No. 35, September 2003

NO. 35 (Sept. 2003):
ECONOMICS AND POLITICS OF THE WORLD SOCIAL FORUM

'Globalisation'

Appendix I: Ford Foundation -- A Case Study of the Aims of Foreign Funding

Appendix II: Funds for the World Social Forum

Appendix I: Ford Foundation — A Case Study of the Aims of Foreign Funding

"Someday someone must give the American people a full report of the work of the Ford Foundation in India. The several million dollars in total Ford expenditures in the country do not tell one-tenth of the story." — Chester Bowles (former US ambassador to India).

In the light of the steady flow of funds from Ford Foundation to the World Social Forum, it is worth exploring the background of this institution — its operations internationally, and in India. This is significant both in itself and as a case study of such agencies.

Ford Foundation (FF) was set up in 1936 with a slender tax-exempt slice of the Ford empire's profits, but its activities remained local to the state of Michigan. In 1950, as the US government focussed its attention on battling the 'communist threat', FF was converted into a national and international foundation.

Ford and the CIA
The fact is that the US Central Intelligence Agency has long operated through a number of philanthropic foundations; most prominently Ford Foundation. In James Petras' words, the Ford-CIA connection "was a deliberate, conscious joint effort to strengthen US imperial cultural hegemony and to undermine left-wing political and cultural influence."1 Frances Stonor Saunders, in a recent work on the period, states that "At times it seemed as if the Ford Foundation was simply an extension of government in the area of international cultural propaganda. The Foundation had a record of close involvement in covert actions in Europe, working closely with Marshall Plan and CIA officials on specific projects."2

Richard Bissell, head of the Foundation during 1952-54, consulted frequently with Allen Dulles, the head of the CIA; he left the Foundation to become special assistant to Dulles at the CIA. Bissell was replaced by John McCloy as head of FF. His distinguished career before that included posts as the Assistant Secretary of War, president of the World Bank, High Commissioner of occupied Germany, chairman of Rockefeller's Chase Manhattan Bank, and Wall Street attorney for the big seven oil corporations. McCloy intensified CIA-Ford collaboration, creating an administrative unit within the Foundation specifically to liaise with the CIA, and personally heading a consultation committee with the CIA to facilitate the use of FF for a cover and conduit of funds. In 1966, McGeorge Bundy, till then special assistant to the US president in charge of national security, became head of FF.

It was a busy collaboration between the CIA and the Foundation. "Numerous CIA 'fronts' received major FF grants. Numerous supposedly 'independent' CIA sponsored cultural organizations, human rights groups, artists and intellectuals received CIA/FF grants. One of the biggest donations of the FF was to the CIA-organized Congress for Cultural Freedom which received $ seven million by the early 1960s. Numerous CIA operatives secured employment in the FF and continued close collaboration with the Agency."3

The FF objective, according to Bissell, was "not so much to defeat the leftist intellectuals in dialectical combat [sic] as to lure them away from their positions."4 Thus FF funneled CIA funds to the Congress for Cultural Freedom (CCF) in the 1950s; one of the CCF's most celebrated activities was the stellar intellectual journal Encounter. A large number of intellectuals were ready to be so lured. CIA-FF went so far as to encourage specific artistic trends such as Abstract Expressionism as a counter to art reflecting social concerns.

The CIA's infiltration of US foundations in general was massive. A 1976 Select Committee of the US Senate discovered that during 1963-66, of 700 grants each of over $10,000 given by 164 foundations, at least 108 were partially or wholly CIA-funded. According to Petras, "The ties between the top officials of the FF and the U.S. government are explicit and continuing. A review of recently funded projects reveals that the FF has never funded any major project that contravenes U.S. policy."

Such experiences ought to have alerted intellectuals and various political forces to the dangers of being bankrolled by such sources.

FF states (on the webpage of its New Delhi office) that from its inception to the year 2000 it had provided $7.5 billion in grants, and in 1999 its total endowment was in the region of $13 billion. It also claims that it "receives no funding from governments or any other outside sources", but the reality, as we have seen, is otherwise.

Ford in India
The FF New Delhi office webpage claims that "At the invitation of Prime Minister Jawaharlal Nehru, the Foundation established an office in India in 1952." In fact Chester Bowles, US ambassador to India from 1951, initiated the process. Like the rest of the US foreign policy establishment, Bowles was profoundly shocked at the "loss" of China (ie the nationwide coming to power of the communists in 1949). Linked to this was his acute worry at the inability of the Indian army to suppress the communist-led peasant armed struggle in Telangana (1946-51) "until the communists themselves changed their programme of violence".5 Indian peasants expected that now, with the British Raj gone, their long-standing demand for land to the tiller would be implemented, and that pressure continued everywhere in India even after the withdrawal of the Telangana struggle.

Bowles wrote to Paul Hoffman, then president of FF: "the conditions may improve in China while the Indian situation remains stagnant.... If such a contrast developed during the next four or five years, and if the Chinese continued their moderate and plausible approach without threatening the northern Indian boundary.... the growth of communism in India might be very great. The death or retirement of Nehru might then be followed by a chaotic situation out of which another potentially strong communist nation might be born." Hoffman shared these concerns, and stressed the need for a powerful Indian State: "A strong central government must be established.... The hardcore of communists must be kept under control.... The prime minister Pandit Nehru greatly needs understanding, sympathy and help from the people and governments of other free [sic] nations."6

The New Delhi office was soon set up, and, says FF, "was the Foundation’s first program outside the United States, and the New Delhi office remains the largest of its field office operations". It also covers Nepal and Sri Lanka.

"The fields of activity suggested [by the US State Department] for the Ford Foundation", writes George Rosen, "were felt to be too sensitive for a foreign (American) government agency to work in.... South Asia rapidly came to the fore as an area for possible foundation activity... Both India and Pakistan were on the rim of China and seemed threatened by communism. They appeared to be important in terms of American policy...."7 FF acquired extraordinary power over the Indian Plans. Rosen says that "From the 1950s to the early 1960s the foreign expert often had greater authority than the Indian", and FF and the (FF/CIA-funded) MIT Center for International Studies operated as "quasi-official advisers to the Planning Commission". Bowles writes that "Under the leadership of Douglas Ensminger, the Ford staff in India became closely associated with the Planning Commission which administers the Five Year Plan. Wherever there was a gap, they filled it, whether it was agricultural, health education or administration. They took over, financed and administered the crucial village-level worker training schools."8

Ford Foundation intervention in Indian agriculture
Given the background of the Chinese revolution and the Telangana struggle, the US priority in India was to find ways to head off agrarian unrest. Thus the first phase of FF's work was in 'rural development'. FF was intimately involved in the Indian government's Community Development Programme (CDP), which Nehru hailed "as a model for meeting the revolutionary threats from left-wing and communist peasant movements demanding basic social reforms in agriculture." The scheme was to carry out agricultural development with some funds from the Programme and voluntary village labour, thus bringing about what Nehru described as a "peaceful revolution". At the Indian government's invitation, FF helped train 35,000 village workers for the CDP.9 By 1960 the Ford and Rockefeller Foundations had between them extended over $50 million on the CDP alone. And by 1971, India, with grants totalling $104 million, was by far the largest recipient of grant aid from the Ford Foundation's Overseas Development Programme.10 However, such cosmetic efforts neither brought about development nor solved the problem of simmering peasant discontent.

In 1959, a team led by a US department of agriculture economist produced the Ford Foundation's Report on India's Food Crisis and Steps to Meet It. In place of institutional change (ie redistribution of land and other rural assets) as the key-stone to agricultural development, this report stressed technological change (improved seeds, chemical fertilisers, and pesticides) in small, already irrigated, pockets. This was the 'Green Revolution' strategy. Ford even funded the Intensive Agricultural Development Programme (IADP) as a test case of the strategy, providing rich farmers in irrigated areas with subsidised inputs, generous credit, price incentives, and so on. The World Bank too put its weight behind this strategy.11

Soon it was adopted by the Indian government, with far-reaching effects. Agricultural production of rice and wheat in the selected pockets grew immediately. Talk of land reform, tenancy reform, abolition of usury, and so on were more or less dropped from official agenda (never to return). But the initial spectacular growth rates eventually slowed. On the average agricultural production all-India has grown more slowly after the Green Revolution than before, and in much of the country per capita agricultural output has stagnated or fallen. Today even the Green Revolution pockets are facing stagnation in yields.

However, the Green Revolution was successful in another sense: it yielded a large market for foreign firms selling either inputs or the technology to manufacture those inputs.

Shift to funding NGO 'activism'
Since 1972 there has been a shift in FF's activities in India. Earlier FF had a large staff, focussing on agriculture and rural development, providing technical assistance in these fields and directly implementing its projects. Now FF's developmental activities continue under the heading "asset-building and community development" (Ford claims that it is responsible for introducing the concept of "micro-lending" in India, now eagerly embraced by the Reserve Bank), but it has added two other heads: "peace and social justice" and "education, media, arts and culture". This is in line with changes in foundation/funding agency policy worldwide, whereby, since the late 1970s, a new breed of 'activist' NGOs, engaging in social and political activity, have been systematically promoted. Among Ford's "peace and social justice" goals are the promotion of human rights, especially those of women; ensuring open and accountable government institutions; strengthening "civil society through the broad participation of individuals and civic organisations in charting the future", and supporting regional and international cooperation.12

Over the period 1952-2002, FF New Delhi office, the first and oldest of FF's 13 overseas offices, has distributed $450 million in grants.13 At a press conference to mark the fiftieth anniversary of FF in India, the foundation's India representative said that it was launching a new Rs 220 crore ($45 million) funding programme — twice the usual annual allocation — and committing substantial funds to disadvantaged groups such as adivasis, dalits and women. "Asked if the shift in focus [from FF's traditional activities in rural development] was prompted by the inequalities caused by the Indian government's economic policies of globalisation and liberalisation, he said there was no question of getting away from globalisation but it had brought some concern also. The projects would, therefore, act as a corrective measure to offset the adverse impact of uncontrolled market forces."14

This is precisely the language of the World Bank and IMF: their answer to "uncontrolled market forces" is not to control them, but to set up tiny well-publicised safety nets to catch a handful from among the masses of people thrown out by market forces.

Further, FF would specifically ensure that people's struggles against the government do not take the course of confrontation: "While admitting that several of the voluntary organisations benefitting from the funding programme could be in confrontation with the government when they were working on issues such as welfare of Adivasis, he said the Foundation did not believe in conflict with the government. The attempt was to complement and cooperate with the efforts of the government."15

Ford has chosen to focus on three particularly oppressed sections of Indian society — adivasis, dalits, and women. All three are potentially important components of a movement for basic change in Indian society; indeed, some of the most militant struggles in recent years have been waged by these sections. However, FF takes care to treat the problems of each of these sections as a separate question, to be solved by special "promotion of rights and opportunities". Since FF's funds are negligible in relation to the size of the social problems themselves, the benefits of its projects flow to a small vocal layer among these sections. These are persons who might otherwise have led their fellow adivasis, dalits and women on the path of "confrontation with the government" in order to bring about basic change, change for all. Instead special chairs in dalit studies will be funded at various institutions; women will be encouraged to focus solely on issues such as domestic violence rather than ruling class/State violence; adivasis will be encouraged to explore their identity at seminars; and things will remain as they are.


Notes:
1. Petras, "The Ford Foundation and the CIA: A documented case of philanthropic collaboration with the secret police", December 2001, www.rebelion.org/petras/english/ford010102. (back)

2. The Cultural Cold War: The CIA and the World of Arts and Letters, 2000, p. 139, quoted in Petras, "The Ford Foundation..." (back)

3. Petras, ibid. (back)

4. Petras, citing Saunders, p. 140. (back)

5. Bowles, Ambassador's Report, 1954, p.79. (back)

6. George Rosen, Western Economists and Eastern Societies: Agents of Change in South Asia 1950-70, 1985, cited in P.J. James, Voluntary Agencies: The True Mission, 1993, pp. 65-67. (back)

7. Rosen, cited in S.K. Ghosh, Development Planning in India: Lumpendevelopment and Imperialism, 2002, p. 23. (back)

8. Bowles, op cit, p. 220. (back)

9. Quotations from Ghosh, Development Planning; see pp. 23-34 for a detailed account. (back)

10.James, p. 69, citing Rosen, p. 56. (back)

11. S.K. Ghosh, Imperialism's Tightening Grip on Indian Agriculture, 1998, p. 24. (back)

12. We have not in this article discussed the last topic, namely FF support of "regional and international cooperation". This is an important area of FF activity in India: the sponsorship of institutes, organisations, seminars, foreign trips, studies, and so on regarding India's relations with other countries, other issues of strategic affairs, and matters of internal security. Through such grants, the US government helps shape Indian foreign policy formulation, and helps integrate Indian internal security institutions with US ones. For example, the New Delhi-based "Institute for Peace and Conflict Studies" is carrying on an FF-funded "three-year project to study different aspects of security in India... a) non-military challenges to security, b) challenges to national integration, c) India's security problematique and d) governance and security. Another recipient of FF funds at the same institute is "a two-year project to explore alternative paradigms of national security in South Asia." (back)

13. www.fordfound.org/news/view_news_detail.cfm?news_index=63. (back)

14. Emphasis added. (back)

15. Hindu, 6/3/02; emphasis added. (back)

 

Next: Appendix II - Funds for the World Social Forum

 

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