Global Policy Forum

Attacking the World’s Constitutions


By Sonny Africa

IBON Features*
August 2005

Since the 1990s, some 130 countries around the world have revised, amended or adopted brand new constitutions to accommodate a framework for the sort of "market democracies" that open up domestic labor, economic sectors and natural resources for neo-colonial exploitation.

In the Philippines, it is clear that charter change (Cha-cha) is being pushed by ideological commitments to "globalization," pressure from powerful political and economic interests such as the United States (US) government, and Philippine government officials' sheer political self-interest. But Cha-cha isn't unique to the country. An increasing number of developing countries is also dancing the Cha-cha, with the US and other developed nations providing the music.

The impetus behind the wave of global charter change is economic restructuring in the neoliberal framework. This entails the removal of restrictions on the movement of capital and goods, the easing of government regulatory power over the economy and the transfer of state-delivered services to the private sector.

Reversing Nationalist Provisions

Economic restructuring through constitutional change is not a new phenomenon. During the waves of colonization in the first half of the 20th century, the great empire-building powers unilaterally drafted charters for their colonies or simply forced them to adopt their colonizers' constitutions. But the current wave of charter changes can be traced to the collapse of the Soviet bloc in the late 1980s, which prompted the Western nations to declare the demise of socialism and the affirmation of capitalism as the "end of history." The "free market" became the only option for economic prosperity. Politically, the downfall of authoritarianism heralded a wave of "pro-democracy" movements worldwide.

These two pressures resulted in what are probably the most changes in national constitutions in such a short period of history. Since the 1990s, some 130 countries around the world have revised, amended or adopted brand new constitutions. The agenda behind these changes has been to create the constitutional framework for the sort of "market democracies" that open up domestic labor, economic sectors and natural resources for neo-colonial exploitation. This phenomenon is uncannily reminiscent of how, during the waves of colonization in the first half of the 20th century, the great empire-building powers unilaterally drafted charters for their colonies or simply just forced them to adopt their colonizers' constitutions.

It also reverses the nationalist constitutions of Latin America, as well as the many post-war independence constitutions emerging from the anti-colonial struggles and liberalization movements in the former colonies of Asia and Africa.

The most extreme charter changes now are the US-imposed constitutions of Afghanistan and Iraq as well as the drastic overhaul of some 25 erstwhile "socialist" constitutions of former Soviet bloc countries in Central Asia and Central and Eastern Europe. In Iraq, for example, the US-led coalition provisional authority (CPA) issued a whole series of laws opening that country to private investors in blatant violation of international law. These included Order 37, which reduced Iraq's corporate tax rate from an estimated 40% to a flat 15%; Order 39, which allowed foreign companies to own 100% of Iraqi assets outside of the natural-resource sector and repatriate 100% of their profits out of Iraq; and Order 40, which allowed banks to set up business in Iraq under the same favourable terms. The CPA also privatized 200 state-owned firms, which produced everything from cement to paper to washing machines, throwing thousands of state employees out of work.

When Iraqi politicians resisted the privatization of Iraq's state-owned companies, the US appointed an interim government that would be bound by an "interim constitution" which protected the US-favored investment and privatization laws. The constitution even included a provision stating that for the duration of the interim government, "The laws, regulations, orders and directives issued by the Coalition Provisional Authority . . . shall remain in force" and could be changed only after general elections are held.

Legal Reform Conceals Economic Restructuring

Although the focus on constitutional change has inevitably been political, the driving motive has been to create the sort of structures and "rule of law" on which market economies depend. This link was recently made clear by Assistant Secretary of State for Western Hemisphere Affairs Roger Noriega, when he complained that the macro-economic reforms being undertaken in the Latin American region (such as liberalization of formerly protected economies to foreign investment and products) were not accompanied by the creation of "clear, impartial, predictable rules applied impartially to all."

Less conspicuous but far more numerous are amendments and revisions with the same objective of deepening the market-orientation of national economies. Noteworthy of singling out in Asia are China's amendments in 1988 and 1993 embracing the private sector and justifying market policies as "building socialism with Chinese characteristics." Across Latin America and the Caribbean, constitutional public controls over trade, investment and the national patrimony were rolled back and key economic sectors were denationalized. In Africa, the "globalizing" presence of IMF-WB stabilization and structural adjustment programs reined in the nationalist stridency of post-independence constitutions.

Developed countries have scores of government or government-funded agencies with substantial "rule of law" and legal assistance programs. The most prominent of these include the United States Agency for International Development (USAID), the American Bar Association Central-Eastern European Law Initiative, the British Know-How Fund (KHF), the German Technical Cooperation (GTZ), the French Inter-ministerial Mission for Central and Eastern Europe (MICECO) and the Dutch Center for Cooperation with Eastern Europe (CCEE). The US also has considerable projects through such groups as the Ford Foundation, the Robert Busch Foundation, the Open Society Institute (with the Constitutional and Legislative and Policy Institute), and the Civic Education Project (CEP). It also uses aid coursed through the Millennium Challenge Account (MCA) initiative as an incentive for developing countries to undertake legal reforms.

Severe Consequences of Charter Change

The social and economic consequences of neoliberal economic reform, whether implemented through charter change or in spite of existing constitutional prohibitions, are severe. Poverty rates and the number of poor in Africa and the so-called "transition" economies of Europe and Central Asia have increased between 1990 and 2000. In China, rapid growth and wealth creation has created deep income disparities, high numbers of unemployed workers, horrific working conditions and lost safety nets for the Chinese working people.

Already weak real gross domestic product (GDP) per capita growth in Latin America continued to slow down throughout the 1990s and turned negative in 2000 even as debt service payments, over the same period, have more than tripled. Violence is also an inevitable consequence of neoliberal reforms as joblessness becomes widespread. In Iraq, the first major act of former occupation Chief Paul Bremer was to fire 500,000 state workers (most soldiers but also doctors, nurses and teachers) as part of neoliberal reforms. This has led to an increase in the armed resistance against US occupation forces. The neoliberal attack on the world's constitutions and its severe consequences are the context against which the debate on charter change in the country should be held.

Notes: IBON Features is a media service of IBON Foundation, an independent economic policy and research institution.

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