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).
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.
Jail employers who exploit migrants, profit from slave labor – Miliband
RT | December 15, 2014
UK employers responsible for flagrant exploitation of migrant workers by violating their rights, paying them paltry wages and offering them poor working conditions, could face jail sentences under a Labour government, Ed Miliband warned on Monday.
During a speech in Norfolk, the Labour leader pledged to introduce a new law to tackle unsatisfactory and inhumane working conditions, which many migrants face in Britain. Legislation change would also help curb wage cuts for local workers, he said.
The proposed law would hold to account those that exploit migrants’ difficult situations. It would focus on criminalizing servitude, slavery, bonded labor, and toughen sentencing for those who force their staff to work under conditions that breach UK requirements. Offenders could face up to 10 years in jail, Miliband said.
To illustrate the acute crisis many migrant workers in Britain face, the Labour chief highlighted a damning case, where immigrants’ human rights were badly violated on British soil.
Some 29 immigrants claimed their wages had been stolen, and they were forced to live in cramped, unsanitary conditions. The immigrants said they were beaten, attacked by dogs and incarcerated in a van for 6 days.
Miliband pledged to clamp down on such rogue employers, particularly those who engage in slave labor or lure workers to Britain under false pretenses.
“This new criminal offence will provide protection to everyone. It will help ensure that when immigrants work here they don’t face exploitation themselves and rogue employers are stopped from undercutting the terms and conditions of everyone else,” he said.
Slave labor in Britain
Earlier this year, the Joseph Rowntree Foundation (JRF) published research that revealed forced labor is a “significant” problem in Britain. The anti-poverty NGO’s report entitled ‘Forced Labour in the UK’ found the phenomenon was largely hidden, but most likely on the increase in Britain.
Drawing from a wide body of evidence, the JRF said the number of those experiencing forced labor in Britain “may run into thousands.” More recent estimates suggest the figure is even higher.
Some 10,000-13,000 victims are thought to be scratching a living in the UK, a review of police sources, the UK Border Force, charities and other bodies revealed in November.
This sobering statistic outweighs last year’s figure by the National Crime Agency’s Human Trafficking Centre, which put the number at 2,744, including 600 children.
“Likely elements within forced labor include low-skill manual and low-paid work; temporary agency work; specific industrial sectors; and certain non-UK migrant workers,” the report stated.
While the JRF’s research acknowledged the criminalization of forced labor in Britain would signal progress, the paper warned it was not a viable substitute for “an effective multi-agency, cross-departmental strategy” that includes measures to address the link between forced labor and human trafficking.
Baseless rhetoric?
While Miliband’s speech in Norfolk addressed social and ethical concerns about immigration in Britain, reports surfaced on Sunday evening that Labour MPs had received a pre-electoral strategy paper saying they should simply “move the conversation on,” should voters express explicit fears about Britain’s border control policies.
Labour aides dismissed the leaked quotes, however, arguing they were taken out of context from a strategic document focusing on how to minimize the threat of Nigel Farage’s Euroskeptic UK Independence Party (UKIP).
But the document leaks, published by the Telegraph, suggested members of the Labour party were instructed not to dispense pamphlets on immigration to all electoral voters, as such a move risked “undermining the broad coalition of support we need to return to government.”
Miliband gave his speech in the Norfolk district of Great Yarmouth. While Labour lost its seat there in 2010, with the constituency now considered a Conservative Party stronghold, it has been identified in recent times as increasingly UKIP-friendly.
In a pre-electoral bid to sway voters to back Labour in 2015, Miliband warned on Monday neither the Tories nor UKIP were prepared to address the underlying causes of immigration.
“They turn a blind eye to exploitation and undercutting because it is part of the low-skill, low-wage, fast-buck economy they think Britain needs to succeed,” he said.
But in light of Sunday’s leaked document, questions have arisen over Labour’s smoke-and-mirrors stance on immigration. Whether Miliband’s pledge is a manifestation of clever electioneering or a solid mandate remains to be seen.
The $7 Million University President
By Lawrence Wittner | CounterPunch | December 15, 2014
In a recent article about Shirley Jackson, the president since 1999 of Rensselaer Polytechnic Institute (RPI)–a private university located in Troy, New York–the Chronicle of Higher Education revealed that, in 2012 (the latest year for which statistics are available), she received over $7 million from that institution. Like many modern campus administrators, President Jackson was also given a large mansion, first class air travel, and a chauffeured luxury car to transport her around the campus.
Thanks to the fact that Jackson also serves on at least five corporate boards, including those of IBM and Marathon Oil, she supplements this income with more than a million dollars a year from these sources.
Despite repeated complaints about Jackson from faculty and students, RPI’s board of trustees has invariably expressed its total confidence in her. Indeed, the board chair recently declared that she is worth every penny of her substantial income. This unwavering support appears to be based not only upon Jackson’s fundraising prowess, but upon the corporate approach that she and the board share.
A key component of this corporate approach is embodied in Jackson’s development and implementation of the Rensselaer Plan, a venture that includes an enormous construction program at a staggering cost. Worried about their institution falling behind rivals in the race to build a high-powered, modern campus, trustees found this university expansion deeply satisfying. But it also meant that RPI ran up its debt to $828 million–over six times its level when Jackson took office. As a result, Moody’s downgraded RPI’s credit rating twice, and describes the financial outlook for RPI as “negative.”
Of course, when operating as a business, there are many ways to pay a top executive’s hefty salary and recoup huge financial losses. As is the practice on other campuses, RPI employs a considerable number of adjunct faculty members–part-timers paid by the course, with pitiful salaries, no benefits, and no guarantee of employment beyond the semester in which they are teaching. One of these adjuncts, Elizabeth Gordon, was paid $4,000 a course–about $10 an hour by her estimates. “Because the pay was so low,” she recalled, “it was like being a volunteer serving the community.” But, as the size of her RPI writing classes grew, she became concerned that the pace of grading, student meetings, and course preparation was undermining her health, which she lacked the insurance to cover. So she quit. Many other adjuncts, however, are still at RPI, scraping by on poverty-level wages and enriching President Jackson.
RPI’s adjuncts once had a voice on campus, as some of them served on RPI’s Faculty Senate. But that came to an end in 2007, when Jackson abolished that entity. From the administration’s standpoint, the abolition of the Senate had the welcome effect of not only depriving adjuncts of their minimal influence, but of crippling the power of regular faculty, as well. The previous year, a faculty vote of no confidence in Jackson’s leadership had been only narrowly defeated. Thus, the administration’s abolition of the Faculty Senate served as a pre-emptive strike. Asked by irate faculty to investigate the situation, the American Association of University Professors condemned the administration’s action as violating the basic principles of shared governance. The administration responded that RPI “has never recognized the role of the AAUP in what we regard as an internal issue.” Ultimately, faculty resistance collapsed, leaving faculty powerlessness and demoralization in its wake.
The Jackson administration, using what union organizers charged were tactics of intimidation, also succeeded in defeating efforts to unionize RPI’s downtrodden campus janitors and cafeteria workers. During one union campaign among janitors, the lead organizer recalled, security guards threw him off campus and the administration fired a janitor on the organizing committee.
In a further effort to cover the administration’s costly priorities, student tuition was raised substantially during the Jackson years. In 2013-14, it reached $45,100–$25,608 above the average tuition at New York’s four-year colleges. Of course, beyond tuition, there are expenses for college fees, room, board, and books, placing RPI’s own estimate of student costs for attendance in 2014-2015 at $64,194. Perhaps to soften the blow to students of this enormous price tag or to signal them about what type of school this is, the RPI web page remarks helpfully that “many of our professors have close ties with top global corporations.”
Having created the very model of an undemocratic, corporate university, President Jackson is appropriately imperious. According to the Chronicle of Higher Education, she has a series of rules that are clear to everyone. These include: 1) Only she is authorized to set the temperature in conference rooms; 2) Cabinet members all rise when she enters the room; 3) If food is served at a meeting, vice presidents clear her plate; and 4) She is always to be publicly introduced as “The Honorable Shirley Ann Jackson.” Falling into rages on occasion, she publicly abuses her staff and frequently remarks: “You know, I could fire you all.” In 2011, RPI’s Student Senate passed a resolution criticizing her “abrasive style,” “top-down leadership,” and the climate of “fear” she had instilled among administrators and staff. It even called upon RPI’s board of trustees to consider Jackson’s removal from office. But, once again, the board merely rallied in her defense.
Perhaps, though, the response of the board of trustees is not surprising. After all, developments at RPI are very much in line with trends at institutions of higher education: inflating administration salaries; exploiting adjunct faculty, regular faculty, and other workers; strengthening administration power; raising tuition to astronomical heights; and, above all, running colleges and universities like modern business enterprises. RPI actually presents us with a glimpse of the future of higher education―a future that we might not like very much.
Lawrence Wittner (http://lawrenceswittner.com) is Professor of History emeritus at SUNY/Albany. His latest book is “What’s Going On at UAardvark?” (Solidarity Press), a satirical novel about campus life.
Gap between rich and poor worst in decades: OECD
Press TV – December 9, 2014
The Organization for Economic Cooperation and Development (OECD) says the gap between rich and poor in most of its member countries has reached its highest level in 30 years.
The organization released a report on Tuesday saying most of its 34 member states have seen a widening inequality gap.
Among its members are both developed and developing nations, including countries from the European Union, the US, Turkey, Mexico and Japan. However, China, Brazil and India are not members of the OECD.
According to the report, the richest 10 percent of people in the OECD area earn 9.5 times the income of the poorest 10 percent. The ratio stood at 7:1 in the 1980s.
The finding also showed that in the couple of decades leading up to the global financial crisis which erupted in 2007, the average household income increased for all OECD member states by around 1.6 percent annually.
However, in recent years, the average household income has stagnated or fell in most OECD member states.
The organization said the expanding inequality gap has negatively affected member states’ economies, with estimates showing that it has slashed more than 10 percentage points off growth in Mexico and New Zealand.
This is while growth rates in the US, UK, Sweden, Finland and Norway would have been more than a fifth higher if there had not been widening inequality.
The organization called for a number of measures to tackle the widening gap, including anti-poverty programs and increased access to high-quality education, training and healthcare.
Berri: Israel is stealing Lebanese gas
Al-Akhbar | December 8, 2014
While political factions are distracted with the upcoming dialogue between Hezbollah and the Future Movement, and the Lebanese government is struggling to resolve the issue of the kidnapped soldiers and counter the threat of terrorist groups on the Syrian border, Israel is stealing Lebanese gas from the deep sea off the Lebanese southern coast, Al-Akhbar reported on Monday.
Parliament speaker Nabih Berri told Al-Akhbar that he received information a few days ago confirming that Israel has started stealing Lebanese gas, expressing his surprise over the government’s lack of interest in the matter.
Berri said “he will personally push the pressing issue early next year,” adding that the Israeli move will force Lebanon to sign two designated decrees that would allow it to start digging for gas and ensure new revenues for the Lebanese economy.
Lebanon is located in the heart of the Levant basin, where seismic surveys indicate the presence of huge oil and gas reserves, but has so far failed to impose itself as a regional player in this area, as neighboring states greedily fight for its resources.
In July 2013, an Israeli company found Karish, a gas field 75 kilometers from the coast of Haifa. The new field is sufficiently close to Lebanon’s maritime borders to allow Israel access to Lebanon’s own reserves. It is evident that Israel is pressing ahead with exploration and production while Lebanon’s own energy plans falter.
At the time, then-Energy and Water Minister Gebran Bassil addressed these concerns in a press conference. “Theoretically…Israel is now able to reach Lebanese gas and that is a very grave situation,” he said.
“We cannot yet say that a disaster has happened, but the new Israeli discovery may indeed lead to one, especially if Lebanon’s efforts continue to be plagued by delays.”
“If Israel drills horizontally in Karish – made possible thanks to US technology – it may be able to reach up to 10 kilometers north into Lebanon’s reservoirs. If Israel drills vertically, it would still be possible for Israel to syphon off Lebanese oil and gas, if the Israeli and Lebanese fields overlap,” Bassil added.
After the discovery of large deposits of oil and gas in the eastern Mediterranean, the main struggle for Lebanon remains with both Cyprus and Israel to prevent encroachment on its maritime boundaries.
Cyprus breached its agreement with Lebanon and signed a deal in 2010 with the Zionist state, which attempted to gobble up 860 square kilometers of Lebanon’s maritime zone.
This incident revealed the need for Lebanon to assert the integrity of its maritime boundaries and to recover all of its Exclusive Economic Zone (EEZ) – currently being disputed by Israel following its agreement with Cyprus.
In theory, there was no dispute over maritime boundaries between Israel and Cyprus. But when the opportunity arose, Israel encroached on Lebanon’s zones as a result of the latter’s failure to quickly ratify its agreement with Cyprus.
The Cypriot-Israeli agreement enabled Israel to foray into Lebanon’s EEZ, although Israel had so far observed the same boundaries adopted by Lebanon in all its operations.
Reports indicate that Israel found a loophole in the agreement between Lebanon and Cyprus which stipulates that the triple point can only be determined through trilateral negotiations.
Since there are no contacts between Lebanon and Israel, the determination of this point is pending negotiations.
Israel’s interpretation of this, however, is that Lebanon has lost 860 square kilometers.
Lebanon managed to recover 500 out of 860 square kilometers of its EEZ according to international community laws, while 360 square kilometers remain effectively under Israeli control.
In November 2013, Israel rejected a proposal for a settlement made by the US administration to resolve the “dispute” between the Zionist state and Lebanon over the boundaries of each side’s EEZ. The proposal concerned the disputed area of Block 9 in the Mediterranean, which Israel claims sovereignty over.
Israel claims that this block – one of the richest areas in terms of commercial gas deposits recently discovered in the Mediterranean – extends into its EEZ.
In September, Director of the Research and Strategic Studies Center General Khaled Hamada said “the expected quantities (of oil and gas) are relatively small, compared to those discovered in the Arabian Gulf, Russia, and the Caspian Sea, but they are enough to make a significant impact on the energy security of Mediterranean countries, and contribute to a lesser extent to Europe’s energy security.”
Hamada pointed out that Israel had already begun commercial gas production, while Cyprus had started exploration in more than one location.
In a conversation with Al-Akhbar, Hamada warned that any further delays in Lebanon’s efforts to implement gas projects would force it to deal with these projects and security arrangements as a fait accompli down the road.
While Lebanon is busy with endless debates, Israel is rushing to put the final touches on its bid to export gas to Europe.
Four years ago, Al-Akhbar published a statement by Israeli Minister Yossi Peled on September 25, 2010 that highlighted the Israeli stance on Lebanon becoming a gas producer country.
Peled, appearing before the Knesset Economic Committee at a special hearing on the oil and gas sector, said that Lebanon had large gas fields similar to the ones Israel had discovered. He cautioned that the Europeans, who were looking for alternatives to Russian gas, had initiated negotiations with Lebanon, saying, “Imagine what it would mean if this country became a gas producer,” something he claimed had equally alarming economic and security implications.
Although Israel managed to pinpoint the challenges it faced, it did predict at the time – and wager on – Lebanon’s complacency. In response to Peled’s warnings in the Knesset, Israeli daily Globes, in a front-page editorial on October 5, 2010, stated:
“Israeli sources who follow events in Lebanon are convinced that, at the current rate of progress, the Lebanese will award the first licenses this year [2010], and will start exploratory drilling within a year. The same sources believe that Lebanon will quickly be able to close the gap between it and Israel, and become a real competitor.
“Past experience shows that Israel has no immediate reason for fear. Lebanon’s natural resources will arouse internal (and external) conflicts no less severe than Israel’s natural resources have provoked here …
“The oil giants will not rush to invest billions in a country where it is not clear who is in control, and where so many other countries openly interfere.”
Israel was proven right. Nothing in Lebanon is exempt from being the object of division and polarization, and thus, obstruction, including the oil and gas sector.
Meanwhile, Turkey is also trying to expand in the eastern basin through northern Cyprus, with a view to reduce its dependence on oil imports from Iran and gas imports from Russia.
Ankara is seeking to build a network of onshore and offshore gas pipelines, to act as an energy transit hub between East and West.
(Al-Akhbar)
Israel tightens economic stranglehold on 1948 Palestinians
By Zouheir Andraos | Al-Akhbar | December 8, 2014
Occupied Haifa – As Israel increases its economic stranglehold on 1948 Palestinians, its racist policies extended to banning them from raising chickens and growing potatoes. This was after the closure of clothes workshops, which were transferred to Jordan, and other similar actions.
As the economic persecution against Palestinians continues, the Israeli Agriculture Ministry recently decided to prevent 1948 Palestinians from raising chickens and thus producing eggs, claiming this department as an exclusive right for Jews in cooperative villages (moshav). Eggs produced by Palestinian establishments disappeared from the market in a matter of days and were replaced by Israeli eggs produced at moshavs (Israeli agricultural settlements) built on the ruins of Palestinian villages destroyed in the Nakba, or the Catastrophe.
Authorities in Tel Aviv also issued a decree banning “Arabs” from growing potatoes, succumbing to the pressure of Israeli potato farmers. The authorities had discovered that growing potatoes is cheap and was an important source of income for Palestinians. These two steps are further proof of the extent of the occupation’s institutional racism.
Palestine is famous for having fertile land, rich in all sorts of plants used by Palestinians as food (such as thyme and mallow), but which are not known or eaten by Jews. This led the Israeli government to instruct its so-called environmental protection authority to prosecute “plant thieves.” It officially announced those plants as “protected species and those who pick them shall be sent to court.”
Environmental protection authorities started fining Palestinians who pick “protected plants.” In the meantime, Jewish traders, who just discovered the importance of such plants for Palestinians, began requesting necessary licenses from the Israeli Agriculture Ministry to grow them and sell them in Arab markets. Palestinians in the interior became a target of a lucrative and popular “Israeli” trade.
In the same context, occupation authorities found another channel to increase the economic stranglehold on Palestinians, with Dubek cigarettes company (the only Israeli cigarette company) announcing it would stop buying tobacco from Arab farmers. Tobacco is one of the main cash crops for Palestinians, especially in the Galilee, inside what is known as the green line. Thus, Israel would have destroyed one of the most important Arab crops in Palestine, and began importing tobacco from its Turkish ally.
Persisting in its economic war and in collaboration with Jordan, Israel recently shut down the small sewing and knitting factories in Galilee, the Triangle, and Negev, the main source of income for many Palestinian families. The occupation authorities plan to relocate them to Jordan, under the pretext of cheap labor. However, the move was rumored to be an attempt to prop up the fragile Jordanian economy, in addition to the occupation’s determination to cut off sources of income for 1948 Palestinians.
The economic stranglehold policies adopted by Israel resulted in the unemployment of one third of the workforce in Negev and Umm al-Fahm. It widened the gap between Palestinian and Israeli unemployment, with a 25 percent unemployment rate for Palestinians and 6.5 percent for Israelis. The same statistics indicated that half of Palestinian children in the 1948 territories currently live below the poverty line.
Ukraine’s Made-in-USA Finance Minister
By Robert Parry | Consortium News | December 5, 2014
Ukraine’s new Finance Minister Natalie Jaresko, a former U.S. State Department officer who was granted Ukrainian citizenship only this week, headed a U.S. government-funded investment project for Ukraine that involved substantial insider dealings, including $1 million-plus fees to a management company that she also controlled.
Jaresco served as president and chief executive officer of Western NIS Enterprise Fund (WNISEF), which was created by the U.S. Agency for International Development (U.S. AID) with $150 million to spur business activity in Ukraine. She also was cofounder and managing partner of Horizon Capital which managed WNISEF’s investments at a rate of 2 to 2.5 percent of committed capital, fees exceeding $1 million in recent years, according to WNISEF’s 2012 annual report.
The growth of that insider dealing at the U.S.-taxpayer-funded WNISEF is further underscored by the number of paragraphs committed to listing the “related party transactions,” i.e., potential conflicts of interest, between an early annual report from 2003 and the one a decade later.
In the 2003 report, the “related party transactions” were summed up in two paragraphs, with the major item a $189,700 payment to a struggling computer management company where WNISEF had an investment.
In the 2012 report, the section on “related party transactions” covered some two pages and included not only the management fees to Jaresko’s Horizon Capital ($1,037,603 in 2011 and $1,023,689 in 2012) but also WNISEF’s co-investments in projects with the Emerging Europe Growth Fund [EEGF], where Jaresko was founding partner and chief executive officer. Jaresko’s Horizon Capital also managed EEGF.
From 2007 to 2011, WNISEF co-invested $4.25 million with EEGF in Kerameya LLC, a Ukrainian brick manufacturer, and WNISEF sold EEGF 15.63 percent of Moldova’s Fincombank for $5 million, the report said. It also listed extensive exchanges of personnel and equipment between WNISEF and Horizon Capital.
Though it’s difficult for an outsider to ascertain the relative merits of these insider deals, they could reflect negatively on Jaresko’s role as Ukraine’s new finance minister given the country’s reputation for corruption and cronyism, a principal argument for the U.S.-backed “regime change” that ousted elected President Viktor Yanukovych last February.
Declining Investments
Based on the data from WNISEF’s 2012 annual report, it also appeared that the U.S. taxpayers had lost about one-third of their investment in WNISEF, with the fund’s balance at $98,074,030, compared to the initial U.S. government grant of $150 million.
Given the collapsing Ukrainian economy since the Feb. 22 coup, the value of the fund is likely to have slipped even further. (Efforts to get more recent data from WNISEF’s and Horizon Capital’s Web sites were impossible Friday because the sites were down.)
Beyond the long list of “related party transactions” in the annual report, there also have been vague allegations of improprieties involving Jaresko from one company insider, her ex-husband, Ihor Figlus. But his whistle-blowing was shut down by a court order issued at Jaresko’s insistence.
John Helmer, a longtime foreign correspondent in Russia, disclosed the outlines of this dispute in an article examining Jaresko’s history as a recipient of U.S. AID’s largesse and how it enabled her to become an investment banker via WNISEF, Horizon Capital and Emerging Europe Growth Fund.
Helmer wrote: “Exactly what happened when Jaresko left the State Department to go into her government-paid business in Ukraine has been spelled out by her ex-husband in papers filed in the Chancery Court of Delaware in 2012 and 2013. …
“Without Figlus and without the US Government, Jaresko would not have had an investment business in Ukraine. The money to finance the business, and their partnership stakes, turns out to have been loaned to Figlus and Jaresko from Washington.”
According to Helmer’s article, Figlus had reviewed company records in 2011 and concluded that some loans were “improper,” but he lacked the money to investigate so he turned to Mark Rachkevych, a reporter for the Kyiv Post, and gave him information to investigate the propriety of the loans.
“When Jaresko realized the beans were spilling, she sent Figlus a reminder that he had signed a non-disclosure agreement” and secured a temporary injunction in Delaware on behalf of Horizon Capital and EEGF to prevent Figlus from further revealing company secrets, Helmer wrote.
“It hasn’t been rare for American spouses to go into the asset management business in the former Soviet Union, and make profits underwritten by the US Government with information supplied from their US Government positions or contacts,” Helmer continued. “It is exceptional for them to fall out over the loot.”
Jaresco, who served in the U.S. Embassy in Kiev after the collapse of the Soviet Union, has said that Western NIS Enterprise Fund was “funded by the U.S. government to invest in small and medium-sized businesses in Ukraine and Moldova – in essence, to ‘kick-start’ the private equity industry in the region.”
While the ultimate success of that U.S.-funded endeavor may still be unknown, it is clear that the U.S. AID money did “kick-start” Jaresco’s career in equity investments and put her on the path that has now taken her to the job of Ukraine’s new finance minister. Ukrainian President Petro Poroshenko cited her experience in these investment fields to explain his unusual decision to bring in an American to run Ukraine’s finances and grant her citizenship.
A Big Investment
The substantial U.S. government sum invested in Jaresco’s WNISEF-based equity fund also sheds new light on how it was possible for Assistant Secretary of State for European Affairs Victoria Nuland to tally up U.S. spending on Ukraine since it became independent in 1991 and reach the astounding figure of “more than $5 billion,” which she announced to a meeting of U.S.-Ukrainian business leaders last December as she was pushing for “regime change” in Kiev.
The figure was so high that it surprised some of Nuland’s State Department colleagues. Several months later – after a U.S.-backed coup had overthrown Yanukovych and pitched Ukraine into a nasty civil war – Under Secretary of State for Public Affairs Richard Stengel cited the $5 billion figure as “ludicrous” Russian disinformation after hearing the number on Russia’s RT network.
Stengel, a former Time magazine editor, didn’t seem to know that the figure had come from a fellow senior State Department official.
Nuland’s “more than $5 billion” figure did seem high, even if one counted the many millions of dollars spent over the past couple of decades by U.S. AID (which puts its contributions to Ukraine at $1.8 billion) and the U.S.-funded National Endowment for Democracy, which has financed hundreds of projects for supporting Ukrainian political activists, media operatives and non-governmental organizations.
But if one looks at the $150 million largesse bestowed on Natalie Jaresco, you can begin to understand the old adage that a hundred million dollars here and a hundred million dollars there soon adds up to real money.
Those payments over more than two decades to various people and entities in Ukraine also constitute a major investment in Ukrainian operatives who are now inclined to do the U.S. government’s bidding.
~
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).
A look at Egypt’s failure to exploit gas in the Mediterranean
By Izzat Shaaban | Al-Akhbar | December 6, 2014
Cairo – The oil and gas resources that Egypt could benefit from are just talk and cannot even be exploited as Israel manipulates these resources and seeks to maintain its control over them by all means possible.
When Israel undertook security measures to protect gas fields in the Mediterranean Sea, including renting a military unit in Cyprus until 2016, it ignited a crisis regarding the right to exploit the oil and gas fields in the Mediterranean. Due to the fact that Israel established the Iron Dome missile defense system to intercept missiles along its coast and off its territorial waters, in addition to its intelligence activities, it was able to monitor the work being done in these economically viable waters.
In addition, Israel has a confidential strategic security understanding with the United States in coordination with Turkey to preempt any international operations aimed at gas exploration and to strike them through the military unit established in Cyprus or the US Sixth Fleet present in the Mediterranean. All these Israeli actions deprive the Egyptian treasury of nearly a billion US dollars yearly for failing to exploit the discovered gas fields in territorial waters in the Mediterranean Sea.
Egypt’s inability to control the gas fields
As a matter of fact, Egypt was never able to control the gas fields located along its territorial maritime borders in the Mediterranean Sea because “Israel seized control of the Leviathan gas field and Cyprus controls the Aphrodite gas field even though they fall within the range of Egypt’s economic water,” according to economic expert Nael Salah al-Din al-Shafi speaking to Al-Akhbar.
According to Shafi, the problem “lies with the location of the fields discovered by some Mediterranean countries and along Egypt’s current maritime border.” He pointed out that “in principle, we cannot estimate the economic returns of the discovered gas fields because there are several of them and we don’t really know their content.”
Maritime delineation
It is known that drawing Egypt’s maritime border was marred with errors. One of these errors, according to Samir al-Najjar, professor of marine science at Alexandria University, is the degree of commitment to the United Nations Convention on the Law of the Sea stipulating that “Coastal States exercise sovereignty over their territorial waters which they have the right to establish its breadth up to a limit not to exceed 12 nautical miles… and have sovereign rights in a 200-nautical mile exclusive economic zone.” That is why, according to Najjar, “If the distance between two states facing each other across the sea is less than 400 nautical miles, they cannot get 200 nautical miles each, therefore they have to agree to demarcate their borders based on the historical and economic rights of each state.”
He added, “If there are no established economic and historical rights for these states, they should resort to maritime delineation based on the meridian or sector line.”
“Egypt overlooked the fact that its established historical rights go back to 200 years BC.” al-Najjar said, pointing out that “after re-measuring, it became evident that the meridian limit in the Aphrodite gas field for example lies three kilometers away.” “This piece of information alone means that two entire fields are located within Egyptian waters,” al-Najjar explained.
Historically, the Mediterranean fields were discovered by geologist Hussam Kheir al-Din. Al-Najjar said that Egypt and Cyprus signed an agreement on February 17, 2003 which was approved by then President Hosni Mubarak and the parliament. In 2006, the two countries signed the so-called Framework Convention to share hydrocarbon reservoirs, meaning gas and oil. However, errors in demarcation postponed the ownership of Aphrodite field, which eventually became Cyprus’ and not Egypt’s. This decision must be reversed but that requires Egypt to redraw its maritime border. Kheir al-Din indicated that Egypt gave up its rights when it agreed to allow internet cables to pass through its water for no charge, pointing out that annual losses vary between $750 million and $2 billion.The reason behind the latest crisis
Security expert, General Ismail al-Gazzar, said the reason behind the latest crises over the Mediterranean waters emerged after Egypt issued the Cairo Declaration at a conference held last month at al-Ittihadiya presidential palace which “foiled an undeclared agreement between Turkey, Cyprus and Israel that aims at pressuring Egypt to impose the status quo after seizing control of all the resources in the Mediterranean.” Gazzar pointed out that “Energy, the US company in charge of gas exploration in the Mediterranean, resorted to military units in anticipation of any international activities to drill for gas.”
Economic losses
Economics professor at the American University of Cairo, Nawal al-Said, said that the two adjacent fields, the Leviathan and Aphrodite, contain reserves worth $200 billion. She pointed out that the US oil and gas company ATB began developing Shimshon, the Egyptian maritime field also seized by Israel, which has about 3.5 trillion cubic feet.
According to economist Amr Helmy, a specialist in financial and stock markets, Egypt has about 123 trillion cubic meters in reserves in the oil fields that are being looted by Israel and about 40 trillion cubic meters of natural gas considered one of the purest in the world. As a result, he added that “Egypt loses about $24 trillion.”
Dis-Accumulation on a World Scale: Pillage, Plunder and Wealth
By James Petras :: 12.03.2014
Introduction
Over the past 30 years, wealth has grown exponentially and has become increasingly concentrated foremost in the upper .01%, then the .1%, followed by the 1% and the upper 10% – 20%.
The large scale, long-term concentration of wealth has continued through booms and busts of the real economy, the financial and IT crises. Wealth grew despite long-term economic recessions and stagnation, because the so-called recovery programs imposed austerity on 80% of the households while transferring public revenues to the rich.
The so-called ‘crises of capitalism’ have neither reversed nor prevented the emergence of an international class of billionaires who acquire, merge and invest in each other’s activities. The growth of wealth has been accompanied by the pillage of accumulated profits from productive sectors which are stored as wealth not investment capital.
The dispossession of capital and its conversion to private wealth subsequently led to the rapid expansion of the financial and real estate sector. Capital accumulation of profits has been the source of private accumulation of wealth at the expense of wages, salaries, public welfare, and state revenues.
The growth of private wealth at the expense of productive investments is a world-wide phenomenon which has been facilitated by an international network of banks, political leaders and ‘regulators’ centered in the United States and England.
The single most important aspect of private wealth accumulation on a world-scale is criminal behavior by the elites in multiple locations and involves the violation of multiple laws and regulations.
The Chain of Illegality: From Exploitation of Labor to the Pillage of the Nation
The original source of private wealth is the exploitation of labor by capital, of which a small percentage of the profits are reinvested in expanding production in the ‘home market’ or overseas. The bulk of the profits are transferred into financial networks which in turn illicitly channel the funds into overseas accounts.
The movements of profits ‘overseas’ takes multiple forms (transfer pricing, phony invoices, etc.) and they are primarily converted to private wealth. These ‘international movements’ of profits are largely composed of mega-thievery or plunder by political and business leaders from ‘developing countries’. According to the Financial Times (17/11/14, p2) “Up to $1 trillion (dollars) is being taken out of developing countries every year through a web of corrupt activities involving anonymous shell companies that typically hide the identity of their true owners”. (my emphasis)
The $1 trillion of stolen profits and revenues from the ‘developing countries’ (Africa, Asia, South America) are part of a “corruption chain” which is organized, managed and facilitated by the major financial institutions in the US and UK. According to a World Bank report in 2011 “70 percent of the biggest corruption cases between 1980 and 2010 involved anonymous shell companies. The US and UK were among the jurisdictions most frequently used to incorporate legal entities that held proceeds of corruption” (Financial Times, 17/11/14, p2.).
This process of “taking out” or pillage of developing countries feeds into rent seeking, conspicuous consumption and other non-productive activity in the ‘developed countries’ or more accurately the imperialist states. The principle beneficiaries of the pillage of ‘developing countries’ by the local elites are their counterparts in the top 1% of the imperial countries, who control, direct and manage the financial, real estate and luxury sectors of their economies.
The very same financial institutions in the imperial countries (and their related accountancy, legal and consultancy arms) facilitate the pillage of trillions from the ‘developed’ countries to offshore sites, via massive tax evasion operations, hoarding wealth instead of investing profits or paying taxes to the public treasury.
Long-term, large scale pillage and tax evasion depends on the central role, at both ends of the world economy, of the financial sector. This results in the ‘imbalance of the economy’ – predominance of finance capital as the final arbiter on how ‘profits’ are disposed.
The extremely narrow membership in the dominant financial sectors means that its growth will result in greater inequalities between classes. A disproportionate share of wealth will accrue to those who pillage the revenues and profits of the productive sector. As a result so-called ‘productive capitalists’ hasten to join and lay claims to membership in the financial sector.
The links between ‘productive’ and ‘fictitious’ capital or financial swindle capital, defy any attempt to find a progressive sector within the dominant classes. But the effort to enter the charmed circle of the dominant financial 1% is fraught with dangers and risks . . . because the financial sector has a very dynamic and super-active capacity for swindles.
The entire process of de-capitalizing the economy is underwritten in the US by the financial elite’s controls over the executive branch of government, especially the ‘regulatory’ and enforcement agencies -Security Exchange Commission, the Treasury and Justice Departments.
Financial institutions facilitate the inflow of trillions of dollars from the kleptocrats in the developing countries as well as the outflow of trillions of dollars by multi-nationals (MNC) to off-shore tax havens. In both instances the banks are key instruments in the process of dis-accumulation of capital by dispossessing nations and treasuries of revenues and productive investments.
The ‘hoarding’ of MNC profits in offshore shell companies does not in any way prevent speculative activity and large scale swindles in the for-ex, equity and real estate markets. On the contrary, the boom in high-end real estate in London, New York and Paris, and the high growth of luxury goods sales, reflects the concentration of wealth in the top .01%, .1% and 1%. They are the beneficiaries of ‘no risk’ pillage of wealth in developing countries, receiving lucrative commissions and fees in laundering the illicit inflows of wealth and outflows by tax dodging multi-nationals.
The Inverted Pyramid of Wealth
A small army of accountants, political fixers, corporate lawyers, publicists, financial scribblers, consultants and real estate promoters make-up the next 15% of the beneficiaries of the pillage economies. Below them are the 30% upper and lower middle classes who experience tenuous affluence subject to the economic shocks, ‘market volatility and risks of downward mobility. Below them, the majority of wage, salaried and small business classes experience declining incomes, downward mobility, rising risks of mortgage foreclosure, job-loss and destitution among the bottom 30%.
Despite wide variations in the class structure between ‘developing’ neo-colonial and developed imperial states, the top 1% across national boundaries has forged economic, personal, educational, and social ties. They attend the same elite schools, own multiple private residences in similar high end neighborhoods, and share private bankers, money launderers and financial advisors. Each elite group has their own national police and military security systems, as well as political influentials who also co-operate and collaborate to ensure impunity and to defend the illegal financial flows for a cut of the wealth.
The investigatory authorities of each developed country tend to specialize in prosecuting rival financial institutions and banks, occasionally levying fines – never imprisonment – for the most egregious swindles that threaten the ‘confidence’ of the defrauded investors.
Yet the basic structure of the pillage economy, continues unaffected – in fact thrives – because the ‘show’ of ‘oversight’ and judicial ‘charges’ neutralizes public indignation and outrage.
The Decisive Role of Dis-Accumulation in the World Economy
While orthodox economists elaborate mathematical models that have no relationship to the operations, agencies and performance of the economy and ignore the real elite actors which operate the economy, Leftist economists similarly operate with theoretical premises about capital and labor, profits and capital accumulation, crises and stagnation, which ignore the centrality of pillage, dis-accumulation, and the dynamic growth of wealth by the international 1%.
The research center, the Capital Financial Integrity Group provides a vast array of data documenting the trillion dollar illicit financial flows which now dominate the world economy.
US MNCs have ‘hoarded’ over $1.5 trillion dollars in overseas shell companies, ‘dead capital’, to avoid taxes and to speculate in stocks, bonds and real estate.
Mexico’s ruling elite organizes massive illicit financial flows, mostly laundered by US banks, ranging from $91 billion in 2007 to $68.5 billion in 2010. The massive increase in illicit financial flows is greatly facilitated by the de-regulation of the economy resulting from the North American Free Trade Agreement (NAFTA). Contrary to most leftist critics the main beneficiaries of NAFTA are not Canadian mine owners or US agro-business or auto manufacturers- it is the US and Canadian financial and real estate money launderers.
From 1960 to 2010 the Brazilian 1% pillaged over $400 billion dollars. These illicit financial flows are laundered in New York, Miami, London, Switzerland and Montevideo. In recent years the rate of pillage has accelerated: between 2000 -2012 illicit financial flows averaged $14.7 billion a year. And, most recently, under the self-styled ‘Worker’s Party” (PT) regime of Dilma Rousseff, $33.7 billion in illicit outflows were laundered annually – 1.5% of the GDP. Much of the pillage is carried out by private and public “entrepreneurs” in the so-called “dynamic” economic sectors of agro-minerals, energy and manufacturing via ‘trade mispricing’, import overpricing and export underpricing invoices.
According to a study published in the Wall Street Journal, (10/15/12), China’s elite’s illicit financial flows top $225 billion a year – 3% of national economic output. China’s 1%, the business-political elite, finance their children’s overseas private education, providing them with half million dollar condos. Illicit flows allow Chinese ‘investors’ to dominate the luxury real estate markets in Toronto, Vancouver, New York and London. They hoard funds in overseas shell companies. The Chinese corporate kleptocrats are the leaders in the drive to deregulate China’s financial markets – to legalize the outflows.
The scale and scope of China’s elite pillage has provoked popular outrage that threatens the entire capitalist structure – provoking a major anti-corruption campaign spearheaded by China’s President Xi Jinping. Thousands of millionaire officials and business people have been jailed, causing a sharp decline in the sales of the world’s luxury manufacturers.
India’s capitalists- as kleptocrats – have long played a major role in de-capitalizing the economy. According to the Financial Times (11/24/14, p3) the Indian elite’s illicit financial flows totaled $343 billion dollars from 2002 to 2011. The Indian Finance Ministry immediately threw up a smoke screen on behalf of the 1%, claiming the Indian elite had only $1.46 billion in Swiss accounts. Most of India’s wealthy have taken to holing their illicit wealth in Dubai, Singapore, the Cayman and Virgin Islands as well as London.
India’s neo-liberal policies eased the illegal outflows. Massive corruption accompanied the privatization of public firms and the allocation of multi-billion dollar assets such as mobile phones, coal fields and energy.
Indonesia, – percentage-wise is the leader in the outflow of illicit flows – fully 23% of annual output. The 1% elite of foreign and domestic capitalists, plunders natural resources, timber, metals, agriculture and dis-accumulates. Profits flow to foreign accounts in Tokyo, Hong Kong, Singapore, Sydney, Los Angeles, London and Amsterdam.
Ethiopia, with per-capita income of $365 dollars, is the site of vast pillage by its ruling elite. From 2000 to 2009, over $11.7 billion dollars in illicit financial flow was laundered mostly by US banks. These outflows enriched the Ethiopian and the US 1% and provoked famine for Ethiopia’s 90%.
Conclusion
The illicit financial flows surpass the capital invested in productive activity. The process of dis-accumulation of capital through relocation is channeled to overseas shell corporations and private bank accounts and beyond into financial holdings and real estate. The accumulation of private wealth exceeds the sums invested in productive activity generating investments and wages. Massive perpetual tax evasion means higher regressive taxes on consumers (VAT) and wage and salaried workers, reductions in social services, and austerity budgets targeting food, family and fuel subsidies.
The past thirty years of deregulated capitalism and financial liberalization, is a product of the financial takeover of state regulatory agencies. The signing of free trade agreements has provided the framework for large scale long-term illicit financial flows.
While illicit financial flows have financed some productive activities, the bulk has vastly expanded the financial sector. The absorption of illicit flows by the financial elite has led to greater inequalities of wealth between the 1% – 10% and the rest of the labor force.
Illicit earnings via mega swindles among the largest and most respected US and EU banks, has curtailed the amount of capital which is available for production, profits, wages and taxes. The circuits of illicit capital flows militate against any form of long-term economic development – outside of the wealth absorbing elites which control both the financial and political centers of decision-making.
The growth and ascendancy of financial elites which pillage public treasuries, resources and productive activity, is the result of an eminently political process. The origins of de-regulation, free trade and the promotion of illicit flows are all made possible by state authorities.
First and foremost, finance capital conquered state power – with the cooperation of “productive capital”. The peaceful transition reflected the interlocking directorates between banks and industry, aided and abetted by public officials rotating between government and investment houses.
The entire African continent was pillaged by billionaire rulers, many former nationalist politicians (South Africa), ex-guerilla and ‘liberation leaders’ (Angola, Mozambique, Guinea Bissau), in collaboration with US, EU, Chinese, Russian and Israeli oligarchs. Trillions of dollars were laundered by bankers in London, New York, Zurich, Tel Aviv and Paris. Growth of the commodity sector bolstered Africa’s decade long expanding GDP – and the mega-outflows of illicit earnings.
World-wide, billionaires multiplied profits ‘received’, but wages, salaries, pensions and health coverage declined! Swindles multiplied as outflows accelerated in both directions. The higher the growth in China, India, Indonesia and South Korea the bigger and more pervasive the corruption and outflows of wealth-led by “Communist” neo-liberals in China, Indian “free marketers” and Russian “economic reformers”.
The World Bank’s and IMF’s proposed “economic reforms” ‘freed’ the incipient political kleptocrats of controls and unleashed two-sided illicit financial flows – laundering funds from abroad and establishing trillion dollar offshore tax dodging citadels.
Illicit swindles dwarfed earnings from ‘capital accumulation’. The relations between capital and labor were framed by the organization and policies dictated by the directors and operators of the trillion-dollar financial networks based on the pillage of treasuries and the wealth of nations.
The center of China’s growth is shifting from manufacturing and the exploitation of labor, to real estate and “financial services”, as worker’s demand and secure double-digit increases in wages. The exploiters of labor turned predators of the national treasury. Under the pretext of “stimulating” the construction sector, real estate speculators in tow with Communist Party officials, absconded with over a trillion dollars from 2009 to 2014. According to Jonathan Anderson of the Emerging Advisors Group “over a trillion dollars” has gone missing in China in the past five years (Financial Times, 28/11/14, p 1.).
Factories still produce, agro-business still exports, the paper value of high tech companies has risen into the high billions, but the ruling 1% of the system stands or falls with the illicit financial flows drawn from the pillage of treasuries. To replenish pillaged treasuries, regimes insist on perpetual ‘austerity’ for the 90%: greater pillage for the 1%, less public revenues for health care which results in more epidemics. Less funds for pensions means later retirement– work til you die.
The plunder of the economy is accompanied by unending wars – because war contracts are a major source of illicit financial flows. Plunder oligarchs share with militarists a deep and abiding belief in pillage of countries and destruction of productive resources. The one reinforces the other in an eternal embrace – defied only by insurgents who embrace a moral economy and who proclaim the need for a total change – a new civilization.
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Iran UN ambassador calls for destruction of all nuclear weapons
Iran’s ambassador to the UN Gholamali Khoshroo
Press TV – March 29, 2017
Iran’s ambassador to the UN Gholamali Khoshroo has called for the total eradication of nuclear weapons.
Khoshroo reiterated Iran’s call during a UN conference aimed at creating a nuclear weapons ban treaty in New York on Tuesday.
“Iran, as a victim of chemical weapons, strongly feels the danger posed by the existence of weapons of mass destruction and is determined to engage actively in international diplomatic efforts to save humanity from the menace of nuclear weapons,” he said.
Khoshroo stressed that Iran is committed to its Non-Proliferation Treaty (NPT) obligations, which include negotiations based on effective nuclear disarmament measures.
He added that several countries continue to ignore international calls and treaties for nuclear disarmament and even continue to increase their nuclear stockpiles. “They do not have political determination to abandon doctrines of nuclear deterrence and nuclear terror,” he went on to say.
Iran’s UN ambassador noted that boycotting the talks by many countries, including the US, shows that the world’s nuclear powers are by no means committed to the eradication of nuclear arms. Britain and France were also among the some 40 countries that did not join the talks.
“We note that prohibition of nuclear weapons must be accompanied by the elimination of such weapons. There can be no doubt that without complete abolition of nuclear weapons, there will be no absolute guarantee against the danger of nuclear war and the use of such weapons,” Khoshroo added.
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