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Issue 236
May/June 2006
Animate Earth



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Cover: illustration: MATT KENYON

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Green Books


Confessions of an Economic Hitman John Perkins Ebury Press, UK, 2006, £7.99

JOHN PERKINS’ STORY of how he deliberately facilitated international loans to countries which could not possibly repay them is on a par with CIA agent Philip Agee’s seminal work of 1975, CIA Diary: Inside the Company.

Agee revealed how the CIA manipulated governments to keep them sympathetic to US interests. His book was the first proof from the inside that US foreign policy prioritised politicians who allowed corporations free rein in their countries.

Now Perkins has done the same for that shadowy world of management consultancies which assess whether poor countries should receive World Bank and other loans.

Campaigns to write off debt have been built on the basis that it was poor judgement, the corruption of politicians in the non-industrialised countries, or adverse climates that have caused poor countries to become even poorer as they repay their debts.

Not so, says Perkins. He was one of the many grey-suited men who would fly into poor countries to assess whether loans should be given. His careful and considered reports provided supposedly objective assessments of future economic growth. These prospects would determine whether a country would be judged a good or a poor risk, and whether the loans would be granted. The loans would be given to governments of non-industrialised countries to purchase goods and services from mainly US companies. The public story was that development of infrastructure would enable the poor to enjoy the lifestyle of the West.

But according to Confessions of an Economic Hitman, Perkins’ reports were anything but objective. Although he was on the payroll of international consulting firms, he was also hired by the US National Security Agency (NSA). Early in Perkins’ career, his NSA superior said his aim was to “justify huge international loans that would funnel money back to US companies; and … to work to bankrupt the countries which received those loans (after they had paid the US contractors, of course), so they would be forever beholden to their creditors, and so they would present easy targets when we needed favours, including military bases, UN votes or access to oil and other resources.”

The supervisor continued: “These projects were intended to create large profits for the (US) contractors and to make a handful of influential families in the receiving countries very happy. The larger the loan, the better. The fact that the debt burden placed on a country would deprive its poorest citizens of health, education and other social services for decades was not taken into consideration.”

How did he do it? Perkins tells of Indonesia, where he was assessing the effect of installing increased electricity-generating capacity in the early 1970s. The electricity infrastructure was to be financed by a US loan, and of course paid to US companies to install. It would be worthwhile only if there was ‘evidence’ that the electricity would promote impressive economic growth.

Perkins is writing the assessment of what level of growth can be assumed. His boss tells him that a colleague who has predicted “only eight per cent a year” has been sacked because he’s “lost touch with reality”. Perkins is asked: “(I’m told) your economic forecast is right on target and will justify load growth of between seventeen and twenty per cent. Is that right?” Perkins assures him it is, and is told: “Congratulations, you’ve just been promoted.”

Such assessments led to the example of Ecuador, which was lent “billions of dollars”. The number of people living in poverty there has now grown from 50% to 70% of the population, and the country has to use 50% of its national budget to pay these debts.

Confessions of an Economic Hitman is not a dry book written in management speak: it is racy, and it has the pace of a novel. It combines personal accounts of what Perkins did (and how much he regrets it now) with analysis of the role of these management consultancies with their phoney assessments.

The irony which he does not make is that the red-necked corporations baying about the benefits of capitalism and the free market have come to dominance only because they’ve been given huge public subsidies, which the poor abroad are now having to pay off.

This book should be an essential part of the armoury of anti-debt campaigners.

Peter Lang is Resurgence Events Director and author of Lets Work: Rebuilding the Local Economy.