‘UK government in blind panic over strike’
Press TV – November 25, 2011
The chief of UK’s leading civil service union has accused the government of being in ‘blind panic’ after Home Office asked some government employees to work as border officers during pension strikes planned for next week.
Selected groups of government employees were contacted to walk through picket lines and check passports as passengers arrive at airports and ports from abroad during the industrial action planned for November 30 by public sector workers against pension reforms, The Guardian reported on Thursday.
The crisis-hit British government hopes to make annual savings of 2.8 billion pounds (USD 4.3 billion) by 2014 through reducing pensions, while forcing employees to work for longer years. Many of the workers are already facing wage freezes.
The General Secretary of Public and Commercial Services Union (PCS), Mark Serwotka said, “They are forcing people to work up to eight years longer, forcing people to pay thousands of pounds for less of a pension; it’s completely unfair.”
He criticized ministers for failing to prevent the move by calling unions in for urgent talks, despite months of warning about the strikes.
Serwotka noted that the government had been more interested in spinning over the issue rather than trying to handle the row, saying, “Yesterday in parliament it was revealed the prime minister misled parliament on the 2 November when he made claims about public sector pensions that have been shown to be false.”
“What that indicates is that rather than worry about the services on the day, rather than plan properly for 30 November, they have been engaging in a PR exercise putting out misleading information to try and force through damaging changes that are unfair. Less than a week before the strike, to suddenly turn round and act in a blind panic is completely irresponsible,” he added.
About four million public sector workers are expected to take part in the protest measure organized by Trade Union Congress (TUC), despite the government’s threats to cut the protesters’ pay and cancel out the concessions it has already made to them if they kept up the demonstrations for longer than 15 minutes.
Letter to Members of the Congressional Super Committee
As the November 23rd deadline approaches for the “super committee” to find $1.2 trillion in deficit cuts over the next 10 years, I am writing to urge the members of the committee to consider options to cut government spending and raise revenue that extend beyond those typically discussed on Capitol Hill and in the media. Members of Congress – both Democrats and Republicans – often appear to be struggling to find deficit-cutting proposals that will either go far enough or attract bipartisan support. I have two proposals that should on the merits – absent the undue influence of special interests in our nation.
The first place that the super committee should look to cut wasteful government spending lies in the hundreds of billions of dollars in direct and indirect corporate welfare that our nation’s government gives away every year. Cutting wasteful government spending in this area alone could produce savings well above and beyond the desired $1.2 trillion in deficit cuts over the next ten years. Democrats and Republicans alike should champion the elimination of corporate welfare as a drain on our government’s budgets. Subsidizing some of the most profitable industries and largest corporations in this country at the level of billions of dollars per year is not consistent with the values of fair competition and a level playing field that are cherished as a part of a capitalist economic system. Nor do they actually allow for a true free market to exist. Instead they skew the playing field toward the largest and most politically powerful multinational corporations and away from small and mid-sized businesses.
Republicans and Democrats talk of the needs of small businesses throughout the country on a daily basis, but rarely are the needs or interests of those businesses represented in Congress when they are different from the Big Boys’ demands. They certainly aren’t represented when small town businesses go out of business despite their best efforts, but the speculators on Wall Street who cheated and gambled their way to the brink were pulled back from the ledge by a past complicit and compliant Congress. Nor were they represented, by the way, when the reason many of those small businesses failed was because of a mega corporation, Wal-Mart, which itself has received hundreds of millions, if not billions, in subsidies over decades. You can talk the talk when it comes to the value of small businesses, free markets, and a capitalist system – but is it not time to start walking the walk?
Yet another proposal that should be explored is the implementation of a financial speculation tax, which would impose a miniscule tax on all trades of stock, bonds, options, and other more speculative financial instruments. A financial speculation sales tax would curb risky speculative trading and high-frequency trading schemes that contribute little real economic value and instead can create a lot of instability. On top of this, a small tax – ranging to 0.5 % depending upon the financial instrument being taxed – could produce hundreds of billions of dollars annually, perhaps as much as $350 billion.
The Capital Institute’s John Fullerton, a former JPMorgan managing director, says it best when he states that a financial speculation tax would “combat one of the most corrosive realities undermining capitalism itself: short-term speculation has displaced real investment, transforming our economy into a bankrupt financial system that lacks morals and purpose.” He has stated that 70 percent of the equities market is composed of speculative, high-frequency, and “quant” driven trading strategies. It is no wonder that our economy is struggling with that much investment going towards entirely unproductive uses. Mr. Fullerton concludes one of his articles by stating that “the real economy and job creation would be enhanced if FDIC-insured consumer deposits funded productive loans to the real economy instead of leveraged short-term speculation by banks and their hedge fund counterparties, and, if more human capital shifted out of finance and into the productive economy.”
Please reference my testimony that I gave before the Committee on the Budget in the U.S. House of Representatives on June 30, 1999. The testimony chronicles some of the most egregious examples of corporate welfare in the United States and can help you to identify proposals for the super committee to adopt. Also look at my recent op-ed, printed in the Wall Street Journal on November 2, 2011, titled “Time for a Tax on Speculation.”
It is my hope these items may be useful to you over the next several days in finding a means to cut the deficit that benefits the American people for once, and not those pursuing unproductive or unfair maneuvers on Wall Street or in the corporate board rooms.
Sincerely,
Ralph Nader
Occupy Oakland Calls for TOTAL WEST COAST PORT SHUTDOWN ON 12/12
By OccupyWallSt | November 19, 2011
Proposal for a Coordinated West Coast Port Shutdown, Passed With Unanimous Consensus by vote of the Occupy Oakland General Assembly 11/18/2012:
In response to coordinated attacks on the occupations and attacks on workers across the nation:
Occupy Oakland calls for the blockade and disruption of the economic apparatus of the 1% with a coordinated shutdown of ports on the entire West Coast on December 12th. The 1% has disrupted the lives of longshoremen and port truckers and the workers who create their wealth, just as coordinated nationwide police attacks have turned our cities into battlegrounds in an effort to disrupt our Occupy movement.
We call on each West Coast occupation to organize a mass mobilization to shut down its local port. Our eyes are on the continued union-busting and attacks on organized labor, in particular the rupture of Longshoremen jurisdiction in Longview Washington by the EGT. Already, Occupy Los Angeles has passed a resolution to carry out a port action on the Port Of Los Angeles on December 12th, to shut down SSA terminals, which are owned by Goldman Sachs.
Occupy Oakland expands this call to the entire West Coast, and calls for continuing solidarity with the Longshoremen in Longview Washington in their ongoing struggle against the EGT. The EGT is an international grain exporter led by Bunge LTD, a company constituted of 1% bankers whose practices have ruined the lives of the working class all over the world, from Argentina to the West Coast of the US. During the November 2nd General Strike, tens of thousands shutdown the Port Of Oakland as a warning shot to EGT to stop its attacks on Longview. Since the EGT has disregarded this message, and continues to attack the Longshoremen at Longview, we will now shut down ports along the entire West Coast.
Participating occupations are asked to ensure that during the port shutdowns the local arbitrator rules in favor of longshoremen not crossing community picket lines in order to avoid recriminations against them. Should there be any retaliation against any workers as a result of their honoring pickets or supporting our port actions, additional solidarity actions should be prepared. In the event of police repression of any of the mobilizations, shutdown actions may be extended to multiple days.
In Solidarity and Struggle,
Occupy Oakland
– In Oakland: the West Coast Port Shutdown Coordinating Committee will meet on General Assembly days at 5pm before the GA to organize the local shutdown, and to network with other occupations.
Hunger threatens millions in Afghanistan
Press TV – November 18, 2011
Aid agencies have warned that starvation threatens the lives of millions of people in Afghanistan in the aftermath of a widespread drought ahead of harsh winter weather.
A group of nine charity organizations warned on Friday that up to three million Afghans are facing hunger, malnutrition and disease following a severe drought that ruined their crops, Reuters reported.
Poor rains earlier this year destroyed 80 percent of wheat crops in the north Afghanistan, northeast and west of the country, facing the impoverished farmers with food shortages, the charities stated.
The group, which included Oxfam and Save the Children, also expressed concern that extreme winter weather would add to the Afghans’ plight, cutting off their access to vital food aid.
“Villagers are telling us that this year the drought has destroyed everything. Their food stocks are already low, and they are worried about how they will get through the coming months,” Oxfam’s country director Manohar Shenoy said in a statement.
“Time is running out to be able to provide communities with the help they most desperately need before a harsh winter makes many areas inaccessible. Snow is already falling and many mountainous areas are likely to be cut off within weeks,” he warned.
The pinch of starvation, as a heavy winter looms, has forced Afghan families to cut down on meals, migrate to neighboring Pakistan and Iran or borrow money to buy food. Schools have closed as more children have to work.
In October, the United Nations made an appeal for $142 million to help Afghanistan fight the drought crisis that has hit 14 of the country’s 34 provinces, but international donors have so far failed to fund more than seven percent of the required sum.
“Families are facing being cut off for winter without enough food and clean water,” said David Skinner, Save the Children’s Afghanistan country director.
Skinner warned that if aid efforts were not increased, children could die of hunger and the already high malnutrition levels in Afghanistan.
Sarkozy’s Austerity Package for France
Making the Poor Pay More to Protect the Rich
By PHILIPPE MARLIÈRE | CounterPunch | November 8, 2011
At the G20 summit in Cannes, Nicolas Sarkozy and Angela Merkel successfully bullied George Papandreou into backing down on a referendum after the Greek prime minister had promised to consult his people on a new bailout. The Franco-German pair ordered Silvio Berlusconi to accept surveillance of Italy’s austerity package by the IMF.
Despite presiding over a disastrous summit, Sarkozy saw it fit to mock Paul Mason, Newsnight’s economics editor, for asking a question that was not to his liking. The French president wondered whether the British insular upbringing meant that the BBC journalist could not understand the “subtleties of European construction”. Sarkozy may not have the last laugh, though. François Fillon, the French prime minister, has just announced a package of austerity measures which may well trigger a wave of discontent and popular unrest at home.
Following an “exceptional” cabinet meeting, Fillon made a spectacular, if not muscular declaration about the economic situation in France. Eager to cajole financial markets, the prime minister promised blood, sweat and tears for the French. Under Sarkozy’s presidency, France has caved in to “Anglo Saxon”-style capitalism.
Depressingly, the philosophy of the French plan is a carbon copy of the failed Greek, Portuguese and Spanish plans: the legal minimum retirement age will be further raised in 2017 and public deficits will be brought down to 0% by 2016. According to Les Echos, an economics daily, these measures aim to “send a strong signal to the credit rating agencies”. To put it more bluntly, this austerity package aims to make the poor pay for the banking system mess and goes to great lengths to protect the rich.
Fillon is committed to collecting €8bn by essentially raising VAT on a number of vital services and goods. This indirect taxation will as usual hit salaried workers and the poorest hardest. The government will also make further cuts on state spending, notably on health (€500m). These austerity measures will do nothing to revitalise a moribund French economy and like in other parts of Europe, it will only further aggravate economic recession.
Fillon pointed out that fiscal revenues are down due to weak economic growth (1% in 2012 as opposed to the forecast 1.75% in the summer of 2011). As economic growth is on the wane and compromised France’s commitment to tackling public deficits (by 3% of GDP in 2013), instant and drastic measures ought to be taken to redress the balance. This is all fine, but why is it that European governments do not seem so concerned about public deficits when they are created by bank-related activities?
When it comes to socialising the banks’ losses and privatising their profits, the Fillon government – like any other European government – turns a blind eye to public deficits. Dexia, a Franco-Belgian bank, was recently bailed out by public money: €10bn were found within days by the two governments (that is €2bn more than the current austerity package). Ironically, the decision to rescue Dexia came days after Fillon had suggested that the Belgian state was on the verge of bankruptcy.
Fillon’s speech will have a familiar ring to citizens across Europe. It is argued that the French live “beyond their means”. It is therefore time to “make sacrifices” for the good of the country, otherwise “your children” will be “heavily indebted”.
This dramatised account of the situation aims to fulfill the same objective: to instil fear and to make innocent people feel guilty for the mismanagement of public money by the government itself.
Let’s face it: if France has deep deficits, it is not because it is “living beyond its means” but rather because of the numerous tax cuts that successive governments have made over the past 20 years. Reduction in income tax has fundamentally benefited the richest (since 2007, for instance, the “fiscal shield” or the scrapping of the wealth tax).
A report published in 2010 by two senior civil servants shows that public debt would be 20% of GDP lower if the government had not made these tax cuts. In other words, despite the 2008 bank bailouts and the subsequent recession, France would only be slightly above the Maastricht criteria (that is, public debts should not be more than 60% of GNP).
The French understand what is at stake: under Sarkozy, progressive taxation such as income tax (the richer one becomes, the more tax one pays) is being replaced by regressive taxation such as VAT (the poorer one is, the more tax one pays). Dubbed the “president of the rich”, Sarkozy is using this austerity package to dramatically revise fiscal redistribution, for the benefit of the rich and to the detriment of the poor. This will economically and politically backfire.
PHILIPPE MARLIÈRE is professor of French and European politics at University College, London (UK). He can be reached atp.marliere@ucl.ac.uk.
The new land grab in Africa
By Agazit Abate | PAMBAZUKA NEWS | 03 November 2011
The recent phenomenon of land grab, as outlined in the extensive research of the Oakland Institute, has resulted in the sale of enormous portions of land throughout Africa. In 2009 alone, nearly 60 million hectares of land were purchased or leased throughout the continent for the production and export of food, cut flowers and agrofuel crops.
Land grab was in part spurred by the food and financial crisis of 2008 when international bodies, corporations, investment funds, wealthy individuals, and governments began to re-focus their attention on agriculture and food as a profitable commodity. As outlined in the reports, the consequences of land grab include increased food insecurity, environmental degradation, community repression and displacement, and increased reliance on aid.
MEET THE INVESTORS
While media coverage has focused on the role of countries like India and China in land deals, the Oakland Institute’s investigation reveals the role of Western firms, wealthy US and European individuals, and investment funds with ties to major banks such as Goldman Sachs and JP Morgan. Investors include alternative investment firms like the London-based Emergent that works to attract speculators, and various universities like Harvard, Spelman and Vanderbilt.
Several Texas-based interests are associated with a major 600,000 hectares South Sudan deal which involves Kinyeti Development LLC, an Austin, Texas-based ‘global business development partnership and holding company’ managed by Howard Eugene Douglas, a former United States Ambassador at Large and Coordinator for Refugee Affairs. A key player in the largest land deal in Tanzania is Iowa agribusiness entrepreneur and Republican Party stalwart, Bruce Rastetter.
US companies are often below the radar, using subsidiaries registered in other countries, like Petrotech-ffn Agro Mali which is a subsidiary of Petrotech-ffn USA. Many European countries are also involved, often with support provided by their governments and embassies in African countries. For instance, Swedish and German firms have interests in the production of biofuels in Tanzanian. Addax Bioenergy from Switzerland and Quifel International Holdings (QIH) from Portugal are major investors in Sierra Leone. Sierra Leone Agriculture (SLA) is actually a subsidiary of the UK based Crad-1 (CAPARO Renewable Agriculture Developments Ltd.), associated with the Tony Blair African Governance Initiative.
As the media has reported, Indian firms are involved in land grab with relation to Ethiopia in particular. Food insecure nations like those of the gulf region are also participating in these land deals for the purpose of food production for their home countries.
ECONOMIC DEVELOPMENT?
A major argument by governments and investors is that these investments will lead to economic development for the home countries. The Oakland Institute reports reveal, however, that the land transactions are either for free (in the case of Mali) or very cheap (in the cases of Ethiopia and Sierra Leone). These transactions are largely unregulated with no stipulation or guarantees that they will help the local populations or create infrastructure. While land grab actors focus their rhetoric on foreign direct investment, there is no evidence to show that foreign direct investment will come into the countries in any substantial amount.
Most of these deals come with huge tax breaks and other investment incentives which is a great deal for the investors, but means less money coming into the country that could possibly go to infrastructure or social services. For instance, Sierra Leone allows 100 percent foreign ownership; there are no restrictions on foreign exchange, full repatriation of profits, dividends and royalties and no limits on expatriate employees.
Another justification for the land deals includes the idea that they will increase employment in the areas involved. Again, the lack of stipulation and on-the-ground research reveals that this is overstated at best and completely untrue at worst. The Emvest Matuba investment project summary and staff at Emergent and Emvest promise job creation with majority employment from the local community. A recent head count provided by Emergent reveals that currently only 17 permanent positions are in security (36 staff). In Mali, the area targeted by recent large land deals which could easily sustain 112,537 farm families (over half a million people, 686,478) is instead in the hands of 22 investors and will create at best a few thousand jobs.
To make matters worse, the limited employment created by these land deals is low wage, seasonal and primarily benefits the investors with cheap labour to compliment cheap land.
COMMUNITY DISPLACEMENT
While those involved firmly contend that communities are not being forcibly removed from their lands and those that are asked to move are being compensated, the opposite proves true. Ethiopian government officials, for instance, have stated that the lands being leased are unused or abandoned. Meanwhile, there is a villagisation process that has relocated 700,000 indigenous people who lived in a land that was targeted for investment.
In 2010 in Samana Dugu, Mali, bulldozers came in to clear the land and when the community protested, they were met by police forces who beat and arrested them. In Tanzania, the land investments of AgriSol Energy are focused on Katumba and Mishamo refugee settlements. The MOU between AgriSol Energy and the local government stipulates that these settlements, which house 162,000 refugees that fled Burundi in 1972 and have been farming the land for 40 years, have to be closed. In June 2009, Amnesty International reported refugees being pressured to leave camps. Some of them lost their homes to a fire set by individuals acting under the instructions of the Tanzanian authorities to get them to vacate the camp. Refugee leaders who have attempted to organize affected refugees have been arrested and detained.
Investment sites in various African countries visited by the Oakland Institute revealed a loss of local farmland where the lands held a variety of different uses and social/ecological value. Some of the lands that are claimed to be unused are those where the communities practice shifting cultivation (where plots of land are left idle after periods of cultivation in order to re-vegetate), pastoralism, and those considered communally used areas.
Forests and national reserves that are home to vital animal, fish and plant species and are a place where communities have found alternative sustenance in times of food scarcity have been burned and cleared out. These lands are being destroyed without an understanding of their significance and without assessments to determine how this will affect local communities.
Many of the communities interviewed stated that there was no prior notification of the land investments. They only realized what was happening when the bulldozers arrived in their communities.
FOOD INSECURITY
While most of the countries and regions targeted suffer from food insecurity, these land deals focus on producing export commodities, including food, biofuels and cut flowers for foreign consumption. In Mali, half of the investors with large land holdings in the Office du Niger intend to grow plants used to produce agrofuels such as sugarcane, jatropha or other oleaginous crops. In Mozambique, most of the investments concern timber industry and agrofuels rather than food crops. Food crops represented only 32,000 hectares of the 433,000 hectares that were approved for agricultural investments between 2007 and 2009.
In Ethiopia, much of large scale land deals have focused on food production for a foreign market. Because land grab throughout Ethiopia has led to the clearing of communal lands and plots used for shifting cultivation as well as forests, the communities’ primary source of sustenance along with their buffer systems are threatened. Additionally, commercial farming on these lands will affect fish habitats and other wildlife hunted in times of food scarcity and the loss and degradation of grazing lands will further increase food insecurity.
Water is of a particular concern as runoff from commercial farms will lead to the contamination and reduction of water supplies. Dam construction in investment site areas like the proposed Alwero River dam spark additional concern of the consequential uncertainty of access to water for local and downstream communities. No clause has been found in the lease agreements that discusses water use and there is no evidence that water use from commercial agriculture is managed, monitored or regulated.
In Ethiopia, not only is there no clause in any of the lease agreements that require investors to improve local food security conditions or make food available for the local populations, the federal government has actually provided incentives for those investors that grow cash crops for a foreign market. Abera Deressa, federal minister for agriculture stated that, ‘If we get money we can buy food anywhere. Then we can solve the food problem.’ A major concern of the communities interviewed is that they believe the government is intentionally creating a situation where communities must rely solely on the government for their food, in an attempt to marginalize and disempower them.
THE ENVIRONMENTAL FACTOR
Environmental degradation is a major concern in these land deals that have limited transparency and regulations in terms of their environmental impact. Forests have many uses for the local communities including as food, medicine, fuel wood and building materials. Forests also retain cultural and historical significance. Expected outcomes of clearing the lands and forests include loss and degradation of wetlands, decrease in wildlife populations and habitat, proliferation of invasive species and loss of biodiversity.
These environmental concerns are exemplified in Ethiopia’s Gambela National Park where the Ethiopian Wildlife Conservation Authority (EWCA) estimates that 438,000 hectares of land have been leased in the vicinity of the park. While the park boundaries are not set, lands that the local population considers a part of the park have been cleared by large-scale investors, including Karuturi and Saudi Star. Wetlands have been altered and forests have been cleared. According to recent surveys, the Gambela National Park is home to 69 mammal species, valuable wetland habitat, hundreds of bird species and 92 fish species.
To compound matters, the practice of industrial agriculture will lead to increased toxicity, disruption of nature’s system of pest control, creation of new weeds or virus strains, loss of biodiversity, and the spread of genetically-engineered genes to indigenous plants. […]
Instead of supporting small farmers, these land deals support industrial agriculture while displacing and disempowering the very people that have the ability to shift their communities from insecure to sustainable populations and environments. Land grab puts these countries on a path that will surely lead to increased food insecurity, environmental degradation, increased reliance on aid and the marginalisation of farming and pastoralist communities. With regards to food, the issue at stake is not only one of increased food insecurity, but an attack on food sovereignty or peoples’ right to produce their own food.
Land grab is irrational at best and violent at worst. It’s a violent act to take away peoples’ right to food, access to their ancestral land, their social and historical ties, and their overall right for human dignity. It’s a violent act to strip them of their future and the land of its fertility.
While land deals are going on behind closed doors, communities are resisting. The 2008 food uprisings, the revolt in Madagascar against land grab, and the recent protests in Guinea, all show communities who are standing up for their right for food sovereignty. In fact, in all of the countries visited, the land deals were met by community organising. Knowing what we know, resisting these land deals on all fronts and working towards investments in sustainable agriculture and empowering local populations points to the only rational and humane way forward.
Egypt and the IMF
Topple Their Debts
By ERIC WALBERG | CounterPunch | November 4, 2011
The Popular Campaign to Drop Egypt’s Debts was launched at the Journalists’ Union 31 October, with a colourful panel of speakers, including Al-Ahram Centre for Political & Strategic Studies Editor-in-Chief Ahmed Al-Naggar, Independent Trade Union head Kamal Abbas, legendary anti-corruption crusader Khaled Ali, and the head of the Tunisia twin campaign Dr Fathi Chamkhi.
Moderator Wael Gamal, a financial journalist, described how he and a core of revolutionaries after 25 January started the campaign with a facebook page DropEgyptsDebt. The IMF offer of a multi-billion dollar loan in June was like a red flag in front of a bull for Gamal, and their campaign really got underway after that, culminating in the formal launch this week, just as election fever is rising.
“Just servicing Egypt’s debt costs close to $3 billion a year, more than all the food subsidies that the IMF harps about, more than our health expenditures,” Gamal said angrily. “We are burdened with a $35 billion debt to foreign banks, mostly borrowed under the Hosni Mubarak regime, none of it to help the people.”
Ali explained the basis of the campaign, which does not call for wholesale cancellation of the debt, but for a line-by-line review of the loan terms and useage to determine: whether the loan was made with the consent of the people of Egypt, whether it serves the interests of the people, and to what extent it was wasted through corruption. He explained that the foreign lending institutions knew full well that Mubarak was a dictator conducting phoney elections and thus not reflecting the will of the people when they showered him with money, and they should face the consequences — not the Egyptian people.
These are the internationally accepted conditions behind the legitimate practice of repudiating “odious debt”, which were used by the US (though mutedly) in 2003 to tear up Iraq’s debt, and by Ecuador in 2009. “Ecuador had an uprising much like our revolution and after the next election the president formed an audit committee and managed to cancel two-thirds of the $13 billion debt,” noted Gamal, leaving the conferencees to ponder what a truly revolutionary government in Egypt could do for the health sector and for employment.
Al-Naggar told how the loans propped up the economy as it was being gutted under an IMF-supervised privatisation programme from 1990 on, allowing foreign companies and Mubarak cronies to pocket hundreds of millions of dollars and spirit them abroad. Meanwhile, what investment that trickled down from the loans went to financing prestige infrastructure projects like the Cairo airport expansion, which was riddled with corruption and serves only the Egyptian elite. Virtually all the loans from this period should be considered liable for writing off.
No government officials deigned — or dared — to come to the conference. On the contrary, Egypt’s Finance Minister Hazem Al-Biblawi told Al-Sharouk that it defames Egypt in the world’s eyes, saying, “like the proverb ‘It looks like a blessing on the outside, but is hell on the inside’.”
Both Gamal and Al-Naggar criticised Biblawi for distorting their intent, which is not to portray Egypt as bankrupt, like Greece, but to shift the burden of the bad loans to the guilty parties — the lenders, and thereby to help the revolution. “It is the counter-revolution that is discrediting Egypt. And they are the old regime that got the loans and misused them, and are now trying to discredit the revolution. The international community should willingly write off the odious loans if it wants the revolution to succeed,” exhorted Al-Naggar.
The enthusiasm and sense of purpose at the conference was infectious. Indeed, this campaign is arguably the key to whether or not the revolution succeeds. But it requires a political backbone that only an elected government can hope to muster. The fawning of Al-Bablawi — this week he hosted another IMF mission — looks like the performance of someone from the Mubarak era, not someone delegated to protect the revolution. He welcomed the delegation and “the possibility of their offering aid to Egypt”.
Al-Naggar pointed out that the purpose of the IMF is not to aid the Egyptian people, but to tie the government to international dictate. Rating agencies are part of this, downgrading Egypt’s credit rating after the revolution. Why? Because Egypt is less democratic? Or because it will be harder to ply Egypt with more loans to benefit Western corporations, and to keep the Egyptian government in line with the Western political agenda. “Silence is golden,” Al-Naggar advised Biblawi, meaning, “If you don’t have something good to say, don’t say anything.”
Chamkhi brought Tunisian warmth to the meeting, though he further incensed listeners as he explained how the Western debt scheming is directly the result of 19th century colonialism. He told how France colonised Tunisia, stole the best agricultural land, and then how the quasi-independent government in 1956 had to take out French loans to buy back the land that the French had stolen, thereby indenturing Tunisia yet again, in a new neocolonial guise. The foreign debt really exploded with Zine Al-Abidine Ben Ali’s kleptocracy, just as did Egypt’s under Mubarak. Shamati eloquently expressed how “debts are not for our development, but to make us poor. To create a dictatorship of debts.”
Tunisia’s first democratic elections brought the Congress for the Republic, which supports the debt revision campaign, 30 seats. So far in Egypt, according to organiser Salmaa Hussein, Tagammu, the Nasserists and Karama support their efforts, along with presidential hopefuls Hamdeen Sabhi and Abdul Monem Abul Fotouh.
There is an international campaign dating from the 1990s, the 2000 Jubilee debt relief movement, and the Cairo conference heard a report from London about efforts on behalf of many third world countries — now including Egypt and Tunisia — by public-spirited Brits. The Arab Spring success stories now have a determined and politically savvy core of activists who know what the score is and will be pushing their respectively revolutionary governments to repudiate the debts from the corrupt regimes they overthrew at the cost of hundreds of lives. As the fiery Independent Trade Union head Abbas cried, adding an apt phrase to Egypt’s revolutionary slogan: “Topple the regime, topple their debts!”
Eric Walberg writes for Al-Ahram Weekly. You can reach him at http://ericwalberg.com/
Keynesian Myths and Illusions
By ISMAEL HOSSEIN-ZADEH | CounterPunch | November 4, 2011
The Keynesian view that the government can fine tune the economy through “appropriate” fiscal and monetary policies to maintain continuous growth at or near full employment is based on the idea that capitalism can be controlled by the state and managed by professional economists from government departments, that is, capitalism run by “experts” in the interest of all. Economic policy making according to this view is largely a matter of technical expertise or economic know-how, that is, a matter of choice.
The effectiveness of the Keynesian model is, therefore, based largely on a hope, or illusion; since in reality the power or control relation between the state and the market/capitalism is usually the other way around. Economic policy making is more than simply an administrative or technical matter of choice; more importantly, it is a deeply socio-political matter that is organically intertwined with the class nature of the state and the policy making apparatus.
The Keynesian illusion has been nurtured or masked by two major myths. The first myth stems from the perception that attributes the implementation of the New Deal and Social Democratic economic reforms that followed the Great Depression and WW II to the genius of Keynes. This is a myth because those reforms were more a product of the fierce class struggle and overwhelming pressure from the grassroots than that of the brains of experts like Keynes. The harrowing socio-economic turbulence of the 1930s generated momentous social upheavals and extensive working class struggles. The ensuing “threat of revolution,” as FDR put it, and the “menacing” pressure from below prompted reform from above—independent of Keynes.
As a relatively well-known academic/economist, however, Keynes provided the theoretical or intellectual rationale for the badly-needed reforms in order to save capitalism by fending off revolution. The auspicious coincidence of the publication of his famous book, The General Theory of Employment, Interest and Money (1936), with the implementation of the New Deal-type economic reforms in the US and Western Europe provided Keynes with much more credit for those reforms and the subsequent economic recovery than he deserved.
The second myth is based on the view that attributes the long economic expansion of the 1948-1968 period in the US and Europe to the efficacy or success of Keynesian policies of economic management. While it is certainly true that expansionary government policies of the time played a big role in the fantastic economic developments of that period, other factors contributed even more to the success of that expansion. These included the need to invest and rebuild the devastated post-war economies around the world, the need to supply the vast post-war global demand for consumer as well as capital goods, lack of competition for US products and capital in global markets—in short, the fact that there was enormous room for growth and expansion in the immediate post-war period.
Harboring these myths and illusions, many Keynesian economists envisioned a silver-lining in the 2008 financial meltdown and the ensuing economic crisis. For, in the “crisis of Neoliberal economics,” they saw an opportunity for a new dawn of Keynesian economics, or the coming of a second New Deal. Well-known Keynesians such as Paul Krugman, Joseph Stiglitz and Dean Baker wrote (and continue to write) passionately on the need to revive Keynesian policies, to implement extensive stimulus packages, to reinstate the Glass Steagall Act and other regulatory measures that were put in place in response to the Great Depression. The excitement on the part of many Keynesians about the prospects of what they perceived as an almost automatic switching of policy gears from Neoliberal to Keynesian economics led George Melloan of the Wall Street Journal to write (sarcastically) “We’re all Keynesian’s Again.”
More than three years later, it is abundantly clear that Keynesian policy prescriptions are falling on deaf ears, as Neoliberalism continues to keep Keynesianism at bay. Indeed, even the nominally socialist and Social-Democratic economies of Europe have adopted the unbridled austerity policies of Neoliberalism.
Shunned, Keynesian hopes and illusions have turned into disappointment and anger. For example, using his New York Times’ column, Professor Paul Krugman frequently lashes out at the Obama administration for ignoring the Keynesian policies of economic expansion and job creation and, instead, following policies that are not very different from those of Neoliberal Republicans. “The truth is that creating jobs in a depressed economy is something government could and should be doing. . . . Think about it: Where are the big public works projects? Where are the armies of government workers? There are actually half a million fewer government employees now than there were when Mr. Obama took office.”
Let me repeat the essential part of Professor Krugman’s statement: “The truth is that creating jobs in a depressed economy is something government could and should be doing.” This is exactly what I call Keynesian illusion: the belief in the ability of government to control and/or manage capitalism; the perception that government “could and should” invest in job creation but, somehow, does not do it now. Yes, a government could and should invest in job creation; but that would be a different government, a disinterested government independent of special interests, not the Obama administration (or the US government more broadly) that is beholden to the big money for its election/reelection. It is true that a capitalist government may occasionally invest in economic growth and job creation; but those would be occasions when such policies are perceived to be also serving the interests of the ruling class (as in the aftermath of the Great Depression and WWII).
It is obvious that the Keynesians’ disgust with the Neoliberal policies of the government of big business is misplaced. At the heart of their frustration is the unrealistic perception that economic strategies and policies are largely intellectual products, and that policy making is primarily a matter of technical expertise and personal preferences: economists and/or policy makers who are far-sighted, good-hearted, or better equipped with “smart” ideas would opt for “good” or Keynesian-type capitalism; while those lacking such admirable qualities would foolishly or misguidedly or heartlessly choose “bad” or “Neoliberal capitalism” [1].
As I have pointed out in an earlier critique of Keynesian economics, it is not a matter of “bad” vs. “good” policy; it is a matter of class policy. Keynesians are angry because they tend to be oblivious or shy away from the politics of class, that is, the politics of policy making. Instead, they seem to think that economic policy making results mainly from a battle of ideas and theories, and they are disappointed because they are losing that battle.
Professor Krugman passionately writes, “Where are the big public works projects? Where are the armies of government workers?” What he fails to mention is that those “armies of government workers” were put to work not courtesy of FDR, or because of Keynes’ brilliant ideas (in fact, when the FDR administration initially embarked on the implementation of the extensive public works projects it did not even know Keynes was alive), but because much larger armies of workers and other grassroots threatened the capitalist system by persistently marching in the streets and demanding jobs. It is interesting that many Keynesian economists admirably fight (of course, in the realm of ideas) for the rights of workers but shy away from calling on them to rise up to demand their rights.
It is not enough to have a good heart or a compassionate soul; it is equally important not to lose sight of how public policy is made under capitalism. It is not enough to repeatedly bash Ronald Reagan as a wicked king and praise FDR as a wise king. The more important task is to explain why the ruling class ousted the wise king and ushered in the wicked one. Government policy makers are certainly not stupid. Why, then, did they switch from the policies of Keynes and New Deal economics to those of Reagan and Neoliberal economics?
The US capitalist class pursued the Keynesian-type policies in the immediate post-war period as long as political forces and economic conditions, both nationally and internationally, rendered those policies effective. Top among those conditions, as mentioned earlier, were nearly unlimited demand for US manufactures, both at home and abroad, and the lack of competition for both US capital and labor, which allowed US workers to demand decent wages and benefits while at the same time enjoying higher rates of employment.
By the late 1960s and early 1970s, however, both US capital and labor were no longer unrivaled in global markets. Furthermore, during the long cycle of the immediate post-war expansion US manufacturers had invested so much in fixed capital, or capacity building, that by the late 1960s their profit rates had begun to decline as the capital-labor ratio of their operations had become too high. In other words, the enormous amounts of the so-called “sunk costs,” mainly in the form of fixed capital, or plant and equipment, had significantly eroded their profit rates [2].
More than anything else, it was these important changes in the actual conditions of production and the realignment of global markets that precipitated the gradual abandoning of Keynesian economics. Contrary to the repeated claims of the liberal/Keynesian partisans, it was not Ronald Reagan’s ideas or schemes that lay behind the plans of dismantling the New Deal reforms (in fact, steps to hammer away at those reforms had been taken long before Reagan arrived in the White House). Rather, it was the globalization, first, of capital and, then, of labor that rendered Keynesian or New Deal-type economic policies no longer attractive to capitalist profitability, and brought forth Ronald Reagan and Neoliberal austerity economics [3].
Karl Marx argued long ago that dreams of an egalitarian socialist society to supplant capitalism could not be realized unless (a) conscious political actions are taken toward that end (i.e., there is not such a thing as automatic collapse of capitalism), and (b) such actions are carried out on a global level. In light of the relentless Neoliberal austerity race to the bottom that globalization has unleashed in recent years and decades, it is obvious that Marx’s provisos for meaningful social change applies not only to radical socialist ideals but also to reformist capitalist programs a la Keynes.
References
[1] Many progressive/Keynesian economists call the protracted crisis that started in 2008 the crisis of “Neoliberal capitalism,” not of capitalism per se—see, for example, David M. Kotz, “The Financial and Economic Crisis of 2008: A Systemic Crisis of Neoliberal Capitalism,” Review of Radical Political Economics, Vol. 41, No. 3 (2009), pp. 305-317.
[2] For a relatively thorough discussion of this issue see Anwar Shaikh’s “The Falling Rate of Profit and the Economic Crisis in the U.S.”; in The Imperiled Economy, Book I, Union for Radical Political Economy, Robert Cherry, et al. (1987).
[3] For an informative analysis of this transition see Harry Shutt’s The Trouble with Capitalism: An Enquiry into the Causes of Global Economic Failure, Zed Books (1998).
~
Ismael Hossein-zadeh is Professor Emeritus of Economics, Drake University, Des Moines, Iowa. He is the author of The Political Economy of U.S. Militarism
Drop ‘dictator debt,’ activists and economists say
By Max Strasser – Al-Masry Al-Youm – 28/10/2011
Egypt has a budget deficit of nearly 10 percent of GDP and the finance minister recently said that the country is on the brink of a liquidity crisis. Meanwhile, economic growth has slowed since the uprising, decreasing government revenues, while public sector workers around the country are striking to raise wages that have been stagnant for decades. Egypt is in a tight fiscal spot.
But a group of Egyptian and international activists have a solution that would take pressure off the budget and at the same time undo the economic legacy of Hosni Mubarak’s corrupt regime. The Popular Campaign to Drop Egypt’s Debt, a coalition of civil society groups and concerned individuals, are calling for a comprehensive public debt audit with the eventual aim of debt forgiveness from foreign lenders.
“This is a popular movement that aims to facilitate Egypt’s economic independence from the many forms of exploitation, subordination and resource misappropriation that were imposed upon the people of Egypt during the past decades by the regime of the ousted dictator Hosni Mubarak and his collaborators abroad,” the campaign wrote in its founding statement.
The campaign, which has been growing since it began on Facebook in March, will kick off publicly with a “Global Day for Egyptian Debt Audit/Cancellation” on 31 October, marked by events in Cairo, as well as Paris, Berlin and London – the capitals of some of Egypt’s biggest creditors. The campaign here has earned the support of some prominent civil society organizations in addition to individual activists, economists and economics journalists.
Organizers hope that this will help push the issue of debt forgiveness into the public conversation in Egypt and among governments that hold Egyptian debt.
“What we’re trying to do is draw public attention, because no one is talking about it,” says Noha al-Shoky, one of the founders of the campaign. “The masses don’t understand that we have a situation at hand here.”
The conference in Cairo will also feature Fathi Chamkhi, a Tunisian university professor who is also leading a similar campaign at home. Those involved in the campaign are hoping that in the wake of the uprisings in the North African countries there is a chance for a clean break with the economic legacies of the fallen regimes.
Budget problems, debt solutions?
International credit rating agencies downgraded Egypt’s sovereign debt rating earlier this month due in part to fears about the high budget deficit.
By the end of the fourth fiscal quarter of the 2010/11 fiscal year, Egypt will hold almost US$35 million in external debt, most of it medium- or long-term, according to the Central Bank of Egypt, which also states that the government pays US$3.4 billion in interest on foreign debt. In addition to this, Egypt has about four times as much debt held by local banks.
Economists and analysts point to a number of other problems that contribute to the high budget deficit, such as massive spending on untargeted subsidies. But debt relief could be a major step toward solving the problem.
At the same time, though, the military-backed interim government is looking elsewhere for budget support.
Planning and International Cooperation Minister Fayza Abouelnaga, who is responsible for international agreements, is currently negotiating with the G8 industrialized states, Gulf countries and International Monetary Fund (IMF) and World Bank in an attempt to secure US$35 billion in loans and economic assistance, according to a government statement earlier this week.
Abouelnaga also announced on Tuesday that she would begin negotiations with the IMF for a US$3 billion loan, the same amount that the cabinet rejected from the IMF in June.
“Given the status of the huge budget deficit and borrowing from abroad, then definitely we need some kind of relief from the debt we have from the past, which is actually more than a third of the budget,” says Ahmed Ghoneim, a professor of economics at Cairo University who is not affiliated with the campaign in any way. “Any kind of initiative [for debt forgiveness] could help the economy.”
Also, some activists hope, wiping some US$30 billion from the ledger book could free up more funds for the social justice spending that many demand, from doctors who are asking for more money for public health to public sector workers demanding better wages.
Moreover, an infusion of foreign capital in the form of debt relief could help spur Egypt’s economic recovery, says Amr Adly, an economist with the NGO Egyptian Initiative for Personal Rights, which has backed the campaign. Improved economic conditions will help produce political stability in the long-term, Adly says.
A time for transparency
Before debt is forgiven, the organizers of the campaign plan to hold a public debt audit, in which Egyptians fully examine the money owed in their names.
A debt audit is a comprehensive examination of what debts are owed to whom and how money has been used. Some of this information is publicly available, but is rarely looked at by people outside the economic elite responsible for making decisions.
The campaigners hope to involve as many people in the debt audit as possible, from students to civil society members to representatives from the popular committees. Some people have already begun working on this, Shoky says, including economics students who are combing through many CDs of data.
The audit will help introduce a level of transparency that never existed under the Mubarak regime.
“I am not a specialist in economics, but I believe that individuals should be involved in how the country is run,” Wael Khalil, an activist and blogger and member of the campaign said in a statement. “Part of this involvement is through knowledge sharing. The priority is to access information, to access the details and to be able to publish it.”
Public involvement in the debt audit will push for transparency and accountability, Adly says, forcing lenders to take into consideration the legitimacy of the governments that they are lending to.
Mubarak’s odious legacy
Debt cancellation campaigners believe that they can make a strong case for the cancellation of Egypt’s debts based on the principle of “odious debt,” a legal theory that holds that debts made by a government that are not in the people’s national interests are illegitimate and should be forgiven once the autocratic regime is removed from power.
Precedents for this date back to the 19th century.
Recently, after the United States invaded Iraq and deposed Saddam Hussein, Washington succeeded in convincing many Western lenders to forgive Iraq’s foreign debts incurred under the former leader’s regime. Post-Mubarak Egypt should fall under the same logic, the debt cancellation campaigners believe.
“The whole idea of odious debt challenges the conclusion of the debt in the first place, saying that the government that signed the debt was not legitimate and borrowers didn’t keep up safeguards of having parliamentary supervision, monitoring,” says Adly.
“There’s been a lot of talk by Western governments about supporting people instead of dictators, so we’re challenging them to put their money where their mouths are,” says Philip Rizk, a co-founder of the campaign.
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Is America behind the massive surge in Kiev regime’s child trafficking?
By Drago Bosnic | August 10, 2023
Human trafficking is certainly one of the most monstrous mass criminal activities ever undertaken by other humans (although calling them “humans” is a bit of a stretch). And yet, there’s a special kind of this deeply repulsive crime that pushes it to diabolical proportions – child trafficking. Underage kids, particularly those who were abandoned, sold or have very poor/abusive family backgrounds, are by far the most vulnerable group. The depraved criminals who engage in such illicit activities specifically target unfortunate children and given there are millions of them all around the globe, particularly in war-torn areas, the “recruitment pool” is effectively endless. Unfortunately, the demand on the black market also seems to be constant and growing, making it a very lucrative and appealing prospect for criminals. … continue
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Aletho News- Diplomacy is Now a Crime in Britain / Ian Proud
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