Shock Doctrine Series

Shock Doctrine by Naomi Klein, 2007, Edited Excerpts

 

Guatemala’s foreign minister on a trip to the World Economic Forum in Davos in 1999: “Destruction carries with it an opportunity for foreign investment.”

 

Not so long ago, disasters were periods of social leveling, rare moments when atomized communities put divisions aside and pulled together. Increasingly, however, disasters are the opposite: they provide windows into a cruel and ruthlessly divided future in which money buys survival.

 

 

Tsunami - Sri Lanka

 

Pre-Tsunami

 

There is now a large enough elite made up on new multimillionaires and billionaires for Wall Street to see the group as “superconsumers,” able to carry consumer demand all on their own. There is no question that high-end tourism is a bankable market. The overall revenues for luxury hotels, where rooms cost an average of $405 a night, went up a rather striking 70 percent between 2001 and 2005.

 

The U.S. was so enthusiastic about Sri Lanka’s potential as a high-end tourism destination, with all its possibilities for resort chains and tour operators, that USAID launched a program to organize the Sri Lankan tourism industry into a powerful Washington-style lobby group.

 

Since Sri Lanka had driven itself into debt buying weapons, the government could not pay for all these rapid upgrades on its own. The usual deals were on offer: loans from the World Bank and IMF in exchange for agreements to open the economy to privatization and “public-private partnerships.” All these plans and terms were neatly laid out in Regaining Sri Lanka, the country’s World Bank-approved shock therapy program finalized in early 2003.

 

Like all shock therapy plans, Regaining Sri Lanka demanded many sacrifices in the name of kick-starting rapid economic growth. Millions of people would have to leave traditional villages to free up the beaches for tourists and the land for resorts and highways. What fishing remained would be dominated by large industrial trawlers operating out of deep ports – not wooden boats that launch from the beaches.

 

Regaining Sri Lank was rejected first through a wave of militant strikes and street protests, then, decisively, at the polls. In April 2004, Sri Lankans defied all the foreign experts and their local partners and voted in a coalition of center-leftists and self-identified Marxists who vowed to scrap the entire Regaining Sri Lanka. 2004 was supposed to have been Year One of the new investor-friendly, privatized Sri Lanka; now all bets were off.

 

Eight months after those fateful elections, the tsunami hit.

 

Post-Tsunami

 

The December 26, 2004 tsunami took the lives of 250,000 people and left 2.5 million people homeless throughout the region. The newly elected government would need billions from foreign creditors to reconstruct the homes, roads, schools and railways destroyed in the storm – and those creditors knew well that when faced with a devastating crisis, even the most omitted economic nationalists suddenly become flexible. As for the militant farmers and fishing people who had blocked roadways and staged mass rallies to derail their previous attempts to clear the land for development, well, Sri Lanka villagers were otherwise occupied at the moment.

 

Just four days after the wave hit, the Sri Lankan government pushed a bill through that paved the way for water privatization, a plan citizens had been forcefully resisting for years. With the country still swamped with sea water and graves not yet dug, few even knew it had happened. The government also chose this moment of extreme hardship to make life even harder by raising the price of gasoline It also began developing legislation to break up the national electric company, with plans to open it up to the private sector.

 

 

Hurricane Mitch - Honduras

 

In October 1998, for an entire interminable week, Mitch had parked itself over Central America, lashing the coasts and mountains of Honduras, Guatemala and Nicaragua, swallowing villages whole and killing more than nine thousand people. The already impoverished countries could not dig themselves out without generous foreign aid – and it came, but at a steep price.

 

In the two months after Mitch struck, with the country still knee-deep in rubble, corpses and mud, the Honduran congress passed laws allowing the privatization of airports, seaports and highways and fast-tracked plans to privatize the state telephone company, the national electric company and parts of the water sector. It overturned progressive land-reform laws, making it far easier for foreigners to buy and sell property, and rammed through a radically pro-business mining law that lowered environmental standards and made it easier to evict people from homes that stood in the way of new mines.

 

 

Hurricane Katrina

 

In New Orleans, no opportunity for profit was left untapped. Kenyon, a division of the mega funeral conglomerate Service Corporation International [a major Bush campaign donor], was hired to retrieve the dead from homes and streets. The work was extraordinarily slow, and bodies were left in the broiling sun for days. Emergency workers and local volunteer morticians were forbidden to step in because handling the bodies impinged on Kenyon’s commercial territory. The company charged the state on average $12,500.