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Thousands of workers have returned to work at a shoe factory in the southern Chinese industrial city of Dongguan, amid allegations of police brutality to quell their protests on Thursday.

At least 2,000 workers demonstrated outside the shoe factory over the sacking of middle managers and the suspension of overtime, which in effect cut wages. The factory is owned by the Taiwanese company Pou Chen, which makes shoes for brands such as Nike and Adidas.

Workers said the firings were related to a drop in orders at the factory and a decision by management to move jobs to another factory in the inland province of Jiangxi.

Factories in southern China are struggling because of rising labour costs over the past year, and a collapse in orders from Europe since the third quarter as the eurozone debt crisis has dragged on.

Earlier this week, Zhu Xiaodan, Guangdong’s acting governor, said the province, which accounts for a quarter of China’s trade, had recorded a drop in exports of about 9 per cent in October because of a collapse in orders from Europe. He said that contrasted with the growth of imports and exports of 26 per cent in the first half of the year.

As labour costs have risen by double-digit rates this year, many companies have moved production from southern China to south-east Asia and China’s inland provinces.

Geoffrey Crothall of the China Labour Bulletin, a Hong Kong-based workers advocacy group, said he expected more labour unrest as other manufacturers shifted production.

“It’s going to be tricky convincing workers [in Guangdong] to move inland,” said Mr Crothall, who added that many young migrants preferred living in Guangdong’s bustling cities. “It’s pot luck where the relocation happens. Will workers have to sign new contracts if they are moved inland?”

About 19 workers were detained by police and later released, according to internet reports. Several posted photographs online of beatings they had sustained in the protests.

A reporter covering the protests for Southern Daily, a Guangzhou newspaper, wrote in a blog about overhearing a conversation between a child and his injured father.

“Why didn’t you call the police after being beaten?’” the child asked. The father told his child he was beaten by police, the reporter said.

Pou Chen fired 18 middle level managers and workers in late October, one of the factors that prompted the protest. One of the factory managers who lost his job wrote in a blog that the company had promoted him as recently as July.

“I have won awards every month. I love my factory and my family works here too,” he wrote in a post late last month.

Pou Chen did not respond to queries about the protests.Additional reporting by Zhou Ping in Hong Kong

By Rahul Jacob

18 November 2011

@ Financial Times

Inquiring minds scattered across the world have been pondering whether Washington elites are sneakily slouching towards Beijing – as in eventually focusing on China as the ultimate bogeyman and catalyst of the Pentagon-denominated Long War.

It’s as if Iraq and Afghanistan, not to mention Libya and the fight for African resources, were mere pawns in the master chess game of the 21st century featuring the US and China.

The Arab Spring, in its early Tunisian and Egyptian chapters, led to the impression that the neo-conservatives promoted ‘clash of civilisations’ was over.

But the 2012 race to the White House has revealed that it is a return of the living dead. With the troubling add-on that Washington reserves for itself the right of nuclear first strikes against any possible confrontation with competitors – China and Russia.

So it’s time to back off and examine how the leadership in Washington and Beijing is interpreting the future.

Exhibit A is China’s Peaceful Development, a white paper released by the State Council Information Office, the cabinet at the heart of the system in Beijing.

Exhibit B is America’s Pacific Century, a wittily-titled essay published by Foreign Policy magazine and written by “global superstar” (according to CNN) and smart power practitioner US Secretary of State Hillary “We came, we saw, he died” Clinton.

Readers are strongly encouraged to read both documents and draw their own conclusions.

Don’t rock my domestic boat

First a word on how Beijing works. The 370-member Central Committee – including ministers, provincial leaders, the top military brass, heads of state companies – is a sort of mega-board of directors of the Chinese Communist Party.

The Central Committee selects the 25-member Politburo. And the Politburo selects the nine-member Standing Committee, the holy of the holies. It’s fair to assume the white paper has been commissioned and approved by these gentlemen.

The Politburo and the Standing Committee are responsible for the Communist Party’s tight grip on the Chinese state, the economy, the civil service, the military, police, education, the media, and last but not least, the carefully constructed official narrative of how China finally got rid of repeated historical humiliations by foreigners and is now a resurgent civilisation.

The white paper has a crystal clear objective; to explain the Chinese model – and the mind-bending subtleties of “socialism with Chinese characteristics” – to the West.

The target audience is Washington and London, Paris, Berlin and Rome.

Yet the fact that Western corporate media barely noticed – not to mention discussed – the paper is already troubling.

The white paper stresses China’s “strong collective consciousness” and “sense of social responsibility” as much as the “multipolarity” of international relations. At the same time, in a subtle nod towards Washington, it rejects a “dangerous cold and hot war mentality”.

Three ultimate fears prevail in Beijing’s narrative. 1) A hardened Cold War mentality blinding the West; 2) The possibility of a trade war with the West; 3) Luan (“chaos”) of the political kind, provoked by outsiders who resent China’s phenomenal economic success.

Even while discussing foreign policy, the paper makes it clear China’s top priority is domestic stability.

China’s interpretation of foreign investment, for instance, is that it is welcomed as long as it enhances domestic stability.

Thus everything is subordinated to “harmonious development” – Chinese President Hu Jintao’s trademark doctrine.

That even implies, in the future, mechanisms to allow the Chinese people to “supervise the government” – something that in the West may be interpreted as democracy, even though not related to Scandinavia’s.

While Beijing endlessly worries about domestic stability, the paper also stresses how dangerously easy it would be for a global economic crisis to force countries – another nod to Washington – to go to war.

So, essentially, Beijing wants “a peaceful mainly economic development in a peaceful multipolar world”. Yet the multi-trillion dollar question is whether the ‘Atlanticist’ West will let it happen.

Hillary’s concerns

Hillary’s essay is bound to express the views of the State Department, which may not necessarily be shared by the Pentagon and the CIA.

For all the smart power rhetoric, the stress is on “continued American leadership well into this century”.

Beijing will also be slightly disturbed that “our treaty alliances with Japan, South Korea, Australia, the Philippines and Thailand are the fulcrum for our strategic turn to the Asia-Pacific”.

Hillary feels obliged to nod to her “Chinese counterparts, State Councillor Dai Bingguo and Foreign Minister Yang Jiechi”, as they have been engaged in “candid discussions about important challenges like North Korea, Afghanistan, Pakistan, Iran, and developments in the South China Sea.”

“Challenges” is the understatement of the century; China and the US fiercely disagree on all these dossiers.

A measure of wishful thinking is at hand, as in “we look to China to take steps to allow its currency to appreciate more rapidly, both against the dollar and against the currencies of its other major trading partners.”

It won’t happen – and Beijing has already made it clear.

As in a Freudian slip, Hillary let it know that “Europe, home to most of our traditional allies, is still a partner of first resort”. And then “we move forward to set the stage for engagement in the Asia-Pacific over the next 60 years”.

So what is it going to be; a special relationship with Europe and just “engagement” with Asia-Pacific?

Unlike Beijing in the white paper trying to address the West’s concerns, Hillary only seems bothered to address Americans.

What she does not say, but leaves implied, has more impact than the text itself. The eternal notion of the US as the indispensable nation. The barely disguised feeling of “danger” about the rise of China. The US in Asia as a benevolent outside power.

Beijing would have noticed there is not a word on Washington’s global drive to control remaining sources of oil, while trying to make life to Beijing as hard as possible.

Not a word on the Pentagon-defined “arc of instability”: from the Maghreb to – you guessed it – Western China.

Not a word on the “need of strategic stability” for the Indian Ocean – which will put the US on a collision course not only with China but also with India.

Not a word on the US Navy’s 2007 maritime strategy – “sustained, forward presence” in the Indian Ocean and the Western Pacific. Or the US Marine Corps 2008 “Vision and Strategy” – covering up to 2025 – defining the Indian Ocean as a privileged theatre of conflict.

Unlike Washington and Tehran, who never talk to each other, at least Washington and Beijing are talking, even if past one another.

Beijing has already announced its peaceful intentions. But when it looks at Africa – and sees its trade and commercial deals being counter-acted by a Pentagon-led militarisation drive – the conclusion is self-evident.

One can only hope that the parties will keep speaking softly – while carrying no big stick.

By Pepe Escobar

31 October 2011

@ Al- Jazeera

Pepe Escobar is the roving correspondent for Asia Times. His latest book is named Obama Does Globalistan (Nimble Books, 2009).

 

It has been little more than a fortnight since Muammar Gaddafi was pulled from a culvert in his hometown of Sirte and shot dead.

As Libya struggles to rebuild, power effectively rests in the hands of the heavily armed militias who ousted the former dictator.

But that hasn’t stopped the British government from pushing ahead with plans to renew arms sales to the war-torn country. The Independent has learned that a defence industry trade delegation is planning to travel to Libya early next year in the hope the country’s new pro-western National Transition Council will become lucrative customers.

UK Trade and Investment (UKTI), the government department which promotes British business interests abroad, is planning to take defence manufacturers to Tripoli in February for a series of meetings with senior government officials. The news will alarm human rights campaigners, who have spent the past nine months documenting the readiness of autocratic Middle Eastern regimes to use imported equipment to violently quell popular opposition movements.

UKTI insists that plans to send the delegation are still at a discussion stage and will only involve “civil security”, not military hardware. “Libya is still under a UN arms embargo so any exports would need to go through the UN,” a UKTI spokesperson said.

“The mission would be to see where Britain could offer help on civil security such as police training and border patrols. We have not approached any British companies yet, although we hope to do so over the coming weeks.”

Last month Lord Green, minister for Trade and Investment, visited Tripoli to see what role Britain could play in rebuilding Libya’s infrastructure and economy. After months of internecine conflict in a country with vast energy reserves, international businesses are well aware of the vast sums of money to be made.

Those nations that took part in the Nato airstrikes against Gaddafi’s regime – notably Britain and France – are determined to reap the rewards of backing the National Transition Council and claw back some of the money spent on their costly bombing campaign. Some have estimated the value of contracts in oil, infrastructure and education to be worth as much as £200bn.

Kaye Stearman, from the Campaign Against Arms Trade, criticised the delegation plans and its timing. “The UK government professes to support a democratic and peaceful future for Libya, yet, even before the dead and injured have been counted, it is mounting trade missions to sell arms to a damaged and traumatised people,” she said. “They show no shame at their past record on arms sales and no willingness to change.”

During questions in Parliament this week, Trade Minister Mark Prisk revealed a list of other countries UKTI’s Defence and Security Organisation are planning to visit over the next five months. Among those listed are a number of human rights abusers including Saudi Arabia, Colombia, Kazakhstan and India. Later this month a delegation will travel to the Saudi capital Riyadh in what a UKTI flyer has advertised as “a great opportunity for UK Defence & Security companies to meet decision makers of the major Saudi organisations active in Saudi Arabia’s Defence & Security sector”.

Saudi Arabia is preparing for its first major security exhibition, IFSEC Arabia. The country is one of Britain’s largest defence customers despite concerns over its autocratic rulers and a dismal human rights record. Recently Saudi troops were sent to Bahrain to help the Sunni Khalifa dynasty quell pro-reform protests led by the country’s majority Shi’as.

Brothers In Arms

Saudi Arabia

King Abdullah’s monarchy remains Britain’s largest arms purchaser despite its dismal human rights record and involvement in suppressing protests in Bahrain earlier this year. Earlier this summer Saudi Arabia was invited to Britain’s DSEi arms fare and there are UKTI (UK Trade and Investment) trips planned for this month and March next year. In 2006 an attempt by the Serious Fraud office to investigate bribery allegations over the sale of Typhoon fighter jets to Saudi Arabia was halted by Tony Blair.

Colombia

UKTI is planning to send a defence delegation to Colombia in February. The government insists that weapon sales to Colombia are minimal and that defence contracts revolve around drug busting. But Colombia’s armed forces, who lead the fight against drugs, have been accused of a plethora of human rights abuses.

By Jerome Taylor

5 November 2011

@ The Independent

 

In the fall of 2000, twenty-five years after the end of the war in Indochina, Bill Clinton became the first US president since Richard Nixon to visit Vietnam. While media coverage of the trip was dominated by talk of some two thousand US soldiers still classified as missing in action, a small act of great historical importance went almost unnoticed. As a humanitarian gesture, Clinton released extensive Air Force data on all American bombings of Indochina between 1964 and 1975. Recorded using a groundbreaking ibm-designed system, the database provided extensive information on sorties conducted over Vietnam, Laos, and Cambodia. Clinton’s gift was intended to assist in the search for unexploded ordnance left behind during the carpet bombing of the region. Littering the countryside, often submerged under farmland, this ordnance remains a significant humanitarian concern. It has maimed and killed farmers, and rendered valuable land all but unusable. Development and demining organizations have put the Air Force data to good use over the past six years, but have done so without noting its full implications, which turn out to be staggering.

The still-incomplete database (it has several “dark” periods) reveals that from October 4, 1965, to August 15, 1973, the United States dropped far more ordnance on Cambodia than was previously believed: 2,756,941 tons’ worth, dropped in 230,516 sorties on 113,716 sites. Just over 10 percent of this bombing was indiscriminate, with 3,580 of the sites listed as having “unknown” targets and another 8,238 sites having no target listed at all. The database also shows that the bombing began four years earlier than is widely believed—not under Nixon, but under Lyndon Johnson. The impact of this bombing, the subject of much debate for the past three decades, is now clearer than ever. Civilian casualties in Cambodia drove an enraged populace into the arms of an insurgency that had enjoyed relatively little support until the bombing began, setting in motion the expansion of the Vietnam War deeper into Cambodia, a coup d’état in 1970, the rapid rise of the Khmer Rouge, and ultimately the Cambodian genocide. The data demonstrates that the way a country chooses to exit a conflict can have disastrous consequences. It therefore speaks to contempor­ary warfare as well, including US operations in Iraq. Despite many differences, a critical similarity links the war in Iraq with the Cambodian conflict: an increasing reliance on air power to battle a heterogeneous, volatile insurgency.

We heard a terrifying noise which shook the ground; it was as if the earth trembled, rose up and opened beneath our feet. Enormous explosions lit up the sky like huge bolts of lightning; it was the American B-52s.

— Cambodian bombing survivor

On December 9, 1970, US President Richard Nixon telephoned his national-security adviser, Henry Kissinger, to discuss the ongoing bombing of Cambodia. This sideshow to the war in Vietnam, begun in 1965 under the Johnson administration, had already seen 475,515 tons of ordnance dropped on Cambodia, which had been a neutral kingdom until nine months before the phone call, when pro-US General Lon Nol seized power. The first intense series of bombings, the Menu campaign on targets in Cambodia’s border areas — labelled Breakfast, Lunch, Supper, Dinner, Dessert, and Snack by American commanders — had concluded in May, shortly after the coup.

Nixon was facing growing congressional opposition to his Indochina policy. A joint US–South Vietnam ground invasion of Cambodia in May and June of 1970 had failed to root out Vietnamese Communists, and Nixon now wanted to covertly escalate the air attacks, which were aimed at destroying the mobile headquarters of the Viet Cong and the North Vietnamese Army (vc/nva) in the Cambodian jungle. After telling Kissinger that the US Air Force was being unimaginative, Nixon demanded more bombing, deeper into the country: “They have got to go in there and I mean really go in…I want everything that can fly to go in there and crack the hell out of them. There is no limitation on mileage and there is no limitation on budget. Is that clear?”

Kissinger knew that this order ignored Nixon’s promise to Congress that US planes would remain within thirty kilometres of the Vietnamese border, his own assurances to the public that bombing would not take place within a kilometre of any village, and military assessments stating that air strikes were like poking a beehive with a stick. He responded hesitantly: “The problem is, Mr. President, the Air Force is designed to fight an air battle against the Soviet Union. They are not designed for this war…in fact, they are not designed for any war we are likely to have to fight.”

Five minutes after his conversation with Nixon ended, Kissinger called General Alexander Haig to relay the new orders from the president: “He wants a massive bombing campaign in Cambodia. He doesn’t want to hear anything. It’s an order, it’s to be done. Anything that flies, on anything that moves. You got that?” The response from Haig, barely audible on tape, sounds like laughter.

The US bombing of Cambodia remains a divisive and iconic topic. It was a mobilizing issue for the antiwar movement and is still cited regularly as an example of American war crimes. Writers such as Noam Chomsky, Christopher Hitchens, and William Shawcross emerged as influential political voices after condemning the bombing and the foreign policy it symbolized.

In the years since the Vietnam War,something of a consensus has emerged on the extent of US involvement in Cambodia. The details are controversial, but the narrative begins on March 18, 1969, when the United States launched the Menu campaign. The joint US–South Vietnam ground offensive followed. For the next three years, the United States continued with air strikes under Nixon’s orders, hitting deep inside Cambodia’s borders, first to root out the vc/nva and later to protect the Lon Nol regime from growing numbers of Cambodian Communist forces. Congress cut funding for the war and imposed an end to the bombing on August 15, 1973, amid calls for Nixon’s impeachment for his deceit in escalating the campaign.

By Taylor Owen and Ben Kiernan

@ The Walrus, the October 2006 magazine

A one-day protest in Oakland, California on Wednesday that involved more than ten thousand people was followed by police action in the early morning hours of Thursday, including the use of tear gas and rubber bullets, followed by dozens of arrests.

The demonstrations on Wednesday involved the participation of many workers and youth outraged over earlier police actions that led to the near-fatal injury of one protester, Iraq war veteran Scott Olsen, who was struck in the head by a projectile. The protests were among the largest organized by the Occupy movement against inequality in the US.

The day became a semi-official event, however, endorsed by the Democratic Mayor Jean Quan, who had overseen the police violence in the first place. The protests were coordinated with the trade unions, and police presence was largely absent during the day.

Mayor Quan issued a statement on Wednesday saying: “We have spent the week collaborating with the Port, county, school district officials as well as clergy, business, community and activity groups to ensure that the day goes smoothly.”

Around 11 pm, however, protesters started occupying the abandoned former offices of Travelers Aid Society, a non-profit organization for the homeless that shut down due to budget cuts. The aim of the “occupation” was to turn the building into a community center.

In response the police fired tear gas and rubber bullets at protesters, and encircled the plaza. By morning dozens of protesters were arrested and at least three were hospitalized.

Since the beginning of the port occupation there had been signs that the police were hoping for a provocation later. After dark a police helicopter had started circling the port shining its spotlight on protesters in the street. Since the street was already well lit with lampposts, this served no purpose other than keeping tensions high.

The actions of a few individuals who broke windows and engaged in vandalism were used as a pretext for police action. As is always the case with such actions, the operations of police provocateurs is likely. According to one eyewitness who spoke to the World Socialist Web Site, some people on the protester side of the barricades responded to the initial police advance in “bizarre and erratic ways.” Most notably one man “appeared sort of out of nowhere” and “broke the windows of some local businesses and tossed trash cans at the police.”

That was far more excuse than the police felt they needed to redouble their use of tear gas and rubber bullets. According to a city press release that afternoon, over 80 people were arrested.

There have now been more than three thousand arrests since the Occupy movement began in September. Elsewhere in the US on Wednesday, protesters in Rochester and Seattle were arrested by police under the Democratic mayors of those cities. Police in Rochester, New York arrested 16 protesters on Wednesday and over 50 since last Friday.

In Seattle under Democratic Mayor Michael McGinn, at least three people protesting the CEO of JPMorgan Chase at a Sheraton Hotel where he was a keynote speaker were arrested, and six people were arrested earlier that day outside a Chase Bank. In both cases, the police made heavy use of pepper spray on large groups of protesters.

Meanwhile, the occupation of the port in Oakland ended calmly Thursday morning when a local president of the International Longshore and Warehouse Union, Richard Mead, invited the last protesters to breakfast and the morning shift started work.

The march on the port and its “shutdown” was agreed upon beforehand by the union bureaucracy and Democrats as a safe way for protesters to vent their anger without raising any of the deeper political questions surrounding the police violence.

Together with organizers who support the occupy movement’s “no politics” approach, the unions sought to engender a carnival like atmosphere to the exclusion of any political discussion. Although many people brought amplifiers and speakers to the port, they were used for music. Notably absent from the rally was any central area to speak about the issues facing workers and discuss the political issues raised by the occupy movement.

None of the unions called an actual strike on Wednesday. However several, most notably the Service Employees International Union and the Oakland Education Association, encouraged their members to take personal days and join the rally with manager approval. Officials from these unions were involved in the organizational meetings to plan the event. Quan also invited city workers to take furlough days.

Absent from every unions’ solidarity statement was any mention of the Democrats or the role they are playing in cutting social services and supporting the rich. Typical were the statements of George Gresham, president of SEIU 1199, the union’s biggest local, and Gerald McEntee, president of the American Federation of State, County, and Municipal Employees, who told the Washington Post that they expected the Occupy Movement to support Obama in the next elections.

By David Brown

David Brown is a WSWS.org writer

 

 

The Arab world saw great political turmoil in the beginning of 2011. The Tunisian dictator Zen el-Abidin was overthrown before January 2011 ended. Then a similar turmoil began in Egypt and hundreds of thousands of people poured in Tahrir square to protest against Hasni Mubarak, another long serving dictator who was forced to go and then Libya, Syria, Yemen and Bahrain. Now all this has been much written about and need not be repeated but what concerns us here is about the role of women in these revolutionary changes in These Arab countries.

In all these countries women played very significant role right from Tunisia to the Yemen. No one can underestimate their role. Both in Egypt and Yemen women initiatives played most crucial role. In fact the Tahrir Square mobilization was due mainly to a young girl’s appeal on the face-book. As everyone knows the social media as face book is called played important role in mobilization in the Islamic world against kings and dictators.

In fact the role of women in political mobilization was so crucial that it was being expected that Nobel for Peace this year would be given to three women from Arab countries i.e. Tunis, Egypt and Yemen but instead it went to women from Africa and Yemen, the later a Muslim woman who also played crucial role in protection of human rights and political mobilization for overthrow of President Salih though there still remains stalemate in Yemen.

What is most important to note is the role of women in political mobilization in the3se countries and secondly it shatters the myth that Muslim women merely sit at home and are worth nothing more than domestic workers and house makers. Muslim women have proved once again that they can mobilize people far more efficiently and purposefully. It is also interesting to note that many women in Tunisia and Egypt were quite active in trade unions and used their experience gained in trade unions to proper use and brought about change in political structure.

But post-revolution a shadow of doubt hangs over them? What this democratic revolution will give them? Or will it take over the rights they had gained under dictatorships.  There is lot of truth in this as much as there is possibility of Islamic laws, as they are, being reimposed in these countries. In Tunisia Ennehda Party has won elections which describes itself a moderate Islamic party. But fortunately Ennahda leader Ghanushi has declared that there will be no change in gender laws which clearly means polygamy will not be re-imposed.

However, Libyan women are not so fortunate. The Libyan leader who is projected as the new Prime Minister after ousting Ghaddafi has already announced that Islamic laws will be the only laws imposed and polygamy will be reintroduced and there will be no more restrictions on it. Ghaddafi, undoubtedly a dictator and had to go, had done lot of good in introducing and consolidating gender justice in Libya. He had given equal rights to women as provided for in Qur’an. He abolished polygamy and gave women important role in public life.

He even maintained that to confine women at home is an imperialist conspiracy to paralyse half the population in the Islamic world. He, therefore, even created special force for women in the army and assigned them duties of body guards. It was undoubtedly a revolutionary step. Now all this is likely to be reversed and the Libyan leader specifically was mentioning polygamy. It will of course remain debatable if the Shari’ah laws as evolved during medieval ages when patriarchy reigned supreme should be re-imposed as it is or  suitable changes in keeping with spirit of Qur’anic values be reformulated?

To say that polygamy is permitted by Qur’an and hence must be reintroduced is really injuring the spirit of Qur’an. At best it is half truth. Polygamy has been allowed in Qur’an but in specific context and with rigorous conditions. Anyone who reads the two verses in Qur’an on polygamy i.e. 4:3 and 4:129 would see that for Qur’an justice is more central than multiple wives. And if justice is so important can polygamy be made rule?

In early seventies whenever a dictator declared his country to be an Islamic state, he would introduce Hudud laws (Islamic punishments for theft, adultery etc. as if these punishments were more central than what factors motivated a person to commit these crimes or punishing is more important than reforming a person. Similarly today when dictatorial regimes end a declaration is made that family laws will be introduced and polygamy will be permissible.

As this writer has always maintained gender justice is very central to the Qur’an provided Qur’an is read in proper context and today with greater and greater role being played by women in public life it is all the more important that gender justice be made equally central in the Shari’ah laws through contextual and normative understanding of Qur’anic verses and shari’ah laws being based on such an interpretation of the Qur’anic verses.

The present Shari’ah laws will not be acceptable to women as education and awareness among them increases and pressure for change will continue to gather momentum. In fact Qur’an unambiguously stands for gender justice and equipped women with all the rights men were given. We are surprised how male interpreters missed this and equally surprising is that Muslim women submitted to these interpretations.

By Asghar Ali Engineer

5 November 2011

 

New York, New York – The current popular challenges to the Western-sponsored Arab dictatorships are hardly a new occurrence in modern Arab history. We have seen such uprisings against European colonialism in the region since its advent in Algeria in 1830 and in Egypt in 1882. Revolts in Syria in the 1920s against French rule and especially in Palestine from 1936 to 1939 against British colonial rule and Zionist settler-colonialism were massive by global standards. Indeed the Palestinian Revolt would inspire others in the colonised world and would remain an inspiration to Arabs for the rest of the century and beyond. Anti-colonial resistance which also opposed the colonially-installed Arab regimes continued in Jordan, in Egypt, in Bahrain, Iraq, North and South Yemen, Oman, Morocco, and Sudan. The massive anti-colonial revolt in Algeria would finally bring about independence in 1962 from French settler colonialism. The liberation of Algeria meant that one of the two European settler-colonies in the Arab world was down, and only one remained: Palestine. On the territorial colonial front, much of the Arabian Gulf remained occupied by the British until the 1960s and early 1970s, and awaited liberation.

After the 1967 War

Amidst the dominant melancholia that struck the Arab world following the 1967 defeat by Israel’s simultaneous invasions of three Arab countries and the occupation of their territories and the entirety of Palestine, the Palestinian revolutionary guerrillas’ challenge to Israel’s colonial power at the Battle of Karamah in March 1968 brought renewed hope to tens of millions of Arabs and renewed concern for the Arab neo-colonial dictatorships (Arafat’s much exaggerated role of his exploits during the battle notwithstanding). The Palestinian revolution was inspirational to many but it also coincided with revolutionary efforts not only around the Third World generally but also in Arab countries as well, which in turn, had inspired the Palestinians.

The best revolutionary anti-colonial news in the Arab world after the June 1967 defeat would come from the Arabian Peninsula. It was in November 1967 that the South Yemeni revolutionaries delivered an ignominious defeat to the British and liberated their country from the yoke of colonial Britain, which had ruled Aden since 1838. The South Yemenis would soon found the People’s Democratic Republic of Yemen, which would last for 22 years before its ultimate dissolution by North Yemen and its Saudi allies.

In neighbouring Oman, the on-going struggle to liberate the country entered a new stage of guerrilla warfare under the leadership of the People’s Front for the Liberation of Oman and the Arabian Gulf (PFLOAG), which came together in September 1968 as a result of the unification of a number of Omani guerrilla groups fighting the British-supported Sultan Said bin Taymur. The PFLOAG had liberated territory in Dhofar from which it continued to launch its attacks to liberate the rest of the country. Indeed national liberation movements were active across the Gulf, and not least in Bahrain where an on-going national liberation struggle, a workers’ movement, students and women’s activism, all coalesced against British colonial rule and their local servants.

Repression

But the US-British-Saudi-Israeli alliance was determined to crush all the revolutionary groups that it could defeat and co-opt those that it could not crush. The effort started in the Gulf. Bahrain, which had been the hotbed of workers and anti-colonial unrest for decades, continued its struggle against British domination and the Bahraini ruling family allied with British colonialism. But as the British were forced out of South Yemen and the threat to their Omani client continued afoot, they transferred their military command to Bahrain, a step that was followed  by massive British capital investment in the country (as well as in Dubai). These developments expectedly brought more repression against the Bahraini people and their national liberation movement. Indeed, it was in this context that the Shah of Iran laid territorial claims to Bahrain and threatened to annex it to Iran as its “fourteenth province.” His territorial ambitions would only be tempered by his Western allies and the United Nations in 1970, after which the Shah would give up on his claims in return for massive Iranian capital investment in the emerging small Arab states of the Gulf, including the United Arab Emirates. The West thanked the Shah for his magnanimity and continued to reward him diplomatically and politically.

On the Jordanian front, King Hussein’s army would reverse the Palestinian guerrillas’ triumphs and defeat them in a massive onslaught in September 1970. The PLO guerrillas would finally be expelled from the country completely in July 1971. However, the PLO guerrillas continued to have a strong base in Lebanon from which they continued to operate against Israel and the Arab dictatorships.

In Sudan, the communist party continued to get stronger in the late 1960s, until the 1969 coup by Ja’far al-Numeiri, who initially could not fully marginalise the communists and waited until he strengthened his regime in 1971 to do so. An attempted coup against his authoritarian rule failed. In its wake, he rounded up thousands of communists and executed all the party’s major leaders, destroying the largest communist party in the Arab world. The Numeiri dictatorship would continue until 1985 and soon the democratic struggle against him would fail bringing in the Saudi-supported candidate Omar al-Bashir who seized power in 1989 continuing in Numeiri’s footsteps.

Only the PFLOAG kept advancing in the early seventies, which required a massive effort on the part of the US-British-Saudi-Israeli alliance to defeat it. The Shah of Iran and the Jordanian King were subcontracted for the effort. They dispatched military contingents to Oman, and, abetted by British advisors, were finally able to defeat the guerrillas and safeguard the throne for Sultan Qabus, the son of Sultan Said, who overthrew his father in a palace coup in 1970 organised by the British.  With the final defeat of the Omani revolutionaries in 1976, the PLO remained the only revolutionary group that survived the onslaught alongside a poor and weak South Yemen, which would finally be swallowed up by the Saudi-supported North Yemen in 1990.

Co-Optation

Saudi and other Gulf money poured into the coffers of the PLO to make sure that Palestinian revolutionism, which was partially crushed in Jordan, would never turn its guns against another Arab regime again. Indeed, Gulf money would transform the PLO into a liberation group that was funded by the most reactionary regimes in the Third World. Arafat’s road to Oslo began after the 1973 war and the massive funding he would begin to receive from all oil-rich Arab dictatorships, from Gaddafi to Saddam Hussein and all the Gulf monarchies. It was this domestication of the PLO that impelled Arab regimes to recognise it in 1974 as the sole legitimate representative of the Palestinian people and the main reason why they supported its recognition by the UN that same year. Indeed, Arafat’s reactionary alliance with Arab dictators was such that some PLO intelligence apparatuses began to share intelligence on Arab dissidents with Arab dictators, including the PLO intelligence apparatus led by Abu Za’im who surrendered Saudi dissident Nasir Sa’id in December 1979 to Saudi intelligence based on the request of the Saudi ambassador to Lebanon. Said was never heard from again and is believed to have been killed by the Saudi authorities. On the diplomatic and solidarity front, while the Polisario front declared the independence of the Western Sahara in 1976, Arafat refused to recognise the state out of respect for his alliance with King Hassan II.

The New Uprisings

As the Palestinian revolutionary groups were the only ones not fully domesticated, as far as the US and other imperial powers were concerned, though they had become sufficiently domesticated from the perspective of the Arab regimes, the new challenge would come from the Palestinian people themselves who revolted in 1987 against their Israeli occupiers. It was this second Palestinian major revolt in half a century, which many now see as inspirational to the present uprisings across the Arab world, which had to be crushed. The Israelis tried their best to crush it but failed. The PLO took it over quickly lest a new Palestinian leadership supplant the PLO’s own authority to represent the Palestinians. As the PLO took over the intifada, efforts were made by the Israelis and the Americans to finally co-opt the PLO and neutralise its potential as a spoiler of US and Israeli policy in the region. It was in this context that Oslo was signed and the PLO was fully transformed from a threat to Arab dictatorships, their US imperial sponsor, and the Israeli occupation, into an agent of all three, under the guise of the Palestinian Authority, which would help enforce the Israeli occupation in an unholy alliance with Gulf dictators and the United States. From then on, PLO/PA guns will only target the Palestinian people.

The US-British-Saudi-Israeli alliance in the region today is following the same strategies they followed in late 1960s and early 1970s and continuing the strategy they followed with the PLO in the early 1990s. They are crushing those uprisings they can crush and are co-opting those they cannot. The efforts to fully co-opt the Tunisian and Egyptian uprisings have made great strides over the last few months, though they have not been successful in silencing or demobilising the populations. On the other side, Bahrain’s uprising was the first to be crushed with the efforts to crush the Yemenis continuing afoot without respite. It was in Libya and in Syria where the axis fully hijacked the revolts and took them over completely. While Syrians, like Libyans before them, continue their valiant uprising against their brutal regime demanding democracy and social justice, their quest is already doomed unless they are able to dislodge the US-British-Saudi-Qatari axis that has fully taken over their struggle – which is very unlikely.

The Palestinians

This brings us to the Palestinian scene. The Palestinian uprising or intifada of 1987 was the first unarmed massive civilian revolt to take place in decades. It was in the wake of the fall of the Soviet Union and the first US invasion of the Gulf that the United States decided to co-opt the Palestinian uprising by giving political and financial benefits to a PLO class of bureaucrats who would proceed to sell out the Palestinian struggle. Thus Arafat neutralised the uprising at Oslo in 1993 and went on to wine and dine with Israel’s and America’s leaders while his people remained under occupation.

But If the Palestinians were a source of concern to the Arab regimes after 1968 lest they help other Arabs revolt against their dictatorships, today, it is the Palestinian Authority (PA) that is worried that the Arab uprisings may influence West Bank Palestinians to revolt against the PA, which continues its intensive security collaboration with the Israeli occupation and its US sponsor. Indeed, while the Israelis failed in the late 1970s in their effort to create a political body of Palestinian collaborators through their infamous Village Leagues, the PA became, not the new “Urban Leagues” that many Palestinians dubbed it, but a veritable National League of collaborators serving the Israeli occupation. The PA’s recent bid for statehood and recognition at the UN and at UNESCO is an attempt to resolve the current stasis of its non-existent “peace process” and the dogged negotiations with the Israelis before the Palestinians revolt against it, especially given the dwindling dividends to the beneficiaries of the Oslo arrangement.

The PA indeed has two routes before it in the face of the collapse of the so-called “peace process”: dissolve itself and cease to play the role of enforcer of the occupation; or continue to collaborate by entrenching itself further through recognition by international institutions to preserve its power and the benefits to its members. It has chosen the second option under the guise of supporting Palestinian national independence. How successful it is going to be in its entrenchment bid remains to be seen, though its success or failure will be calamitous for the Palestinian people who will not get any independence from Israeli settler colonialism as long as the PA is at the helm.

As I have argued before, the Israeli-PA-US disagreement is about the terms and territorial size of the disconnected Bantustans that the PA will be given and the nature and amount of repressive power and weapons its police force would have to use against the Palestinian people, while ascertaining that such weapons would never have a chance of being used against Israel.  If Israel shows some flexibility on those, then the disconnected Bantustans will be quickly recognised as a “sovereign Palestinian state” and not a single illegal Jewish colonial settler will have to give up the stolen lands of the Palestinians and return to Brooklyn, to name a common place of origin for many Jewish colonial settlers. It is this arrangement that the PA is trying to sell to Israel and the US. Without it, the PA is threatening that West Bankers may very well revolt against it, which would be bad for Israel and the US. So far, neither the US nor Israel is buying it.

The Struggle Continues

As for the larger Arab context, those who call what has unfolded in the last year in the Arab World as an Arab “awakening” are not only ignorant of the history of the last century, but also deploy Orientalist arguments in their depiction of Arabs as a quiescent people who put up with dictatorship for decades and are finally waking up from their torpor. Across the Arab world, Arabs have revolted against colonial and local tyranny every decade since World War I. It has been the European colonial powers and their American heir who have stood in their way every step of the way and allied themselves with local dictators and their families (and in many cases handpicking such dictators and putting them on the throne).

The US-European sponsorship of the on-going counterrevolutions across the Arab world today is a continuation of a time-honoured imperial tradition, but so is continued Arab resistance to imperialism and domestic tyranny. The uprisings that started in Tunisia in December 2010 continue afoot despite major setbacks to all of them. This is not to say that things have not changed and are not changing significantly, it is to say, however, that many of the changes are reversible and that the counterrevolution has already reversed a significant amount and is working hard to reverse more. Vigilance is mandatory on the part of those struggling for democratic change and social justice, especially in these times of upheaval and massive imperial mobilisation. Some of the battles may have been lost but the Arab peoples’ war against imperialism and for democracy and social justice continues across the Arab world.

By Joseph Massad

18 November 2011

@ Al Jazeera

Joseph Massad is Associate Professor of Modern Arab Politics and Intellectual History at Columbia University. He is author of several books including: The Persistence of the Palestinian Question (Routledge, 2006) and Desiring Arabs (Chicago University Press, 2007), and Colonial Effects (Colomibia University Press, 2011).

NEW HAVEN – The United States has a classic multilateral trade imbalance. While it runs a large trade deficit with China, it also runs deficits with 87 other countries. A multilateral deficit cannot be fixed by putting pressure on one of its bilateral components. But try telling that to America’s growing chorus of China bashers.

America’s massive trade deficit is a direct consequence of an unprecedented shortfall of domestic saving. The broadest and most meaningful measure of a country’s saving capacity is what economists call the “net national saving rate” – the combined saving of individuals, businesses, and the government. It is measured in “net” terms to strip out the depreciation associated with aging or obsolescent capacity. It provides a measure of the saving that is available to fund expansion of a country’s capital stock, and thus to sustain its economic growth.

In the US, there simply is no net saving any more. Since the fourth quarter of 2008, America’s net national saving rate has been negative – in sharp contrast to the 6.4%-of-GDP averaged over the last three decades of the twentieth century. Never before in modern history has the world’s leading economic power experienced a saving shortfall of such epic proportions.

Yet the US found a way to finesse this problem. Exploiting what Valéry Giscard d’Estaing called the “exorbitant privilege” of the world’s reserve currency, the US borrowed surplus savings from abroad on very attractive terms, running massive balance-of-payments, or current-account, deficits to attract foreign capital.

The US current account, which was last in balance in 1991, hit a record deficit of $801 billion (6% of GDP) in 2006. This gap has narrowed in the past couple of years, but much of the improvement probably reflects little more than the temporary impact of an unusually tough business cycle.

This is where America’s multilateral trade deficit enters the equation, for it has long accounted for the bulk of America’s balance-of-payments gap. Since 2000, it has made up fully 96% of the cumulative current-account shortfall.

And that is what ultimately makes the China-centric blame game so absurd. Without addressing the root of the problem – America’s chronic saving shortfall – it is ludicrous to believe that there can be a bilateral solution for a multilateral problem.

Yet that is exactly what US officials, together with many prominent economists, believe America needs. Since the trade deficit is widely thought to put pressure on US jobs and real wages, the US-China trade imbalance has come under special scrutiny in these days of great angst. Yes, China does account for the largest component of America’s multilateral trade deficit – making up 42% of the total trade gap in 2010. Conscious outsourcing and supply-chain management decisions by US multinationals play an important role in exaggerating China’s share. But that does little to let China off the hook in the eyes of Washington.

Long-standing charges of currency manipulation provide the proverbial smoking gun that US politicians – of both parties – believe justifies the imposition of steep tariffs on China’s exports to the US (which totaled $365 billion in 2010). That was precisely the argument behind the US Senate’s recent overwhelming approval of a “currency bill” that took dead aim on China.

While it may be convenient to hold others accountable for America’s problems, this is bad economics driving bad politics. In an era of open-ended US government budget deficits and chronic shortfalls in personal saving, America is doomed to suffer subpar savings and massive multilateral trade deficits for as far as the eye can see.

In that vein, closing down trade with China, while failing to address the saving shortfall, is like putting pressure on one end of a water balloon. The Chinese component of America’s multilateral trade deficit will simply migrate somewhere else – most likely to a higher-cost producer. That would be the functional equivalent of a tax hike on beleaguered American families – hardly the solution that US politicians are promising.

This is not to ignore important US-China trade issues that need to be addressed. Market access should be high on the agenda – especially for a sluggish US economy that needs new sources of growth, like exports. With China now America’s third largest – and by far its most rapidly growing – export market, the US should push hard to expand business opportunities in China, especially as the Chinese economy tilts increasingly toward internal demand. China should be viewed as an opportunity, not a threat.

At the same time, the US government should come clean with the American public about charges of Chinese currency manipulation and unfair trade practices. The renminbi has, in fact, appreciated by 30% relative to the US dollar since mid-2005. In broad multilateral terms – a far more meaningful gauge because it measures a currency’s value against a broad cross-section of a country’s trading partners – the “real effective” renminbi currently stands about 8% above its most recent 12-year average (1998-2010).

Yes, China continues to accumulate a vast fund of foreign-exchange reserves. But this is as much the result of speculators’ “hot money” plays as it is a conscious and perfectly reasonable effort by Chinese policymakers to remain focused on financial stability and manage currency appreciation in a gradual, disciplined, and orderly fashion.

China-bashing in the US speaks to a corrosive shift in the American psyche. It deflects attention away from those truly responsible for perpetuating the greatest saving shortfall in history. Washington has been seduced by the political economy of false prosperity. That seduction has encouraged America to squander its savings and live beyond its means for nearly two decades. Now the game is up.

The ultimate test of any nation’s character is to look inside itself at moments of great challenge. Swept up in the blame game, the US is doing the opposite. And that could well be the greatest tragedy of all. After all, America’s 88 deficits did not arise of thin air.

By Stephen S. Roach

28 October 2011

@ Project Syndicate, 2011.

Stephen S. Roach, a member of the faculty at Yale University, is Non-Executive Chairman of Morgan Stanley Asia and the author of The Next Asia.

Copyright: Project Syndicate, 2011.

 

UK firms have been urged to ignore stereotypes and grasp long-term business opportunities in Saudi Arabia

British officials like to talk of a strategic relationship between the “two kingdoms” – the UK and Saudi Arabia – building on close bilateral ties between London and Riyadh going back decades.

This is not just “camel corps” bluster frequently heard from the cosy confines of the Foreign Office. The links between the two countries do indeed run deep. Saudi Arabia is the UK’s largest trading partner in the Middle East, and Britain is the Saudi kingdom’s second largest foreign investor after the US, visible exports totalling £3.1 billion ($4.88 billion) in 2010, a rise of 16 per cent on the previous year. Saudi-UK joint ventures number over 200 and counting.

But the UK’s committed band of Saudi friends are frustrated with the overall response of corporate Britain to the scale of the Saudi opportunity.

Though British firms are doing well in the kingdom, noted influential former UK ambassador to Riyadh Sir Sherard Cowper-Coles at the Opportunity Arabia conference in London in late September, British firms should be doing far more to win orders and friends in the kingdom.

At the annual event staged by the Middle East Association to raise the profile of Saudi business in the UK, Sir Sherard – now a director of international business development at BAE Systems – didn’t mince his words.

Presenting the kingdom as a rock of stability in a turbulent region, politically influential both regionally and internationally, with the largest economy in the MENA region, Sir Sherard bemoaned the failure to market these advantages properly.

“Saudi Arabia is a country of huge potential but it always seems to undersell itself, particularly to UK exporters and investors,” said Sir Sherard. “It seems there’s a group of devotees who do understand the kingdom and care for it and who go back again and again – but there are too many who don’t understand it.”

A blunt speaker frequently critical of the allied effort in Afghanistan since retiring from the Foreign Office, Sir Sherard says both sides need to do more to build on historic ties.

Baroness Liz Symons, a former trade minister in Tony Blair’s government, urged UK firms to get their feet on the ground. “If you want to do business in Saudi Arabia you have to go there, get there early and stay there,” she told the conference.

Sir Sherard, a fluent Arabic speaker who headed the British embassy in Riyadh between 2003 and 2006, views Saudi Arabia as an unvarnished opportunity for British business. “Saudi Arabia remains the serious country in the Middle East and in my view the most stable – a country with a serious economy, equivalent to over a quarter of Arab GDP, with an excellent economic outlook and enormous prospects through the decades ahead,” he said.

However, Saudi Arabia suffers from a series of prejudices. Prime among these are an impression that it is an absolute monarchy ruled by gerontocrats prone to blocking reform. Sir Sherard was keen to puncture these myths.

“There are images of Saudi Arabia instead of information, stereotypes instead of statistics, prejudice instead of plain facts,” he said.

The kingdom is making progress, said Sir Sherard. When he left Saudi Arabia, the kingdom ranked 38 in the World Bank’s ease of doing business ranking – in the four following years it leapt from 38th to 11th.

Despite growing volumes of business between the UK and Saudi Arabia, Sir Sherard argued these are not growing at the rate they might. “Investor appetite is high but not as high as it should be. Yes, UK exports last year were still up 16 per cent at £3.6 billion so they are doing well, but in my view not doing well enough,” he said.

His message to UK firms is to get out there and stay there. He pointed to BAE’s extensive presence in Saudi Arabia going back four decades (see page 46), and its willingness to invest in upskilling Saudis and then employ them; 58 per cent of BAE Systems’ 6,0000 employees in the kingdom are Saudi nationals. “We’re proud of our plans to transfer skills from Lancashire or Surrey out to the Kingdom,” said Sir Sherard.

Other Saudi-British businesses were also keen to boost the Saudi economy’s strengths. Thamer Jan, general manager of commercial banking at Saudi British Bank, argued that Saudi Arabia had weathered the economic storm of the last few years much better than other emerging markets, with growth in the range of four to five per cent per year.

Reform challenges are significant, noted Jan, with unemployment the major issue. “This is a key challenge for us, as we have a relatively young population with 35 per cent of population under 15,” he said.

The government is making the effort to improve things. “The economy remains dependent on government spending. However strides are being made to encourage the private sector to play a more active role,” said Jan.

Another major challenge is the shortage in housing supply in Saudi Arabia. “There is significant demand in housing, with a need for up to one million new homes by 2015. The proposed mortgage law should assist people owning their own home, but is still a work in progress,” said Jan.

Much of the uplift for the housing sector is coming from a munificent King Abdullah bin Abdulaziz, who in February and March 2011 announced a $130 billion financial package to spread the wealth wider. This is already having a major impact on the Saudi economy.

“Part of that package was a complete review of wages of government employees and it has had a strong impact on the economy both at private sector and public sector levels,” said Jan. “Spending will take time to filter though but we’ve seen evidence that it has positively impacted the economy and we expect 2011 to be a strong year.”

The Saudi financial sector, meanwhile, looks in robust fettle. “No Saudi banks have had to resort to government support, unlike some neighbouring economies,” said Jan.

According to Jan, there is an increased amount of cross-border business – payments, cash banking, treasury and trade finance. And with that there’s been strong infrastructure growth that has driven credit growth to 10 per cent in 2011, up from five per cent in 2010.

Excess liquidity is, however, one obstacle facing Saudi banks, he said. “The challenges for banks are primarily that we are at the moment running ample liquidity and that has driven some larger banks to misprice risk or price risk cheaply,” warned Jan.

The generally robust economic backdrop in Saudi Arabia is underpinned by a sustained move towards industrialisation, part of a strategic attempt to deliver more value-added to the resource-rich kingdom.

According to Leslie McCune, managing director of Chemical Management Resources, this is manifesting itself in the petrochemicals sector. “There’s a strong drive towards industrialisation that is much more pronounced than in previous years,” he told the conference, noting the words of the chief executive of state oil company Saudi Aramco, Khalid al Falih: ‘nations do not raise living standards by exporting commodities.’

McCune said there was now a growing resistance to exporting commodities to countries and then re-importing them. Why export plastic pellets to China to make into pipes to put into Jeddah’s municipal water system, he asked.

The wealth of opportunity on offer in Saudi Arabia in petrochemicals and other sectors will keep the kingdom on the UK and other countries’ radar screens.

But the clearest message from the conference was that having an on-the-ground presence is the key ingredient to making a success of a tough market – with more than one delegate grumbling about the cumbersome process of obtaining business visas.

For those with the patience and perseverance, the kingdom nonetheless offers substantial rewards, said Sir Sherard.

“If I have one message on my return to Saudi Arabia it is to vote with your feet, get out there and have a strategic vision, because in the end the rewards are enormous with enterprising young Saudis waiting connect with western investors,” he concluded.

Saudi-UK trade ties (2010)

Value of UK exports to Saudi Arabia (visible goods)             $4.6 billion

Estimated value of UK services exports to Saudi Arabia      $3 billion

Value of Saudi exports to UK        $1.5 billion

Number of UK-Saudi joint ventures            200

Total value of investment made by UK-Saudi joint ventures              $17.5 billion

by James Gavin

November 2011

@ The Gulf Business News and Analysis

The G20 summit in Cannes has concluded in disarray and without details in “agreements”. Leaders were unable to agree upon financing the IMF to help advanced capitalist countries in distress. No G20 state is willing to participate in the euro zone bailout fund.

However, one “achievement” is there instead of a total failure: interventions in two democracies – Greece and Italy – appeared close to coup although a G20 leader disagreed. So, all should agree with the leader: These are not coups de grace, but a mere attempt to change government or press government to listen to interventionists for the sake of markets. Italy and Greece have been made to submit to creditors’ dictation.

The Cannes Crisis Festival, considered a flop by some commentators, saw little progress on resolving Europe’s debt crisis. The leaders, as Angela Merkel acknowledged, had failed to interest any of the G20 state in investing in a new initiative. From her statement it appeared that China and Russia bargained a bit. Russia and China demand IMF to secure their investments. A strange symptom within a world structured along a NATO-WB-IMF-WTO design.

But Cannes summit has failed to raise market confidence. Stock markets in New York, Frankfurt and Paris initially expressed their reaction by moving down.

The continuing eurozone debt crisis dominated summit had the hope to increase IMF resources by $250bn to more than $1tn. But the hope has not touched this material world. The hope has been kept suspended for G20 finance ministers with the hope to be materialized in next February.

The summit communiqué made commitment to move “more rapidly” towards greater exchange rate flexibility, agreed to give IMF more money, welcomed Italy’s “wisdom” to invite the IMF to monitor its reforms, and called on countries with strong public finances to take steps to boost domestic demand.

“Dark clouds, Ban Ki-moon warned at an event with main stream labor leaders in Cannes, “have gathered once again over the global economy. […M]any people cannot even see the light at the end of a long, long tunnel.” With a similar mood, David Cameron said the crisis was having a “chilling effect” on his country’s economy. He hinted at worse to come, describing this as only “a stage of the global crisis”. The UK leader felt that in the interest of his country the eurozone crisis should be sorted out as rapidly as possible.

For playing down failure to make progress on major issues Nicolas Sarkozy tried to appear as a warrior for the cause of Robin Hood tax. Sarkozy expressed his willingness to “fight to defend Europe and the euro” as he said in a post-summit press conference.

Sarkozy said: We cannot accept the explosion of the euro, which would mean the explosion of Europe. He has assured that the G20 had agreed to boost the IMF. He made a forecast: G20 would agree by February. The French leader denied the demands on Silvio Berlusconi represented almost an IMF coup: “We never wanted to change governments, either in Greece or in Italy. That is not our role; that is not our idea of democracy.” However, he said that George Papandreou’s decision not to tell fellow EU leaders about plans to hold a referendum was “shocking”. Barack Obama reminded Greek and Italian parliaments to take decisive action. The US leader praised increased scrutiny of Italy as a step in the right direction.

The summit deliberations showed Britain’s inability to take burden. Cameron admitted that the G20 summit had failed to resolve the eurozone debt crisis. He went on: “I’m not going to pretend all of the problems in the eurozone have been fixed, they haven’t.” Cameron feels, “[t]he problem is that not all of the details… have been put in place.” He assured British taxpayers that increasing UK contributions to the IMF would not put their “money at risk”, and the money would not support a eurozone bailout. He revealed a fact: Contributing money to support the IMF was, as a trading nation, “in our interests”. He also suggested that the issue of increasing contribution to the IMF would not be put on a vote in the Commons. It appears that UK capital does not have interest in euro bail out, but in expansion of global business.

The Greek drama annoyed the Cannes festival as Papandreou announced to hold a referendum on austerity package being pushed through Greece’s throat. The political move panicked markets around the world and the G20 leaders. But dominating capital’s dictation made Papandreou step back. He threw away referendum plan to seek people’s mandate on the austerity plan that includes sell-off of public property. The Papandreou government sought confidence in parliament after alleged horse trading and survived a confidence vote.

Italy with its near-nonexistent growth was an amazing player in the Cannes show. Rome now threatens to carry Europe’s debt crisis up to a level that can fall on the entire earth’s capitalist economy, and make it spin listlessly. Italy’s borrowing rates are rising to the levels that forced the PIG to seek bailout “benevolence” in all its crudeness. With a $2.5 trillion debt Italy has agreed to let the IMF monitor its implementation of austerity program.

But, as a Reuter’s story described, the “fierce pressure from financial markets and European peers” was not a humiliation for Berlusconi as he agreed to have the IMF and the EU monitors. It was reported that Berlusconi “was summoned to a late-night hotel meeting with Merkel, Sarkozy, the IMF director general Christine Lagarde and Obama, where he was instructed to bring Italy under […] IMF surveillance to ensure he implements […] measures, including changes to the labor market, […] the sell-off of state assets.” However, Berlusconi tried to minimize the satiric-political impact of the decision, saying that it had been requested by Italy rather than imposed by world leaders. He boasted: He had invited the IMF to offer advice; he had rejected an offer of IMF funds. He claimed that his country was more solid than France or the UK. “Italian restaurants and vacation spots are always full. Nobody has the sense the country is in a crisis”, said the scandal-ridden Italian leader.

The IMF bosses will audit Italy’s books of accounts to make sure the austerity measures are implemented with brute force. An EC team will also supervise. Moreover, the Media Mughal of Italy with a history of not standing by promises had to make a new promise to European leaders in Cannes, the famous film festival place that sees attractive film figures: a confidence motion within 15 days in Roman Senate. These developments achieved by external and Italian finance elites impacted Italian politics. Desertions from coalition government of Berlusconi have made its life uncertain.

Shall there be horse trading in the country’s political market dominated by the rich? Shall the trade be called democratic distribution of patronage by one of the richest men of Italy? All, from Catholic Church to business, want Berlusconi’s exit. But the democratic warrior knows well that Italy is not Libya. This perception has led him to brush aside the desire of powerful interests. He has already found traitors to the country as he described party rebels. Have ghosts of fallen dictators overshadowed the character of Italian comedy in a Roman Holiday? However, there are all the possibilities of Berlusconi’s Mubarak Moment.

The world now is a bit different whatever the Italian leader claims. The IMF bosses do not only dictate the poor in the South. They are now showing muscles in advanced capitalist countries. Now, after Greek Tragedy and Italy Incident, the ruling elites, many of them are pure robbers and plunderers, of IMF-dictated-poor countries should get “rid” of sense of shame. The founding fathers of the Bretton Woods institutions had not imagined that one day in future their institutions designed to subdue the poor world would discipline advanced capitalist countries. Even, Marx had not imagined. Has something rotten down in the core of capitalism? The IMF is disciplining Ireland, Portugal and Greece, “dignified” capitalist countries not “shameless” like the poor countries.

Russia made a major advance in the summit as the country will be allowed into the WTO, “the biggest step in world trade liberalization since China joined a decade ago.” The step will have implication on present major players in the world trade club. China’s increasing power was evident in the summit as the country resisted calls to allow its currency to appreciate. It now appears that these two countries are making their voices heard in the gathering of the powerful and aspiring-powerful.

The disarrayed drama, the unwillingness to fund IMF, the flexing of power reaching close to coup in advanced capitalist countries, the humiliations, etc. raise a few fundamental questions related to capitalist world system that was in euphoria with a brute onslaught named globalization a few years back.

By Farooque Chowdhury

Dhaka based free lancer Farooque Chowdhury contributes on socioeconomic issues.