John Perkins in his book 'Confessions of an Economic Hit Man' and 'The Secret History of the American Empire', tells the gripping tale of how he had, as an EHM helped America to control global economy by using foreign aid as a strategic weapon

The starting point of the strategy delineated in the book was to convince the political and financial leadership of the targeted underdeveloped country to accept enormous development loans from institutions like the World Bank, International Monetary Fund (IMF) and United States Agency for International Development (USAID). EHM would come as consultants to multilateral banking institutions and government corporations, fiddle with economic statistics and suggest infrastructure development that would usher in vibrant economic growth. Payoffs, extortion, sex ... were the tools used for the game. Once these countries were saddled with huge debts that could not be repaid, the American government and the international aid agencies would dictate repayment terms or demand favours, including military bases, United Nation votes or access to oil and other natural resources, force dropping of subsidies and trade restrictions that supported local businesses, and demand privatising of public services like health, education, and water. Building the infrastructure would, of course, go to a Halliburton or a Bechtel, who would build an electrical system or ports or highways. For example, when Ecuador owed a huge debt, America demanded that their Amazon rain forests with vast reserves of oil be given to its oil companies.


If the economic subversion through EHM failed, the “jackals” — the Central Intelligence Agency (CIA) operators — entered the scene for the dirty job of deposing or assassinating the political leader of the country. Perkins showed how this was done in Iran, Panama, and Ecuador.

If the “’jackals” failed, the American Empire had to go in for outright military invasion of the victim country, as with Panama in 1989 and the first invasion of Iraq in the early 1990s. So the first plan was an economic, second a political, and third a military approach to dominate nations that did not toe the American line.


The art of making strategic economic gains without a full-fledged war had been perfected by America in Iran in 1951. That was the time when the constitutionally elected Prime Minister Mossadegh, nationalised the oil industry so that Iran could begin profiting from its vast oil reserves that had so far been under the control of the British. This angered the British, but their attempts at coup d’état was unsuccessful. So the Americans intervened and entrusted the job with Kermit Roosevelt, a CIA agent who very quickly brought about a coup that overthrew Mossadegh and installed Shah of Iran. Thus, by merely spending millions of dollars, America could achieve its aim without direct confrontation with Russia. But there had been a risk of embarrassment had the hands of CIA been proved.


So, America decided to use organisations like the CIA and the National Security Agency (NSA) to recruit men like Perkins and then send them to work for private consulting companies, engineering firms or construction companies, so that if they were caught, there would be no connection with the government. Perkins worked as chief economist for a company named Chas T Main in Boston, Massachusetts.


Perkins’ account of what happened in Indonesia can serve as an illustration of the whole process. Perkins arrived in Indonesia in 1971 and helped to create the economic studies to secure financing from the international agencies. Meanwhile, East Timor, a Portugal colony in the Indonesian archipelago, declared itself independent in 1975. America, which had an eye on the island’s oil and gas deposits and mineral wealth, supported Suharto’s invasion of East Timor and the subsequent massacre of people. Oil and mineral extraction companies entrenched themselves in Indonesia, and big corporations benefited from its cheap labour. Mounting loans and stringent repayment conditions forced Suharto to cut food subsidies and other social benefits to the poor, and this created such an unrest that he was forced to resign in 1998. American government always coveted the oil in the Indonesian Aceh province. During the tsunami of 2004 that devastated Indonesia, America, under the pretext of relieving disaster victims supported the armed forces in thoroughly quashing the Free Aceh Movement. The ’disaster relief’ programmes helped only American engineering firms and corporations that owned hotels, retail chains, communication networks, banks and insurance companies.


What EHMs were able to achieve in Saudi Arabia is equally enlightening. America needed dependable supplies of oil after the Organisation of the Petroleum Exporting Countries (OPEC)-led 1970’s oil crisis that had brought down its economy to a low. To ensure that there was no such threat in the future, American government agreed to keep the royal House of Saud in power and offered total political and military support. In return, the Saudi government agreed to maintain oil supplies and prices that would be acceptable to America. They were also forced to invest most of their petro-dollars in American government securities, the interest from which would be used to hire American companies to build new infrastructure in Saudi Arabia. The American government isolated Saudi Arabia from its leading role in OPEC and ensured that Saudi Arabia would not use its oil power against America.


When the same policy was applied to Iraq, Saddam Hussein didn’t oblige America. When the EHM failed in this scenario, the “jackals” tried to foment a coup or revolution. Since they weren’t able to get through to Hussein, America was forced to take the next line of defence, which was war.


For over a decade, Perkins travelled all over the world — Indonesia, Panama, Ecuador, Columbia, Saudi Arabia, Iran — and worked with men like Panama’s President Omar Torrijos, who became his personal friends. Perkins alleged that Torrijos was assassinated by American interests, who did not like the negotiations between Torrijos and a group of Japanese businessmen who were promoting the idea of a new, larger, sea-level canal for Panama and had a bomb planted aboard his aircraft. The story of Perkins is important for illuminating the ways of a country that calls itself the champion of democracy.