Bank Must Take Stand for Third World

Banking giant J.P. Morgan Chase is under pressure to condemn millions of people to perpetual poverty.

Thanks to the short-sighted surrenders of two of its competitors, J.P. Morgan Chase's management is now facing serious harassment by the activist group Rainforest Action Network (search), who wants to dictate the bank’s lending policies in the developing world.

Last week, RAN expanded its campaign against the U.S. financial services industry into tony Greenwich, Conn., to the very street where J.P. Morgan Chase's CEO, William Harrison, lives.

RAN activists put up old-fashioned Wild West-type "Wanted" posters featuring Mr. Harrison as "Billy the Kid." The posters criticized the bank for "reckless investment in environmentally and socially destructive projects in dozens of countries" and urged Mr. Harrison's neighbors and friends to "ask him to do the right thing."

RAN wants to control J.P. Morgan Chase's lending policies in developing countries, especially with regard to energy projects and logging. As an extremist group that rails against oil, wood, and meat consumption, RAN wants to block lending to projects it claims may contribute to global warming or involve logging in "sensitive" areas.

Given RAN's agenda, what’s next? Opposition to loans for ranchers and home builders?

What makes the stakes so high is that banking giants Citigroup and Bank of America have already caved in to RAN, following a similar poster assault near the home of Citigroup Chairman Sanford Weill in 2004. If J.P. Morgan Chase joins these capitulating capitalists, then that means the three largest financial services companies —­ thus, virtually an entire industry — will have ceded control of a portion of their businesses to anti-business activists and turned their backs on many in the developing world.

J.P. Morgan Chase has so far held out against some of RAN’s more appalling tactics like rounding up second graders from Mr. Harrison's hometown in December, and transporting them to J.P. Morgan Chase's Manhattan headquarters to protest the bank during school hours — a stunt aptly described by Terence Corcoran of Canada’s National Post as "ideological child abuse."

But RAN’s latest brand of intimidation may be working. A J.P. Morgan Chase spokesman told the New York Times last week that the bank was "on track for April" in terms of a review of its lending policies as demanded by RAN.

Let’s consider the consequences should Mr. Harrison give in to RAN.

“The real targets — the victims — of all these campaigns are the world’s poorest children and families,” point out Niger Innis and Paul Driessen of the Congress of Racial Equality. “Their countries are deprived of investment dollars to generate electricity, create jobs, improve health, education and nutrition, build modern homes and businesses, and instill hope for the future,” add Innis and Driessen.

The World Health Organization reported in May 2002 that 5,500 children die every day from consumption of food and water contaminated with bacteria. The WHO painted a shockingly bleak picture for millions of third-world children: 1.3 million under the age of five die annually from diarrheal diseases caused by unsafe food and water; another 2.2 million die from respiratory infections caused or exacerbated by poor sanitation.

This death toll equates to about 40 jumbo jets filled with kids crashing every day — a death toll that can only be alleviated by economic development.

CORE’s Driessen points out that 2 billion people around the world lack electricity. A billion people live on less than $200 per year; three billion live on less than $700 per year. As an illustration of the often disturbingly confused priorities of many environmentalists, a dam project in India’s Gujarat Province was halted after eco-activists pressured lenders to withdraw financial support. The dam had to be stopped because it would “change the path of the river, kill little creatures along its banks and uproot tribal people in the area,” one eco-activist smugly intoned.

“The local ‘tribal people,’ however, don’t appear to appreciate her intervention,” wrote Driessen in his book Eco-Imperialism: Green Power, Black Death. “One resident angrily called the activists’ handiwork ‘a crime against humanity,’ because the project would have provided electricity for 5,000 villages; low-cost renewable power for industries and sewage treatment plants; irrigation water for crops; and clean water for 35 million people.”

People in the third world need economic development. It’s the only truly sustainable solution for them — and access to the financial services necessary for economic development is largely in the hands of lenders like J.P. Morgan Chase, with $1 trillion in assets and operations in 50 countries.

Appeasing RAN would be an unconscionable and socially irresponsible business decision for J.P. Morgan Chase to make and would amount to a shameful betrayal of the millions who look to this nation and its lenders for hope.

Mr. Milloy publishes and is an adviser to the Free Enterprise Action Fund.
Steven Milloy publishes and, is adjunct scholar at the Cato Institute, and is the author of Junk Science Judo: Self-defense Against Health Scares and Scams (Cato Institute, 2001).

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