capitalism


These charts tell us all we need to know about the militarization of the US economy, which has marched hand in glove with the militarization of US foreign policy.

US durable goods shipments from 2000-2009

US durable goods shipments from 2000-2009 (shown full size)

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US shipments and orders of durable goods 2008-2009

US shipments and orders of durable goods 2008-2009 (shown full size)

This trend is a particularly ominous sign for American democracy. Back in 2006 Harpers published a conversation about American democracy and the military over the question of whether a military coup is possible in the United States, American coup d’etat: Military thinkers discuss the unthinkable. Participating in the conversation were Andrew Bacevich, Brig. Gen. Charles J. Dunlap Jr., Richard Kohn, Edward Luttwak, and Bill Wasik. A number of interesting points were discussed.

BACEVICH: … another crucial reason there could never be a military coup in the United States: the military has learned to play politics. It doesn’t need to have a coup in order to get what it wants most of the time. Especially since World War II, the services have become very skillful at exploiting the media and at manipulating the Congress—particularly on the defense budget, which is estimated now to be equal to that of the entire rest of the world combined.

WASIK: If we are talking about a “creeping coup” that is already under way, in what direction is it creeping?

BACEVICH: The creeping coup deflects attention away from domestic priorities and toward national-security matters, so that is where all our resources get deployed. “Leadership” today is what is demonstrated in the national-security realm. The current [Bush] presidency is interesting in that regard. What has Bush accomplished apart from posturing in the role of commander in chief? He declares wars, he prosecutes wars, he insists we must continue to prosecute wars.

KOHN: By framing the terrorist threat itself as a war, we tend to look upon our national security from a much more military perspective.

BACEVICH: We don’t get Social Security reform, we don’t get immigration reform. The role of the president increasingly comes to be defined by his military function.

KOHN: And so our foreign policy becomes militarized. We neglect our diplomacy, de-emphasize allies.

BACEVICH: … Meanwhile, we’ve underfunded the State Department for twenty-five years.

DUNLAP: Well, I don’t think it’s anything new that the State Department is underfunded. The State Department has no bases in any state, so it does not have a constituency.

KOHN: One of the great pillars in our history that has prevented military intervention in politics has been the military’s nonpartisan attitude. That’s why General George Marshall’s generation of officers essentially declined to vote at all, as did generations before them. In fact, for the first time in over a century we now have an officer corps that does identify overwhelmingly with one political party. And that is corrosive.

WASIK: So it seems clear that whether we like it or not, the military has learned how to use the political system to protect its interests and also to uphold what it sees as its values. Thinking over the long term, are there any dangers inherent in this?

KOHN: Well, at this point the military has a long tradition of getting what it wants. If we ever attempted to truly demobilize—i.e., if the military were suddenly, radically cut back—it could lead if not to a coup then to very severe civil-military tension.

BACEVICH: Because the political game would no longer be prejudiced in the military’s favor.

KOHN: That’s right.

BACEVICH: But there is a more subtle danger too. The civilian leadership knows that in dealing with the military, they are dealing with an institution whose behavior is not purely defined by adherence to the military professional ethic, disinterested service, civilian subordination. Instead, the politicians know that they’re dealing with an institution that to some degree has its own agenda. And if you’re dealing with somebody who has his own agenda, well, you can bargain, you can trade. That creates a small opening—again, not to a coup but to the military making deals with politicians whose purposes may not be consistent with the Constitution.

Looking at the charts above, it looks like there has already been a coup of sorts on the economy. If spending on the military were reported the way spending on health care is reported, people would be asking some serious questions about this. One can certainly argue that public health and health in general is an equally important part of the defense of a country and its citizens, though I have not ever seen the argument framed in those terms. Of course the money issues are not going to be reported the same way. We have just seen what happens with our corporate dominated news business. Even when news reporting results in actual news getting reported, and is good for ratings, if the major corporations who own the news companies see it as harmful, it will be censored and shut down, witness the Olbermann O’Reilly feud.

China is the paymaster for current US military spending. And China is also a target of US military attention. China is perceived as a great rival for the natural resources of Africa, especially oil, which is one major reason for the creation of the US Africa Command, AFRICOM. We can infer a number of things from the charts above, especially if the trend they map continues. Among those is that the Africa Command will grow, and increase its interference with people, countries, and governments in Africa. The other is that China will have increased ability and power to control what the US says and does, much in the way that the corporate paymasters shut down the Olbermann O’Reilly feud. After all, when your finger is between someone’s teeth, you don’t hit him on the head.

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The New York Times gave Darfur nearly four times the coverage it gave the Congo in 2006, while Congolese were dying of war-related causes at nearly 10 times the rate of those in Darfur.  Graph: John Emerson (backspace.com)

Two graphs, the New York Times gave Darfur nearly four times the coverage it gave the Congo in 2006, while Congolese were dying of war-related causes at nearly 10 times the rate of those in Darfur. Graphs: John Emerson (backspace.com)

Julie Hollar has written a superb analysis of why the conflict in the Congo is ignored by the media; Congo Ignored, Not Forgotten, When 5 million dead aren’t worth two stories a year. She covers when and why coverage was better, and what is going on now. I won’t repeat all she writes, it is well worth reading. Near the end she includes this paragraph:

Paying attention to the Congo would also mean reporting on the main factor fueling the conflict: the plunder of the country’s resources, which primarily benefits multinational corporations. The conflict areas of the Congo are rich with minerals like copper, tin, gold, diamonds, cobalt and coltan, a mineral used for cell phones and other common electronic devices. Rebel groups who hold these areas sell off the minerals at cut-rate prices, using the profits to maintain power as big companies look the other way. As happened with conflict diamonds in Sierra Leone and Angola, activists are pushing for a mechanism to make corporations verify that they aren’t buying the Congo’s conflict minerals.

The GDP of both Rwanda and Uganda include minerals stolen from the Congo. So far both countries are rewarded for this theft by praise for their economic progress, and of course by the money these minerals bring. Too many people in too many countries are profiting from Congo’s wealth. Canada is the largest mining interest in the Congo, and funds a lot of the conflict. Mostly all parties are perfectly willing to see the conflict continue. Despite the massive number of deaths, the use of rape as a form of terrorism, used along with murder and dismemberment to threaten and depopulate areas, and the conscription of children as soldiers by all sides, most of the media coverage of the Congo conflict involves endangered gorillas or Angelina Jolie. Media coverage discounts and ignores the people of the Congo.

The Congo conflict is sometimes known as Africa’s world war. Here is a list from 2001 of many of the parties involved, from Natalie Ware at American University.

  • The Democratic Republic of Congo (DRC):
    * Hutu Interhamwe militia – mostly from Rwanda and responsible for 1994 genocide of Tutsis in Rwanda
    * Former Hutu members of the Rwandan military – also responsible for 1994 genocide of Tutsis in Rwanda
    * Mai Mai – group of traditional Congolese local security forces
    These groups operate inside the DRC supporting the government “often as guerillas operating inside territory held by antigovernment forces” (U.S. State 2001)
  • Libya – provides arms and logistical support but no troops
  • North Korea – sent advisors to train government troops
  • Rwanda – supports Congolese Rally for Democracy based in Goma (RCD/Goma) and Congolese Rally for Democracy based in Bunia (RCD/Goma); majority Tutsi
  • Uganda – supports the Movement for the Liberation of the Congo (MLC); mainly non-Tutsi
  • Burundi – fights against various Hutu groups based in the DRC that are against the Tutsi-led Burundi government
  • Angola – supports the government of the DRC
  • Namibia – supports the government of the DRC
  • Zimbabwe – supports the government of the DRC
  • Sudan – supports the Alliance of Democratic Forces (ADF); Ugandan expatriates against the government of Uganda

The conflict in the DRC is often characterized as an ethnic conflict. It is a resource war. The various sides exploit ethnicity when it works to their advantage in the pursuit of mineral and other natural resources. All the groups engaged in fighting in the Congo engage in terrorism and conscript children.

China is missing from the above list, its presence has expanded greatly since 2001. The west is entirely missing from the list. Canada, the United States, the UK, countries of the EU, are all players in one form or another, and have been for some time. They are a huge market for the stolen mineral wealth of the Congo, and home base for the multinational corporations who fuel the plunder. Canada is the biggest player in mining. China is also heavily involved in mining in the Congo. The US is supplying a great deal of military training and arms transfers to Rwanda and Uganda, which extend their reach and power into the Congo.

Barclays off-shore banking will bring more of this to Ghana

Barclays offshore banking will bring more slums like this to Ghana

In a move guaranteed to increase poverty and crime throughout Ghana and West Africa, Barclays Bank, at the 2005 invitation of former President Kufuor, is setting up off shore banking in Ghana. Other big banks are waiting to join in the tax haven business in Ghana following Barclays lead.

Barclays bank is playing a lead role in the establishment of a tax haven in Ghana, in a move that could see huge mineral wealth in west Africa vanish into it from poverty-stricken countries’ coffers, the Observer can reveal.

The controversial British lender has for the last four years worked closely with the Ghanian government to start an International Financial Services Centre offering low taxes and minimal financial disclosure.

Development charities fear that the establishment of a fully operating tax haven so close to oil- and mineral-rich countries such as Nigeria, Sierra Leone and Equatorial Guinea will encourage a rapid increase in tax and capital flight.

There is also concern that cocaine barons, increasingly using west Africa as a trafficking route into Europe, could launder drug money through Ghana.

Oil-producing nations are plagued by corruption and drug trafficking and the creation of this international financial services centre will make this worse – not better.”

This move was initiated in 2005 by former President Kufuor. In light of what we now know about the theiving and raids on the treasury by himself and his cronies, it looks like they were planning ahead to hide stolen assets from the people of Ghana. We know Kufuor initiated this move from an article on GhanaWeb in 2005, when the offshore banking plans got underway:

Barclays Bank to assist Ghana establish off-shore banking
2005 Accra, March 30, GNA
Barclays Bank Plc is to assist the Government to establish off-shore banking in Ghana, Mr David Roberts, Executive Director of the Board of Directors of Barclays Plc and Barclays Bank Plc, said on Wednesday.

“We have to make the necessary arrangements to make off-shore banking operational in Ghana,” he said in reaction to an appeal by President John Agyekum Kufuor that the Bank cooperated with the Government to establish offshore banking.

President Kufuor made the appeal when a delegation of the Bank’s Directors attending the first International Executive Committee Meeting outside Europe in Accra, paid a courtesy call on him at the Castle, Osu.

The discovery of oil in Ghana was not announced until June 2007. But by 2005 they knew it was in the works. The Cape Three Points Deep Petroleum Agreement was signed in 2002, and potential oil fields mapped, also in 2002. So it seems likely Kufuor and his NPP cronies were planning for the influx of oil cash, and a place to stash and hide the money conveniently close to home. Even without oil, their misappropriation of government assets is impressive. There are many examples documented on GhanaWeb, such as Massive looting at Ministries, especially since the change in government has brought a bit more transparency. Financial transparency is what every watchdog group says is needed in the African oil and resource business. Financial transparency is what off shore banking is designed to eliminate.

Barclays Bank has been repeatedly implicated in illegal and unethical banking operations. In March the Guardian published a number of internal memos from Barclays, from WikiLeaks:

The documents are copies of alleged internal memos from within Barclays Bank. They were sent by an anonymous whistleblower to Vince Cable, Liberal-Democrat shadow chancellor. The documents reveal a number of elaborate international tax avoidance schemes by the SCM (Structured Capital Markets) division of Barclays.

According to these documents, Barclays has been systematically assisting clients to avoid huge amounts of tax they should be liable for across multiple jurisdictions.

A commentator to the Financial Times stated:

I was lucky enough to read through the first of the Barclays documents…

I will say it was absolutely breathtaking, extraordinary. The depth of deceit, connivance and deliberate, artificial avoidance stunned me. The intricacy and artificiality of the scheme deeply was absolutely evident, as was the fact that the knew exactly what they were doing and why: to get money from one point in London to another without paying tax, via about 10 offshore companies. Simple, deliberate outcome, clearly stated, with the exact names of who was doing this, and no other purpose.

Until now I have been a supporter of the finance industry – I work with people there regularly and respect many of them, and greatly enjoy the Financial Times and other financial papers. However this has shone a light on something for me, and made me certain that these people belong in jail, and companies like Barclays deserve to be bankrupt. They have robbed everyone of us, every single person who pays tax or who will ever pay tax in this country (and other countries!)

If Barclays can get away with this in the UK, with UK laws and enforcement, how much more can they get away with in Ghana, where the current legal and enforcement communities have a much shorter history, and are grossly underpaid.

Barclays have also been implicated in corrupt associations and illegal dealings with Equatorial Guinea, and along with other banks in Angola. From the BBC:

The same lax regulation that created the credit crunch has let some of the world’s biggest banks facilitate the looting of natural resource wealth from poor countries.

I have quoted Nicholas Shaxson in previous posts, but what he says regarding the movement of money is right on the mark:

There are basically three forms of dirty money. One is criminal money: from drug dealing, say, or slave trading or terrorism. The next is corrupt money, like the fromer Nigerian dictator Sani Abacha’s looted oil billions. The third form, commercial money – what our finest companies and richest individuals hide from our tax collectors – is bigger. The point – and this is crucial – is that these three forms of dirty money use exactly the same mechanisms and subterfuges: tax havens, shell banks, shielded trusts, anonymous foundations, dummy corporations, mispricing schemes, and the like, all administered by a “pinstripe infrastructure” of mainstream banks, lawyers, and accountants.
. . .
In this parallel secret universe the world’s biggest and richest individuals and firms, News Corporation, Citigroup, and, yes, ExxonMobil – can quite legally cut themselves loose from pesky full taxation and grow explosively, leaving smaller competitors, who pay their full dues along with the rest of us, choking in their dust. This undermines the very notion of capitalism: the big companies’ advantage has nothing to do with the quality or price of what they produce. If you are worried about the power of big global corporations, don’t always attack them directly, but attack bank secrecy instead. This is the clever way to take on the big fish, using a net that would also snag the Sani Abachas, the Mobutus, the North Koreas, the terrorists, and the drug lords.
(Poisoned Wells: The Dirty Politics of African Oil, by Nicholas Shaxson, p.225&227, ISBN 978-1403971944)

In 2007 Kufuor and Barclays raved on about what a wonderful opportunity offshore banking would be for Ghana:

President Kufuor said … the Government was fully aware of the numerous challenges and difficulties inherent in the operation of the facility and gave the assurance that the necessary safeguards had been put in place to stave off abuses.

Legal and administrative measures, he said, had been enacted to provide the needed checks and balances within the economy in particular and society in general.

“These measures should promote best practices in service delivery. More importantly, they should affirm the good faith and determination of the entire society to make Ghana a safe, secure and peaceful environment for investment.”

President Kufuor, through whose initiative the offshore banking had become a reality, said It must help to transform the financial system for accelerated socio-economic development.

He said last year, 658 billion dollars was transferred from developing countries to the developed countries, noting that if about half of this had been lodged in such a facility in Africa, the pace of development of the Continent would have been tremendously enhanced.

If that money had gone into offshore facilities in or near the developing countries, it would have made no difference. The reason for offshore banking is to evade the checks, balances, and safety measures. In fact, offshore banking will allow and promote the legal and illegal theft of money from Ghana, and is designed to do just that. Corporate money, drug money, stolen money, money from arms deals, money from illegal bunkering and corrupt politicians, all disappear offshore. Barclays and other big banks take money out of the reach of the countries those assets came from, and out of the reach of the governments and the citizens they are supposed to serve. I doubt Kufuor’s lavish praise for offshore banking was due to naivité. He was planning to be one of those advantaged by the bank at the expense of his own country. It is not for nothing he is known as Thiefuor to many of his countrymen.

Aside from those few who become very rich indeed, oil, and other extractive resources can make a country much poorer. The phenomenon is described in this article in Foreign Policy:

Collier’s model shows that producers of oil, timber, and minerals would on average see their gross domestic products rise by 10 percent in the first seven years, only to have them crash two decades later to only 75 percent of where they started. Sudden cash flows in unprepared countries, he says, lead to unsustainable public consumption, rising inflation, soaring inequality, trade protectionism, and a real danger of civil war.

As Shaxson points out:

People often put the problem like this: oil money would be a blessing but politicians steal it, so people don’t see the benefits. But it’s much worse: the oil wealth not only doesn’t reach ordinary people, but it actively makes them poorer.

Barclays and other big banks help make and keep the majority of people poorer. They insure there is no level playing field. Offshore banking is the tool that possessors of criminal money, corrupt money, and commercial money use to hide that money from its source, and to prevent reinvestment in the people and the places the money came from. That is why it is so shameful for Ghana to be setting up offshore banking. It is shameful that a former president initiated and promoted this tool to steal from the Ghanaian people, and it is shameful for the current government if they allow this to proceed as planned. If offshore banking goes forward, slums such as in the picture above will expand exponentially, people will suffer and die because their assets are being stolen from them, and they have nothing to fall back on.

imfpoultryEU dumping chicken parts on Ghana, cartoon by Khalil Bendib for corpwatch.org

Once again it looks like Africa will get to to subsidize the disasters of western capitalism.

In past global downturns, the severity of the impact on Africa varied considerably from state to state. This downturn is washing up on all of the continent’s shores, cramping both the formal and informal sectors as currencies lose value, the cost of imports rise, and living standards fall. As the big engines of regional growth have slowed – South Africa in the south, Nigeria in the west, and Kenya in the east – the contagion has spread to poorer countries in the landlocked interior.

Economists, investment analysts and policymakers were all slow to see this coming. Until late last year, many believed that the poorest continent would escape relatively unscathed from the gathering storms. This was partly because African banks were not exposed to the toxic assets eating away at Wall Street and the City of London.

It also resulted from the belief that the continent’s strengthening economic performance has been the result of interwoven trends, not just the commodity boom. …

it now seems painfully obvious just how vulnerable this emerging recovery was likely to be, given its roots in world trade and a relatively narrow base of exports.

Ghana has already suffered at the hands of the free marketeers, the banksters who are eliminating the middle class, and crushing the poor everywhere. Ghana has been the victim of agricultural dumping, chicken and tomatoes from the EU, plus rice from the US. From CorpWatch in 2005:

In 1992 domestic poultry farmers supplied 95 percent of the Ghanaian market, but by 2001 their market share had shrunk to just 11 percent. The imported chicken is available (wholesale) at a price that is only slightly more than half of the wholesale price of local chicken.

The accompanying loss of jobs has also been remarkable. The industry has lost 150 jobs in the past few months alone, say the Farmers Associations. Commercial poultry farms — which do not include small rural producers — employ up to 5,000 people. Any job loss has far reaching implications for Ghana’s 20 million people because each worker often provides support for numerous others in their household.

Foreign producers currently pay a 20 percent tariff or tax on the poultry they send to Ghana. Two years ago, the Ghanaian Parliament passed a law allowing an additional 20 percent tariff to be imposed on imported chicken, bringing the overall tariffs to 40 per cent.

In a dramatic move, just two months after the law was passed, the Customs and Excise Preventive Services (CEPS), the body responsible for implementing the tariffs, issued an order reversing the decision. The new tariffs were said to be in conflict with regional tariffs. In other words, the proposal have been blocked by the International Monetary Fund (IMF), an institution in which the Ghanaian government has less than 0.5 per cent of the vote.

Adding insult to injury:

The IMF made it clear that it was opposed to the higher tariffs on the grounds that it will hurt Ghana’s poverty reduction program.

Wheareas IMF policies consistently increased the number of unemployed, expanded poverty, and decreased productivity and self sufficiency in Ghana as in most countries.

There is some question as to whether a 40 percent tariff on the chicken would actually solve the problem. According “For Richer or Poorer” an April 2004 report released by Christian AID, it was estimated that “tariffs would need to be 80 percent, four times their current level” to allow local producers and processors to compete fairly with EU imports,” because “European producers gave enjoyed decades of subsidies, support and protection from their government.”

In fact IMF policies expand and increase the reach of poverty:

“It is through no fault of ours that our production costs are high,” he adds. “Just look at electricity and water tariffs, as well as the price of petrol and diesel. So, in plain terms, our government is telling us to fold up.”

As pointed out farther along, those electricity and water tariffs are the direct result of IMF actions.

In fact, most members of the once thriving 400,000 member National Association of Poultry Farmers have folded up. And Ghana’s rice and tomato industries are equally threatened.

… Ghana was on the way to becoming self-sufficient in rice production in the 1970s and 1980s. But the IMF structural adjustment program halted farm subsidies to rice farmers. Ghana now produces a mere 150,000 tonnes of rice, or 35 percent of its domestic need.

No longer able to farm because of the high prices of agriculture inputs, many young people are flocking to the urban centers searching for non-existent jobs. More displaced people from the rice and poultry sectors are bound to increase the numbers drifting to the urban centers, causing social problems.

The greed and theft of Wall Street are hitting Ghana through no fault of Ghanaians:

This is a good place to survey what Wall Street and the City of London did to the world. Ghana, which has met its millennium goals on children in primary education and cutting poverty, has been an economic and political success story, with high growth. A centre-left government has just taken over after hard-fought but peaceful elections. It is better protected than some, the prices of its gold and cocoa holding up in the recession. Offshore oil will flow in a few years.

But last year world food and oil prices soared. China’s slashed demand for raw materials is harming much of Africa. Global warming caused a drought that drained the dam powering Ghana’s electricity, requiring crippling oil imports. The last government borrowed to cover these unexpected costs, the currency dropped in value, inflation rose to 20% and credit has dried up.

Economists at the NGO Oxfam point out that this was not caused by profligacy, but by external events last year. A further source of bitterness: if rich countries had kept their 2005 Gleneagles promises, as Britain did, Ghana would have received $1bn, with no need to borrow at all.

Where should Ghana turn? To the IMF, of course, now the G20 has swelled its treasury. But there is deep political and public resistance after previous bad experience. Remember how humiliated Britain felt going cap in hand to the fund in 1976. Ghanaians know how World Bank and IMF largesse came with neoliberal quack remedies.

Cutting public services, making the poor poorer, putting cash crops and trade before welfare was the old IMF way. It was the IMF that insisted on meters for Ghana’s water supply, demanding full cash recovery for the service, steeply raising costs for the poorest. The World Bank insisted on a private insurance model for Ghana’s health service that has been administratively expensive and wasteful. The new government rejects it, promising free healthcare for children. The IMF wants subsidies for electricity removed, again hitting the poorest hardest. A market policy of making individuals pay full cost for vital services instead of general taxation has made the IMF hated; Ghana has now voted for more social democratic solutions. Freedom from the IMF feels like a second freedom from colonialism to many countries.

No wonder the new government hesitates to apply for a loan

The IMF protests that it has changed: it no longer prescribes or monitors so oppressively, and countries seeking loans can set their own goals. A British cabinet minister was quoted on G20 day as saying that it should be no more stigmatising than “going to a spa to recuperate”. Arnold Mcintyre, the IMF’s representative in Ghana, insists that it would be entirely up to the government to propose its own measures. This is, to put it politely, disingenuous.

Every government knows what it has to do to get credit, so Ghana has already said it will lower its deficit from 15% to 9.5% of GDP in one year, steeply cutting public sector costs. “They can do it through efficiency savings, with no damage to services,” says Mcintyre breezily. The government grits its teeth and says it can, and will: IMF economic thought often enters the soul of finance ministers. IMF power makes it the sole credit-rating agency for all other donors and lenders – an IMF thumbs-down means money from everywhere is cut off.

Oxfam’s senior policy adviser and economist, Max Lawson, doubts such cuts are needed, just a loan to tide Ghana over. “The IMF is too brutal … demanding balanced books within one or two years. The only way to make such a deep cut is in social spending: teachers’ salaries are the main item.”

It’s a strange irony that Barack Obama and Gordon Brown embrace a Keynesian fiscal stimulus and in its name pour out global largesse to the IMF to distribute. But loan recipients risk a Friedmanite tourniquet, cutting off their economic lifeblood. Will Obama and Brown see how their policy is translated on the ground?

Free market is a religion, a belief. It is not science or economics. We have brutal global evidence that it does not produce the advertised results, or live up to its promises. As long as the true believers are in charge, there will be no substantive change. The article quoted above points out that microcredit, and local credit unions are the way to raise productivity, relieve poverty, and increase the numbers of children in school and spending on education. The tiny local credit unions in Ghana discussed in the article have a 0% default rate on their microloans. But none of that is big and glamorous, and it does nothing to add to bankster CEO salaries and bonuses. So I doubt we will see much change in the behavior and policies of the IMF.

Note (4/28/09):
Khalil Bendib very graciously extended permisssion to use the cartoon above.  His cartoons combine elegant drawing with witty and incisive commentary.  You can see more at his website: The Pen is Funnier Than the Sword.  
You can buy his book here.

GEGGADE DESERT, Djibouti - French and American forces head out to a U.S. Marine CH 53 helicopter for transport to desert survival training in the Geggade Desert, Djibouti March 23, 2009. The training provided by the French Forces in Djibouti integrates U.S. service members deployed to Camp Lemonier, Djibouti and French military personnel while teaching survival skills specific to the Djiboutian deserts. (U.S. Air Force photo by Technical Sergeant Joe Zuccaro)

GEGGADE DESERT, Djibouti - French and American forces head out to a U.S. Marine CH 53 helicopter for transport to desert survival training in the Geggade Desert, Djibouti March 23, 2009. The training provided by the French Forces in Djibouti integrates U.S. service members deployed to Camp Lemonier, Djibouti and French military personnel while teaching survival skills specific to the Djiboutian deserts. (U.S. Air Force photo by Technical Sergeant Joe Zuccaro)

Daniel Volman and William Minter describe the problem succinctly in Making Peace or Fueling War in Africa:

The government has presented AFRICOM as a cost-effective institutional restructuring and a benign program for supporting African governments in humanitarian as well as necessary security operations. In fact, it represents the institutionalization and increased funding for a model of bilateral military ties — a replay of the mistakes of the Cold War. This risks drawing the United States more deeply into conflicts, reinforcing links with repressive regimes, excusing human rights abuses, and frustrating rather than fostering sustainable multilateral peacemaking and peacekeeping. It will divert scarce budget resources, build resentment, and undercut the long-term interests of the United States.

While AFRICOM may be new, there’s already a track record for such policies in programs now incorporated into AFRICOM. That record shows little evidence that these policies contribute to U.S. or African security. To the contrary, there are substantial indications that they are in fact counterproductive, both increasing insecurity in Africa and energizing potential threats to U.S. interests.

When the GAO published its February report on AFRICOM, PDF: Actions Needed to Address Stakeholder Concerns, Improve Interagency Collaboration, and Determine Full Costs Associated with the U.S. Africa Command, the conclusion was:

This report addresses three challenges that could affect the ultimate success of AFRICOM. First, DOD has not yet fully allayed concerns about the command’s role and mission both inside the U.S. government and with potential African partners. Second, AFRICOM has not yet determined how many personnel it needs from other U.S. government agencies or what functions they will perform, and interagency planning processes are still immature. Third, DOD has not yet decided the locations for AFRICOM’s permanent headquarters and presence on the continent, or agreed upon criteria with stakeholders for making such decisions, leaving considerable uncertainty about future costs at a time when defense budgets are projected to become increasingly constrained. DOD and AFRICOM are working to address these challenges but it is unclear when their efforts will be completed. Unless these challenges are addressed, the effectiveness of the command may suffer and costs are likely to escalate.

What the GAO report does not address is any overall justification for the command to exist at all. It assumes the command is a good thing and should go forward. It treats African and US skepticism as “misperception”. To assert this is to take the erroneous approach that all the problems are public relations problems: the truth does not matter, what an organization is doing does not matter, only the image projected in the advertising campaign matters.

AFRICOM hurts brand America, and stands in the way of any genuine multilateral efforts towards peacemaking or peacekeeping. AFRICOM stands in the way of civil society groups who are trying to strengthen democratic institutions in their own countries. It is often a threat to these same groups, treating them as “insurgents” or “terrorists” and assisting repressive governments to crack down on them. Bilateral military ties strengthen the military sector in its efforts to suppress competition and regulation from the civilian sector. This comes when Africans throughout the continent want the military out of government and back in the barracks. When the US supports only the military, the civilian sector can whither. We currently see this US policy at work in Somalia, Sudan, Ethiopia, Kenya, Uganda, the DRC, Rwanda, the Niger Delta, Mali, Senegal, just to name a few places. This hurts the people in those countries, and by doing so hurts the interests of the United States. It hurts support and goodwill for the United States.

Militarism limits the possibility of developing a climate where entrepreneurs can create business, except those businesses that can be carried out at the point of a gun. And it makes it difficult or impossible to develop the civil infrastructure and institutions necessary for peace and democracy. This strengthens the enemies of the US, by demonstrating the US does not care about the majority of the citizens in Africa or the world, and weakens US influence. Militarism is a lavish gift to the enemies of the US, giving those enemies more credibility, and enhancing their support and ability to attack US citizens and institutions.

Brand America has generally been popular in Africa. Bush policies did it tremendous damage. So far Obama seems to be continuing those same policies. The opportunity for positive change is still open.

At the Summit of the Americas yesterday Obama said:

“It’s a reminder for us in the United States that if our only interaction with many of these countries is drug interdiction, if our only interaction is military, then we may not be developing the connections that can, over time, increase our influence.”

The US War on Drugs has been an unbroken failure, and has now driven the drug trade to West Africa.  AFRICOM has been trying to promote its efforts at drug interdiction in Ghana and throughout West Africa as a way to get its foot in the door. The same goes for “terrorism” interdiction, and “insurgency” interdiction throughout the continent. Both Latin America and Africa would like to leave militarism behind. Let us hope Obama understands and means his own words.

To repeat and expand the wise words of Volman and Minter:

The government has presented AFRICOM as a cost-effective institutional restructuring and a benign program for supporting African governments in humanitarian as well as necessary security operations. In fact, it represents the institutionalization and increased funding for a model of bilateral military ties — a replay of the mistakes of the Cold War. This risks drawing the United States more deeply into conflicts, reinforcing links with repressive regimes, excusing human rights abuses, and frustrating rather than fostering sustainable multilateral peacemaking and peacekeeping. It will divert scarce budget resources, build resentment, and undercut the long-term interests of the United States.

While AFRICOM may be new, there’s already a track record for such policies in programs now incorporated into AFRICOM. That record shows little evidence that these policies contribute to U.S. or African security. To the contrary, there are substantial indications that they are in fact counterproductive, both increasing insecurity in Africa and energizing potential threats to U.S. interests.

There’s no one prescription for those countries now facing violent conflicts, much less for the wide range of issues faced by over 50 African countries. Africa’s serious problems, moreover, will not be solved from outside, either by the United States or by the “international community.”

Nevertheless, it’s important to ensure that U.S. Africa policy does no harm and that the United States makes a significant contribution to diminishing the real security threats on the continent. Once one recognizes that U.S. national security also depends on the human security of Africans, some essential elements of such a framework do become clear. To what extent they can be embodied into practice will depend not only on the internal deliberations of the new administration in Washington, but also on whether Africans working for peace and justice on the continent can themselves chart new directions and make their voices heard.

Africans working for peace and justice on the continent can only be heard if someone is listening. The US needs to listen to these groups, and find ways to include them in the conversation. Working towards democratic processes is needed everywhere. The US needs some work on democracy at home after the past eight years. It cannot be done with guns, or with structural adjustment programs. Without democratic oversight, capitalism is just organized crime.  Democratic oversight requires democratic participation of the people who live in a place.  The people on the ground throughout Africa must be able to participate in the decisions that affect their lives.

Unless the US is willing to engage with other than its military, it is wasting its money, showing its weakness, and making it far more difficult to achieve its goals or increase its influence. As Obama said:

“… if our only interaction is military, then we may not be developing the connections that can, over time, increase our influence.”

africa_on_earthcc Hitchster

In view of topics in my last two posts, AGRA & Monsanto & Gates, Green Washing & Poor Washing and African Bloggers At The G20, there are a couple of articles at Pambazuka that have a lot to say.

Yash Tandon writes about the crisis of the global North in relation to the global South:

Western civilisation has been going through a deepening crisis over the last 120 years – to be precise since around mid-1880s when serious colonisation began of the African continent as a desperate attempt to get out of the crisis created by the limits to growth within Europe. The present systemic crisis – whose most recent manifestations are the global financial crisis and the ecological crisis – is only its latest manifestation. Western civilisation’s crisis is deeper than most people realise or willing to acknowledge.

… The ruling political and corporate elites in the West are losing control both in their own countries and over much of the South. Judging by the attempts made by them in recent months, it is evident that they have no clue about how to get out of the dual political-economic and ecological crises. They have serious problems of resource depletion and global warming which compound to create a situation not unlike what they experienced in the 1880s when they faced limits to growth in Europe.

The re-colonisation option does not look promising for the future, because although they are presently attempting to neo-colonise the South, this will meet with stiff resistance not only from the South but also from progressive peoples in the North.

It must be recognised that much of the South is still in the phase of consolidating the gains of national struggles. The vilification of these efforts as ‘failed states’ or as ‘terrorist states’ is misguided and dangerous. We must not fall into that trap.

Tandon provides a great deal more detail describing the historical problem and suggesting approaches to work towards solutions. Read the whole article: Political, economic and climatic crises of Western civilisation – Dangers and opportunities.

Another essay with a lot to think about is The global financial crisis: Lessons and responses from Africa by Demba Moussa Dembele. As the article summary describes:

The crisis provides fundamental lessons, says Dembele, the first being that markets do not have self-correcting mechanisms, and that market failures are not less costly than state failures. Secondly, “the collapse of the neoliberal dogma is a major blow to the international financial institutions. What is even more devastating to them is the reversal of most of the policies they had advocated for decades in Africa and in other ‘poor’ countries under the now discredited SAPs (structural adjustment programmes). The IMF and the World Bank are supporting fiscal stimulus – expansionary fiscal policies – in the United States, Europe and Asia.”

Thirdly, its clear that the state remains a central player in solving crises caused by markets, and is not the sole cause of economic and social problems in Africa that neoliberal policy has categorised it as.

Dembele writes:

One major lesson for Africa is that they should no longer trust the IMF and World Bank and for that reason they should not listen to their ‘advice’ anymore. This is why it is incomprehensible and even a shame to see African countries hold a meeting with the IMF in Tanzania with the aim of building ‘a new partnership’. In the statement issued after that meeting, African countries are calling on the IMF to extend its ‘experience and expertise’ as if African leaders and policy makers had not learned enough lessons from the experience of nearly 30 years of ruinous IMF policies from SAPs to PRSPs (poverty reduction strategy papers).

Another major illustration of the crisis of legitimacy of the neoliberal system is the strong recognition that the state is a central player in solving the crises brought about by unfettered markets, and it will remain a key actor in the development process, whether in developed or developing countries. Some may recall former US President Ronald Reagan’s assertion in the 1980s that the state was ‘part of the problem, not of the solution’. This signalled the era of massive deregulation and the assault on the state and public service and ownership. It opened the door to some of the most sweeping and devastating structural adjustment policies in Africa. African states came under vicious attacks as ‘predatory’, ‘wasteful’, ‘rent-seeking’, ‘corrupt’ and ‘inept’.

All these qualifications were intended to discredit the state as an agent of economic and social development and the experience of state-led development that took place in the post-independence period up to the late 1970s. Despite the remarkable achievements of that period, the IMF and World Bank used every possible negative example to blame the state for all Africa’s crises. They told African leaders that the state was the main, if not the unique, cause of the economic and social crisis in Africa Accordingly, the solutions they advocated included withering away the state by eliminating or limiting its intervention in the economic sphere. Hence the imposition of fiscal austerity programs, the downsizing of the civil service and the dismantling of the public sector with the privatisation of state-owned companies.

But the financial and food crises show that the state is an indispensable and indisputable agent of development and part of the solution to the current global crises. It is deregulation and market fundamentalism that are part of the problem.

Still in the name of ‘comparative advantage’, African countries were forced to give priority to cash crops at the expense of food production. The food crisis and Africa’s great dependence on food imports illustrate once again that the IFIs have misled African countries into adopting policies that are detrimental to their fundamental interests. The IMF and World Bank, which bear a great responsibility in the food crisis in Africa, are now all too happy to ‘assist’ African countries in proposing them ‘emergency loans’ to buy food from Western countries.

The same IFIs are behind the attacks against the state that translated into the destruction of the public sector to the benefit of foreign capital.

… privatisation translated into massive job losses and social exclusion. It may be argued that there is some correlation between the aggravation of poverty and the growing foreign control of resources and assets, because this control is associated with repatriation of huge profits and tax evasion. In a sense, privatisation can be assimilated to a robbery of national patrimony – including strategic sectors – through the transfer to foreign control of assets built throughout years of sacrifices by the people.

Therefore, reversing privatisation is necessary in order to restore people’s sovereignty over a nation’s resources. It is time for African countries to put back into public and collective hands the control of key sectors and natural resources. No genuine endogenous development is possible without control of a nation’s wealth. So Africa should learn from the lessons being given by capitalist countries, including the United States, which are nationalising their banks and financial institutions. But more importantly, African countries should learn from the examples of other southern countries, like those of South America and Asia, where governments are taking back what was sold off to multinational corporations.

There is much more detail, discussion, and documentation, read the whole article, The global financial crisis: Lessons and responses from Africa

I cringe when I hear about the G20 stimulus package using the IMF and the World Bank. Supposedly it is intended to help Africa get out of current problems caused by the collapse of global financial capitalism. So long as the IMF and World Bank continue their traditional practices, they will bring disaster. I think Naomi Klein offers some targeted advice to the US and specifically to the US Congress:

It should first of all demand an independent review of the role the IMF played in creating and deepening the crisis (for instance, by requiring that loan recipients deregulate their financial sectors and eliminate capital controls, as the IMF did during the Asian Economic Crisis). And it should demand that the IMF never require recipients of this loan money to make deep cuts to social spending (on health, education and pensions…) or to lay off public sector workers in the midst of the crisis. This is crucial because the IMF has been requiring exactly these types of budget cuts and layoffs in exchange for loans in Latvia and elsewhere in Eastern Europe, causing massive unrest. Further, if governments decide that in order to meet the crisis, they need to do things like subsidize farmers (the major demand in the Greece protests, for instance), they must retain the flexibility to do that.

The reasoning is simple: Obama is on record demanding that other G20 countries spend money on economic stimulus. The trillion dollar G20 pledge was presented to us as a global economic stimulus package. But the IMF is well known for demanding the exact opposite from its loan recipients: deep budgetary austerity, tax increases, and bans on subsidies. That means that unless there are clear conditions attached to the new IMF money, the extra trillion dollars could actually lead to deep economic contractions, with the new money just going to useless financial sector bailouts in countries around the world, rather than into real economy investments. It’s also worth noting that some of the money is going to the World Bank so it’s an opportunity to make demands that the World Bank invest in green energy and infrastructure, as opposed to dirty energy, a bad habit of the bank.

Satellite view of Africa

Satellite view of Africa from google maps

Sokari has been covering the G20, and writes:

It is ironic when you think of the lack of African representation considering the West’s dependency on Africa and not the other way around. This has been from slavery through colonialism to the present. Resources such as oil, copper, gold, silver, chromium, coffee, cocoa and more recently cash crops for feeding the West. Unfair trade policies, low commodity prices, failure to adequately tax companies operating in Africa and the complicity of Western governments and banking institutions in providing tax havens for money stolen by African politicians. If aid is not in itself a business would it not be preferable for example to pay fair prices for Africa’s resources?

Asked if anything positive will come out of this Summit – Not if one is thinking in terms of a major shift in policy towards Africa and Africans taking the initiative to come up with new strategies for development as I mentioned in my previous post. But I do agree with Bob one possible positive outcome may come from changes in Tax Haven laws whereby monies stolen by corrupt politicians is returned to the countries and access to tax havens is shut down.

Daudi is at the G20 too, and writes:

Relying on our current political leaders to draw up and implement a strategy to make Africa relevant in a positive way is a non starter. Indeed those who have succeed in making African relevant to international policy making have done so for increasing negative reasons, for example Mugabe in Zimbabwe and Bashir in Sudan. Ethan Zuckerman labelled the position taken by such political leaders as a strategy of, “If we act deranged enough, maybe they’ll just give us the country.

The burden rests on us, the ordinary citizens of Africa, to come up with a strategy that will increase our positive relevance to important global conversations and thus make it impossible to ignore Africa, Africans and the issues they feel important. I would love to hear your thoughts on what this strategy should adopt.

Also Michael Hudson points out something entirely missing in the US press when discussing the G20, or the US or global economy, in Financing the Empire:

The U.S. media are silent about the most important topic policy makers are discussing here (and I suspect in Asia too): how to protect their countries from three inter-related dynamics:

(1) the surplus dollars pouring into the rest of the world for yet further financial speculation and corporate takeovers;

(2) the fact that central banks are obliged to recycle these dollar inflows to buy U.S. Treasury bonds to finance the federal U.S. budget deficit; and most important (but most suppressed in the U.S. media,

(3) the military character of the U.S. payments deficit and the domestic federal budget deficit.

Strange as it may seem – and irrational as it would be in a more logical system of world diplomacy – the “dollar glut” is what finances America’s global military build-up. It forces foreign central banks to bear the costs of America’s expanding military empire – effective “taxation without representation.” Keeping international reserves in “dollars” means recycling their dollar inflows to buy U.S. Treasury bills – U.S. government debt issued largely to finance the military.

To date, countries have been as powerless to defend themselves against the fact that this compulsory financing of U.S. military spending is built into the global financial system. Neoliberal economists applaud this as “equilibrium,” as if it is part of economic nature and “free markets” rather than bare-knuckle diplomacy wielded with increasing aggressiveness by U.S. officials. …

… The U.S. media somehow neglect to mention that the U.S. government is spending hundreds of billions of dollars abroad – not only in the Near East for direct combat, but to build enormous military bases to encircle the rest of the world, to install radar systems, guided missile systems and other forms of military coercion, including the “color revolutions” that have been funded – and are still being funded – all around the former Soviet Union.

Pallets of shrink-wrapped $100 bills adding up to tens of millions of the dollars at a time have become familiar “visuals” on some TV broadcasts, but the link is not made with U.S. military and diplomatic spending and foreign central-bank dollar holdings, which are reported simply as “wonderful faith in the U.S. economic recovery” and presumably the “monetary magic” being worked by Wall Street’s Tim Geithner at Treasury and Helicopter Ben Bernanke at the Federal Reserve.

So the ultimate question turns out to be what countries can do to counter this financial attack.

AFRICOM, the US Africa Command, is the newest feature of this global military aggression, and expansion of military spending. There is a lot here to ponder, for Americans, if they ever hear about it, and for everyone else in the world.

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