Iran’s 1953 coup: A nation interrupted

Iranian oil was indispensable in lubricating the allied war machine and when the Iranian parliament voted in 1951 to nationalise their own resource out of the hands of the British-owned Anglo-Iranian Oil Company (AIOC), the fate of Mohammed Mossadeq was apparently sealed. According to Kinzer, British diplomats in Washington trying to persuade Eisenhower to back a coup argued, in addition to the obvious gambit that there was a threat of Soviet encroachment via an expanded Tudeh party, that the oil nationalisation would cost the British exchequer 100 million pound per annum. This figure was the amount in royalties paid by the Anglo-Iranian oil company and does not include their own profits – a mere 16% of which was given to Iran under the terms of the D’Arcy concession.

Mossadeq explained his nationalization policy in a 21 June 1951 speech:

“Our long years of negotiations with foreign countries have yielded no results this far. With the oil revenues we could meet our entire budget and combat poverty, disease, and backwardness among our people. Another important consideration is that by the elimination of the power of the British company, we would also eliminate corruption and intrigue, by means of which the internal affairs of our country have been influenced. Once this tutelage has ceased, Iran will have achieved its economic and political independence. The Iranian state prefers to take over the production of petroleum itself. The company should do nothing else but return its property to the rightful owners. The nationalization law provide that 25% of the net profits on oil be set aside to meet all the legitimate claims of the company for compensation”.

Tensions escalated from here with the British government threatening legal action against purchasers of oil produced in the formerly AIOC-controlled refineries. Agreements were then made with other international oil companies not to purchase Iranian oil, a de facto blockade was reinforced as Britain beefed up its presence in the Persian Gulf, Iran was blocked from accessing its hard currency in British banks, key British commodities were prohibited from being exported and a complaint was finally issued by them to the United Nations. This latter action concluded in a humiliating diplomatic defeat for the British as the UN Security Council having heard the case presented by both Mossadeq and the British ambassador to the UN voted on October 19th, 1951 to postpone discussion of the question to a certain day or indefinitely’.

However, this success was short-lived as the following week’s discussions in Washington with the World Bank and US officials failed to secure any relief for the Iranian economy.

In late 1951 elections were brought to an abrupt halt when the minimum number of deputies had been returned to achieve a parliamentary quorum with Mossadeq asserting that foreign agents’ had been exploiting the election campaign with bribes to destabilize Iran. In July 1952, with Iranians becomingly increasingly hard-pressed by a devastatingly effective blockade the Royal Navy intercepted the Italian oil tanker Rose Mary and forced it into the British protectorate of Aden on the grounds that it was carrying ‘stolen property’.

Clearly the best men in Iran were opposed to such blatant thievery and for their support of Mossadeq and nationalisation they were later hounded out of office and subjected to a brutal crackdown as and when the Shah was reinstated. They had to wait 25yrs before they could get their chance to reverse this enforced coup d’etat and by that time the clerics had the upper hand purely because the temples, madrassas and other religious outlets were the only public spaces left unsolicited by the secret police.

When Madeleine Albright, who in 2000 became the first US official to even acknowledge that there was CIA involvement in the 1954 coup, characterised it as a setback for democracy’ it made you wonder at the time whether there were white kites in the offing between Tehran and Washington – until you realised of course that it was Clinton’s last month in office and they were evidently passing that particular hot potato to the Gore camp should he prevail.

For all the talk of Obama sitting down without preconditions you may wonder at the old disaffected Mossadeq supporters and their political lineage; are they not entitled to an apology, an explanation, an acknowledgement at least of hardships endured? And, like most people most everywhere I felt a warm glow of contentment as I watched President Obama taking the oath of office but when he asks the Muslim world to stop blaming ‘the West’ for its problems you have to wonder how comprehensive is his understanding of the Middle East.

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Did Ahmadinejad really say he wished to “wipe Israel off the map”?

Factoid (n) : “A piece of unverified or inaccurate information that is presented in the press as factual, often as part of a publicity effort, and that is then accepted as true because of frequent repetition.” – Answers.com

The assertion the Iranian president Mahmoud Ahmadinejad wished to “wipe Israel off the map” is the official candidate for factoid of the millenium. In an era of total information recall it is astounding that this absolute and utter fabrication has received and continues to command so much mileage on the information superhighway. The “wipe Israel off the map” attribution is a deliberately propagandistic mistranslation of an Ahmadinejad speech whose repetition corresponds more to the wish-fulfillment of political hawks than any observed reality. What is more, a 10yr old with internet access and a modicum of journalistic savvy would be able to tell you this.

On October 25th, 2005 at the Ministry of Interior conference hall in Tehran, newly elected Iranian President Mahmoud Ahmadinejad delivered a speech at a conference entitled “The World Without Zionism.” It was in this speech that he quoted the words of the late Ayatollah Khomeini which were fated to be not only mistranslated but falsely attributed to him. The exact quote in Farsi is as follows:

“Imam ghoft een rezhim-e ishghalgar-e qods bayad az safheh-ye ruzgar mahv shavad.”

As every Farsi scholar whose opinion has been solicited has subsequently declared this passage is most accurately translated word for word as follows; “Imam (Khomeini) ghoft (said) een (this) rezhim-e (regime) ishghalgar-e (occupying) qods (Jerusalem) bayad (must) az safheh-ye ruzgar (from page of time) mahv shavad (vanish from)”.

Or, to put it more clearly; “The Imam said this regime occupying Jerusalem must vanish from the page of time.” There is obviously a vast difference between calling for a nation, people or country to be wiped from the face of the earth – basically an act of genocide – and the call for the end of an ideology associated with a particular regime.

Neither Ahmadinejad (nor Khomeini) wanted anything ‘wiped from the map’ because the Persian word for map “nagsheh” is not contained anywhere in the original Farsi quote. In the context of the argument which Ahmadinejad was putting forth he says that the “Zionist regime” was imposed as a strategic bridgehead to ensure Western hegemony over the region and its assets. Whether or not you agree with his historical analysis you cannot go on to aver based on this evidence alone that he is calling for the destruction of the state of Israel.

He is simply borrowing approvingly from Khomeini a quote to reinforce his argument that an aggressive, non-accommodating Israeli regime which repeatedly tramples on Palestinian rights must surely vanish from the page of time’. He goes on to bolster his case by saying that other seemingly invincible regimes have since collapsed and crumbled; the Soviet Union, the Iran of the U.S. backed Shah and Saddam Hussein’s Iraq.

It was in fact the Islamic Republic News Agency who reported from the “World without Zionism” conference who were responsible for the inflammatory “wiped off the map” misquote and this line, which made such good copy, was gleefully picked up by all the major Western outlets such as Al Jazeera, Time, CNN and the BBC without any attempt to doublecheck its accuracy. The mistranslated quote has since been spread worldwide and has been repeated ad infinitum by journalists, broadcasters, pundits and politicians usually as a preamble to justifying further sanctions and calling for an end to the Iranian nuclear enrichment programme. President Bush said the comments represented “a specific threat to Israel” and in a speech in Cleveland in March 2006 vowed he would resort to war to protect Israel because, “the threat from Iran is, of course, their stated objective to destroy our ally Israel.”

An October 2006 memo released by the Israeli lobby group AIPAC warns that; “Ahmadinejad and other top Iranian leaders are issuing increasingly belligerent statements threatening to destroy the United States, Europe and Israel.” Ariel Sharon has demanded that Iran be expelled from the UN for calling for Israel’s destruction and Shimon Peres has threatened to wipe Iran off the map. Benjamin Netanyahu went a step further by warning that Iran was “preparing another Holocaust for the Jewish state” and that Ahmadinejad should be tried for war crimes for inciting genocide.

Tony Blair meanwhile expressed his “revulsion” whilst mooting the possibility that it might be necessary to attack Iran. As recently as the presidential debates both John McCain and Sarah Palin repeated the misquote as justification for not sitting down for talks “without preconditions” with the Iranian leadership. Neither of them were subsequently corrected by either Joe Biden or Barack Obama whom we must assume either agreed with their assessment or were unaware that the quote was falsely attributed or were aware but simply didn’t wish to seem too dove-like given their position on troop withdrawal from Iraq.

It is difficult to believe that with the resources at their disposal these politicians were unaware that the “wipe Israel off the map” quote was falsely attributed and taken out of context and yet they are happy to feed the myth themselves by repeating the falsehood on every available occasion. We need to keep a close eye on this factoid. A politician’s willingness to repeat it is a useful barometer of the truth – if and when the war drums begin to beat again.

Corporations and the World Water Crisis

“If the wars of the 21st century were fought over oil,
the wars of the next century will be fought over water.”
Ismail Serageldin, former Vice President, World Bank.
Newsweek, 1995.

It would be foolish and somewhat erroneous to pinpoint a particular event or time that heralded the steady erosion of water’s sovereignty as a public good but some critics see the 1992 Rio “Earth Summit” and the prioritisation given there to the provision of clean water and proper sanitation as an economic goal as opposed to a human right as the moment when corporate encroachment began in this hitherto public domain. Through intensive lobbying of the international financial institutions (IFI’s) corporations managed to depict themselves as the white knights who would help achieve the Millenium Development Goals by spearheading a revolution in water utilities management. They told the major international lenders (World Bank, the Inter-American Development Bank and the Asian Development Bank) who, evidently, required little inducement, that privitisation was the only route to follow if they wished to beef up the ailing infrastructures of municipal water utilities, expand coverage and increase those connection rates to safe and secure sources that were so vital in reducing incidences of water-borne diseases such as cholera and diarrhea. The plan seemed good on paper and matched the ideological bent of these institutions at the time since, for the policy planners and economic advisors in the IFI’s it was only an extension of the Washington Consensus model of development; privitisation, deregulation and public sector retrenchment.

The most grevious charge that can be laid at the door of the multinationals is that they have piggybacked on the goodwill expressed in the MDG’s to acquire and consolidate their ownership of key freshwater resources at a time when climate change and corporate usage itself (Nestle pumping Lake Michigan, Cut flower exporters draining Lake Naivasha in Kenya, Coca-Cola’s bottling plants in India) is creating ever more water-stressed regions. Today, every one of Africa’s 677 freshwater lakes is officially listed in dangerous decline.

In less than a decade, and in tandem with these resource pressures, water is undergoing a silent transformation from public good to privately-held (and traded) commodity. Big water companies such as Suez and Vivendi are now double-listed on the major stock exchanges and we seldom think nothing of buying bottled water, even in restaurants. Reports of excessive fluoridation and other hazards associated with the public management of water utilities now seem commonplace. Yet, unreported is the fact that even by the Food and Drug Administration’s own admission the bottled water industry is the most unregulated sector on their books. We have been habitually groomed into accepting as natural the idea of water as just another commodity. Hadji Guiss, special rapporteur on water rights for the UN Subcommission on the Protection and Promotion of Human Rights laments that water in his own Senegal and most everywhere else in the developing world has become a commodity that is “sold to the highest bidder”.

By 2003, Maude Barlow, veteran water campaigner and author of two devastating critiques of corporate involvement in the water crisis (“Blue Gold” and “Blue Covenant”) could comment darkly in the UK’s Guardian that: “the private sector was the first to notice: the planet is running out of fresh water at such a rate that soon it will be the most valuable commodity on earth.” (Feb 26th).

The pattern of IFI lending has become all too familiar offering a one -track solution to a multi-dimensional problem. Neoliberal programmes of privitisation and deregulation suited to the conditions that prevailed in the Western economies have been assumed appropriate to the completely different circumstances of emerging economies. The charge made by Joseph Stiglitz, former World Bank chief economist, of a rigidly inflexible template for economic reform been grafted wholesale and without consideration of regional peculiarities seems doubly appropriate in the case of the water industry. For privitisation in the developing world, far from being the promised panacea has too often led to opportunistic monopolising with exclusionary pricing structures, price gouging and the cherry-picking of profitable management sectors.

For example, in 2006, after years of water service cut-offs, flooding due to lack of proper drainage, huge rate increases and multiple broken promises, the Argentine government unilaterally annulled its 30-year contract with Aguas Argentinas, a Suez subsidiary, to provide water to the 10 million residents of Buenos Aires. So vexed were the Argentine authorities that the courts have been asked to prevent top corporate executives from leaving the country, pending possible criminal charges for allowing high levels of nitrates in the capital city’s drinking water. The World Bank had helped Suez secure the contract in 1993 in what was then the world’s largest transfer of a public water system into private hands. Suez’ neglect of the unprofitable sewage treatment wing of its operation has meant that today the Rio de la Plata is one of the few rivers in which industrial pollution can be seen from space.

In Ghana, where the UK’s Department for International Development (DFID) made its aid payments conditional on part-privitisation, rate increases have shot up 50-70% in some areas. Priced out of the market many have no option but to resort to drinking water from contaminated sources. In Tanzania, Biwater brought the cash-strapped government to court for breach of contract despite their record of higher rates, water shortages and erratic supplies. Despite winning the case the govt. of Tanzania still owes the World Bank the original $140 million loan.

In Johannesburg, the pro-corporate iGoli 2002 privitisation drive has been renamed “E-Coli 2002” by frustrated locals. In KwaZulu-Natal province the installation of pre-paid meters led directly to a cholera outbreak that claimed 200 lives in August 2002. Despite instances where municipal workers would come back at night and show locals how to break into water meters many were still left with no option but to drink from rivers with cholera warning signs. This incident, among others led a Johannesburg High Court judge on 30th April 2008 to declare the use of pre-paid meters to be “illegal and unconstitutional”. It is a ruling that was made possible by such initiatives as the non legally binding General Comment by the United Nations Committee on Economic, Cultural and Social Rights in November 2002 that “access to water is a human right” and that it is a “social and cultural good, not merely an economic commodity”. At the time, WHO director-general Gro Harlem Brundtland called the declaration of water as a human right ” a major boost in efforts to achieve the UN ‘s Millennium Development Goals” – deeply ironic given IFI/corporate assurances over the desirability of water commodification.

Zimbabwe’s Third Chimurenga by Bob Seery

The people of Zimbabwe are still fighting a war of independence 28yrs after it was nominally granted in 1980 with the signing of the Lancaster House Agreement. The negotiating team for the newly unified Patriotic Front led by Robert Mugabe’s Shona dominated ZANU and Joshua Nkoma’s Ndebele dominated ZAPU received verbal assurances from the then chairman of the discussions, Lord Carlisle, that the British Government would provide compensation to white farmers whose farms were required for redistribution among the colonially dispossessed black population. A ten-year hiatus was agreed upon whereby the bitter pill of the ‘willing-seller’ clause could then be constitutionally amended by the Zimbabwean government. By the time the right to compulsorily purchase was introduced in the 1992 Land Acquisition Act, 70% of the richest and most productive land still lay in the hands of only 4,500 white commercial farmers while six million African farmers eked out a precarious existence on small farms averaging 3 hectares in the increasingly barren communal areas, formerly known as the native reserves. Thomas Packenham in the Scramble for Africa’ gives us his description of how this state of affairs came into being;

” In October 1893 British troops and volunteers crossed into King Lobengula’s core territory of Matabeleland. The entire region rapidly fell into their hands as they inflicted heavy casualties on the Ndebele. Under terms of the resulting Victoria Agreement, each volunteer was entitled to 6,000 acres of land. Rather than an organized division of land, there was instead a mad race to grab the best land, and within a year 10,000 square miles of the most fertile land had been seized from its inhabitants. White settlers confiscated most of the Ndebele’s cattle in the process, a devastating loss to a cattle-ranching society such as the Ndebele. The large tracts of land now run by relatively few white settlers required workers, and the Ndebele became forced laborers on the land they once owned, essentially treated as slaves. The Shona also saw their cattle confiscated by white settlers, and were driven into poverty through the imposition of onerous taxes by the new British rulers. The inevitable uprising by the dispossessed Ndebele and Shona in 1896 was finally crushed over one year later by the British at the cost of 8,000 African lives. The region was established as a new colony in the British realm and named Rhodesia in honor of Cecil Rhodes.”

Greg Elich in ‘Zimbabwe Under Siege’ continues the story;

“Passage of the Native Reserves Order in 1899 created reserves on the most arid land, on which the indigenous inhabitants were to be herded. By 1905, nearly half of the indigenous population was confined to reserves. From 1930 onwards, Africans were not allowed to own land outside of the barren reserves. During the twenty-year period beginning in 1935, the Rhodesian regime forced an additional 67,000 African families from their homes and transported them to the reserves. As the Africans were beaten and herded into trucks at gunpoint, their homes were levelled by bulldozers. The reserves soon became overcrowded with people and cattle, and the colonial government decreed in 1944 that 49 of the reserves were overstocked. During the next thirty-some years, well over one million cattle in the reserves were either killed or confiscated for use by white settlers. As the long liberation struggle grew, Rhodesian Security Forces became increasingly repressive, executing civilians, burning villages and crops and shooting cattle”.

‘Independence’ therefore, was always somewhat illusory as long as these structural disparities in land ownership sustained the economic hegemony of an elite non-indigenous kleptocracy whose interests were safeguarded by the UK and US via IMF and World Bank policies. Powerful white landowners included members of the British House of Lords and most importantly the richest and most powerful man in Africa, who is not a ‘tin-pot dictator’ but DeBeers CEO and non-executive director of Anglo-American, Nicky Oppenheimer who has, according to Forbes an estimated personal fortune of $6.05 billion. He is the grandson of Ernest Oppenheimer, who succeeded Cecil Rhodes as carteliser-in-chief of Africa’s most lucrative natural resource and founded in 1917 with John Pierpoint Morgan jnr. the Anglo-American Corporation which at the time of his death in 1957 controlled 95% of the world’s supply of diamond production.

Today, Anglo-American, whose net income in 2007 was over $7 billion has several prominent subsidiaries including DeBeers itself, the world’s largest diamond producer; Anglogold Ashanti, one of the world’s largest gold producers and Anglo Platinum, the world’s largest producer of platinum. Anglo-American, 51% of whose shares are held by American citizens have operations right across Africa including Ghana, Mali, Mozambique, Namibia, South Africa and Botswana. In 2000, 20yrs after Zimbabwean ‘independence’ the Oppenheimer family ‘ranch’, which is more of a country within a country, still sits proudly in the midst of ten thousand square kilometres (2.4 million hectares) of prime arable farmland. It is impossible to conceive that issuing a ‘compulsory acquisition order’ as Robert Mugabe did for this particular property would do anything but invite all the hell and damnation that the sustained wrath of Africa’s most powerful dynasty could muster.

There is an unwritten rule book in the case of all too many ‘developing’ countries whereby the incumbent indigenous rulers can ensure for themselves a life of relative peace, repose and prosperity merely by allowing an agreed proportion of their country’s wealth to be siphoned away by foreign interests usually in exchange for military and financial support and the all-important collusive silence of the international media in the inevitable brutality used to quell opposition. In the early 90’s after no meaningful land reform had taken place, and after none of the feared pogroms against whites and following Zimbabwe’s acceptance of the IMF’s Structural Adjustment Programme (SAP) in 1991, Mugabe had all the appearances of being ‘our kind of guy’. So much so that he was given a knighthood in 1994 and was much in demand by international media outlets for his predominantly honest, eloquent and insightful appraisals of various world events. Of all African leaders he was the one which Europeans in particular could most readily identify. He had a law degree from the University of London (gained during his eleven years imprisoned by Ian Smith’s apartheid Rhodesia), spoke with a surprisingly strong British accent and had inherited many of the affectations of the ‘English gentleman’. ‘All Zimbabweans should play cricket’, he once declared. ‘We should be a nation of gentleman’.

However, SAP, as for many African countries turned out to be a disaster for Zimbabwe. It offered a far too rigid formula of deregulation, privitisation, cuts in government spending, crippling taxation hikes and responded to the inevitable inflationary pressures by forcing through currency devaluations which conveniently made their exports dirt cheap for US and European purchasers. SAP also subscribed to the theory of ‘comparative advantage’ which asserts that an economy is better off ‘specialising’ in what its good at instead of diversifying its export base. It was this precise policy of cash-crop intensification to the detriment of nurturing food staples which caused the great Bengalfamine of 1770 by the British East India Company and I’m really not in any position at present to register anything but my incomprehension at its wholesale adoption at this point in the 20th century. As a consequence, subsidies were withdrawn from independent small-holders and instead focused on the development of this large-scale, heavily industrialised water table draining monoculture’ agriculture. This left many developing countries overly reliant on a favourable international stock price for those few commodities which became their specialised ‘comparative advantage’.

With the corporate mergers of the 90’s in agro-industry and mining and the vertical integration of the supply chain the ‘theory of comparative advantage’ has only exposed many developing countries to the price cartels of multinational purchasers. Staple export commodities such as sugar, tea, cocoa and cotton were up until very recently actually cheaper in non-adjusted terms than they were twenty years ago. If you find that hard to believe, given the escalating prices we pay in our supermarkets for these items and their derivatives (our clothes, half our food) just check out the historical price record on for instance the Mombassa commodity exchange. The fairtrade movement has certainly brought awareness of the immense vampirism involved here and they justifiably point to the ‘nasty’ corporations however their critique too often falls short of their own governments by whom they are largely funded, for it is they after all who had nominated the very IMF and World Bank Officials who had engineered this transnational heist to begin with.

Why would developing’ countries such as Zimbabwe have allowed their economies to be ‘restructured’ in such an evidently detrimental fashion? First of all, the newly decolonised states of the 60’s, 70’s and 80’s were cash-strapped either through capital flight, wars of independence or civil wars where opposing sides were used as proxies in the ‘Grand Game’ between the USSR and the United States. Some, such as Zimbabwe, saw the futility of this stance and joined the Non-Aligned Movement, a block of 77 countries who, through their unity and under the chairmanship of Robert Mugabe succeeded, via UNCTAD, in setting price controls on international commodity fluctuations until that institution was effectively paralysed by the then G7 and replaced by the World Trade Organisation. The oil crises of the seventies meant many Western banks were awash with Saudi petrodollars and were happy to find many desperate borrowers in Africa, Latin America and south east Asia, regardless of the punitive interest rates demanded.

With the boost to neoliberalism provided by the fall of the Berlin Wall and the fracturing of the Soviet Union, the IMF was now free to step fully into the breach by offering ‘help’ with balance of payments with the caveat of the sundry above-mentioned conditionalities necessitated by Structural Adjustment. No longer occupying the role of Janus-faced buffer cuddling up to one superpower and now another, the proud, newly independent nations had no option but to sink or swim with the tide of neoliberalism.

So I have to express some amusement when I hear the charge that Mugabe has grossly mismanaged the economy – the acceptance of SAP, compulsory in Africa after 1990, implies by definition the ceding of monetary and fiscal policy to IMF planners and policy makers. Some, the truly corrupt African governments such as Abache’s in Nigeria saw SAP for what it was, an open invitation to corruption, and couldn’t flog off their country’s resources quick enough. Just witness today the legacy of allowing Shell, private army included, free reign in the Delta region. Most African leaders however were dragged through the process kicking and screaming and IMF country reports of the 90’s are punctuated everywhere with the doleful refrain that ‘privitisations’, ‘deregulations’, ‘liberalisations’, and various other abominations’ weren’t taking place nearly as fast as they should. Many compromise formations such as semi-state parastatals began to emerge during the decade such as the Botswana government’s 50/50 partnership with DeBeers. But the pressures on African leaders to conform shouldn’t be underestimated when a more pliant political rival can have his party’s chances of election multiplied tenfold by a timely injection of Western capital. Play the game or pretend to play the game; this is the ignominious liminal state that Western policy has reduced African leaders to.

Where is Africa’s chair on the UN Security Council? The only continent without one and something they have been asking for at every General Assembly for the past 15 years. If it were given presumably then the West would be forced to look upon a strong unified continent instead of the media’s depiction of a patchwork of failed states marshalled by corrupt tyrants. For example, Transparency International’s ‘Corruption Perception Index’ has followed the World Bank who first pioneered this sort of thing by listing as one of its criteria for ‘efficiency’; ‘length of time taken to set up a business’, as though a long waiting period implied a proportional level of graft when in reality its more often a government’s covert resistance to a SAP-inspired prescription to plunder. And even if he’s working for an Abache-type regime maybe his demands to be ‘greased’ are because his real wages shrunk in half because of an austerity plan and he needs to buy anti-retrovirals for his brother or a false passport for his sister who can claim asylum in Europe by telling their immigration control how nasty and despotic her president is since the Geneva Convention makes no allowance for economic war crimes. Which is just as well since we’d all be in the dock.

Now that Mugabe has shown himself to be definitively not ‘our kind of guy’, i.e someone who would gladly squander his own nation’s resources for the promise of peace and security and the benefit of our engorged portfolios; a prostituted international media, with the exception of Al Jazeera English, commands the entire world to scream in abhorrence. And we do scream of course, loudly and impetulantly, because we are by and large decent people who are more than willing to do what we can ‘to help the poor’ and when we are told by our national broadcasters of a ‘corrupt dictator’, of his greedy, self-serving ‘network of cronies’ and how they have turned the former ‘breadbasket of Africa’ into an economic backwater with floods of refugees and ‘millions more on the brink of starvation’ our Pavlovian indignation reaches a peak of frenzy. Almost as an afterthought, the Weimerian hyperinflation figure is then typically inserted as an almost comical aside. Bread now costs $12 billion, only last month a teachers annual salary! I know we are meant to find this a vaguely amusing confirmation of Mugabe’s incompetence and despotism. Worse still, and this is perhaps the last straw for our now salivating triggers is that the sacred institute of democracy itself has been defiled with the intimidation and brutalisation of supporters of the rival political party, the Movement for Democratic Change led by that poor beleagured black man, Morgan Tsvangirai. Such is the general level of ignorance that this deplorably facile propaganda is digested unquestionably. Reports nowadays don’t even bother mentioning the resettlements let alone ‘invasions’ of white-owned farms.

In the mid-90’s, at the height of the hardships induced by IMF-imposed Structural Adjustment, land resettlements began sporadically by disgruntled Zimbabweans tired of Mugabe’s perceived procrastinations over land reform. Yet to the West, Mugabe had still to maintain the impression that he is committed to Structural Adjustment else the IMF’s support for balance of payments will be withdrawn and the economy effectively destroyed. To his supporters in the War Veterans Association (WVA) who fought alongside him for land rights the question of compensation payments now became a matter of urgency.

Greg Elich describes some of the effects of SAP in Zimbabwe in 1994;

“The rise in food prices was seen as a major problem by 64 percent of respondents, while many indicated that they were forced to reduce their food intake. ESAP resulted in mass layoffs and crippled the job market so that many were unable to find any employment at all. In the communal areas, the rise in fertilizer prices meant that subsistence farmers were no longer able to fertilize their land, resulting in lower yields. ESAP also mandated the elimination of price controls, allowing those shop owners in communal area who were free of competition to mark prices up dramatically.”

Tsvangirai, at this time a trade union leader was stirring popular dissatisfaction, erroneously blaming the government for high taxes when in fact such measures were being dictated by the IMF. It is of course equally probable that he had no idea at the time that SAP required almost complete IMF macro- and micro-management of the economy. Meanwhile, Mugabe responded to the increasingly vociferous WVA by providing a once-off settlement and it was this unbudgeted outlay which caused the first crash of the Zimbabwean dollar. It also signalled to international investors that the agitators for land reform within ZANU-PF were the real power in Zimbabwe and that their stated goal of occupying those lands, forcibly if necessary and without providing the compensation demanded by white farmers would become a reality. It was thus that the Zimbabwean dollar depreciated tenfold between 97 and 01. If speculators could make this assessment then it stands to reason that Foreign Secretaries and development professionals also had the necessary intelligence from the ground to accurately gauge the mood of the country yet when the occasion arose in 98 to intervene and prevent the inevitable ‘forced resettlement’ they snorted with disbelief. With spiralling inflation and massively depleted reserves of foreign currency Zimbabwe had to rely on grudging support from the IMF and the occasional lifeline from China to fund fuel imports and provide vital agricultural inputs.

Mugabe was in a position to know more than anyone that a crisis was looming. Late in 1997, Claire Short, the UK’s International Development Secretary, enflamed the situation even further by declaring that Britain did not regard itself as having ‘any special obligations to fund land reform’. In September of 1998 an International Donors Conference was convened in Harare to drum up support for a viable compensation package for white farmers. The time to act was clearly now. Speaking at the opening session Kofi Annan, then UN Secretary General said; “The equitable distribution of productive capital such as land is not only economically important but also essential to ensure peace and stability”. Reiterating these concerns President Mugabe said;

“We must move forward speedily and vigorously otherwise they will resettle themselves in a manner they deem appropriate. Such anarchy will not be helpful to anyone. We therefore trust that the governments efforts for orderly resettlement will receive the necessary donor support”.

Nobody believed him. All the donors’ perceptive faculties were programmed to make them believe that all they were listening to was the justifications of yet another corrupt African dictator’ on the graft. More white elephants they winked and yawned at themselves knowingly. And yet they didn’t know. And they still don’t know – anything. $2.2 billion, half the profits of Anglo-American’s African operations in that year, and one third of Nicky Oppenheimer’s thieved fortune was the sum agreed by all parties to be capable of solving once and for all the 100 yr Zimbabwean land question; $180,000 was eventually pledged.

The failure of the international community to engage constructively with the Zimbabwean government at this point, whilst totally predictable, has led directly to the violence, refugeeism and misery that we see today. It would moreover take a thousand Hagues a hundred years to do justice to the roll call of morally bankrupt cretins involved in this fiasco. It seemingly failed to dawn on any present that Mugabe’s warning that they would ‘resettle themselves’ might actually occur. Utterly unheard of. Could never happen. Yet it did, and it is evident that Mugabe, tired of jumping through hoops and attempting to satisfy the endless conditionalities required by the IMF and its brood of vampires, that he had finally dropped the facade of pretending to be ‘our kind of guy’ and lent what has now been called the ‘third chimurenga’ his tacit approval. By doing so he has ensured that his person will be villified by an utterly strumpeted Western media incapable and unwilling of providing anything but the most superficial of analyses. In the end, they are simply uncomprehending.

No-one will dispute that today MDC is under attack by Zanu-PF supporters. However, the fact of the matter is that the MDC was formed in September 1999 by prominent members of the white-dominated Commercial Farmers Union as a direct response to the land resettlements. Behind the MDC and mysteriously omitted by the wholly biased international press coverage who would like us to think that the MDC are some kind of people’s movement of native Zimbabweans agitating against an incompetent despot are in fact many prominent white Zimbabweans. David Coltart, the MDC shadow justice minister served in the Rhodesian police force and is a legal expert who, in power, will be poised to examine the constitutional status of the land resettlements with an obvious view to reversing them. In addition, Roy Bennett, the party treasurer, is a pugnacious white landowner who once attempted to throttle a Zimbabwean judge for calling his ancestors ‘thieves and murderers’ and Eddie Cross, who was the MDC’s newly confirmed Secretary of Economic Affairs in September 1999. made the following policy announcement clearly echoing the raison d’etre of SAP;

“We are going to fast track privatization. All fifty government parastatals will be privatized within a two-year frame, but we are going far beyond that. We are going to privatize many of the functions of government. We are going to privatize the Central Statistics Office. We are going to privatize virtually the entire school delivery system. And you know, we have looked at the numbers and we think we can get government employment down from about 300,000 at the present time to about 75,000 in five years.”

The unavoidable conclusion therefore among Zanu-PF party strategists is that the gains secured in land acquisition will be reversed if the MDC gains control and that they themselves will become the objects of a witch-hunt by the western press.

The land seizures, by any yardstick a sublime manifestation of natural justice, are in fact, technically ‘illegal’ and have been condemned in Washington and London, the financial backers of the MDC. On the American side, this support was secured by the signing into law by President Bush in December 2001 of the Zimbabwean Economic Recovery and Development Act (ZIDERA) The law instructed American officials in international financial institutions, to “oppose and vote against any extension by the respective institution of any loan, credit, or guarantee to the government of Zimbabwe,” and to vote against any reduction or cancellation of “indebtedness owed by the government of Zimbabwe.” The law also authorized President Bush to fund “an independent and free press and electronic media in Zimbabwe”; in other words, a media network aimed at toppling the government.

Post-Colonial Poverty in the Global South

It was the French anthropologist Alfred Sauvy who first used the term ‘Third World’ in reference to the ‘underdeveloped’ countries of the global south. Writing in the French magazine L’Observateur (Aug 14, 1952) Sauvy concluded a powerful critique of colonialism by asserting that; ‘in the end this ignored, exploited, scorned Third World like the Third Estate, wants to become something too’. He was paraphrasing Sieye’s famous observation about the Third Estate during the french revolution and how the peasantry had aspirations of their own beyond the aims of the aristocracy (First Estate) and the clergy (Second Estate).

In the Cold War era the phrase was adopted readily as it became a handy way of demarcating that territory that lay outside the immediate sphere of the two great superpowers. In time, with the dissipation of hostilities that followed the collapse of the Berlin Wall, this meaning too became largely redundant. Today, the ‘Third World’ is a shrunken concept as it has managed to reduce the diverse complexity of whole continents to stock images of helpless black babies with bloated bellies mercilessly surrounded by tsetse flies and barren landscapes.

As a matter of fact the phrase has been long abandoned by serious campaigners precisely because of these connotations of impotence, helplessness and passivity. The preferred terms used nowadays by activists are either the global south’ or the majority world’. This is not to say there was no merit in Sauvy’s original wording for it at least intended to confer the dignity of an active narrative, a struggle for rights and emancipation and, given the outcome of the historical events to which they alluded, a sense of manifets destiny. It is in fact perhaps more useful to retain this original suggestion of ‘the ignored, exploited and scorned’ to truly understand poverty in the global south for it is questionable whether the people in these regions have ever actually attained true independence and autonomy.

For instance, the debt crisis’ of the late 70’s and early 80’s left many countries in Africa, Asia and Latin America looking towards the IMF and World Bank as lenders of last resort. Conditionalities attached to the concessional financing needed to alleviate the debt burden amounted to the wholesale adoption of the corporate-led neoliberal model of economic development. Two prominent theories underpin this economic philosophy; (a) Friedmanite ‘supply-side’ economics which holds that lowering the costs of production is the key to economic growth (ie tax cuts for the rich and investors) and (b) the theory of comparative advantage which favours specialization over economic diversification.

The presence of both these assumptions are behind the main elements that comprise a typical IMF-imposed structural adjustment programme (SAP); deregulation, privitization, liberalisation, currency devaluation and measures to stimulate export-oriented growth. In addition to these, ‘austerity measures’ such as cutbacks in health and education and the slashing of public sector wages are advocated to release funds either to satisfy creditors or to fuel market-led growth via private sector retrenchment. The net effect of these policies is to supposedly liberate and empower the ‘miraculate’ of capital itself; which, left alone to its own majestical workings is assumed to be the panacea poverty is looking for.

For example, deregulatory policies such as lowering of constraints on hiring and firing, the undermining of trade union power, decreasing the number of bureaucratic procedures required for setting up a business and the altering of land laws to suit inward investment are all intended to create a more conducive environment under which capital can thrive. However, the problem here is that the prescriptions laid down by the international financial institutions (the IMF and World Bank) more often appear to be drafted by corporate lobby groups intent on prising open vulnerable economies for their own benefit .

Export processing zones (EPZ’s) are perhaps the most extreme form of a deregulated business environment. Begun in India in the early 80’s when the government introduced a five-year tax break for companies who wished to relocate their manufacturing base the vast majority of employees are young women. Their primary purpose is to supposedly generate export revenue and their numbers have since mushroomed. In 2002 there were an estimated 43 million people working in about 3000 EPZ’s spanning some 116 countries and producing items such as clothes, shoes, electronics and toys. Naomi Klein describes the working conditions as follows; “Regardless of where the EPZ’s are located, the worker’s stories have a certain mesmerizing sameness: the workday is long – fourteen hours in Sri Lanka, twelve hours in Indonesia, sixteen in Southern China, twelve in the Phillipines. The management is military-style, the supervisers often abusive, the wages below subsistence and the work low-skill and tedious.”

Another notable feature that Klein observed was that the majority of the women were migrants from rural areas; “they would have stayed at home if they could, but the choice was made for them: most of their families had lost their farms, displaced by golf courses, botched land-reform laws and more export processing zones.”  One young girl told her; “Working on the farm was difficult yes, but there we had our family and friends and instead of always eating dried fish we had fresh food to eat”. (No Logo, pg. 220.)

This brings us to the heart of the issue because if EPZ’s and large-scale plantations or monoculture farming are to be the motors through which export revenues are going to be obtained then they will require a readily available pool of cheap labour and this can only be achieved by exerting a squeeze on rural households. As we know, the majority of people in the developing countries are small-scale farmers with a few hectares of land. However, trade liberalisation means that cheap imports from the heavily subsidised large producers of the West are undercutting the capacity of these rural households to stay afloat. Recent FAO studies have noted that there has been an increasing concentration of land – ownership in a wide cross-section of countries.

 In Cambodia, for example, mirroring global patterns, 10-15% of the country’s farmers have become landless since 1989. SAP- inspired government policies have withdrawn subsidies from farm inputs that contribute towards domestic food production and instead switched them to those products that are being grown for export such as tea, cocoa, coffee and cotton. John Madeley writes “Women, who produce 60-70% of food in most African countries, have been affected disproportionately by the elimination of subsidies, the drying up of credit and the surge of food imports as a result of trade liberalisation”. In order to stay on the land many males are forced to migrate to the towns and cities or to the plantations to seek seasonal employment. This, of course, produces further hardships for women whose workload is often doubled and has a negative effect on the education of their children who are often forced to leave their schooling for long periods to help out at home.
Austerity measures such as cuts in health and education expenditure further necessitate dependency or incorporation into a cash-based economy. The introduction of user fees  for medical services and the increasing privitization of secondary and primary schooling generates more pressure for self-sufficient, subsistence based households to switch to cash-cropping. Those that cannot afford decent medical care simply don’t attend and in fact the 2005 UNDP report shows that for most African countries the maternal mortality ratio has steadily disapproved since 1990. Increasingly tight domestic budgets may also mean that some children will have to be withdrawn from school early and the preference here is usually towards the girl-child.

One of the consequences of the theory of comparative advantage is the loss of economic diversification. All too often countries in the south are streamlined towards the production of a handful of basic commodities. Stock market fluctuations can overnight halve the value of primary commodities as was the case for instance in the mid-80’s when the international price crashed for major exports such as coffee and cotton. The neoliberal response is a currency devaluation to make exports more attractive to international buyers.

But what this creates over time is a huge gulf in purchasing power parity between countries of the north and those of the south. It also exacerbates the brain drain’, encouraging those with a university education to seek employment in the North and to sustain their hard-pressed families through remittances thereby depriving the south of the very talents that it so obviously requires in the years ahead. Many women, anxious to keep their children in school are faced with little option but to secure working visas for foreign posts in childcare or nursing, straining the family unit and further eroding the social fabric.

It is these varied elements of SAP, still expounded today, that, when stripped of their beguiling veneer are seen to achieve their true ends; providing an army of cheap labour and relaxing barriers for the extraction of raw resources. At this nether end of the flows of late capitalism it is the impoverished themselves who have become the anti-miraculate, the unspoken and the disenfranchised, frozen timelessly in our images of dispossession.

“Hope” for the Middle East?

Obviously its early days yet but it should be clear to everyone that the US is not the same player it has been traditionally now that we have an Obama administration. What exactly those differences are, whether they are strong enough to actually make a renewed peace process’ viable, the coming weeks and months will decide. Obama’s decision, for instance, to make entreaties on the Saudi-owned al-Arabiya news channel to renew diplomatic relations with the Iranians has been viewed by the wider Arab and Muslim world as a positive step that bodes well for any future negotiations.

Also, Obama’s appointment of George Mitchell as peace envoy. Being an Arabic- speaking son of a Lebanese immigrant with a good track record of listening’ has to be a plus here, along with his role in brokering successful peace talks in Northern Ireland. This, coupled with the fact that he has already headed a commission whose report identified the key difficulty; Israeli settlements in the West Bank. I know it doesn’t take a mastermind to figure that one out but how many times has this been explicitly acknowledged and foregrounded on the American side; apart from Carter.

The question you have to ask yourself is whether Hamas are providing any room for dialogue. Is there anything in what they are saying that provides an entry point for mediating parties? We all know about the fiery rhetoric of their Charter and varied translations do little to dampen it – it belongs to a species of polemics that has one foot in this world, one in the next.

But the fact of the matter is that the Hamas leadership has distanced itself more and more from the Charter – without actually abandoning it – particularly since the 06 elections. Its jihadist authors have already been executed by Israel (the paraplegic Yassin blown to smithereens in his wheelchair along with a dozen innocents outside a Gazan mosque 5yrs ago) and new leader Meshal has confirmed repeatedly his readiness to recognise Israel if the ‘two-state solution’ with pre-67 borders is put on the table. Neither is this the watered-down two-stater proposed by Ehud Barak with separate Jewish cantons and control over water resources which led to the unravelling of the Camp David Accords.

According to Khaled Hroub (author of ‘Hamas: Political Thought and Practice’) the concept of the two-state solution is now the cornerstone of Hamas’ thinking. “I doubt we will see the old Hamas again” he says. Why does he say this? Because Meshal and the other leaders have been saying things like the following for the last four years;

“Our message to the Israelis is this: we do not fight you because you belong to a certain faith or culture. Jews have lived in the Muslim world for 13 centuries in peace and harmony; they are in our religion “the people of the book” who have a covenant from God and His Messenger Muhammad (peace be upon him) to be respected and protected. Our conflict with you is not religious but political” (07)

“We shall never recognise the right of any power to rob us of our land and deny us our national rights. We shall never recognise the legitimacy of a Zionist state created on our soil in order to atone for somebody else’s sins or solve somebody else’s problem. But if you are willing to accept the principle of a long-term truce, we are prepared to negotiate the terms. Hamas is extending a hand of peace to those who are truly interested in a peace based on justice.” (06)

“If Israel withdrew to the 1967 borders and recognised the rights of the Palestinian people – including the right of those in the diaspora to return to their land and to East Jerusalem and to dismantle the settlements – Hamas can then state its position and possibly give a long-term truce with Israel, as Sheikh Yassin said. This is a position that Hamas could take but only after Israel recognises the right of the Palestinians, to show and confirm its willingness to withdraw to the 1967 borders.” (08)

There is more than enough leverage in the above for a dedicated team committed to a workable solution to make real progress. What I see at the moment is the possibility of some sort of renewed alliance between Fatah and Hamas. Egypt are currently hosting talks to try and bring this about and Mahmoud Abbas must be seen to play ball here else he is in danger of being toppled from within. Fatah received a negative backlash from Muslims across the region over their weak responses to the recent Israeli incursion/massacre and will be anxious to clean their bib in the eyes of their peers. He has already been heard recently being critical of last year’s accelerated expansion of Israeli settlements – something that he was loathe to do beforehand for fear of being cut from the loop. Many US and European diplomats have already conceded that Hamas will have to be talked to eventually, for instance James Baker, and the recent events in Gaza, in fact, have been a disaster for the Israeli publicity machine.

Even the Council on Foreign Relations concede that the Hamas majority in the elections was secured because of their perceived lack of corruption and greater commitment to funding for social programmes. What is an absurdity is the continual reality negation over Hamas legitimate claims to be representatives of the Palestinians. Simply wishing they didn’t win it or that their programme of resistance isn’t more popular among ordinary Palestinians than watching what must appear to them to be the fawning obeisance of Fatah preside over the further dismantling of their territory is just the purest self-delusion.

Admittedly, their funders in turn will have to get flexible on Sharia and their claims over East Jerusalem but their position on the Zionist entity’s’ right to exist’ is predicated on Israel’s continued presence in the West Bank – an internationally agreed upon illegal occupation – which to Hamas is justification for any and all hostilities. Remove the forces of occupation along with the settlements and they are ready to conduct dialogue. This is their position and Khaled Mashal has repeated it often enough to make you wonder why the assertion continues to be regurgitated that they are unconditionally committed to the destruction of Israel irrespective of what gestures and concessions it makes. This position only suits hawks of every hue and persuasion including those on the Israeli side who don’t wish to see any dismantling of West Bank settlements.

So the US need no longer be viewed as an obstacle to progress by the Palestinians. If its policy makers instead of continually referring to an increasingly defunct founding document instead focused on what possibilities exist for dialogue then we may be in a position at last to debate the merits of peacekeepers – they have to have a peace to keep first though.

Is Foreign Aid the Solution to Global Poverty?

Foreign aid is one of many solutions to the multi-faceted problem of global poverty and would of course make a more telling difference than present if it were properly administered, divorced from political praxis (arms transfers to client states), specifically targeted (white elephant projects), untied from ideologically determined conditionalities (the push for privitisation in the water sector) and, moreover, actually in accordance with internationally agreed commitments (the famously defunct .7% of GNP).

There are also powerful arguments to be made from those who suggest that the focus on aid detracts from other initiatives. We may look no further than the support for the removal of agricultural supports for producers in the West as they drastically lower the international purchasing price for sellers in the global south. Likewise, there are those who maintain that the “dumping” of these often subsidised goods on developing markets drastically undermines the ability of domestic producers to maintain their livelihoods. Also, shouldn’t consumers in the rich world be made more aware of the existence of the fair trade label and how that delivers real and lasting benefits to the communities involved.

In international trade policy, attention has been paid by campaigners in achieving preferential trade tariffs and quotas for exporters in the developing world. Some have argued that the World Bank and IMF should reorientate its loan strategy and instead focus on encouraging the development of tertiary industries that can exploit these countries own natural resources. For example, why hasn’t West Africa which produces three quarters of the world’s cocoa beans not established its own Hershey’s or Cadbury’s?

Or why hasn’t there been sufficient capital raised to develop domestic refining capacity for nations dependent on crude oil export revenues. In all too many cases they are simply importing the finished version of what they have previously exported. Others again argue that the World Bank has become irrelevant in dealing with global poverty and should actually be abolished. Also, shouldn’t workers in Export Processing Zones producing textiles for foreign markets be entitled to a minimum wage under international law since they are producing for a global market? And what about the crippling debt still being paid by so many developing countries? Is it right that Kenya pays back $600 million annually to international creditors while it only receives $100 million in bilateral aid disbursements.

Foreign aid is a vital component of a multi-pronged attack on what still remains a scandalous state of affairs and we should not be blinded by superfluous arguments which pit the merits of “Aid” against those of “Trade”, “Debt” and other socially progressive initiatives. With respect to the above mentioned internationally agreed commitments on aid it may be said that the benchmark for official development assistance (ODA) was set almost forty years ago when the UN General Assembly voted for a commitment of .7 per cent of GNP from the developed countries. This was reiterated at the Rio Earth Summit in 1992 with the adoption of Agenda 21 where developed countries agreed to; “augment their aid programmes in order to reach that target as soon as possible”.

Ten years later an international conference on “financing for development” sat in Mexico and produced the Monterrey Consensus wherein signatories agreed to “urge all developed countries that have not done so to make concrete efforts toward the goal of .7 percent of gross domestic product as official development assistance”. In that year, 2002, ODA was around $53 billion or just .2 percent of rich-world GDP. If, therefore, rich countries had met the target, aid that year would have reached $175 billion or .7 percent of the $25 trillion rich-world GDP. It as well to bear these figures in mind because they are used as reference points by those, such as Jeffrey Sachs, who contend that poverty can be alleviated almost exclusively through the transfers of financial largesse. Leaving this aside for the moment we may say that though non-binding legally, these agreements are neither a “letter to Santa Claus” to borrow from Jean Kirkpatrick’s infamous dismissal of the UN Declaration on Human Rights nor are they mere vaguely worded aspirational documents. This is mainly because, despite all their foot dragging and rhetoric, OECD governments have at least been shoehorned into making public avowals of their commitment to adjust incrementally upwards their donations to reach .7 by 2015. This is all meant to coincide, happily enough, with the completion of the Millenium Challenge goals.

Now, the point about Sachs’ work, and he is the world’s leading academic proponent of boosting foreign aid, is that he must demonstrate almost beyond dispute the eventual effectiveness of these massive disbursements if and when they do arrive. Hence Sachs’ task in “The End of Poverty” is to produce what project managers everywhere will be familiar with, though not on such a grand scale; a full cost-benefit analysis – for ridding the world of poverty.

There is an exhaustive case study made of Sauri, a group of eight remote villages with a 5,000 strong population in Nyanza province, western Kenya. We are spared the ghantt charts and log-frame analyses but the procedure is still one of an admirable clinical efficiency and each projected “output” comes with a readily quantifiable price tag. Thus the “Big Five” development interventions for Sauri are assessed roughly as follows (1) agricultural inputs: fertilisers and improved fallows for the five hundred arable acres will cost roughly $100 per hectare per year which comes to $50,000 per year for the community. (2) in health: a proper clinic staffed by a doctor and nurse providing free malarial care and other necessities – $50,000 (3) for power, transport and communications – $25,000 (4) for water and sanitation; a combination of protected springs, bore wells and community taps – $25,000 (5) investments in education – school meals would be paid for through increased grain yields through the application of fertilisers . and so on.

This is just a snapshot to give readers an idea of the detailed planning involved. The eventual cost of all these improvements was estimated to be around $350,000 per year for a an initial few years until the village complex became self-sufficient. The progress of Sauri can be viewed from the website of the Earth Institute and is an important pilot project which is ultimately intended to dispel the doubts of sundry naysayers and foot draggers who bemoan the supposed waste of our tax dollars. In a few short years it has reduced the incidences of malaria tenfold, tripled food yields, drastically reduced chronic hunger and malnutrition and given birth to small cottage industries such as horticulture, carpentry and animal husbandry. As Sachs himself says “sooner rather than later, these investments would repay themselves not only in lives saved, children educated, and communities preserved, but also in direct commercial returns”.

In short, we can conclude by saying that “Aid” can work miracles, it is demonstrably effective in saving lives but let us not forget also that it is but one strategy among many that should be deployed to address a complex ethical imperative.

UNCTAD and the New International Economic Order

The early successes of the G-77, a lobbying bloc of developing countries within the UN, and the Non-Aligned Movement (NAM), a group of independent nations attempting to retain sovereignty amidst cold war intrigues, culminated in the formation of the United Nations Conference on Trade and Development (UNCTAD) in 1964 under the helm of Raul Prebisch, its first Secretary-General. Prebisch was an Argentine economist who wrote extensively in the 50’s on the worsening terms of trade between the industrialised countries of the North and the non-industrialised countries of the South. Basically, his research concluded that the South required more and more of its own raw materials and resources to purchase ever fewer manufactured goods from the North. This structuralist critique in fact soon became the dominant viewpoint within the UN, effecting policy decisions in ECOSOC, the UNDP and elsewhere.

With his appointment the ‘Third World’ countries saw UNCTAD as the principal vehicle within which a more equitable restructuring of the world economy could take place. Three related goals were immediately adopted by Prebisch; (1) the establishment of a commodity price stabilization mechanism, (2) a scheme of preferential tariffs for goods from Third World to First World markets and (3) a demand for greater foreign assistance, viewed by many not as charity but rather compensation or reparations  for decades of declining commodity purchasing power. The immediate impetus for convening the April 74′ Special Session of the UN General Assembly which passed the charter of the New International Economic Order and the Charter of the Economic Rights and Duties of States was the summit of NAM held in Algiers in September 73′. It was attended by an unprecedented 33 heads of state, including key delegates from OPEC.But these advances must be seen within the context of a strong bargaining hand.

Two years before, huge US deficit spending to finance Vietnam led to an overvalued dollar forcing Nixon to decouple and suspend dollar-gold convertibility thereby ending the 30 year Bretton Woods arrangement. The global financial system eventually convulsed with the stock market crash of January 73′, a death by a thousand cuts affair which only bottomed out in Dec 74′. But most of all the G-77 were emboldened by the success of the ex-colonies within OPEC whose embargo in late 73′, a protest over the Yom Kippur War being waged by Israel, compounded this misery. In the two years from 1972 to 1974, the US economy slowed from 7% growth to -2.% contraction, with inflation jumping from 3% in 1972 to 12% in 1974 and by 75′ in the UK it had hit 25%.

At the meeting of UNCTAD IV in Nairobi in 1976 the Integrated Programme for Commodities (IPC) was set up guaranteeing protection from excessive price fluctuation for 18 specified commodities through the creation of a common fund. 

The resolute language within the NIEO/CERDS documents certainly sprang from what must have been pragmatic assessments of what was attainable under the prevailing climes – and should not be viewed as a species of charitable concession granted by Western powers in the grip of some inexplicable egalitarian fever.

Eventually, it is true, the documents became anachronistic’ their long funeral cortege marshalled by the Brandt Commission throughout the 70’s with last rites applied by Reagan at Cancun in 81′ as he re-symmetricalised the cosmos under the Washington Consensus’, but at the time there must have been every expectation that an epoch stirring breach’ was on the horizon.

So the highpoint of UNCTAD’s success was the fourth trade conference in Nairobia in 1976 after which right-wing think tanks such as the Heritage Foundation became increasingly vocal over what they saw as a disturbing realignment of global economic power through the medium of UN mechanisms. Disputes became more rancorous and bitterly contested and in the end no new commodities were added to the IPC. UNCTAD was eventually wound down and defanged through G7 lobbying and today concerns itself only with analysis, technical advice’ etc. surviving on a relatively minuscule budget of $100 million per annum. The issues that were its bread and butter are now debated within the – far from democratic – green rooms’ of the WTO, viewed by many critics as a neoliberal Trojan horse created by corporate lobbyists and their legal teams. The principle of preferential tariffs however still holds good today and their compatibility with WTO regulations are a source of contention for instance between the EU and the African – Caribbean – Pacific (ACP) countries in the current Economic Partnership Agreements. Likewise the Monterrey Consensus has tried to get a meaningful commitment (.7% of GNP) on overseas development aid by the OECD countries.

But the bottom line with respect to the protection of indigenous labour and resources is that the spirit of this compact as signalled by the 1962 GA Resolution on the Permanent Sovereignty of Natural Resources has not been met. Though these principles then became customary international law and have subsequently been imposed on developed states through arbitration awards it is sadly the case that without the support and funding of UNCTAD the power of the IPC and other like initiatives has withered substantially over the years along with the living standards of millions of primary commodity producers across the developing world. Nowadays the call for reparations and the acknowledgement of the injustice of declining terms of trade has been replaced by the promotion of fairtrade; conceived as a species of charity.

Here is a link for those interested in how the IPC is doing today; http://common-fund.org/

Collapse of the WTO’s Doha Round of Trade Talks

The World Trade Organisation was set up as a replacement to the General Agreement on Trades and Tariffs in 1994 during the latter’s Uruguay round of trade talks. It was conceived as both a permanent forum for trade negotiations and as an arena within which the mediation of multilateral dispute resolutions could take place. Lori Wallach, trade lawyer for Public Citizen Watch, in her ground-breaking book “Whose Trade Organisation” is less charitable, describing it as a “neoliberal trojan horse” designed ostensibly to push through Friedmanite policies of unrestricted “free trade” but which in reality operates as a corporate-controlled vehicle for further prising open weakened economies – a “slow motion global coup de’tat“.

The attempt to launch a new trade round in Seattle in December 1999 concluded in general disarray, with rich and poor countries stalemated amidst much acrimony and scenes of often violent protest by what the media simplistically dubbed as “anti-globalisation” supporters. The breakdown in fact occurred over the hubristic top-down management of the globalisation process with key issues being the developed countries protectionist barriers to agricultural imports from the developing world, the inflated subsidies paid to rich-world farmers, particularly in the US, EU and Japan, the call by developing countries for greater protection against the “dumping” of heavily subsidised agricultural produce and the refusal of the poor countries to accept an expansion of the WTO’s remit to include certain non-tariff related trade issues; the so-called “Singapore Issues”.

In an increasingly interconnected world with rising trade volumes Western advocates of neoliberal free trade have consistently pointed to the need for a global set of trade rules and the dismantling of trade barriers, yet too often they fail to apply these standards on their own trade distorting protectionist activities. Rich countries of the industrialised North, whose politicians appear to be hopelessly aligned with farming lobbies spend over $300 billion annually supporting their domestic agricultural markets – a figure equal to the GNP of sub-Saharan Africa and six times the amount given in bilateral aid.

Before Doha even began the EU wished to include three new areas for discussion; investment and competition policy and new rules governing trade and the environment even though many developing countries don’t even have competition authorities. However, of these new issues, the environment-related provisions proved the most difficult point of contention with the EU looking for assurances that the “precautionary principle” would be written into WTO law thereby protecting their citizens from the potential dangers of uncertain science as with GM foods. Developing countries on the other hand saw the EU’s environmental concerns as a back door to further protectionism; envisaging in a low-tariff environment the blocking of their exports over “green” issues through the insistence of eco-labelling and so forth.

The reluctance to embrace this expanded agenda at the expense of a focus on developing world concerns was seen in the months leading up to the Doha Ministerial by the October 23rd 2001 statement by the G-77 and China warning that the rich countries must put helping the poor at the centre of discussions. Mike Moore, Director-General of the WTO, reiterated these sentiments the following week endorsing the call for a development-focused round of talks.

There was also some outstanding issues left over from the Uruguay round. The agreement on Trade Related Intellectual Property Rights (TRIPS) needed to be revised in light of the AIDS crisis – South Africa, Brazil and India wanted a blanket exemption so they could supply their populations with affordable generic drugs whilst patent-holding lobbyists sought guarantees against their re-export into Western markets. In addition there were also over a 100 agreements identified by developing countries which had as yet to be effectively implemented. The most important of these “implementation issues” from the point of view of the global South related to the North’s obligations to open their markets more fully for developing country exports.

For example, many African, Asian and Latin American countries still faced restrictions in areas where, in the absence off trade-distorting domestic subsidies provided by the EU, US and Japan they would otherwise have a competitive advantage due to their low-cost environment. In addition to this subsidy regime they had asked that provisions governing the practice of “tariff escalation” be revised as promised to allow for greater access of Southern products into industrial nations. Tariff escalation simply entails the successive raising of import levies indexed on the amount of processing underwent by basic commodities. Some decried the practice from the point of view that it encouraged developing countries to produce only those goods which would receive a lower tariff;and thus discouraged the development of local industries in the global South that focused on providing highly processed end-products. One need only look at the number of Fortune 500 companies in the agri-business sector that source their raw materials cheaply from producers in the South to realise the kind of lobbying power opposed to any changes which would realign the “natural” competitive advantages here.

Related to this, was the call by the poorest African states, prior to Doha, to be exempted from the Trade-Related Investment Measures (TRIMs), set for implementation by 2003. Under these measures, they were obliged to remove from their statute books legislation protecting local businesses and industry – the very agents that would be poised to take advantage of an environment more conducive to the export of highly processed goods – from open competition with those foreign companies who would avail of a more liberal FDI regime. Prior to the commencement of the Doha round the US continued to state that it supported the “full and faithful implementation” of the WTO agreements, meaning that developing countries must meet the obligations they took on in Marrakech (where the Uruguay round was completed in 1995), and within the agreed-upon time frame.

Yet, despite all these reservations and unfinished business left over from the Uruguay round on November 14th 2001 in Doha, Qatar, the WTO’s 142 members agreed, 18 hours after their talks deadline, that they were ready to begin a new round of trade talks. African countries were eventually won over by a declaration that the TRIPS agreement should not prevent them dealing with the AIDS crisis; i.e. they could produce generics and exceptions to patent controls could now be made on public health grounds. Other poorer countries were given more time to work on the “implementation” issues and promised help with “capacity-building”.

India almost pulled out of negotiations citing their wariness of embracing the EU’s insistence on including the Singapore Issues (investment and competition policy, trade and the environment) on the talks agenda along with the US reluctance to liberalize textiles and soften their anti-dumping measures, particularly with regard to steel which is protected by powerful lobby groups in Washington. Activists from the South perhaps understood something of the bind Robert Zoellick, the US Trade Representative was in, in this respect, given that Congress had yet to approve Fast-Track negotiating authority for the Bush Administration. Later called Trade Promotion Authority this had been pulled by Congress in 1994 and if approved in 2002 would grant the Bush Administration the ability to present a negotiated trade agreement as a “yes” or “no” vote to Congress. Without TPA it was considered doubtful whether a Doha Trade Agreement would survive a process of congressional nit-picking given the powerful political connections of the cotton and steel lobbyists.

The EU for their part were forced to accept a stronger commitment to phase out their export subsidies and to make cuts in their domestic supports, despite fierce opposition from the French. But as one African said at Doha, issues that “may lose elections in France are life and death in Tanzania.”

Commitments from the North were also made to reduce their peak tariffs on heavily processed or industrial goods such as textiles. This was a key concession as Lesser Developed Countries (LDC’s) were hitherto obliged to specialise in the export of primary commodities because of the lower import tariffs. This had the effect of help driving the overall price for commodities down as they were competing against other LDCs who were likewise taking advantage of the lower tariff band. It also addressed one of the main grievances that developing countries felt were largely due to the Uruguay round – in the nine years from the birth of the WTO in 1994 to 2003 nonpetroleum primary commodity prices plunged to historic lows falling on average by more than a quarter.

This was disastrous in terms of generating foreign currency since 70% of export revenues for developing countries comes from agriculture. According to the September 2002 Journal of International Trade Statistics in the period from 1995-2001 cereal prices were down 31%; coffee was down 65%, cocoa 24%, food commodity prices were down 24%, timber was down 18%, cotton 51%, wool 26% and rubber prices were down 62%. Likewise, in UNCTAD’s 2002 Trade and Development Report it was noted that extreme dollar-a-day poverty rose for people in these primary-commodity exporting countries where the percentage of people earning less than a dollar a day grew from 63% of the population in 1981-83 to 69% in the 1997-99 period.

However, the success of the Doha talks was limited to the adoption of a framework for discussion and the setting of a timeline to accomplish an agreement. Nothing as yet had been decided. As the Economist put it;

“The Doha agenda is based on a gamble: that poor countries, who felt they were given a raw deal by the previous Uruguay round of trade negotiations that ended in 1994, will now feel that rich countries are prepared to open their markets. If poor countries are not convinced of this, the Doha round will fail.”

So, given that the Doha round was now accepted as being a pro-poor “development round” with liberalization of agriculture as its central plank the first nail in its coffin was surely provided by the 2002 US Farm Bill. This election year extravaganza passed by the House and Senate in May 2002 was a remarkable boon for farmers comprising an additional 80% boost in agricultural spending for market losses amounting, roughly, to a figure of $82 bn over ten years. The bill, as the Economist remarked “extended or re-introduced subsidies for a host of farm products”. For America’s biggest crops; soybeans, wheat and corn it invented new payments related to price and production and thus were highly trade distorting; exactly the opposite of what Doha was supposed to be about. Moreover, three quarters of the cash would go to the richest 10% of farmers making US subsidies per farm three to four times that of European levels. In the Uruguay round countries had agreed to cut and set ceilings for their trade-distorting subsidies. At this time, America’s had been $19.1 bn. The 1996 Freedom to Farm Act had aimed to phase out subsidies for most agricultural products but as prices fell in the late 90’s (see above) farmers cried foul and Congress capitulated with emergency payments pushing up total support which threatened US commitments under Uruguay. As the Economist put it at the time;

“The political clout of farm states in an election year led to this gross subsidy-fest, with lawmakers falling over themselves to dole out cash to farmers The signal to the rest of the world is unambiguous. American officials in Geneva (WTO H.Q.) may be talking about freer trade in agriculture, but Washington politicians are sending American farmers exactly the opposite message.”

And all it seems to win over tight seats in the November Senate elections in states with powerful farming lobbies such as Iowa, Missouri and South Dakota. Clearly the Farm Bill sent all the wrong messages to other OECD WTO signatories who had been hard-pressed under the Doha framework of talks to relinquish their support to farmers. Europe, who were loathe to make any commitments on CAP reform could now point to the example of the US’s most recent protectionist surge and, in fact, the following October, the French president, Jacques Chirac, made a deal with the German chancellor, Gerhard Schroeder, to keep CAP spending broadly unchanged until 2013. After the Farm Bill, US support to farmers amounted to 25% of the value of agricultural produce. This, however, still lagged behind the coddled European farmers who still accounted for half the EU’s budget of $200 bn and who receive 35% of the value of agricultural produce in supports and Japan who give their farmers an outrageous 60% of its value in 2002.

In August, Congress voted 215-212 to grant Bush Fast-Track negotiating power but this authority now appeared devoted to the pursuit of bilateral trade agreements such as CAFTA, NAFTA and the FTAA rather than the multilateral “development round” of Doha. The slow motion coup detat was evidently giving itself a bilateral makeover pressing for regional negotiations in an attempt to dilute LDC bargaining power. Meanwhile, poor countries became increasingly skeptical before the Cancun ministerial. Apart from the US, EU and Japan’s seeming unwillingness to do anything to liberalize their agricultural sectors they were actively reneging on the solemn promises delivered in Doha which got the second round of talks going in the first place. The tariff reductions to allow easier access to their imports never materialized along with the promises of cheap access to medicines for TB, malaria and AIDS; America refused to endorse a formula for transfer agreed upon by all the other parties.

On August 30th , less than a month before the Cancun ministerial, a deal was cut which allowed poor countries to import generics ‘in case of emergencies’. The tepidness of this solution on such an emotive issue was lost on no-one. By April 03 James Wolfenssohn, the World Bank president was prompted to describe the talks over subsidy cuts as “a dialogue of the deaf”. For many, a litmus test of the supposed pro-poor agenda of Doha was the fate of the West African cotton exporter group – Burkina Faso, Mali, Chad and Benin. America gives 36% (organicconsumers.org) of its 25,000 cotton farmers $3bn a year in trade-distorting subsidies that produce $4bn worth of cotton that depress world prices and wreaks havoc on the livelihoods of traditional exporters. That the draft text produced half-way through Cancun could make only vague pledges “to review the textiles sector” and then suggested that perhaps the African countries may be “encouraged to diversify out of cotton”, told participants in other discussion groups all they needed to know – nothing had changed since the Uruguay manipulations; US and EU politicians were still shamelessly in hock to their pampered robber baron farmers.

The Singapore Issues were next on the agenda. The South refused to budge still reeling over the extent of the betrayal on cotton subsidies. Two days later 90 countries signed a letter saying they were not prepared to move into talks in these areas. Pascal Lamy, the EU’s chief negotiator whittled them down to three then two and finally just before the talks imploded insisted they should at least discuss “trade facilitation”. In the end the outraged African countries refused to discuss any of the four Singapore issues and South Korea said it could only accept negotiations on all four. At this point, Luis Ernesto Derbez, Mexico’s foreign minister and chairman of the Cancun meeting canceled the conference under the premises of an impasse of interests.

Clearly, the developed countries had either completely misread the South’s determination to end the scandal of subsidies or they had no intention of ever coming to an agreement; being happy with the spoils they had already received after Uruguay. Bilateral trade agreements now appear to be the order of the day and why not as from the rich country perspective this dilutes their counterparty’s bargaining power and makes it impossible for them to apply the leverage required to phase out the scandalous system of subsidies.

CIA Crushes ‘Spiritual Socialism’ in Guatemala

The 1944 Guatemalan revolution saw “the little Napoleon of the tropics”, Jorge Ubico, overthrown amid scenes of jubilation and demands for democratic reforms. Once described by Tomas Borge as “crazier than a half dozen opium smoking frogs” his apparatus of power was dismantled and a new constitution adopted which for the first time extended the suffrage to all adults. Jose Arevalo, a popular teacher among the poor, was returned as the new president with an overwhelming 85% of the vote.

Under his new programme for reform, dubbed “spiritual socialism” a third of government income was set aside to address pressing social needs; hospitals and schools were built, a programme of immunizations was put in place and a nationwide literacy campaign established. Harsh vagrancy laws were abolished and in 1947 a new labour code was adopted giving workers the right to strike and form unions. Some coffee farms were turned into cooperatives, tenants were protected from summary eviction and a new national development agency was set up to provide technical assistance and lines of credit to peasant farmers. Obviously these reforms came at a price, stirring resentment among some old-school military figures of the Ubico era, wealthy landowners and foreign businesses who had extensive holdings in the country – especially the United Fruit Company (UFCO).

Nicknamed El Pulpo (the Octopus) by locals the UFCO controlled vast territories and transportation networks throughout Central America, Columbia , Ecuador and the West Indies. In How the United Fruit Company Shaped the World’, Peter Chapman called it a law unto itself’, and the first of the modern multi-nationals’ which specialised in coup d’etats and the support of repressive regimes’.

After the 1944 revolution, Guatemala had become a mecca for socialist radicals including the young Che Guevara who in 1953 wrote to his family in Argentina; “Along the way I had the oppurtunity to pass through the dominions of the United Fruit … I have sworn before a picture of the old and mourned comrade Stalin that I won’t rest until I see these capitalist octopuses annihilated. In Guatemala I will perfect myself and achieve what I need to be an authentic revolutionary”.

Back in 1901 the government of Guatemala hired the UFCO to manage its postal service but by 1930 it had absorbed over twenty rival firms to become the largest employer in Central America. It held vast tracts of lands which it withheld from farmers who wanted a share of the banana trade.

It was this manipulation of land use rights which eventually led to a conflict with Arevalo’s successor, Jacobo Arbenz, who was elected on a promise to continue the reforms of his popular predecessor. Arbenz was no fool however – well aware of the Monroe Doctrine and the US policy of containment in an era of budding cold war suspicions, sought to distance himself – publicly at least – from some of the more radical leftist elements within Guatemala. After winning the presidential elections of 1950 with 65% of the vote, for instance, he promised to raise the standard of living by transforming the country into “an independent capitalist nation”.

Arbenz became increasingly radicalised however and it was the law of agrarian reform, passed in July 1952 that finally drew the ire of Washington. A memorandum from Director of Intelligence (Smith) to the Under Secretary of State (Bruce) dated Dec 12, 1952 talks of the Guatemalan government’s radical and nationalist policies’ that are mobilizing the hitherto politically inert peasantry’ and which have the support or acquiescence of almost all Guatemalans’. It also mentions the threat to large landholders and to certain foreign economic interests, especially the United Fruit Company’.

For the first time in Guatemalan history the government had responded to the needs of its indigenous population by attempting to rectify the deeply inegalitarian patterns of land ownership. Idle and state-owned land would be distributed to the landless and the former owners of the land were to be compensated with government bonds. But the value of the land was calculated on the basis of the cosy tax they had been paying, usually a fraction of its true value. And so, between 1953 and 1954 almost 9,000 square kilometres of land were redistributed to some 100,000 peasant families. The landowner most seriously affected by the reforms was the United Fruit Company, which only farmed around fifteen percent of its holdings, and thus lost about half of its property.

But El Pulpo’s tentacles were everywhere. The brother of the Assistant Secretary of State for Inter-American Affairs John Moore Cabot had once been president of United Fruit and Ed Whitman who was United Fruit’s principal lobbyist was married to President Eisenhower’s personal secretary, Ann Whitman. However, it was with the appointment of their own board member and largest shareholder Allen Dulles as head of Central Intelligence in Feb, 1953 that Arbenz’ days became truly numbered. His brother, John Foster Dulles was Secretary of State and pretty soon they both convinced Eisenhower to approve plans to overthrow the most popular government in Guatemala’s history.

In the event, Operation Washtub’s first step was to plant a phoney cache of Soviet arms in Nicaragua and then declare them the unequivocal evidence of nefarious ties to Moscow. As he relinquished his presidency under heavy bombardment on the night of June 27th, 1954, Arbenz called the invading army “a heterogeneous Fruit Company expeditionary force”. The following week, John Peurifoy, the US ambassador to Guatemala, flew the new government to Guatemala aboard a US Air Force plane. So, with the mopping up complete, Carlos Castillo, the son of a large landowner, was given the dictatorship – his party being the only one allowed run in the 1955 elections. In the end, the only recorded evidence uncovered by CIA operatives of Soviet influence’ were two bills to the Guatemalan Communist Party from a Moscow bookstore – for $22.95.

Thus ended ten years of “Spiritual Socialism”.

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