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Mexico Opens Energy Industry to Foreign Investment

By Diego Cupolo | Upside Down World | December 13, 2013

In a historic move, Mexican congress members have voted to open the state-controlled energy sector to foreign investment for the first time in 75 years. On Thursday, President Enrique Peña Nieto applauded the legislation, which is poised to become the nation’s most significant economic reform since the North Atlantic Free Trade Agreement.

“The energy reform marks a fundamental transformation that will allow us to increase our energy sovereignty and self-sufficiency in Mexico,” Peña Nieto wrote on Twitter Thursday morning. “It will also drive productivity, economic growth and job creation in Mexico.”

The legislation will alter several articles of Mexico’s Constitution, allowing private multinationals to develop the country’s oil and natural gas resources for the first time since 1938, when former President Lazaro Cardenas nationalized the energy industry with the creation of Pemex, or Petróleos Mexicanos.

Though Mexico still owns its natural resources, foreign companies such as Exxon Mobil Corp. and Chevron Corp will be able to search, drill and open gasoline stations under contract with the Mexican state.

The end of the Pemex energy monopoly is expected to bring Mexico an additional $20 billion in foreign investment per year as multinationals race to tap vast deepwater oil reserves in the Gulf of Mexico. According to the U.S. Energy Information Administration, the region is the largest unexplored oil patch outside the Arctic Circle.

Yet in a country where local oil production has long been a source of national pride and is often equated with sovereignty, the reform has been heavily contested by opposition leaders from the Party of Democratic Revolution (PRD), who have said the measure should go before a national referendum.

“We warn all private, national and, above all, transnational businesses and companies that want to come and invest in Mexico and petroleum, in order to expropriate Mexican petroleum, to think again,” said Jesus Zambrano, president of the PRD. “The most probable outcome is that within a year and a half, a recall referendum will reject this change.”

On Thursday, PRD members blocked the entrances to the lower house’s main voting hall to prevent discussion of the bill. Antonio Garcia, a PRD lawmaker, even stripped down to his underwear during to symbolize a nation stripped of its wealth.

Regardless, members from the ruling Institutional Revolutionary Party (PRI) and the conservative National Action Party (PAN), met in an adjacent conference room where they passed the legislation with 353-134 vote. Peña Nieto is expected to sign the bill in February after it has been ratified by state legislatures.

Currently, Mexico is the 10th largest oil producer in the world and proponents of the reform say it could propel the nation into the top five by taking advantage of new extraction and deepwater exploration technologies that Pemex cannot afford.

After peaking in 2004, Mexico’s oil production has declined by 25 percent to 2.5 million barrels a day. During the same period, Pemex has more than doubled operational spending to $20 billion per year, gaining the company a reputation for inefficiency and corruption.

Still, Pemex revenues provide a third of Mexican government’s annual budget and the company’s 160,000 employees face an uncertain future as lawmakers finalize the reform details, which include the removal of all five representatives of Pemex’s worker’s union from the company board.

To put the PRI agenda in perspective, The Financial Times said “energy is the climax of a sweeping agenda of reforms, including telecoms, labor, tax and education, which Enrique Peña Nieto has championed in his first year as president.”

Sources:
El Pais: México cambia su historia energética a contrarreloj – http://internacional.elpais.com/internacional/2013/12/12/actualidad/1386888542_011957.html
Bloomberg: Mexico Passes Oil Bill Seen Luring $20 Billion a Year – http://www.bloomberg.com/news/2013-12-12/mexico-lower-house-passes-oil-overhaul-to-break-state-monopoly.html
New York Times: Mexico’s Pride, Oil, May Be Opened to Outsiders – http://www.nytimes.com/2013/12/13/world/americas/mexico-oil.html?hpw&rref=business
Financial Times: Mexico courts foreign investment with energy reform – http://www.ft.com/intl/cms/s/0/e2242e2c-632e-11e3-886f-00144feabdc0.html#axzz2nIk7FhZe
Wall Street Journal: Mexico Congress Passes Historic Energy Bill – http://online.wsj.com/news/articles/SB10001424052702303932504579254013051981266

Reuters: Mexican Congress passes radical shake-up of oil industry – http://ca.reuters.com/article/businessNews/idCABRE9BB16820131212

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December 14, 2013 Posted by | Economics | , , , | Leave a comment

NAFTA at 20: State of the North American Worker

Twenty years since its passage, NAFTA has displaced workers on both sides of the U.S.-Mexico border, depressed wages, weakened unions, and set the terms of the neoliberal global economy.

By Jeff Faux | Foreign Policy in Focus | December 13, 2013

Foreign Policy In Focus is partnering with Mexico’s La Jornada del campo magazine, where an earlier version of this commentary appeared, to publish a series of pieces examining the impacts of the North American Free Trade Agreement (NAFTA) 20 years since its implementation. This is the first in the series.

The North American Free Trade Agreement, or NAFTA, was the door through which American workers were shoved into the neoliberal global labor market.

By establishing the principle that U.S. corporations could relocate production elsewhere and sell their products back into the United States, NAFTA undercut the bargaining power of American workers, which had driven the expansion of the middle class since the end of World War II. The result has been 20 years of stagnant wages and the upward redistribution of income, wealth, and political power.

A Template for Neoliberal Globalization

NAFTA impacted U.S. workers in four principal ways.

First, it caused the loss of some 700,000 jobs as companies moved their production to Mexico, where labor was cheaper. Most of these losses came in California, Texas, Michigan, and other states where manufacturing is concentrated (and where many immigrants from Mexico go). To be sure, there were some job gains along the border in the service and retail sectors resulting from increased trucking activity. But these gains are small in relation to the losses, and have generally come in lower paying occupations. The vast majority of workers who lost jobs from NAFTA, therefore, suffered a permanent loss of income.

Second, NAFTA strengthened the ability of U.S. employers to force workers to accept lower wages and benefits. As soon as NAFTA became law, corporate managers began telling their workers that their companies intended to move to Mexico unless the workers lowered the cost of their labor. In the midst of collective bargaining negotiations with unions, some companies even started loading machinery into trucks that they said were bound for Mexico. The same threats were used to fight union organizing efforts. The message was: “If you vote to form a union, we will move south of the border.” With NAFTA, corporations also could more easily blackmail local governments into giving them tax breaks and other subsidies, which of course ultimately meant higher taxes on employees and other taxpayers.

Third, NAFTA drove several million Mexican workers and their families out of the agriculture and small business sectors, which could not compete with the flood of products—often subsidized—from U.S. producers. This dislocation was a major cause of the dramatic increase of undocumented workers in the United States, putting further downward pressure on North American wages, particularly in already lower-paying labor markets.

Fourth, and ultimately most importantly, NAFTA created a template for the rules of the emerging global economy, in which the benefits would flow to capital and the costs to labor. Among other things, NAFTA granted corporations extraordinary protections against national labor laws that might threaten profits, set up special courts—chosen from rosters of pro-business experts—to judge corporate suits against governments, and at the same time effectively denied legal status to workers and unions to defend themselves in these new cross-border jurisdictions.

The U.S. governing class—in alliance with the financial elites of its trading partners—applied the NAFTA principles to the World Trade Organization, to the policies of the World Bank and IMF, and to the deal under which employers of China’s huge supply of low-wage workers were allowed access to U.S. markets in exchange for allowing American multinational corporations to invest there. The NAFTA doctrine of socialism for capital and free markets for labor also drove U.S. policy in the Mexican peso crisis of 1994-95, the Asian financial crash of 1997, and the global financial meltdown of 2008. In each case, the U.S. government organized the rescue of banks and corporate investors while letting the workers fend for themselves.

A Watershed in U.S. Politics

In U.S. politics, the passage of NAFTA under President Bill Clinton signaled that the elites of the Democratic Party—the “progressive” major party—had accepted the reactionary economic ideology of Ronald Reagan.

A “North American Accord” was first proposed by the Republican Reagan in 1979, a year before he was elected president. A decade later, his Republican successor, George H.W. Bush, negotiated the final agreement with Mexico and Canada.

At the time, the Democrats who controlled Congress would not approve the agreement. And when Democrat Bill Clinton was elected in 1992, it was widely assumed that the political pendulum would swing back from the right, and that therefore NAFTA would never pass. But Clinton surrounded himself with economic advisers from Wall Street and in his first year pushed the approval of NAFTA through the Congress.

Despite the rhetoric, the central goal of NAFTA was not “expanding trade.” After all, the United States, Mexico, and Canada had been trading goods and services with each other for three centuries. NAFTA’s central purpose was to free American corporations from U.S. laws protecting workers and the environment. Moreover, it paved the way for the rest of the neoliberal agenda in the United States: the privatization of public services, the deregulation of finance, and the destruction of the independent trade union movement.

The inevitable result was to undercut the living standards of workers all across North America: Wages and benefits have fallen behind worker productivity in all three countries. Moreover, despite declining wages in the United States, the gap between the typical American and typical Mexican worker in manufacturing remains the same. Even after adjusting for differences in living costs, Mexican workers continue to make about 30 percent of the wages that workers make in the United States. Thus, NAFTA is both symbol and substance of the global “race to the bottom.”

Creating a New Template

Here in North America there are two alternative political strategies for change.

One is repeal: NAFTA gives each nation the right to opt out of the agreement. The problem is that by now the three countries’ economies and populations have become so integrated that dis-integration could cause widespread dislocation, unemployment, and a substantial drop in living standards.

The other option is to build a cross-border political movement to rewrite NAFTA in a way that gives ordinary citizens rights and labor protections at least equal to the current privileges of corporate investors. For example, all three NAFTA nations should adopt similar high standards for the protection of free trade unions, collective bargaining, and health and safety—and their citizens should have the right to sue other countries for violations.

This would obviously not be easy. But a foundation has already been laid by the growing collaboration among immigrant, trade unionist, human rights, and other activist organizations in all three counties.

If such a movement could succeed in drawing up a new continent-wide social contract, North American economic integration—instead of being a blueprint for worker exploitation—might just become a model for bringing social justice to the global economy.

Jeff Faux is the founder, and now Distinguished Fellow, of the Economic Policy Institute in Washington DC. His latest book is The Servant Economy.

December 14, 2013 Posted by | Civil Liberties, Economics, Environmentalism, Solidarity and Activism, Timeless or most popular | , , , , , , , | Leave a comment

‘Excuse to throw us out’: Spanish cave dwellers say authorities’ actions ‘unlawful’

RT | December 14, 2013

A rare way of life is under threat in Spain where authorities have renewed attempts to evict dozens of cave-dwelling families from their homes in an ancient settlement in Granada. Residents say “it’s a disgrace”, and are determined to resist eviction.

Throughout the week dozens of activists have been protesting the eviction they deem unlawful and unfair.

The San Miguel cave dwellers say they have been the victims of the authorities, violating their human rights, and evicting people for cynical reasons only.

San Miguel is the site of one of the four main cave neighborhoods in Southern Spain. For over a thousand years, hundreds of caves carved out of the eye-catching hilltop have been home to gypsies and other homeless settlers.

Abandoned in the 1960s, in recent times eight caves have been occupied by squatters, who reclaimed them to turn them into modest and unconventional homes.

However, several years ago the council announced plans to turn the site into a tourist attraction. The Sacramento caveman heritage would include flamenco caves for tourists, a number of “artisan” and souvenir workshops, as well the main landmark – a hotel – which, according to the council, would “respect the harmony of the area”. The caves happen to be located in a lucrative location, affording the best views over the city, which relies on a robust tourism economy.

The authorities aren’t ruling out the possibility of going to court to get an eviction order. According to the cave dwellers, the court in Strasbourg has already ruled that eviction must be suspended until they have been provided with proper accommodation.

On Thursday, Granada’s city council proposed providing social housing to the cave dwellers.

RT’s Lucy Kafanov, reporting from the site, spoke to local residents and activists who told her it’s the third attempt by the authorities to clear cave dwellings in the past six years. Officials have repeatedly claimed that the “hand-made” homes built there are dangerous.

A spokesman for the cave dwellers argues their homes may be lacking fancy furniture but are perfectly habitable. Juan Antonio Parra told RT that should eviction take place this time round, people will band together to resist it.

“We certainly will resist, using every legal means available. Which is more than can be said of the city council, whose actions have been unlawful and underhand all along the way. First, they have no property rights on the caves. Secondly, they never did an expert assessment of the caves’ condition. There have been no cave-ins in any of the caves that the city council proclaimed to be crumbling as far back as three years ago, not even after the heavy rainfall we have had. So we can see their lie for what it is: they just need an excuse to throw us out.”

Parra says that what is happening these days is in fact highly reminiscent of past events.

“This has happened before, the seizures and the evictions: under the Francoist regime, and before that, during the reign of the Catholic kings. These caves have always sheltered Arabs, Gypsies, etc. The past still prevails in this part of Granada, so we believe the authorities will not succeed here.”

Local activist, Antonio Redondo, believes that plans to evict the cave dwellers have nothing to do with worries about comfortable and safe living conditions.

“It is a disgrace. This has nothing to do with concerns for the people. The government cares nothing for the fact that there are some 500 evictions administered in Andalusia every day. Instead, they keep trying to exploit the situation. They insist on eviction rather than carry out an assessment of the caves’ condition, or call a town hall meeting with the cave dwellers in order to explain the makeover plan and offer to relocate the inhabitants. This shows how totally unconcerned they are about these people.”

The government of Andalusia is expected to bring experts to the site to evaluate it. The cave dwellers are also looking for independent architects to confirm that their houses are a safe place to live.

In a bid to resolve the escalating crisis, the activists are planning to establish a co-op tenant council to help sort out property rights.

“After all, these caves belong to the original settlers. That makes the city council complicit of a fraudulent sale scheme, where all of their assets are effectively illegal,” Parra told RT.

“Right now, we are attending various meetings to figure out what our nearest future looks like.”

So far initial plans to convert the caves into a tourist area have been canceled due to the global economic crisis.

Spain, whose banks suffered a severe blow during the financial downturn, is said to be slowly emerging from a deep economic slump. Although Spain’s economy grew 0.1 percent in the July-to-September period, it still has one of the highest unemployment rates in the industrialized world. Earlier this year, the International Monetary Fund predicted that the debt-ridden country is likely to be saddled with unemployment of about 25 percent until up to 2018. Unpopular austerity measures have led to riots across the country.

December 14, 2013 Posted by | Civil Liberties, Corruption, Economics | , , , | Leave a comment

Four Kaupthing Banking Executives Sentenced To Prison

By Paul Fontaine – Grapevine – December 12, 2013

In a landmark ruling, Reykjavík District Court sentenced four former executives of Kaupthing Bank to between 3 and 5 1/2 years in prison for financial crimes dating back to 2008.

Vísir reports that former Kaupthing director Hreiðar Már Sigurðsson received the heaviest sentence: five and a half years, minus time already spent in custody. He was also sentenced to pay 33.4 million ISK in legal fees.

Former Kaupthing chairperson – and former Interpol fugitive – Sigurður Einarsson was sentenced to five years, and a total of 14.3 million ISK in legal fees.

Investor Ólafur Ólafsson was sentenced to three and a half years, and 20.6 million ISK in legal fees.

Former director of the Luxemborg branch of Kaupthing Magnús Guðmundsson was sentenced to three years in prison.

In the court’s opinion, the four conspired to conceal the fact that one of the investors in Kaupthing, Mohammad Bin Khalifa Al-Thani, owned his 5.01% stake in the bank thanks to money lent to him by the bank itself.

Investigations into the four go back to the Icelandic bank crash of autumn 2008. In the wake of a report on the contributing causes of the crash from the Special Investigative Commission, the Special Prosecutor’s Office was created. The office targeted many top bank officials from Glitnir and Kaupthing.

Eva Joly, who at one point served as an assistant to the Special Prosecutor, told the Grapevine last year that Iceland should “be proud you invested in these investigations”, while cautioning to have patience – investigations were three years along at the time.

The four are expected to appeal the decision to the Supreme Court. All of their prison sentences are non-probationary.

December 14, 2013 Posted by | Corruption, Economics | , , , | Leave a comment

Paul Krugman’s Ignorant Assessment Of TPP Shows What A Nefarious Proposal It Is

By Mike Masnick | Techdirt | December 13, 2013

… It appears that Krugman has decided to discuss the TPP agreement after many of his readers asked him to weigh in. And his response is basically to dismiss the entire agreement as not really being a big deal one way or the other. The entire crux of his analysis can be summed up as: trade between most of the countries in the negotiations are already quite liberalized, so removing a few more trade barriers is unlikely to have much of a consequence. Therefore, the agreement is no big deal and he doesn’t get why people are so up in arms over it.

On his basic reasoning, he’s correct. There’s little trade benefit to be gained here. In fact, some countries have already realized this. But that’s why the TPP is so nefarious. It’s being pitched as a sort of “free trade deal,” and Krugman analyzes it solely on that basis. That’s exactly what the USTR would like people to think, and it’s part of the reason why they’ve refused to be even the slightest bit transparent about what’s actually in the agreement.

Instead, the TPP has always been a trade liberalization agreement in name only. Sure, there’s some of that in there, but it’s always been about pushing for regulatory change in other countries around the globe, using trade as the club to get countries to pass laws that US companies like. That’s why there’s an “IP chapter” that is entirely about building up barriers to trade in a so-called “free trade” agreement. It’s why a key component of the bill is the corporate sovereignty provisions, frequently called “investor state dispute settlement” (in order to lull you to sleep, rather than get you angry), which allow companies to sue countries if they pass laws that those companies feel undermine their profits (e.g., if they improve patent laws to reject obvious patents — leading angry pharmaceutical companies to demand half a billion dollars in lost “expected profits.”)

Krugman judging the TPP solely on its net impact on trade is exactly what TPP supporters are hoping will happen, so it’s disappointing that he would fall into that trap. Thankfully, economist Dean Baker, who does understand what’s really in TPP, was quick to write up a powerful and detailed response to Krugman that is worth reading.

However it is a misunderstanding to see the TPP as being about trade. This is a deal that focuses on changes in regulatory structures to lock in pro-corporate rules. Using a “trade” agreement provides a mechanism to lock in rules that it would be difficult, if not impossible, to get through the normal political process.

To take a couple of examples, our drug patent policy (that’s patent protection, as in protectionism) is a seething cesspool of corruption. It increases the amount that we pay for drugs by an order of magnitude and leads to endless tales of corruption. Economic theory predicts that when you raise the price of a product 1000 percent or more above the free market price you will get all forms of illegal and unethical activity from companies pursuing patent rents.

Anyhow, the U.S. and European drug companies face a serious threat in the developing world. If these countries don’t enforce patents in the same way as we do, then the drugs that sell for hundreds or thousands of dollars per prescription in the U.S. may sell for $5 or $10 per prescription in the developing world. With drug prices going ever higher, it will be hard to maintain this sort of segmented market. Either people in the U.S. will go to the cheap drugs or the cheap drugs will come here.

For this reason, trade deals like the TPP, in which they hope to eventually incorporate India and other major suppliers of low cost generics, can be very important. The drug companies would like to bring these producers into line and impose high prices everywhere. (Yes, we need to pay for research. And yes, there are far more efficient mechanisms

for financing research than government granted patent monopolies.)

… Full article

December 14, 2013 Posted by | Corruption, Economics | , , , , | Leave a comment

U.S. to Destroy a Half-Billion Dollars’ Worth of Unused Aircraft in Afghanistan

By Noel Brinkerhoff | AllGov | December 13, 2013

The U.S. military has decided to scrap nearly half a billion dollars worth of aircraft purchased for Afghanistan’s air force because the planes couldn’t handle the climate, among other problems.

A total of 16 cargo planes, the G222 manufactured by Italy’s Finmeccanica, now sit at Kabul International Airport. They were flown only 200 of the 4,500 hours scheduled for flight training by Afghan pilots before the U.S. decided to shut them down.

The Obama administration spent $486 million to purchase the aircraft, which were supposed to comprise 15% of the Afghan Air Force.

“We need answers to this huge waste of U.S. taxpayer money,” John Sopko, the Special Inspector General for Afghanistan Reconstruction who is investigating the matter, said in an email to Bloomberg. “Who made the decision to purchase these planes, and why? We need to get to the bottom of this, and that’s why we’re opening this inquiry.”

A January 31 Pentagon Inspector General report, marked “For Official Use Only,” criticized NATO and U.S. training commands for “hav[ing] not effectively managed the program.”

Lieutenant General Charles Davis, the U.S. Air Force’s top military acquisition official, told Bloomberg: “Just about everything you can think of was wrong for it other than the airplane was built for the size of cargo and mission they needed.”

“Other than that, it didn’t really meet any of the requirements,” he added.

A key problem was that the planes couldn’t handle the heat and dust of Afghanistan’s environment, which caused numerous maintenance troubles and prevented them from flying.

Davis said the Air Force tried to sell the aircraft to another country, but couldn’t locate any buyers. So now they will be dismantled for parts.

The U.S. decided to replace the G222s with American-made C-130H transports for the Afghan Air Force to use. But the replacements won’t be available until 2016.

To Learn More:

December 13, 2013 Posted by | Corruption, Economics | , , , | Leave a comment

US: Anti-Iran ‘non-nuclear’ sanctions are OK

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US State Department official Wendy Sherman at the Senate Banking Committee on Dec. 12, 2013
Press TV – December 13, 2013

The administration of President Barack Obama has told lawmakers in US Congress that they could pass new sanctions against Iran as far as they are not “nuclear-related.”

During a public testimony before the Senate Banking Committee on Thursday, State Department official Wendy Sherman, who led the US delegation in nuclear talks with Iran in Geneva, indicated that US lawmakers had the green light from the Obama administration to pass new anti-Iran sanctions as long as the sanctions are not “nuclear-related.”

“Given that there are different kinds of sanctions and the agreement focuses on nuclear-related sanctions,” Sen. Mike Crapo, the top Republican on the Committee, asked Sherman, “assuming we can specify exactly what that is and distinguish between the different sanctions, does that mean that Congress would be free to pass other sanctions measures while we are” negotiating over a final deal over Iran’s nuclear energy program?

“We have said to Iran that we will continue to enforce all of our existing sanctions, and we have said that this agreement pertains only to new nuclear-related sanctions,” Sherman answered.

In a phone interview with Press TV on Thursday, US Congress policy advisor Frederick Peterson said that the problem with some hawkish US lawmakers who are pushing for a new anti-Iran sanctions bill is exacerbated by the way the Obama administration is “misrepresenting” the interim deal between Iran and the P5+1 to the American people and Congress.

Meanwhile, the US Departments of Treasury and State announced new sanctions against a number of companies and individuals for “providing support for” Iran’s nuclear energy program.

Treasury Department official David Cohen, who also testified before the Senate Banking Committee on Thursday, said the new sanctions were “a stark reminder to businesses, banks, and brokers everywhere that we will continue relentlessly to enforce our sanctions.”

Iranian Deputy Foreign Minister Abbas Araqchi has hit out at Washington, saying that the new restrictions are in full contradiction with the recent nuclear deal between Tehran and the P5+1. Araqchi also said that Tehran is now assessing the current situation.

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December 13, 2013 Posted by | Deception, Economics, Progressive Hypocrite, Wars for Israel | , , , , , | Leave a comment

Iran slams new US sanctions on firms, individuals

Press TV – December 13, 2013

Iran’s Deputy Foreign Minister Abbas Araqchi slams the new US sanctions targeting Iran, saying the bans run counter to the spirit of the recent nuclear deal reached between Tehran and six major world powers.

“This [US] move is against the spirit of the Geneva deal,” Araqchi said on Friday.

“We are assessing the current situation,” the senior member of Iran’s nuclear negotiating team added.

On Thursday, the administration of US President Barack Obama issued new sanctions against more than a dozen companies and individuals for “providing support for” Iran’s nuclear energy program.

The US Treasury Department said it was freezing assets and banning transactions of entities that attempt to evade the sanctions against Iran.

The sanctions came despite the nuclear deal inked between Iran and the five permanent members of the UN Security Council – Russia, China, France, Britain and the US – plus Germany in the Swiss city of Geneva on November 24 in a bid to set the stage for the full resolution of the West’s decade-old dispute with Iran over the country’s nuclear energy program.

Under the Geneva deal, the six countries have undertaken to lift some of the existing sanctions against the Islamic Republic in exchange for Iran agreeing to limit certain aspects of its nuclear activities during six months. It was also agreed that no more sanctions would be imposed on Iran in the same time frame.

Iran and the six powers ended four days of intense expert-level negotiations in Vienna, Austria, on Thursday.

Iranian Foreign Minister Mohammad Javad Zarif had earlier warned that the Geneva nuclear deal will be “dead” if the US imposes further sanctions against the Islamic Republic.

“The entire deal is dead. We do not like to negotiate under duress. And if Congress adopts sanctions, it shows lack of seriousness and lack of a desire to achieve a resolution on the part of the United States,” Zarif said in an exclusive interview with Time magazine in Tehran on Saturday.

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December 13, 2013 Posted by | Economics, Video, Wars for Israel | , , , | Leave a comment

US ‘defence’ budget includes additional military aid for Israel

MEMO | December 12, 2013

Lawmakers in the US Congress reached an agreement on Monday in both the House and the Senate on the proposed federal budget for 2014, which would allocate $520.5 billion for defence spending and $491.8 billion for non-defence.

The defence budget includes an increase in military aid to Israel that will be given as private aid, thus it will be in addition to the $3.1 billion dollars already given annually to Tel Aviv.

The budget is still awaiting formal approval and the exact amount of additional aid to Israel remains unclear.

Israeli newspaper Haaretz reported that the US House of Representatives Armed Services Committee had endorsed an increase of $488 million in military aid to Israel to pay for Israel’s procurement and development of additional rocket and missile interception systems. The newspaper noted that this sum is considerably higher than previously expected.

However, Reuters news agency reported that the additional military aid to Israel would exceed $500 million after a compromise defence bill proposed on Monday agreed to boost US spending on missile defence by $358 million to $9.5 billion, mandating another homeland defence radar and increased funding for US-Israeli cooperative efforts.

Israel’s Channel 7 News reported that US President Barack Obama had originally requested $220 million of additional private military aid to Israel to buy extra Iron Dome short-range interceptor missiles and the batteries they are launched from, which was approved.

According to the Israeli media network, in addition to the above, the supplementary aid will allocate $173 million in funding for US-Israeli cooperative missile defence programs, which includes “nearly $34 million to improve the Arrow weapon system and $22 million for work on developing another, more advanced interceptor,” noting that, “The move signals further cooperation between Boeing and Israel Aerospace Industries (IAI).”

The new budget will also allocate $117.2 million to Israel for the “development of the David’s Sling short-range ballistic missile defence system, which is being developed jointly by Israel’s state-owned Rafael Advanced Defence Systems and the US’s Raytheon.”

Furthermore, “An additional $15 million will be directed for US co-production of Iron Dome components. Raytheon has a joint marketing agreement with Israeli state-owned manufacturer Rafael Advanced Defence Systems for the Iron Dome system.”

Both the US and Israeli media are reporting that the supplemental funds are intended to protect Israel from the increasing threats coming from Iran, Gaza and Hezbollah in Lebanon.

In addition to the supplemental aid, US Secretary of Defence Chuck Hagel has promised Israel that the existing $3.1 billion package of military aid would remain intact, despite US spending cuts.

The final vote on the budget is expected to take place before Congress leaves for the year.

Haaretz noted that, “Despite frequent disputes with Prime Minister Benjamin Netanyahu’s government regarding the peace process with the Palestinians and the Iranian nuclear threat, US President Barack Obama’s administration continues to be extraordinarily generous when it comes to granting military aid. Israeli defence officials see last week’s decision as further evidence of the strength of the relationship between the two countries.”

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December 12, 2013 Posted by | Corruption, Economics, Ethnic Cleansing, Racism, Zionism, Militarism, Progressive Hypocrite | , , , , , | Leave a comment

Ukrainian president intends to sign EU deal: Ashton

Press TV | December 12, 2013

EU High Representative for Foreign Affairs and Security Policy Catherine Ashton says Ukrainian President Viktor Yanukovych “intends to sign” an agreement with the European Union to enhance economic and political relations with the bloc.

Ashton said on arrival for a meeting in Brussels on Thursday after her visit to Kiev that Yanukovych “made it clear to me that he intends to sign the association agreement.”

She added that the short-term economic and financial issues Ukraine faces could be “addressed by the support that not only comes from the EU institutions, but actually by showing that he has a serious economic plan in signing the association agreement.”

Ashton also said that the signature of the deal would help to bring in the kind of investment that the Ukrainian president is in need of.

The executive body of the European Union had said on December 9 that Ashton would travel to Ukraine on December 10 on a two-day visit, with a European Commission spokesperson noting that the visit aims to “support a way out of the political crisis in Ukraine.”

Last month, Kiev refused to sign the agreement with the bloc in a move that triggered major street protests by the opposition supporters, who want Ukraine to become closer to the EU and distance itself from Russia.

Clashes erupted several times between the anti-government protesters and police forces during the demonstrations. Several arrests were made in the course of the protests as well.

In an effort to calm the political unrest, President Yanukovych invited all parties, including the opposition, to engage in dialog. However, Ukrainian opposition leaders on Wednesday turned down his offer of negotiations, calling for dismissal of his government and release of the detained protesters.

On the same day, the US State Department said it is considering sanctions against Ukraine if security forces intensify the crackdown on anti-government protesters in the country.

Ukrainian Prime Minister Mykola Azarov and Interior Minister Vitaly Zakharchenko had vowed earlier that police would not act against peaceful protesters.

December 12, 2013 Posted by | Economics | , , , , | Leave a comment

How the ANC Sold Out South Africa’s Poor

A Faustian Pact With Neoliberalism

By RONNIE KASRILS | CounterPunch | December 11, 2013

South Africa’s young people today are known as the Born Free generation. They enjoy the dignity of being born into a democratic society with the right to vote and choose who will govern. But modern South Africa is not a perfect society. Full equality – social and economic – does not exist, and control of the country’s wealth remains in the hands of a few, so new challenges and frustrations arise. Veterans of the anti-apartheid struggle like myself are frequently asked whether, in the light of such disappointment, the sacrifice was worth it. While my answer is yes, I must confess to grave misgivings: I believe we should be doing far better.

There have been impressive achievements since the attainment of freedom in 1994: in building houses, crèches, schools, roads and infrastructure; the provision of water and electricity to millions; free education and healthcare; increases in pensions and social grants; financial and banking stability; and slow but steady economic growth (until the 2008 crisis at any rate). These gains, however, have been offset by a breakdown in service delivery, resulting in violent protests by poor and marginalised communities; gross inadequacies and inequities in the education and health sectors; a ferocious rise in unemployment; endemic police brutality and torture; unseemly power struggles within the ruling party that have grown far worse since the ousting of Mbeki in 2008; an alarming tendency to secrecy and authoritarianism in government; the meddling with the judiciary; and threats to the media and freedom of expression. Even Nelson Mandela’s privacy and dignity are violated for the sake of a cheap photo opportunity by the ANC’s top echelon.

Most shameful and shocking of all, the events of Bloody Thursday – 16 August 2012 – when police massacred 34 striking miners at Marikana mine, owned by the London-based Lonmin company. The Sharpeville massacre in 1960 prompted me to join the ANC. I found Marikana even more distressing: a democratic South Africa was meant to bring an end to such barbarity. And yet the president and his ministers, locked into a culture of cover-up. Incredibly, the South African Communist party, my party of over 50 years, did not condemn the police either.

South Africa’s liberation struggle reached a high point but not its zenith when we overcame apartheid rule. Back then, our hopes were high for our country given its modern industrial economy, strategic mineral resources (not only gold and diamonds), and a working class and organised trade union movement with a rich tradition of struggle. But that optimism overlooked the tenacity of the international capitalist system. From 1991 to 1996 the battle for the ANC’s soul got under way, and was eventually lost to corporate power: we were entrapped by the neoliberal economy – or, as some today cry out, we “sold our people down the river”.

What I call our Faustian moment came when we took an IMF loan on the eve of our first democratic election. That loan, with strings attached that precluded a radical economic agenda, was considered a necessary evil, as were concessions to keep negotiations on track and take delivery of the promised land for our people. Doubt had come to reign supreme: we believed, wrongly, there was no other option; that we had to be cautious, since by 1991 our once powerful ally, the Soviet union, bankrupted by the arms race, had collapsed. Inexcusably, we had lost faith in the ability of our own revolutionary masses to overcome all obstacles. Whatever the threats to isolate a radicalising South Africa, the world could not have done without our vast reserves of minerals. To lose our nerve was not necessary or inevitable. The ANC leadership needed to remain determined, united and free of corruption – and, above all, to hold on to its revolutionary will. Instead, we chickened out. The ANC leadership needed to remain true to its commitment of serving the people. This would have given it the hegemony it required not only over the entrenched capitalist class but over emergent elitists, many of whom would seek wealth through black economic empowerment, corrupt practices and selling political influence.

To break apartheid rule through negotiation, rather than a bloody civil war, seemed then an option too good to be ignored. However, at that time, the balance of power was with the ANC, and conditions were favourable for more radical change at the negotiating table than we ultimately accepted. It is by no means certain that the old order, apart from isolated rightist extremists, had the will or capability to resort to the bloody repression envisaged by Mandela’s leadership. If we had held our nerve, we could have pressed forward without making the concessions we did.

It was a dire error on my part to focus on my own responsibilities and leave the economic issues to the ANC’s experts. However, at the time, most of us never quite knew what was happening with the top-level economic discussions. As  Sampie Terreblanche has revealed in his critique, Lost in Transformation, by late 1993 big business strategies – hatched in 1991 at the mining mogul Harry Oppenheimer‘s Johannesburg residence – were crystallising in secret late-night discussions at the Development Bank of South Africa. Present were South Africa’s mineral and energy leaders, the bosses of US and British companies with a presence in South Africa – and young ANC economists schooled in western economics. They were reporting to Mandela, and were either outwitted or frightened into submission by hints of the dire consequences for South Africa should an ANC government prevail with what were considered ruinous economic policies.

All means to eradicate poverty, which was Mandela’s and the ANC’s sworn promise to the “poorest of the poor”, were lost in the process. Nationalisation of the mines and heights of the economy as envisaged by the Freedom charter was abandoned. The ANC accepted responsibility for a vast apartheid-era debt, which should have been cancelled. A wealth tax on the super-rich to fund developmental projects was set aside, and domestic and international corporations, enriched by apartheid, were excused from any financial reparations. Extremely tight budgetary obligations were instituted that would tie the hands of any future governments; obligations to implement a free-trade policy and abolish all forms of tariff protection in keeping with neo-liberal free trade fundamentals were accepted. Big corporations were allowed to shift their main listings abroad. In Terreblanche’s opinion, these ANC concessions constituted “treacherous decisions that [will] haunt South Africa for generations to come”.

An ANC-Communist party leadership eager to assume political office (myself no less than others) readily accepted this devil’s pact, only to be damned in the process. It has bequeathed an economy so tied in to the neoliberal global formula and market fundamentalism that there is very little room to alleviate the plight of most of our people.

Little wonder that their patience is running out; that their anguished protests increase as they wrestle with deteriorating conditions of life; that those in power have no solutions. The scraps that are left go to the emergent black elite; corruption has taken root as the greedy and ambitious fight like dogs over a bone.

In South Africa in 2008 the poorest 50% received only 7.8% of total income. While 83% of white South Africans were among the top 20% of income receivers in 2008, only 11% of our black population were. These statistics conceal unmitigated human suffering. Little wonder that the country has seen such an enormous rise in civil protest.

A descent into darkness must be curtailed. I do not believe the ANC alliance is beyond hope. There are countless good people in the ranks. But a revitalisation and renewal from top to bottom is urgently required. The ANC’s soul needs to be restored; its traditional values and culture of service reinstated. The pact with the devil needs to be broken.

At present the impoverished majority do not see any hope other than the ruling party, although the ANC’s ability to hold those allegiances is deteriorating. The effective parliamentary opposition reflects big business interests of various stripes, and while a strong parliamentary opposition is vital to keep the ANC on its toes, most voters want socialist policies, not measures inclined to serve big business interests, more privatisation and neoliberal economics.

This does not mean it is only up to the ANC, SACP and Cosatu to rescue the country from crises. There are countless patriots and comrades in existing and emerging organised formations who are vital to the process. Then there are the legal avenues and institutions such as the public protector’s office and human rights commission that – including the ultimate appeal to the constitutional court – can test, expose and challenge injustice and the infringement of rights. The strategies and tactics of the grassroots – trade unions, civic and community organisations, women’s and youth groups – signpost the way ahead with their non-violent and dignified but militant action.

The space and freedom to express one’s views, won through decades of struggle, are available and need to be developed. We look to the Born Frees as the future torchbearers.

Ronnie Kasrils was a member of the national executive committee of the African National Congress from 1987 to 2007, and a member of the central committee of the South African Communist party from December 1986 to 2007. He was the country’s minister for intelligence services from 2004 to 2008. This is an extract from the new introduction to his autobiography, Armed and Dangerous.

December 11, 2013 Posted by | Corruption, Economics, Ethnic Cleansing, Racism, Zionism, Timeless or most popular | , , , , , , | Leave a comment

Obscure Government Agency Brings Criminal Charges against 107 Bankers, but Stays Clear of Wall Street

By Noel Brinkerhoff | AllGov | December 11, 2013

A little-known federal office has demonstrated that bankers have not avoided criminal prosecution altogether since the 2008 financial crisis. Experts note, however, that those thrown in jail have largely been from small institutions, leaving counterparts at Wall Street powerhouses untouched.

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) was originally created to oversee the government bailout of the auto and financial industries. But it has used its congressional authority to pursue bank executives who misused bailout funds.

To date, SIGTARP has gone after 107 senior bank officers, most of whom have been sentenced to prison, according to The Washington Post. Its work also has produced $4.7 billion in restitution paid to victims and the government.

Not bad for an agency with only 170 employees and a budget of $41 million, putting them at a disadvantage in terms of resources and manpower compared to government regulators like the Securities and Exchange Commission and the Office of the Comptroller of the Currency.

What it lacks in size it makes up for in terms of criminal authority authorized by Congress. Unlike regulators, SIGTARP can issue search warrants, seize property and even make arrests.

But those targeted by SIGTARP have run community banks, not the national institutions that dominate Wall Street.

“Essentially, we’re looking for lies and greed,” SIGTAR chief Christy L. Romero told the Post. “Usually, people have gone to such great lengths to try to hide the schemes that we find that they end up violating several laws, which leads to long sentences.”

The average sentence given to those convicted of crimes as a result of SIGTARP investigations is five years and nine months, which is twice the length of the average sentence for white-collar crime in the U.S. SIGTAR currently has 150 ongoing criminal and civil investigations.

Mark Williams, a former bank examiner who teaches finance at Boston University, told the Post that it’s been less difficult for SIGTARP to go after the small fish.

“The amount of direct evidence of banker wrongdoing in these smaller bank cases is easier to show,” he said.

Williams added that SIGTARP’s work nonetheless sets “an important precedence that bad banker behavior will not be tolerated and [will be] aggressively prosecuted.”
To Learn More:

SIGTARP Proves That Some Bankers Aren’t Too Big to Jail (by Danielle Douglas, Washington Post)

Treasury Dept. Fails to Implement Two-Thirds of Post-Bailout Recommendations (by Noel Brinkerhoff and David Wallechinsky, AllGov)

December 11, 2013 Posted by | Corruption, Deception, Economics | , | Leave a comment

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