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“Access to Finance” and the Death of Development in the Asia-Pacific

2014; Routledge; Volume: 45; Issue: 1 Linguagem: Inglês

10.1080/00472336.2014.907927

1752-7554

Toby Carroll,

Global Financial Regulation and Crises

AbstractThis article details and dissects the promotion by the World Bank's International Finance Corporation of financial intermediaries – entities such as wholesale and retail micro-finance organisations and deposit-taking banks – as a key component within the push to establish and extend capitalist social relations in the underdeveloped world. It argues that the approach must be seen as emanating not out of some (re)discovery of key methods that foster the substantive and sustainable improvement of material conditions but rather the material and ideological interests attending late capitalism. Focusing on financial intermediary support in the Asia-Pacific, this article begins by outlining the new politics of development driving financial intermediary support and the broader agenda to which it belongs. The second section of the article details some "working examples" of the International Finance Corporation's support of financial intermediaries in the Asia-Pacific, fleshing out the precise form that financial intermediary support takes. The article concludes by highlighting how the approach is further consolidating the death of development as a modern nationalist/internationalist project and deepening the distribution of late capitalism's contradictions.Key Words: Financial intermediariesInternational Finance Corporationneoliberal developmentdeep marketisationView correction statement:Corrigendum: "Access to Finance" and the Death of Development in the Asia-Pacific Notes1 I have used the double "petite" to emphasise the scale of many enterprises – often single owner-operator concerns providing rudimentary goods and services – now targeted by neoliberal access to finance programmes. Using the term "petite bourgeoisie" – traditionally used by Marxists to refer to small-property holding shopkeepers, farmers and other operators of commercial enterprises often based around family labour – would seem to overstate the "micro" and "small" aspects of the commercial and accumulative activity in focus.2 BRICs was coined by Goldman Sach's Chief Economist, Jim O'Neil, which now, with the addition of an "S," includes South Africa. Not surprisingly, several of Southeast Asia's fast-growing countries (Indonesia, Vietnam and the Philippines) are in the latest high-performing equity fund put together by Goldman Sachs – the Goldman Sachs N-11 Equity Fund. The fund, which is outperforming the company's fund for the BRIC economies, was put together based upon O'Neil's identification of the countries "likely to make the greatest increased contribution to global [gross domestic product]" (Bloomberg, August 7, 2012.)3 The World Bank's Global Development Horizons 2011 (GDH 2011), defines a country under the banner of emerging economy/emerging market if that country has "relatively high levels of economic potential and international engagement" (World Bank Citation2011a, xvii).4 According to the United Nations Conference on Trade and Development (UNCTAD), total FDI flows to developing Asia (the largest regional recipient of FDI) were estimated at US$406 billion in 2013, with China – ranked second in the world in terms of FDI inflows – accounting for $127 billion of this. The regional breakdowns within Asia were as follows: South-Asia, $33 billion; Southeast Asia, $116 billion; East Asia, $219 billion. While developing Asia is seen as the narrow (in a regional sense) destination for global FDI, UNCTAD points to the importance of FDI flows to Latin America and the Caribbean and Africa in further propelling the push of investment into developing countries (UNCTAD Citation2014, 5).5 It should be noted that the IFC is not alone in deploying deep marketisation modalities. The European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank, for example, are increasingly echoing much of the IFC's agenda, and many bilateral aid agencies are also either partnering with these organisations or building deep marketisation elements into their operations.6 The IFC transferred grant amounts of US$200 million, $450 million, 500 million and $150 million to the "soft-lending window of the Bank" – the International Development Association – in 2010, 2009, 2008 and 2006 respectively (IFC Citation2011, i).7 The IFC's biggest country exposure (27 %) is overwhelmingly in the much-fetishised new poles of global growth – the BRICs (Brazil, Russia, India and China) (IFC Citation2011, 12).8 The IFC has changed its categories for sectoral commitments in recent times. Important to note for our purposes here is the separating out of the "Financial Markets", "Funds" and "Trade Finance" categories that were previously folded into one category.9 Here I am defining Southeast Asia in a geographical sense rather than a political one, such as that associated with ASEAN.10 Mercy Corps' high-profile donors include a veritable who's who of (largely US) capital and their foundations, including The Bill and Melinda Gates Foundation, Goldman Sachs Gives, Nike Foundation, Starbucks Foundation, Western Union Foundation, The Rockefeller Foundation, Google Foundation, Walmart Foundation, Chevron, Citi Foundation, Nike, Shell and Microsoft. Institutional donors have included the US Department of Agriculture, the US Agency for International Development, the UK Department for International Development, The European Commission, the UN, and the governments of many developed countries (Mercy Corps Citationn.d.b, Citationn.d.c).11 This figure does not include Hivos-Triodos' clients in Bank Andara, which in 2011 were counted as 844,264, 35% of whom were women (Hivos-Triodos Fund Citation2011, 20).12 The 2009 Summary of Proposed Investment (IFC Citation2009c) lists a significant shift in shareholdings of HFG. As of December 2008 the shareholding was listed as follows: Angelica Investments (9.62 %), GS Dejakoo (8.67 %), JPM Securities (4.22 %), National Pension Fund (3.90 %), Deutsche Bank (2.65 %) and Posco (2.20 %), with "public" shareholdings making up the balance.13 This section is a modified version of a section of an earlier article (Carroll Citation2012) in which I detailed deep marketisation in greater depth.