies, the report says.
"The scandals we have outlined in this report must never be allowed to happen again," Mukarji said.
Christian Aid has called upon the new British government to amend the 2002 International Development Act to bar British aid from being tied to policies of liberalization or privatization, to make public all its discussions with the World Bank and the IMF so that progress can be monitored, and state clearly that poor countries have the right to raise tariffs to protect their infant industries.
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