Adonis Diaries

Posts Tagged ‘Neoliberalism

 

The TPP Will Finish What Chile’s Dictatorship Started

Late Chili President Salvador Allende said at the UN in1972, a speech given less than a year before the US masterminded a military coup d’état that overthrew him and killed him:
“We are faced by a direct confrontation between the large transnational corporations and the states. The corporations are interfering in the fundamental political, economic and military decisions of the states.
The corporations are global organizations that do not depend on any state and whose activities are not controlled by, nor are they accountable to any parliament or any other institution representative of the collective interest. In short, all the world political structure is being undermined.”

Neoliberalism is hard to define. It could refer to intensified resource extraction, financialization, austerity, or something more ephemeral, a way of life, in which collective ideals of citizenship give out to marketized individualism and consumerism.

This September 11th will be the forty-second anniversary of the US-backed coup against the democratically-elected Chilean government, led by the Socialist Salvador Allende, kicking off a battle that is still being fought: in Chile, protests led…

Like rust, neoliberalism never sleeps.

The global rentier class that enriches itself off the neoliberal property-rights regime had, a decade ago, hoped to lock down Latin America under the hemisphere-wide Free Trade Agreement of the Americas (FTAA).

In its original version, the FTAA was meant to be a special carve-out for Washington and Wall Street, as global “free trade” advanced under the umbrella of the Doha round of the WTO.

Kind of an economic Monroe Doctrine, whereby the United States could maintain its regional hegemony over Latin America while still promoting, when it suited, globalization.

But that scheme fell apart with the return of Latin America’s post–“Washington consensus” left, led at the time by Brazil, Venezuela, and Argentina. And the Doha round stalled.

So Washington came back with the Trans-Pacific Partnership, a 12-country treaty—including Chile, Peru, and Mexico—vigorously promoted by the Obama administration.

It’s been described nicely by Lori Wallach as NAFTA on steroids.

As others have pointed out, the TPP isn’t really about trade. Rather, it’s a supra-national regulatory straitjacket that institutionalizes Allende’s 1972 warning.

Among other things, the TPP has the effect of hiving off Brazil and Argentina from Latin America’s Pacific Rim countries. South America’s governing left is weakened and defensive, and the vitality with which Lula, Chávez, and Kirchner pushed back on any number of US initiatives—war on Iraq, trade, intellectual property, and so on—is dissipated.

In Brazil, Dilma has recently capitulated on a number of issues she had long resisted, including surveillance and the adoption of Patriot Act–like “anti-terror” legislation (not to mention her recent visit to NYC to genuflect before Henry Kissinger).

The divide-and-rule TPP would, by creating a divergent set of economic interests among neighboring countries, further limit the possibility of political solidarity against economic and security policies pushed by Washington (as this pro-TPP op-ed implies).

The TPP includes one provision that will, if activated, complete the 1973 coup against Allende:

its Investor-State Dispute Settlement mechanism (ISDS) that allows corporations and investors to “sue governments directly before tribunals of three private sector lawyers operating under World Bank and UN rules to demand taxpayer compensation for any domestic law that investors believe will diminish their ‘expected future profits.’”

You can read James Surowiecki, in The New Yorker, here on the ISDS. And here is Elizabeth Warren. And Public Citizen and The Atlantic.

The principle behind the ISDS—that corporations have an inherent right to demand compensation for any regulation that might impinge on their “expected future profits”—is a perfect negation of a major principle of Allende’s socialist program: that poor nations not only had a right to nationalize foreign property but could also deduct past “excess profit” from compensation for that property, calculated as anything above 12 percent of a company’s value.

Allende and his Popular Unity coalition not only seized the operations of the Anaconda and Kennecott mining companies but, once the sums were done, handed them overdue bills for even more money.

On September 28, 1971, Allende signed a decree that tallied the “excess profit” owed by these companies to be $774,000,000. (as might be expected, US and Canadian mining companies, including the current version of Anaconda, are strong for the TPP.)

This decree was a turning point in the history of international property rights, when Washington (which, since the Mexican Revolution, had grudgingly accepted the idea of nationalization) decided that its tolerance of Third World economic nationalism had gone on long enough.

In an October 5, 1971, meeting in the Oval Office, Treasury Secretary John Connally complained to Nixon: “He’s [Allende] gone back and said that the copper companies owe $700 million. It’s obviously a farce, and obviously, he’s a—he doesn’t intend to compensate for the expropriated properties. He’s thrown down—He’s thrown the gauntlet to us. Now, it’s our move.”

Nixon then said he had “decided we’re going to give Allende the hook.”

Connally: “The only thing you can ever hope is to have him overthrown.”

In the 1970s, socialism was, for many, on the horizon of the possible, with the principle of “excess profit” seen as a way for exploited countries to, in Allende’s words, “correct historic wrongs.”

Today, forget nationalization, much less socialism. If the TPP is ratified and ISDS put into effect, countries won’t be able to limit mining to protect their water supply or even enforce anti-tobacco regulation.

This September 11, as the Obama administration makes its final push for the TPP, it’s worth taking a moment to realize why all those people in Chile—and in Uruguay, Brazil, Argentina, Guatemala, El Salvador, and throughout Latin America—died and were tortured: to protect the “future profits” of multinational corporations.

 

 

How Neoliberal expatriate Contractor Class is managing the contracted national debt in Lebanon?

How neoliberalism is applied in your country?

Neoliberalism is not a difficult concept to comprehand: Just observe its applications and consequences on your survival instinct.

The best way to understand neolibralism in the western developed nations is to witness how developing States are applying it.

Particularly, new small States recognized in the UN that were under direct mandated powers for many decades, and now are appeasing their former “masters” in order to enrich the oligarchy ruling class these under-developped “nations” are sustaining.

How neoliberalism is applied in Lebanon?

Together with the governor of the Central Bank and the Prime Minister, the minister of Finance is a crucial player in the management of government debt.

From 1992, late Rafik Hariri PM, and later the Hariri clan hoarded the control of these three institutions.

The policy adopted in 1993 pegged the Lebanese currency to the US dollar. What that means?

The State borrows on behalf of the government large sums of loans that are not needed to finance the deficit.

The borrowing mechanism is basically a political decision to get the State tightly linked to outside multinational financial institutions… Institutions that the ruling class has invested in and wants to generate quick profit in this globalization era… at the expense of the people they claim to work for their benefit…

This scheme drove up the demand for the Lebanese currency, raised the interest rates on government debt, and high interest returns for depositors (reaching 30% at determined periods as the Future Movement spread the words among its elite class to deposit) and the new expatriate Contractor wealthy class of billionnaires…

Leading the country into a dept trap.

A debt ever increasing ($60 bn) and absorbing a third of the government budget, every year since 1992.

Servicing the interest of the debt has one purpose: Keeping the new neoliberal Contractors class in control of the management of the financial and economic institutions.

The main benefiaciaries were commercial banks and their wealthy depositors: Lebanon financial and economic elite classes (new expatriate contractors, warlords, oligarchic politicians…) have the necessary savings to invest in government debt instruments.

The notion of neoliberalism is that, as long as the government maintains the confidence of the elite classes in the soundness of the financial policy, the situation can remain in control, precariously in control, and relying mainly on foreign support for the policy.

The IMF working paper from 2008 mentions that the continuous rollover of Lebanon debt depends on an “implicit guarantor” from donors and international financial institutions.

And who is the main donor guarantor? It is Saudi Arabia absolute wahhabi monarchy.

This Saudi Kingdom

1.  Bought up Lebanon government bonds when investors refused to buy the bonds

2. It provided the largest chunk of concessionary loans at Paris 2 donor conference in 2002, and Paris 3 in 2007

3. It transfered One $bn to the central bank during Israel preemptive war in June 2006.

Consequently, the governor of the central bank, PM and finance minister must satisfy Saudi Arabia confidence!

The Hariri clan main objective was to deepen neoliberal economic “reforms”.

Former Fouad Seniora PM reiterated the neoliberal program, including privatization of State-controlled entities, welfare “reforms“, politically aimed at curtailing patronage opportunities of political rivals to the Future Movement…

However, Seniora could not pull off his wishes of abolishing the Council of the South (a Box of money controlled by Parliament chairman and worlord Nabih Berri) or the Central Fund for the Displaced “sandouk al mouhajjareen” (controlled by the Druze warlord Walid Jumblatt)

For over two decades, the Hariri clan attached a dozen public institutions to the Prime Minister, controlled the municipality of Beirut, extendit building permits to its elites and the foreign investors and dropping any resistrictions when convenient, assigning public contracts to the “Future Elite contractors” and entrepreneurs at manyfold the proper cost, extending their hold on Solidere for 75 years, never accounting for the bids on Sukleen which collect waste in Beirut at $100 per ton while costing $30 in Zahle for example…

The current “national debt” has skyrocketed to reach $70 bn, even after 2 decades of paying high interest rates. In addition to funding the warlord “reconstruction chests”, part of the loans were used to paying the tribute to the Syrian oligarchy, since lebanon was under Syria mandated power till 2005.

Mind you that Syria, after 2001, began a neoliberal policy for its oligarchic elite class, and privatizing new public institutions such as the mobile telecommunication and oil extraction and grandiose Real Estates development in Aleppo, Homs and Damascus…

Note 1: The oil boom increased the number of Lebanese workers in the Arab Gulf Emirates and Saudi Arabia within a decade from just 50,000 in 1970 to well over 210,000 in 1980, or one third of Lebanon work force.

Note 2: Post inspired from two chapters written by Fabrice Balanche and Hannes Baumann in the book “Lebanon after the Cedar Revolution

Note 3: A wealthy international neoliberal club requires from its members to extract profit from their own country, as a proof of allegiance to global neoliberalism, in order to facilitate the infusion of unwarrented loans to their corresponding State.

Have you witnessed that almost all current prime ministers, finance ministers and governors of central banks in Europe, the USA and many other countries were “employees” at the IMF, the World Bank , World Commerce institutions and international financial corporations?

Note 4: Basically, the expatriate billionnaire contractors initially got the blessing of the former civil war warlords (Nabih Berri, Walid Jumblatt, Samir Jagea… supported by Syria, Saudi Arabia and the US neoliberal financial institutions) who were brought back to power, and then managed their financial porfolio and financed the election campaigns as political allies…


adonis49

adonis49

adonis49

October 2020
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