JOHN PERKINS WANTS US TO think hes an economic Luca Brazi the big guy who helped Don Corleone make someone an offer he couldnt refuse. Perkins, a PCV in Ecuador, gives us his life story including how he was recruited to work at Chas. T. Main (MAIN), an international consulting firm that handles World Bank and other donor agency projects. His mission was to facilitate large international loans to developing countries that, in turn, would spend the money with MAIN and other U.S. companies such as Bechtel, Halliburton, etc. through giant engineering and construction projects. Perkins was also to make sure that the countries receiving the loans would not be able to repay them, so they would forever be in debt, both literally and figuratively, to their creditors, and continue to have to borrow more money, for more projects, to generate even more profits for the companies that carry them out. In other words, Perkins was to be an agent of the foreign aid practice in which developed countries assist lesser-developed ones via loans with conditionality. Such conditionality may include a change in recipient country policies including privatization of key services such as water, electricity, road construction, etc.; the easing of bureaucratic obstacles for foreign investors; and a proviso that almost always insists that foreign advisors be part of the loan package. So Perkins helps a number of countries borrow the money, tells them how to spend it through his company, and then when the money runs out, helps them borrow some more for additional projects in a never-ending cycle.
Perkins almost succeeds at convincing us of this sinister plot, with a mixture of financial intrigue, mysterious assassinations and luxurious globetrotting. We meet along the way the exotic Claudine, who seduces Perkins into the ways of becoming an Economic Hit Man (EHM). And then there is Uncle Frank, who works for the National Security Agency and encourages Perkins to join the Peace Corps in preparation for his future EHM role. The author resembles another cinematic figure in financial guise during his adventures an astute Forrest Gump showing up in meetings at significant points in the history of developing countries. He encounters, among others, the Shah of Iran, Omar Torrijos, President of Panama, Prince W an influential member of the House of Saud, Robert McNamara then President of the World Bank, and during a literary interlude, Graham Greene, who encourages Perkins to write a book and make it about things that matter.
Part diatribe against what the author calls coporotocracy; part venting guilt about convincing developing countries to take the giant loans and spend them through his consulting firm, making Perkins rich in the process; and part international thriller, these confessions have all the right elements of things that matter, but the formula doesnt quite work. Perkins gets it mostly right when he describes the system of tied foreign aid, in which recipient countries are obligated to spend the money they receive on goods and services from the donor country. Such policies lead, in the case of the United States for example, to silly rules at USAID whereby travelers on USAID contracts can only fly on US flag carriers even though other carriers may get them to their destination faster and cheaper. Recent news about bidding practices among United States firms such as Halliburton working in Iraq, echo Perkins description. The policies of international banks in the 70s and 80s, giving endless loans to Latin America and leading to a series of structural adjustments, in which new loans were issued, are further evidence of the practices Perkins points out. And finally, for those of us who have had to struggle mastering the likes of Thai, Tagalog and Sinhala, Perkins is linguistically correct when he says Bahasa Indonesia is one of the easiest languages in the world to learn.
But the implication that there is a grand cabal of construction and consulting firms, donor agencies and recipient country leaders with EHMs wielding their ways through boardrooms and bedchambers, tests the readers credulity. Confessions of an Economic Hit Man might have worked as an investigative analysis of foreign aid/loan practices and their shortcomings, with recommendations on how to improve the system. It also might have worked as a piece of fiction, as was suggested by one publisher who saw an earlier draft of the work. We could market you in the mold of John Le Carre . . . the publisher states in Perkins preface. In the end, however, the book reads more like a screenplay, with Perkins as the bad-guy-turns-good-guy financial action hero.
Perkins could have produced an important book had he been clearer in his purpose and structure. But for us, we suggest you wait and see the movie.
Howard Schuman is a former VP at Citibank and former Senior Manager at Price Waterhouse, based in Indonesia. He has worked on projects for the World Bank, the UN, the Asian Development Bank and USAID. He currently is advisor to the Central Bank of Sri Lanka. His latest book is Human Resources Toolkit for Financial Institutions in Developing Markets.