Aletho News

ΑΛΗΘΩΣ

Climate Policy Risk: Who’s In Denial?

By Marlo Lewis | Cooler Heads | December 19, 2014

Earlier this week, economist Roger Bezdek gave a presentation at the Ronald Reagan Building titled “Carbon Dioxide: Social Cost or Social Benefit?” Washington Post columnist Dana Milbank covered the event and published a short review titled “The new climate denialism: More carbon dioxide is a good thing.”

Granted, it’s hard to develop an argument about a complex, technical subject in a 760-word column, but Milbank doesn’t even try. He takes cheap shots and spouts off without knowing whereof he speaks.

Milbank starts with a snarky putdown, asserting that “though Bezdek is an economist, not a scientist, he played one on Monday.” How so? Some of Bezdek’s slides show the fertilization effects of carbon dioxide (CO2) emissions on crop yields and plant growth. For example:

big marlo

That is not playing scientist, it is citing scientific research.

Another slide shows that, over the past 250 years, CO2 emissions closely correlate with population growth, life expectancy, and per capita GDP.

big marlo 2

Milbank retorts that “correlation is not the same as causation.” Deep! But does he really think unprecedented improvements in the human condition — a greater than doubling of average human life expectancy, an eight-fold increase in the sheer abundance of human life, and an eleven-fold increase in global per capita GDP — would have occurred without fossil fuels?

Milbank repeatedly misfires, as the excerpts below (indented in blue) and my comments (standard width in black) show.

For years, the fossil-fuel industries have been telling us that global warming is a hoax based on junk science.

Name a single CEO of any major energy company or trade association who says that! If there are any, they are outliers. Skeptics argue that predictions of catastrophic global warming are based on speculative interpretations of selective evidence and models projections that increasingly diverge from observations. That’s a different thesis — and much harder to refute. Milbank inveighs against a straw man.

But now these industries are floating an intriguing new argument: They’re admitting that human use of coal, oil and gas is causing carbon dioxide in the atmosphere to rise — but they’re saying this is a good thing.

New argument? The Center for the Study of Carbon Dioxide and Global Change has emphasized the ecological and health benefits of atmospheric CO2 enrichment since its inception in 1998. Founder Sherwood Idso’s first peer-reviewed paper on the subject was published in 1991.

I pointed out to Bezdek that increasing energy use fueled the economic growth, and CO2 was just a byproduct. So wouldn’t it make more sense to use cleaner energy?

CO2 does not dirty the air, so reducing/capturing CO2 emissions does not make energy cleaner. CO2 is not “just” a byproduct; it is the inescapable byproduct. Thus, UN emission reduction targets endanger both existing economic, health, and welfare benefits and progress towards a wealthier, healthier world.

He [Bezdek] went on to point out that “35,000 people every year in the United States die in automobile accidents, but the solution is not to ban automobiles. You try to make them safer.” And the solution to climate change is not to ban energy but to make it cleaner.

Making energy “cleaner” in the present context means banning (rapidly phasing out) the carbon-based fuels that currently supply 82% of U.S. and world energy consumption, and are projected — absent additional market-rigging interventions — to supply 80% of U.S. energy in 2040.

The presentation began as a standard recitation of the climate-change denial position, that “there’s been no global warming for almost two decades” and that forecasts are “based on flawed science.”

Milbank provides no evidence that the “standard recitation” is incorrect – very likely because he can’t.

Christy Models vs Observations 1979 - 2014 highlighting U.S. Model Average

So instead, he resorts to name calling and labels Bezdek a ‘denialist.’

Enough back and forth. What matters is the big picture. Some 1.3 billion people in developing countries have no access to electricity and 2.3 billion people face chronic electricity shortages.

People-with-no-or-partial-electricity-Pachauri-Nature-2014

Source: International Institute for Applied Systems Analysis

Even in Europe and the United States, millions of low-income households struggle with high energy costs. Many must choose between heating and eating.

eu-inability-to-heat-home-map-031013

Source: EU Fuel Poverty Network

Bedzek Potential Health Impacts of High Energy Prices

Source: Bezdek (2014)

Forcing an energy-starved planet to abandon fossil fuels before cheaper substitutes are available is bound to have profound social costs. That is Bezdek’s thesis, and it is spot on. Milbank is in denial.

December 22, 2014 Posted by | Deception, Economics, Mainstream Media, Warmongering, Malthusian Ideology, Phony Scarcity, Science and Pseudo-Science | | Leave a comment

The Customs Union and Israel’s No-State Solution

scarjo-soda

By Amal Ahmad | Al-Shabaka | November 29, 2014

Trade regimes between nation states are either autonomous, implying that nation X has no trade obligations towards nation Y, or preferential, establishing low barriers between X and Y and binding them with reciprocal obligations and benefits.

Customs unions are a form of preferential trade, although they take it one step further by establishing uniform barriers against the rest of the world, thereby harmonizing the external trade policy of the union’s member states. Israel and the Palestinian territory have been bound by a customs union de facto since 1967 and de jure since 1994.

Theoretically, a customs union carries mutual benefits to the member states. However, as the United Nations Conference on Trade and Development noted in a 1988 report, between 1967 and 1988 the customs union between Israel and the OPT treated the two economies as dualisms that entrenched the status quo, which, at that time, had established the OPT as a reservoir of cheap labor and Israel as a production and export powerhouse.

Importantly, the arrangement allowed for the unrestricted flow of Israeli goods into the Palestinian economy. Since then, the state of the Palestinian economy has only worsened, and its dependence on imports from Israel has deepened.

The economy is marked by industrial stagnation and the decline of other productive sectors, particularly agriculture, as well as growing trade deficits and a weak export base. The customs union has been key to this process of stagnation, keeping the Palestinian economy industrially weak, underdeveloped, and dependent on imports.

Such skewed results are to be expected given the vast asymmetry of productive capacity between Israel and the OPT. The harm to the Palestinian economy has been further magnified by Israel’s ability to impose at will, as the occupying military power, a one-sided and inconsistent implementation of the union.

Israel’s use of duty-free import quotas is a particularly egregious example of how Israeli actions have magnified the skewedness of the customs union (see the recent analysis by the Palestine Economic Policy Research Institute, MAS). As part of its free trade agreements with other countries, Israel is able to export a certain amount of its goods to country Z, duty free or at a discounted customs rate, while pledging to import a certain amount of goods from country Z at a similarly discounted rate. The goods Israel pledges to import from its partners are often agricultural commodities and food products, which otherwise enjoy a high level of commercial protection in Israel.

Since signing the Paris Protocol in 1994, Israel has given the Palestinian Authority 20 percent of its import quotas. So, if Israel pledges to import 2,000 tons of milk from country Z duty-free, Palestinian retailers can apply for a license (given by Israel) to import up to 400 tons of that product duty-free. Obviously, this is advantageous for the Palestinian retailers who reap a profit margin by buying the imported milk for less while selling it at the same price.

However, the problem is greater than meets the eye. Israel gives Palestinians 20 percent of the import quota but none of the corresponding export quota. For example, if country Z pledges to buy 2,000 tons of tomatoes from Israel in exchange, 100 percent of these tomatoes come from Israeli producers.

Effectively, then, Israel is using the Palestinian economy to divert pressure off its own market by reducing the penetration of cheap imports by 20 percent, while reserving the full benefits of export deals to itself. This example underscores Israel’s ingenious protectionist strategy and its use of the Palestinian economy simply as an appendage when convenient.

Any benefit to Palestinians in the process is purely ad hoc and actually comes at the expense of productive industry.

No Way Out

Many analysts have, over the years, argued that if the implementation of the customs union were “better” or more in line with theory, then it would be optimal for the OPT’s trade and development. However, such calls to “rescue” or “modify” the union obfuscate the real problems facing the OPT, including the vicious cycle and vast asymmetry with its largest and most “free” trading partner, Israel.

In theory, two alternatives exist. The first alternative would involve a relatively closed (non-preferential) arrangement or an asymmetric free trade agreement.

Such arrangements would restrict the access of Israeli imports to the Palestinian market by instating barriers (tariffs) against these imports, temporarily protecting Palestinian producers and encouraging industrial development. However, such arrangements, including a standard free trade agreement, involve rules of origin to distinguish which goods came from where and therefore require the presence of a hard border between the partners.

In other words, such an arrangement could only be implemented in a post-conflict two-state solution scenario.

The second alternative would be to keep trade open but under the auspices of a future single bi-national state that would be responsible for the well-being of both Israeli and Palestinian producers. Such a state would manage a common fiscal platform with targeted support for the backward areas, implying protection of Palestinian producers via fiscal transfer instead of external tariffs. Clearly, this option, too, could only be implemented in a post-conflict one-state solution scenario.

In practice, however, no alternatives exist. As shown above, all alternative arrangements, regardless of their economic merits, presuppose either the delineation of internal borders or their elimination, translating into either a sovereign Palestinian state or an integrated bi-national state.

However, this policy brief argues that both these political scenarios undermine Israel’s strategic interests. All other trade arrangements, therefore, are off the table, regardless of economics, except for the one that requires neither borders nor integration: a customs union.

Indeed, the major benefit of the customs union to its Israeli architects has been the postponement of the border issue and keeping borders interim. Penetration into the Palestinian market is of minor importance to the Israeli economy and could have been achieved via other regimes such as a free trade area.

The union, then, is a choice made out of political necessity rather than economic desirability. It illustrates that the only “solution” for Israel is a no-state solution where the Palestinians are neither sovereign nor integrated, but perennially contained, with repercussions across the political and economic spheres.

The Importance of Borders — or Lack Thereof

In the rest of the world, politics reflect underlying economic interests. However, in the OPT, economic arrangements reflect political interests, and to a perverse degree. Israeli interests are imposed through military power, which is why the Israeli military was the “economic” administrator of the OPT from 1967-1988 and remains the main Israeli point of liaison with today’s Palestinian administrators.

Indeed, the political border considerations of Oslo dictated the economic trade arrangements of the Paris Protocol: Given Israel’s insistence on precluding final status border arrangements, the customs union was the only viable option.

Rather than an economically desirable choice, it was an outcome of political necessity for Israel, and there is substantial evidence that the Palestinian side was blackmailed into accepting the union after Israel threatened to stop Palestinian labor flow, as seen in the documents produced by the Ben-Shahar Committee and the Israeli government at the time. Furthermore, documents by the Bruno Committee as far back as 1967 attest to the far-reaching history of border considerations dictating “impure” trade integration of the OPT with Israel.

Instead of elaborating on the potential significance to Palestinian trade of this political trajectory, the literature on the customs union has managed to ignore it altogether, preferring to keep the analysis “politics-free” beyond vague references to the Israeli occupation while focusing on post-conflict frameworks.

In the case of the Palestinians, however, this should be the point of departure for analysis. Border considerations reflect strategic interests that offer the ultimate political economy context for the trade debate.

Not for nothing were the Oslo Accords, and, by extension, the Paris Protocol, incomplete and vague contracts that did not discuss many contingencies (the protocol is 35 pages compared to the 1,000+ page NAFTA) and were, most importantly, interim in nature. Several Palestinian economists, including Raja Khalidi as well as Adel Zagha and Husam Zomlot, point out that the economic problems in the OPT do not have an economic solution, and that the fundamental problem of the Paris Protocol is political.

What this policy brief argues is that the point of the protocol was not to give Israel the upper bargaining hand in final status, given that incomplete contracts favor the stronger party. The aim was to put off final status altogether in line with Israel’s policy since 1967. Further, this brief argues that the Zionist project lies at the heart of Israel’s desire for and design of an incomplete and interim contract with the OPT.

Zionism’s desire for a Jewish majority and for differential national rights for Jews within that majority has, as Mushtaq Khan has argued, dictated a political reality in which the Israeli state cannot delink from the OPT but also cannot swallow it into a single state.

A sovereign Palestinian state does not solve “the Palestinian problem” inside Israel, while one bi-national state defeats the Zionist national project outright. From a Zionist perspective, the best, or indeed only, solution to the Palestinian “problem” of demography and claim to rights, is a no-state solution, in which the Palestinians are contained manageably and in perpetuity. Israeli minister of economy Naftali Bennett recently explicitly expressed this as a “plan for peace.”

Thus, the customs union will persist so long as Israel’s interest in maintaining what could be termed “strategically absent” borders persists. This understanding helps to explain the historical endurance of an “economic” union that serves no rationale in theory and is full of contradictions in practice.

The relevance of this analysis to assessing developments in Israel-Palestine is illustrated by the recent controversy over customs stations. Customs stations are stations for collecting tariffs on imports. They are not supposed to exist in customs unions where trade between member states is supposed to be free. However, they are sometimes placed along an internal border to begin the transition to a free trade agreement or to more protectionist agreements.

Some economists have long advocated the establishment of customs stations between Israel and the OPT in the hope that the stations could pave the transition to a more economically desirable trade regime. Furthermore, this thinking goes, as a symbol of fiscal autonomy for the Palestinians, such stations might pave the way for political autonomy. However, this reflects a failure to comprehend the political containment context, which precludes the possibility of these stations ever translating into a functioning, sovereign border.

This reality became crystal clear when, after six months of secret negotiations, the Israeli government and the PA signed an agreement to “tighten cooperation” on tax and customs in July 2012. The agreement reevaluated the tax clearance mechanism and established new customs stations. The stated purpose was to reduce funds leakage from Israeli customs to the PA and to improve Palestinian customs capabilities.

The PA, no doubt, signed out of desperation given that even a marginal improvement in customs revenue, which constitutes 70 percent of the non-aid budget, would help. And they joined the Israeli signatories in lauding the deal as a step towards Palestinian fiscal and political sovereignty.

In fact, the deal did not foresee a better reality but rather reflected an extremely adverse one. Tweaking the union to secure incremental improvements certainly brought some small gains in terms of revenue but none at all for Palestinian productive capabilities since it left the majority of trade flows with Israel intact, maintaining the asymmetry.

The fact that the custom stations set out by the deal were and are being placed along Israel’s Separation Wall, the illegal and de facto structure that penetrates the West Bank, confirms Israel’s commitment to containment along interim lines that separate the populations while keeping borders strategically absent.

The customs stations issue highlights a crucial point: Analyses of trade and of the economy more broadly must be situated in the relevant context of Israel’s policy of containment as conflict management, including its pursuit of a no-state solution whereby borders are strategically absent and the Palestinians and their economy are contained manageably and in perpetuity.

Post-conflict frameworks, which assume a final status with defined borders and underpin the calls for the different trade scenarios described above, may appeal to a community within Israel and Palestine and internationally that is desperately looking for a two-state solution. However, they obfuscate the real issues facing the Palestinian economy and, in doing so, validate and help to sustain the adverse status quo.

Bringing Borders Back: Refocusing the Israel-Palestine Trade Debate

Israel’s strategic containment lies at the heart of the Palestinian economic challenge. In an economy as underdeveloped and severely deformed as the Palestinian economy, rigorous development policy is required to overcome the vicious cycles and initiate virtuous developmental ones.

The exact policies are highly context-specific and are often the result of trial and error learning processes. But the political economy requirements are clear: There must be a sovereign centralized power within defined borders that can navigate the fiscal platform for state taxation and spending policies. The fiscal platform is necessary not only for building local capacities and incentives, but also for mediating between the country’s stage of development and the competitive pressures of international markets, and for supporting nascent capitalists.

Here lies the full tragedy of the Palestinian economy. For trade to serve development goals, certain fiscal capacities like import substitution and export promotion are required especially in the initial stages. But since development more broadly requires a fiscal base that in turn presupposes a sovereign, then the current containment of the OPT and their preclusion from any sovereign is the worst possible scenario for any developing economy.

The absence of both fiscal transfer within a one-state Israel-Palestine and sovereign protection under a Palestinian state incapacitates the taxation capabilities at the heart of all development processes and prevents any strategy of supporting domestic capability. The contained economy will necessarily operate in an entirely ad hoc fashion that is catastrophic not only to long-term development but to short-term viability.

What can be done to redress the situation? First, development actors should eschew ex-post conflict frameworks, including state-building and final-border scenarios, as inappropriate to understanding, assessing, or planning the Palestinian economy.

Rather, their point of departure must be an understanding of not only the subjugation of the Palestinian economy to Israel’s mode of conflict management but also to its specific kind of conflict management, i.e., containment. Otherwise, it is impossible to grasp the real roots of the ongoing deterioration of the economy and the absence of development prospects

Second, if the international community truly wants to support Palestinian development, it must confront, expose, and challenge Israel’s containment of the OPT. This includes the rejection of the façade of a two-state solution or “peace process”” and an acknowledgement of the way that Israel is managing the Palestinian population and their economy in perpetuity, refusing to consider any arrangement that separates them into a sovereign state (see e.g., recent statements by Prime Minister Benjamin Netanyahu and Justice Minister Tzipi Livni) or to integrate them into a bi-national state.

In addition, it is past time for the international community to call out the racist vision, of differential rights for Jews and non-Jews within Israel as well as in the OPT that underpins this strategy. While such positions by the international community would not guarantee a “solution” one way or the other, they would certainly support the struggle against what might otherwise be perennial political containment and economic backwardness.

In short, there is a need to refocus debate, analysis, and action on Israel’s containment strategy — a de facto no-state solution for the OPT — and the repercussions of this strategy on the economic sphere. Until then, the underdevelopment of Palestinian trade and the economy more broadly will remain institutionally guaranteed.

Al-Shabaka is an independent non-profit organization whose mission is to educate and foster public debate on Palestinian human rights and self-determination within the framework of international law.

Amal Ahmad is a Palestinian economic researcher whose work focuses on fiscal and monetary relations between Israel and Palestine.

 

December 22, 2014 Posted by | Economics, Ethnic Cleansing, Racism, Zionism | , , , | Leave a comment

Ecuador ends deal with Germany on environmental issues

Press TV – December 20, 2014

Ecuador has terminated its environmental cooperation with Germany after German legislators tried to visit an Amazon rainforest recently opened for oil exploitation, the country’s foreign minister says.

“Ecuador unilaterally ends all cooperation with Germany on environmental issues,” Ricardo Patino said on Friday.

In 2012, Germany and Ecuador inked a cooperation deal worth 36 million euros ($44 million) to protect the environmentally sensitive rainforest known as Yasuni. They also signed another deal worth 7 million euros ($9 million) in other environment projects.

“If they think they had the right to doubt the word of Ecuador’s government on the issue of Yasuni because they were providing funds, we’ll give them their money back with interest,” Patino added.

He also noted that the Latin American country has not received the funds for the rainforest, and the money allocated for the other projects will be returned soon.

In 2007, Ecuadorian President Rafael Correa asked rich countries to donate $3.6 billion to help protect the Yasuni in exchange for pledges not to drill for the oil beneath it.

However, Correa allowed the national oil company to do drilling after his proposal was not welcomed by the other countries.

Earlier this month, Correa did not permit the German lawmakers to visit the Yasuni to observe oil production and talk to activists opposing the measure.

The Ecuador government assured that it will take every measure possible to protect the sensitive Amazon environment during the extraction process. However, the Correa government was not pleased that the German delegation wanted to meet with opposition groups first.

“We either have relations based on equality, or none at all,” Correa said in a statement to the German delegation, asking if Germany would likewise accept a delegation from Ecuador coming to their country to inspect their nuclear projects, for instance. Correa added that his country “stopped being a colony 200 years ago.”

December 20, 2014 Posted by | Economics, Environmentalism | , | Leave a comment

Obama authorizes sanctions against Russia’s Crimea

RT | December 19, 2014

US President Barack Obama has authorized sanctions against individuals and entities operating in Russia’s Crimean peninsula, the White House said in a statement.

Obama has issued an executive order that “prohibits the export of goods, technology, or services to Crimea and prohibits the import of goods, technology, or services from Crimea, as well as new investments in Crimea,” according to the statement.

The executive order also authorizes the Secretary of the Treasury to impose sanctions on “individuals and entities operating in Crimea.”

The move comes just a day after the European Union introduced similar action against the Russian region of Crimea and Sevastopol, accepted into the Russian Federation following the referendum last March.

The United States did not recognize the reunification and has been calling on Russia to “end its occupation and attempted annexation of Crimea.”

“We will continue to review and calibrate our sanctions, in close coordination with our international partners, to respond to Russia’s actions,” Obama’s statement reads.

The bill that opened way for further sanctions against Russian economy – dubbed Ukraine Freedom Support Act of 2014 – was signed on Thursday. However Obama was hesitant to introduce any new measures until they are synchronized with European partners.

December 19, 2014 Posted by | Economics | , | Leave a comment

Money Buys Influence in US for Fugitive Ecuadorean Bankers

teleSUR | December 18, 2014

Family members of Ecuador’s fugitive Isaias brothers appear to have received preferential treatment in the U.S. thanks to political donations to the Democratic Party, The New York Times revealed Tuesday.

Estefania Isaias — the daughter of Roberto Isaias, one of two brothers wanted in Ecuador for bank fraud — had been barred from entering the United States after committing immigration fraud. That ban was lifted thanks to the intervention of high-ranking officials in the U.S. State Department. The lifting of the ban was made possible thanks to the assistance of Robert Menendez, a Democratic Senator.

The New York Times investigation reveals that the office of Menendez lobbied extensively in support of Estefania Isaias, even reaching out to Cheryl Mills, Hilary Clinton’s chief of staff while Clinton was she was U.S. secretary of state. He succeeded in getting Ms. Isaias into the United States and wrote to her to tell her the news a mere day after the Isaias family gave a donation to the Democratic Party.

Estefania’s sister Maria also faced a ban on entering the United States and Menendez’s office once again worked to intervene in her favor — also after receiving a donation from the Isaias family.

A spokesperson for Menendez told the Times that his office’s advocacy in the case of Ms. Isaias was routine. However, Linda Jewell, former U.S. ambassador to Ecuador, told the Times, “Such close and detailed involvement by a congressional office in an individual visa case would be quite unusual, especially for an applicant who is not a constituent of the member of Congress.”

The U.S. newspaper reported that the family donated hundreds of thousands of dollars to political campaigns, which were often followed by favorable decisions by the U.S. government.

The Isaias brothers, Roberto and William, were found guilty in absentia for a fraud worth US$400 million. They were sentenced to eight years in prison. The Isaias brothers have been living in the United States, fugitives from Ecuadorean justice. The government of Ecuador has requested their extradition but the U.S. government has denied the request.

Ecuador claims that the political donations made by the family is buying them protection in the U.S. However, The New York Times also reported that the U.S. Department of Homeland Security is currently working to have the Isaias brothers deported.

The U.S. Justice Department is investigating Senator Menendez for his support of the Isaias brothers. The senator is suspected of attempting to influence immigration officials in exchange for donations from the fugitive brothers.

December 19, 2014 Posted by | Corruption, Economics | , , , , | Leave a comment

Address to the Cuban people on new opening with the U.S.

By Raul Castro | December 17, 2014

Since my election as President of the State Council and Council of Ministers I have reiterated in many occasions our willingness to hold a respectful dialogue with the United States on the basis of sovereign equality, in order to deal reciprocally with a wide variety of topics without detriment to the national Independence and self-determination of our people.

This stance was conveyed to the US Government both publicly and privately by Comrade Fidel on several occasions during our long standing struggle, stating the willingness to discuss and solve our differences without renouncing any of our principles.

The heroic Cuban people, in the wake of serious dangers, aggressions, adversities and sacrifices has proven to be faithful and will continue to be faithful to our ideals of independence and social justice. Strongly united throughout these 56 years of Revolution, we have kept our unswerving loyalty to those who died in defense of our principles since the beginning of our independence wars in 1868.

Today, despite the difficulties, we have embarked on the task of updating our economic model in order to build a prosperous and sustainable Socialism.

As a result of a dialogue at the highest level, which included a phone conversation I had yesterday with President Obama, we have been able to make headway in the solution of some topics of mutual interest for both nations.

As Fidel promised on June 2001,when he said: “They shall return!” Gerardo, Ramon, and Antonio have arrived today to our homeland.

The enormous joy of their families and of all our people, who have relentlessly fought for this goal, is shared by hundreds of solidarity committees and groups, governments, parliaments, organizations, institutions, and personalities, who for the last sixteen years have made tireless efforts demanding their release. We convey our deepest gratitude and commitment to all of them.

President Obama’s decision deserves the respect and acknowledgement of our people.

I wish to thank and acknowledge the support of the Vatican, most particularly the support of Pope Francisco in the efforts for improving relations between Cuba and the United States. I also want to thank the Government of Canada for facilitating the high-level dialogue between the two countries.

In turn, we have decided to release and send back to the United States a spy of Cuban origin who was working for that nation.

On the other hand, and for humanitarian reasons, today we have also sent the American citizen Alan Gross back to his country.

Unilaterally, as has always been our practice, and in strict compliance with the provisions of our legal system, the concerned prisoners have received legal benefits, including the release of those persons that the Government of the United States had conveyed their interest in.

We have also agreed to renew diplomatic relations.

This in no way means that the heart of the matter has been solved. The economic, commercial, and financial blockade, which causes enormous human and economic damages to our country, must cease.

Though the blockade has been codified into law, the President of the United States has the executive authority to modify its implementation.

We propose to the Government of the United States the adoption of mutual steps to improve the bilateral atmosphere and advance towards normalization of relations between our two countries, based on the principles of International Law and the United Nations Charter.

Cuba reiterates its willingness to cooperate in multilateral bodies, such as the United Nations.

While acknowledging our profound differences, particularly on issues related to national sovereignty, democracy, human rights and foreign policy, I reaffirm our willingness to dialogue on all these issues.

I call upon the Government of the United States to remove the obstacles hindering or restricting ties between peoples, families, and citizens of both countries, particularly restrictions on travelling, direct post services, and telecommunications.

The progress made in our exchanges proves that it is possible to find solutions to many problems.

As we have reiterated, we must learn the art of coexisting with our differences in a civilized manner.

December 17, 2014 Posted by | Economics | , | Leave a comment

Russia ‘forced to accept’ €1.86bn compensation for former shareholders of oil giant

RT | December 17, 2014

Russia has agreed to pay €1.86 billion in compensation to former Yukos shareholders after the European Court of Human Rights (ECHR) refused its appeal, said Russian Justice Minister Aleksandr Konovalov.

“The judges have made the decision. We are forced to accept it. We believe it is unreasonable, but there’s nothing we can do,” said Konovalov as quoted by RIA.

At the same time he said Russia is not obliged to abide by the decisions of the ECHR, adding that the enforcement of decisions is ‘goodwill’ on the part of a member country of the Council of Europe.

“Life will show to what extent this decision will be enforced in Russia,” he said.

On Tuesday the ECHR ruled against the Ministry of Justice appeal to overturn the July 2014 decision. The court then ordered Russia to pay the compensation.

Russia must now pay €1.86 billion (US$2.51 billion) to the former shareholders of Russia’s once largest private oil company for unfair tax proceedings, which allegedly led to the liquidation of Yukos in 2007.

The compensation sum was calculated on the basis of fines imposed on Yukos by the Ministry of Taxes and Assessments in 2000 and 2001 following a tax audit. A part of the seven percent execution fee levied against the company was included as well.

Another ruling by the International Arbitration Court in the Netherlands has ended a decade long case brought by former Yukos shareholders which ordered Russia to pay about $50 billion in damages.

The Yukos oil company existed from 1993 to 2007. In August 2006 it was declared bankrupt at the request of a syndicate of foreign banks to which Yukos owed about $500 million. Later this debt was purchased by Rosneft. In 2007 the company’s property was sold at auction to cover its debts. Yukos was dissolved on November 21, 2007.

READ MORE:

Russia ordered to pay $2.5 bn to Yukos shareholders

‘Mega-arbitration’: Court orders Russia to pay $50bn in Yukos case

December 17, 2014 Posted by | Economics | , | Leave a comment

Nuclear ultimatum: Scottish National Party challenges Labour on Trident

RT | December 16, 2014

The Scottish National Party (SNP) will only support a Labour government in a hung parliament after the May 2015 general election if they agree to scrap Britain’s nuclear weapons program, Scottish First Minister Nicola Sturgeon said.

Sturgeon ruled out a formal coalition with Labour, but suggested the SNP would support the party if they agreed to some “hard conditions.”

A recent YouGov poll highlights the SNP’s growing popularity in Scotland following September’s independence referendum, while Labour support in its historic heartland appears to be dwindling.

While the SNP currently have only five MPs in the House of Commons in Westminster, the party’s surge in support could see them playing a key role in making or breaking a government if no party gains a majority in the May election.

Sturgeon was speaking at a press conference on Monday following face-to-face talks with Prime Minister David Cameron. During the talks Cameron agreed to allow the Scottish Parliament to lower the voting age to 16 in time for the election.

Sturgeon told assembled press she remains staunchly opposed to nuclear weapons on principle, but also argues it makes no economic sense to pursue Trident in the future.

“You add into that at the moment this economic lunacy at a time when services are under pressure, you’re facing the extent and scale of public sector cuts over the next few years, to be spending £100 billion on a new generation of nuclear weapons that even many military experts now say are not required.”

Speaking alongside the leaders of the Green Party and Welsh nationalists Plaid Cymru, Sturgeon also attacked the Westminster parties for continuing austerity policies which hit the vulnerable hardest.

“But despite the deeply damaging impacts of failed austerity, the Tories and Labour have made crystal clear their determination to carry on regardless.

“And after four years propping up the Tories, the Lib Dems have no credibility. It is time for a new approach to UK politics – and for our parties to use our influence to bring about progressive change at Westminster,” she said.

Sturgeon was elected SNP leader and First Minister in November following Alex Salmond’s resignation. During the build up to the independence referendum Sturgeon served as Deputy First Minister and has served as an SNP member of the Scottish Parliament since 1999.

The SNP ultimatum will be an added challenge for Scottish Labour’s new leader Jim Murphy, who was elected to the position on 13 December. Increasing support for the SNP means Murphy’s own seat could be vulnerable, SNP Deputy Leader Stewart Hosie told STV News.

“Mr Murphy spent two years campaigning side by side with the Tories in Scotland, and in that sense he is part of Labour’s problem in Scotland, not the solution,” Hosie said.

With Labour unlikely to abandon Trident as a condition of a shared power arrangement, the party faces an uphill battle to secure seats in a nation which appears to be turning its back on them.

December 17, 2014 Posted by | Economics, Militarism | , , , , | Leave a comment

Iran Nuclear Talks à la Israeli-Palestinian Negotiations

By ISMAEL HOSSEIN-ZADEH | CounterPunch | December 16, 2014

Soon after the Iran nuclear talks were recently extended for another seven months (beyond the November 22, 2014 deadline), President Rouhani spoke with the Iranian people in a televised address in which he sought to portray the inconclusive negotiations as a diplomatic victory for Iran, as an indication that his team of negotiators “stood their ground” in the face of excessive demands by the US and its allies.

In reality, however, the extension meant the failure of the Iranian negotiators to achieve anything of substance (in terms of sanctions relief) in exchange for the significant unilateral concessions they had made a year earlier. To put it differently, it meant that the US and its allies refused to honor what they had promised Iran in return for its suspension and/or downgrading of its nuclear technology.

A year earlier, that is, in the first round of negotiations on 24 November 2013, Iran had agreed to the following significant concessions: limit its enrichment of uranium from the level of 20 percent to below 5 percent purity, render unusable its existing stockpile of 20 percent fuel for further enrichment, not activate its heavy-water reactor in Arak, not use its more advanced IR-M2 centrifuges for enrichment, and consent to extensive IAEA inspections of its nuclear industry/facilities.

This obviously means that Iranian negotiators had agreed to more than freezing Iran’s nuclear technology; more importantly, they had reversed and rolled back significant scientific achievements and technological breakthroughs of recent years.

In return, the US and its allies had agreed that following the “confidence building” implementation of these commitments by Iran, economic sanctions against that country would be lifted.

A year later, and despite the fact that IAEA has consistently confirmed Iran’s compliance with these commitments, major sanctions continue unabated. At a press conference on November 22, 2014, US Secretary of State John Kerry boasted that undiminished sanctions have forced Iran to either reverse or freeze much of its nuclear program. “Today,” Kerry stated, “Iran has no 20 percent enriched uranium. Zero. None. They have diluted and converted every ounce that they have… Today, IAEA inspectors have daily access to Iran’s enrichment activities and a far deeper understanding of Iran’s program.”

Instead of honoring what they had promised during the initial negotiations of year ago, the US and its allies now argue that Iran needs to make more concessions, and that therefore more time is needed for further negotiations—hence the seven-month extension of negotiations, to July 1, 2015.

And what are the new demands that are made of Iran? The new requirements, which the Iranian negotiators have now additionally agreed to, include the following:

* Expanded snap Inspections of Iran’s Centrifuge Production Facilities: under the seven-month extended negotiations, the IAEA will double its unannounced, snap inspections of Iran’s centrifuge production facilities.

* Conversion of more 20% Uranium Oxide to Reactor Fuel: Iran will convert 35 additional kg of its remaining 75 kg of 20% enriched uranium powder from oxide form into reactor fuel for the Tehran Research Reactor, thereby helping prevent the reversibility of a key concession Iran has made.

* Further Limitations on Research and Development (R&D) of Advanced Centrifuges and Enrichment Technology. The most important of these new limits are:

* Iran cannot pursue semi-industrial-scale operation of the IR-2M, a necessary prerequisite toward mass production of the model.

* Iran cannot feed IR-5 model centrifuges with uranium gas.

* Iran cannot pursue gas testing of the IR-6 centrifuge on a cascade level.

* Iran cannot install the IR-8 centrifuge at the Natanz Pilot Plant, preventing it from being tested with uranium gas.

* Iran is prohibited from using other/new forms of enrichment, including laser enrichment [source].

And what would Iran gain in return for these significant additional/new concessions? Not much. Under the extended interim agreement, as in the two previous interim agreements, dating back to November 2013, Iran will be permitted to repatriate only $700 million per month of its nearly $100 billion assets that are frozen overseas under the sanctions regime.

This explains why many critics have pointed out that Iranian negotiators have, once again, made significant one-sided concessions without much reciprocity in the way of sanctions relief. It also explains why President Rouhani’s (and his negotiating team’s) portrayal of the extension of negotiation as a diplomatic victory for Iran is far from warranted—it is, indeed, tantamount to self-deception, or more precisely, deception of the Iranian people.

Off-the-record briefings in Washington indicate that the US is projecting a long period of 15 to 20 years of protracted negotiations before restrictions on Iran’s civilian nuclear program are fully lifted. In light of the fact that the US and its allies have already achieved their goal of downgrading and freezing Iran’s nuclear program, while retaining crippling sanctions on that country, their policy of prolonging negotiations—as a tactic to avoid honoring what they have promised Iran—is understandable. As Keith Jones, a keen observer of the Iran nuclear talks, points out:

“Washington is determined to continue to subject Iran to crippling economic sanctions, with relief doled out incrementally and over a period of years. Moreover, during a lengthy initial period, the Western powers want only piecemeal suspension of the sanctions, not their repeal, so that they can be quickly reinstituted should they determine that Tehran has failed to fulfill its commitments” [source].

This means that President Rouhani’s (and Foreign Minister Javad Zarif’s) wishful thinking that a combination of generous concessions and a diplomatic charm offensive would suffice to have the US lift the economic sanctions against Iran has, effectively, placed his negotiators on a slippery slope, with no end to ever newer demands and additional conditions required of them by the US and its allies.

The perils of prolonged negotiations—increasingly resembling the Israeli-Palestinian negotiations—go beyond downgrading and/or freezing Iran’s nuclear technology. Equally devastating are the crippling effects of the continued sanctions on the Iranian economy/society.

Detrimental effects of sanctions on the Iranian economy have been further exacerbated by the Rouhani administration’s misguided policy of having tied the fate of Iran’s economy to the outcome of nuclear negotiations—effectively, making the future of the economy hostage to the unreliable and unpredictable consequences of the nuclear talks. This policy stems from the administration’s neoliberal economic outlook that seeks solutions to economic stagnation, poverty and under-development in unreserved integration into world capitalist system. The policy tends to hurt Iran in two major ways.

First, by tying the chances of economic recovery in Iran to the removal of the sanctions, that is, to the “successful” conclusion of the nuclear talks, the policy has undermined Iran’s bargaining position in the negotiations. Indeed, it can reasonably be argued that President Rouhani condemned Iran to a losing nuclear negotiation long before he was elected. He did so during his presidential campaign by pinning his chances for election on economic recovery through a nuclear deal. This was a huge mistake, as it automatically weakened Iran’s bargaining position and, by the same token, strengthened that of the United States and its allies. By exaggerating the culpability of his predecessor in the escalation of economic sanctions against Iran, he committed two blunders: (a) downplaying the culpability of the US and its allies, and (b) placing the onus of reaching a nuclear deal largely on Iran.

Second, the policy of linking the chances of an economic recovery to the outcome of nuclear negotiations and/or the lifting of sanctions has created an ominous atmosphere of business/market uncertainty among the Iranian investors and entrepreneurs. Uncertainty is perhaps the worst enemy of a market economy, which explains why long-term, productive investment is drying up in Iran, or why economic stagnation has deteriorated since President Rouhani took office in early 2013.

Iran could minimize the baleful effects of sanctions by trying to delink its economic policies from nuclear negotiations and the threat of further sanctions. This would be possible if the Rouhani administration’s economic outlook somehow tilted away from outward-looking to inward-looking strategies of economic development; that is, the development of a “resistance economy,” as Iran’s Supreme leader, Ayatollah Khamenei has put it. This requires an economic strategy that would view the sanctions as an opportunity to mobilize national resources and chart an industialization course toward import-substitution and economic self-reliance—something akin to a war economy, since Iran has effectively been subjected to a brutal economic war by the United States and its allies.

Such a path of development would be similar to the eight years (1980-88) of war with Iraq, when at the instigation and support of regional and global powers Saddam Hussein launched a surprise military attack against Iran. Not only did the Western powers and their allies in the region support the Iraqi dictator militarily but they also subjected Iran to severe economic sanctions. With its back against the wall, so to speak, Iran embarked on a revolutionary path of a war economy that successfully provided both for the war mobilization to defend its territorial integrity and for respectable living conditions of its population.

By taking control of the commanding heights of the national economy, and effectively utilizing the revolutionary energy and dedication of their people, Iranian policy makers further succeeded in bringing about significant economic developments. These included: extensive electrification of the countryside, expansion of transportation networks, construction of tens of thousands of schools and medical clinics all across the country, provision of foodstuffs and other basic needs for the indigent at affordable prices, and more.

Alas, despite its record of success, this option seems to be altogether alien to President Rouhani and his team of economic advisors who, following the neoliberal/neoclassical school of economic thought, maintain that the solution to Iran’s economic problems lies in an unrestrained integration into world capitalism, in a wholesale (and often fraudulent) privatization of the economy, and in an IMF-style of economic austerity.

Ismael Hossein-zadeh is Professor Emeritus of Economics (Drake University). He is the author of Beyond Mainstream Explanations of the Financial Crisis (Routledge 2014), The Political Economy of U.S. Militarism (Palgrave–Macmillan 2007), and the Soviet Non-capitalist Development: The Case of Nasser’s Egypt (Praeger Publishers 1989).

December 16, 2014 Posted by | Economics, Ethnic Cleansing, Racism, Zionism, Wars for Israel | , , , , | Leave a comment

Illegal Financial Dealings Rob $1 Trillion from Poorer Nations

teleSUR | December 16, 2014

Global illicit financial flows (IFF), including crime, corruption and tax evasion, hit a historic high of US$991.2 billion dollars in 2012 alone – most of which was funneled out of developing and middle income economies, according to a new report released on Monday.

The new study by Global Financial Integrity (GFI), a United States-based watchdog that exposes financial corruption, reported that this number is a drastic increase from 2003, when illicit financial flows (IFF) totaled US$297.4 billion.

That means IFF increased an average of 9.4 percent (adjusted for inflation) a year – growing twice as fast as global GDP, said GFI President Raymond Baker.

Illicit funds from shady business, corruption and tax evasion have also been growing at an alarming rate in Sub-Saharan Africa and the Middle East and North Africa (MENA), at 24.2 and 13.2 percent respectively – more than double the global growth rate.

The report shows that developing countries lose more money through IFF than they gain from aid and foreign direct investment (FDI) combined.

“As this report demonstrates, illicit financial flows are the most damaging economic problem plaguing the world’s developing and emerging economies,” said Baker

In the time period between 2003 and 2012, the last year that data was available, developing countries lost about US$6.6 trillion dollars due to illicit transactions – what could have been invested in local business, healthcare, education or infrastructure, said one of the report’s authors Joseph Spanjers.

“It is simply impossible to achieve sustainable global development unless world leaders agree to address this issue head-on,” he added.

Sub-Saharan Africa saw some of the biggest losses as IFF comprised 5.5 percent of the country’s GDP.

China, Russia, Mexico, India and Malaysia saw the largest outflow of illicit funds in 2012.

The GFI study showed that trade misinvoicing – the overpricing of imports and the underpricing of exports – was the most common method to move money around illegally, accounting for 77 percent of illicit transactions.

“Suppose you live in Cameroon,” says Baker, “and want to get money out. As an importer, you ask your supplier abroad to increase the price by 20 percent and invoice you for 120 percent. When you pay that extra 20 percent is put into an account for you.”

To tackle the problem, GFI called for the United Nations to include specific targets to halve all trade-related illicit flows by 2030, as the international body prepares to discuss new Sustainable Development Goals to replace the Millenium Development Goals next year.

December 16, 2014 Posted by | Corruption, Economics | , | Leave a comment

« Previous Entries     Next Entries »