The TPPA strengthens the hand of the biggest corporations and will lead to further concentration of wealth in the richest 1%, says Dr Jeyakumar Devaraj.
Just last week, The Star (19 January) reported Oxfam’s finding that “Runaway inequality has created a world where 62 people own as much wealth as the poorest half of the world’s population – a figure that has fallen from 388 just five years ago”.
This over-concentration of wealth in the hands of the world’s richest is the main causes of poor aggregate demand and sluggish demand that is bedevilling the world economy resulting in persistent recessionary tendencies and high levels of unemployment.
The high level of indebtedness of the bottom 90% of the world’s population is the reason why all the “quantitative easing” carried out by the US, Japan and other countries have not really spurred growth in the real economy but have only led to stock market rallies.
What the world needs is a fairer distribution of the word’s wealth. The percentage going to the top 1% has to be reduced and redirected to the pockets of the bottom 50% of the population.
This could take the form of:
- higher minimum wages for the world’s poor;
- the closure of tax havens so that the world’s richest can’t avoid taxes by hiding their wealth in off-shore accounts;
- legislation to limit transfer pricing that enables the 1% to repatriate their profits to tax havens;
- a better safety net funded by the increase in taxes on the richest 1%.
These measures will not only help re-distribute world income in a fairer manner, but will also boost aggregate demand and create business opportunities and jobs for younger people all over the world.
The TPPA is going to do exactly the opposite. For the TPPA is nothing but a corporate wish list.
TPPA gives big capital massive new “rights”:
- the right to invest in the 12 TPPA member countries without any restriction, without requirements regarding technology transfer, local content, etc
- the right to repatriate its profits as it wishes;
- much stronger intellectual property protection which will lengthen the period when big capital will have a monopoly;
- the right to tender for government contracts;
- the outlawing of any form of government assistance to state-owned enterprises; and
- the right of big capital to use the ISDS provisions to sue any government that does anything that will affect the bottom-line of the foreign investor.
The TPPA strengthens the hand of the biggest corporations and will lead to further concentration of wealth in the richest 1%.
This is precisely the opposite of what the world needs at this point in time. It is akin to feeding ice cream to a diabetic!