The Nepalese Don’t Understand Capitalism

Surfing through the TV channels on a laid-back New Year’s Day I chanced upon a tennis match involving my favourite Spanish left-handed World No 1. It seems one of the tournaments warming players up for the Australian Open Grand Slam in Melbourne this month is being held in Doha, capital city of that well-known tennis-playing nation, Qatar.

Spot the tennis-players. ExxonMobil tournament in Qatar

Excuse me if a little cynicism crept into that last sentence. You can’t really blame the players, I know, because after all, tennis is their job, and there’s $US 1,096,910 in prize money up for grabs in that Doha tournament. Still, I felt some admiration for Roger Federer, who is apparently doing his warm-up in Brisbane, Australia.

You are perhaps aware that the hereditary absolute monarchy of Qatar is also scheduled to host the FIFA World Cup in 2022, but has been attracting some unwelcome media attention for alleged mistreatment of labourers working on the associated huge construction projects. The tiny Arab state is, according to Wikipedia, ‘the world's richest country [by per capita GDP] and achieved the highest human development in the Arab World and 36^th highest globally . . . and also the 19^th most peaceful country in the world’.  Qatar has a population of 1,903,447 of which, sadly for male Qataris, only 498,283 (or 26 percent) are female. In fact, however, only 15 percent of those nearly two million residents are actually citizens – the vast majority being expatriate male labourers from India, Nepal, the Philippines, Bangladesh and other nations not ranked quite so high on lists of per capita wealth and/or peacefulness.

One assumes, then, given the high level of peace in Qatar, that Qatari males have better odds of finding a girl than the overall statistic might lead us to think. Similarly, since wages for migrant workers, according to Human Rights Watch, ‘typically range from $8 to $11 for between nine and eleven hours of gruelling outdoor work each day’, one must further assume that per capita income stats and measurements of human development only reflect the situation of actual Qatari nationals.

The Guardian ran an article on 29 December pointing out the shocking fact that, in spite of ‘brutal working conditions and flagrant abuse of workers' rights’, thousands of impoverished Nepalese men queue up each day for the chance to work in Qatar and other Gulf states. Their hope is that they will earn $200 a month for a couple of years, pay back the fee charged by employment agencies back home, and perhaps start a small business or send their children to school on their return.

Protest against treatment of
migrant workers in Gulf States

Living conditions in Nepal are so bad that stories of over-crowded accommodation, starvation rations and non-payment of wages are not sufficient to shorten those queues. The Wikipedia entry mentions Nepal in the same sentence as Rwanda and Bangladesh, stating that nearly 60 percent of the people live on less than $2 a day, with unemployment and underemployment approaching half of the working-age population. More than one third of households do not have a toilet in their house, and less than half have running tap water. ‘Leading diseases and illnesses include diarrhea, gastrointestinal disorders, goiter, intestinal parasites, leprosy, visceral leishmaniasis and tuberculosis.’ Malnutrition is a serious problem: ‘about 47 percent of children under five are stunted, 15 percent wasted, and 36 percent underweight.’ Another Guardian article in June this year described the death of a 12-year-old girl in Kathmandu. The girl, working as a domestic slave for a higher-caste family to repay a debt incurred by her father, had apparently ‘doused herself in kerosene and then set herself alight.’ Such slavery, the article continues, is not at all uncommon.

It’s a sad story, but what can you do? Time ran an article in their Business and Money section last week entitled: ‘How a Starbucks Latté Shows China Doesn’t Understand Capitalism’. The gist was that Chinese are unreasonably complaining because Starbucks charges more for a coffee in Taiyuan than it does in downtown Manhattan – with similar charges made against Nestlé and Danone. The writer says, in essence, that the Chinese should shut up. The answer, as usual, comes down to ‘the bottom line’, which is: ‘Companies will price their products based on what the consumer is willing to pay’ – and if you don’t like the price, don’t buy the product. Big talk, but in this case I suspect capitalism may find its bottom line rationale clashing with its need to tap into the one-and-a-half billion Chinese consumer market.

Nevertheless, that headline did raise another question in my mind: Who actually does understand capitalism? Getting back to that tennis tournament in Doha, the major sponsor is the American multinational oil and gas corporation ExxonMobil – not surprising, I guess, since little old Qatar has the world’s third largest natural gas reserves, as well as a good supply of petroleum. According to Wikipedia, ExxonMobil’s largest shareholder is that paragon of international philanthrocapitalism, the Bill and Melinda Gates Foundation. Two members of the current board are a professor of economics at Stanford University and another of management practice at Harvard Business School. Well, that trio at least should have a pretty good grasp of how capitalism works. Certainly their baby looks in rude financial health. ‘As of July 1, 2010, ExxonMobil occupied eight out of 10 slots for Largest Corporate Quarterly Earnings of All Time. Furthermore, it occupies 5 out of 10 slots on Largest Corporate Annual Earnings’.

On the other hand, you yourself may not be as well versed in the philosophy that drives the world economy as the Gates couple and those disinterested academics, so let me give you a couple of pointers. The ExxonMobil bottom line, not surprisingly, does not attach great importance to the environmental health of Planet Earth. That Wikipedia entry lists six major oil spills within continental United States for which the corporation was responsible and whose seriousness they tried to downplay: apart from the Exxon Valdez disaster of March 1989, more recently there have been oil spills in Brooklyn and the Yellowstone River in July 2007, a pipeline spill and benzene leak at Baton Rouge Refinery in April and June 2012 and another oil spill at Mayflower in March 2013. ExxonMobil have been accused of funding organisations disseminating misinformation about the part fossil fuels play in causing global warming. Even the people at Forbes, not generally known for caring about the downtrodden masses, have raised questions of company executives bribing and/or taking kickbacks from the dictatorial regimes of oil-rich nations such as Angola and Kazakhstan.

You might think that, if only out of cynical self-interest, the board of ExxonMobil might want to throw a few of those All Time Highest Quarterly Earnings in the direction of Nepal and its enslaved girl children. Even Rafael Nadal, if he knew what was going on, might be persuaded to donate a portion of his winner’s purse. But clearly the sponsors of tennis and the football World Cup are happy to have their company names and logos broadcast to television sets around the world and accept at face value the Qatari royal family’s hype about the wealth and standard of living of their people. Whatever spin its most ardent proponents try to put on it, capitalism is largely about short-term profit; and concern for future generations, or disadvantaged present-day ones is not a major factor in bottom line accounting.

Another example is the financial sector, in particular, the denizens of Wall St who were credited with causing the global crisis of 2008. In February 2009 President Barack Obama appointed Former Federal Reserve Chairman Paul Volcker to chair a board tasked with advising the administration on matters affecting economic recovery. In January 2010 the board came back with a set of proposals aimed at preventing banks from engaging in the kind of dodgy trading and investing that had led to the financial meltdown. Those proposals, popularly known as the Volcker Rule, and officially as the Dodd-Frank Wall St Reform and Consumer Protection Act (!!!), have been doing the rounds of various ‘agencies’ for the past four years, and are now scheduled to go into effect on 1 April 2014 (any significance in that date, I wonder?).

Clearly those ‘agencies’ have had plenty of time to play with the proposals. According to an article in Time’s Business pages, the original relatively simple recommendations have been tampered with and expanded to such an extent that ‘The Volcker rule . . . has been turned into Swiss cheese by bank lobbyists’ – on whom their employers spend nearly half a billion dollars a year. The article goes on to say that ‘the biggest banks are even bigger now than they were before the crisis: the eight largest financial institutions in the U.S. control nearly $15 trillion worth of assets, or about 90% of GDP’.

It seems to me one of the big differences between post-modern economies and those in the developing world is the sophistication level of their corruption; the capacity for burying their dirty activities in a legal labyrinth, or exporting them offshore. In between, of course, are the oil-rich newcomers, who just snow the soiled underwear with money and defy the world to criticise.

Take Dubai. I resent it intensely when my plane stops there on the way to Auckland or Sydney. If I want to go there, I’ll buy a ticket – which I will never willingly do. This year I’m going via Malaysia – not lily-white, for sure, but less objectionable than its Middle Eastern Muslim cousin.

The population of that desert oasis is similar to Qatar, with more or less the same ratio of males to females, for pretty much the same reason – more than 70 percent are poor migrant workers from Asia. Sharan Burrow, general secretary of the International Trade Union Confederation says, ‘Most companies are forcing their workers to live in squalor. An unconscionable number of workers die due to unsafe conditions.’ Workers are ‘effectively living in 21^st century slave states,’ she says. According to Al-Jazeera, unions and strikes are illegal. Annual per capita income of citizens in the United Arab Emirates is $48,158, but only 20 percent of the 7.9 million residents have citizenship – almost impossible to get if you can’t prove a paternal blood relationship to the original inhabitants. Women’s rights are reportedly beyond medieval. In Dubai, a woman who reports being raped can be sentenced to over a year of time in prison for ‘engaging in extramarital relations.’

On the other hand, thousands of Western ex-pats, including tennis and rugby players, choose to live, work and play in the UAE, lured by high salaries and a lifestyle they could not afford in their own countries. Apparently adjudicators from the Guinness Book of Records were on hand in Dubai on New Year’s Eve to officially witness the world’s largest ever fireworks extravaganza. The six-minute display is said to have exploded half a million fireworks spread over nearly 100 kilometres of coastline, provided employment for 200 technicians (from US firm Fireworks by Grucci) using 100 computers, and cost $6 million.

In the end, perhaps that’s the real secret of capitalism’s success: blind the ‘haves’ with lavish displays of pyrotechnics, and keep the self-immolating Nepalese slave-girls well out of sight.