Adonis Diaries

Posts Tagged ‘World Bank

Tidbits #16

Prediction that the richest 1%  in the world would own the same wealth as the poorest 50% by 2016 had come true a year earlier than expected. Those are the only predictions that come true. Including increased natural calamities. And increased flow of refugees and displaced people. And more people dying of hunger and curable diseases.

The adult world is becoming a curiosity to me at an advanced age: When the time was due to step in, it was too late for me to learn a new set of behaviors, like observing intently and asking plenty of supposedly nonsense questions

Refugee kids playing “game of crossing borders”: running around then shouting POLICE POLICE … all kids to the ground, quiet! They get caught by the police. Kid continues the story: “ then they put us in this closed van! No windows, very crazy roads. We started vomiting, they didn’t stop. They just kept driving and sent us back to this camp in Bosnia.

” Sometimes, your only available transport is a leap of faith“? All the time, all I need is an available transport system: train for example and public on-time public transport?

Mimeomia: the frustration of knowing how easily you fit into a stereotype, even if you never intended to, even if it’s unfair, even if everyone else feels the same way. Categorization trend is Not helpful in sociology.

Civilization “conveyor belt”: Tribes bordering urban and rural regions. Transmitters of cultural differences, prime “intelligence gatherer or front-line intelligence agencies” for the powerful neighboring empires. These tribes are the guides in time of wars; and they guard the security of caravans crossing regions and extend facilities in water and supplies.

 Music is syntactic, not semantic (meaning). Language of music preceded speech.

The Mekong Delta is a huge network of river tributaries that far outnumber roads. Because of the combined effects of climate change, dams, and sand mining of the river, 300,000 people have left the region over the past few years—they can no longer sustain their livelihoods due to the dwindling waterways.

Why world economy is Not disturbed and shares don’t drop when epidemics are located in Africa? Ebola, Sida…

In 2 decades (1910-30) the Harlem section of Manhattan drew nearly 175,000 African Americans to its neighborhood of just three square miles. The influx of people to the area led to a period of groundbreaking contributions in what became known as a the Harlem Renaissance. #BlackHistoryMonth

Two decades since bed bugs returned in force, why don’t we have a solution? The answer comes down to money: very expensive to treat. Bed bugs have circled the world, traveling on first-class luggage and hopping on hostel-going backpacks, paranoia has followed.

The quick stress reaction is considered “positive,” because it is temporary and helps us survive. But there are the “toxic stress” from frequent more mundane stressors: Our bodies react in the same way. When a child faces constant and unrelenting stress, from neglect, or abuse, or living in chaos, the response stays activated, and may eventually derail normal development. The consequences sometimes even span generations for these adverse childhood experiences, or ACEs,

I am glad oil and gas demand and consumption and reserves are dwindling: constant growth economies are the plight for the recovery of earth and sustainable situation

Three current studies have uncovered this direct correlation: Offshore accounts of “Elite class” of under-developed States increase 3 folds each time the World Bank infuses fresh money to their States. And it is the poorer people who suffer from increase taxes and conditions imposed by the IMF and World Bank. 

Comparing the behavior of Turkey Erdogan with Syria leadership on US $ restriction and sanctions

Syria Lira versus Turkish Lira that devalued 20% in a week.

What about the Syrian and Turkish currency? How the financial system fared in both countries?
Within a week of Trump imposed harsh financial transactions on Turkey, for buying Soviet anti-jet missiles SS400, Erdogan reacted virulently and nuttily demanding from the Turks to exchange their saving in dollars to State currency, as
During the world war on Syria, this regime never asked its citizens to change their saving into local currency or sell their jewelry and gold acquisition..
Mind you that the main purpose of Syria civil war was to punish the regime and its citizens for developing with Zero sovereign debt for 2 decades and remaining self-sufficient in food stuff and medicine, while having a universal health care and free education.
As the war is coming to an end, Syria is still self-sufficient in food stuff and is Not intending to borrow money from the colonial powers or the World Bank or the IMF.
Factories are back to work and exporting to Iraq, Lebanon and Iran.
Syria is generation enough energy to even export to Lebanon.
Lebanon, ruled since 1991 by the same civil war militia “leaders” has been spending $20 billion on public energy and barely generating 10 hours: the deficiency is provided by the mafias private generators.
The Gulf Emirates and Saudi Kingdom are in a hurry to open their embassies in Damascus, but Syria is Not about to let diplomacy set aside the compensations required that they inflicted on the Syrian people.

ليرة تركيّة و ليرة سوريّة..

سبع سنوات و نيّف من الحصار الاقتصادي و التّجاري و السّياسي و الاجتماعي و التّكنولوجي فقدت خلالها اللّيرة السّوريّة قيمتها الشّرائيّة بشكل يفوق أكثر التّوقّعات تشاؤماً و بمراحل، لم يخرج علينا القائد الأسد ليطلب منّا أن نبيع دولاراتنا المخبّأة للبنك المركزيّ و لا أن نبيع مدّخراتنا من ذهب و مجوهرات و نودع ثمنها في المصارف العامّة.

العالم-مقالات وتحليلات

الإرث الهائل من أساليب التّدبير الّتي كرّسها عهد القائد الخالد حافظ الأسد أتت أُكلها في سنوات القحط و الحصار ،لم نركع لمطالب صندوق نقد دولي و لم نشحذ من دول صديقة و لم تفرض الحكومة سياسات تقشّف واضحة أو وقحة ضدّ الشّعب، صحيح أنّنا عانينا و لا زلنا من التضخّم و غلاﺀ الأسعار و ارتفاع سعر صرف الدّولار ،لكن كلّ المؤشّرات كانت تدل على أنّ الدّولة تسيطر بشكل أو بآخر على كلّ ما يجري و أنّ ارتفاع الدّولار أو انخفاضه هو حكماً بيدها ،

و من كان يعتقد أنّ السّوق السّوداﺀ وحيتانها هي من تفرض سعر الدّولار فهو قصير نظر وأعمى بصيرة، أعجبنا ذلك أم لم يعجبنا، كانت سياسة ذات بعد نظر.

من يتابع سيرورة الأمور يدرك أنّ الدّولة استثمرت في الأزمة عبر إدارتها بخبرة وبحنكة منقطعة النّظير وجنّبت نفسها الرّضوخ والانصياع للدّول الغربيّة ولم تضع رقبتها على نطع السّيّاف الاقتصادي العالمي المتمثّل بصندوق النّقد الدّولي.

تركيّا دقّت ناقوس الخطر على لسان رئيسها بعد أسابيع قليلة من الإجراﺀات الأمريكيّة الّتي طالت اقتصادها وتسبّبت بشبه انهيار لعملتها، حيث طالب أردوغان الشّعب التّركي ببيع مدّخراته من القطع الأجنبي للمصارف الحكوميّة وبيع الذّهب والمجوهرات وتوطين ثمنها في المصارف كإجراﺀ داعم لليرة التّركيّة وصرّح بعبارة تنمّ عن يأس وإفلاس حيث قال : “لنا اللّه”

نمتنّى أن تنعكس العقليّة الاقتصاديّة السّوريّة الّتي أدارت الأزمة والّتي يمكن وصفها بالعبقريّة، نتمنّى أن تنعكس إيجاباً على حياة المواطن السّوري في المرحلة القادمة بما يستحقّ،

فالحمل الّذي تكبّد عناﺀه هذا المواطن خلال فترة الحرب تنوﺀ بحمله الجبال وحقّه على الدّولة أن تعوّضه سنين صبره خاصّة يعد تباشير الانتصارات العسكريّة الكاسحة للجيش العربيّ السّوريّ وللانفراجات الاقتصاديّة المبشّرة والّتي هي انعكاس واضح لانتصارات الجيش.

بشار كاسر يوسف– دمشق الآن

USA Territorial expansion and dominion under various excuses

Here are a few samples of countries that US troops invaded and occupied under various excuses since Independence. Almost all of these countries have experienced repeated US military operations over the last 2 centuries

First, the reasons were for securing interest and US personnel safety.

Then, it was for maintaining Free Market for US export

Then the reasons were for creating “democratic systems” that the US and all colonial nations abhorred to institute abroad

Then it was for sustaining makeshift democracies while fully supporting all dictatorships around the world, as long as they were Not satellite to Soviet Union, or current China

Then fomenting extremist factions, (lately religious extremists of Al Qaeda and ISIS) in order to destabilize nations that were debt free from IMF and World Bank (like Syria, Iraq, Venezuela…)

1776–1794 – Chickamauga Wars, a continuation of the Second Cherokee War that included a larger number of native tribes attempt to halt the expansion of settlers into Kentucky and Tennessee
1785–1795 – Northwest Indian War, a series of battles with various native tribes in present-day Ohio. The goal of the campaign was to affirm American sovereignty over the region and to create increased opportunities for settlement.
1816 – Spanish Florida. United States forces destroyed Negro Fort, which harbored fugitive slaves making raids into United States territory.[RL30172]
1823 – Cuba. US landings in pursuit of pirates occurred April 8 near Escondido; April 16 near Cayo Blanco; July 11 at Siquapa Bay; July 21 at Cape Cruz; and October 23 at Camrioca.[RL30172]

1835–42 Florida Territory. US Navy supports Army’s efforts at quelling uprisings and attacks on civilians by Seminole Indians. Government’s efforts to relocate Seminoles to west of the Mississippi are hindered by 7 years of war.

1835–36 Peru. December 1835, to December 7, 1836. Marines “protected American interests” in Callao and Lima during an attempted revolution.[

1838–39  Sumatra (Indonesia). December 1838, to January 1839. A naval force landed to punish natives of the towns of Quallah Battoo and Muckie (Mukki) for depredations on American shipping.

1840 – Fiji Islands. July. Naval forces landed to punish natives for attacking American exploring and surveying parties

1842 – Mexico. Commodore Thomas ap Catesby Jones, in command of a squadron long cruising off California, occupied Monterey, California, on October 19, believing war had come. He discovered peace, withdrew, and saluted. A similar incident occurred a week later at San Diego

1870 – Kingdom of Hawaii. US forces placed the American flag at half-mast upon the death of Queen Kalama, when the American consul at Honolulu would not assume responsibility for so doing.

1871 – Korea. Shinmiyangyo. US naval force attacked and captured five forts to force stalled negotiations on trade agreements and to punish natives for depredations on Americans,

1882 – Egyptian Expedition. American forces landed to protect American interests during warfare between British and Egyptians and looting of the city of Alexandria by Arabs

1888 – Haiti. A display of force persuaded the Haitian Government to give up an American steamer which had been seized on the charge of breach of blockade.

1888–89  Samoan crisisFirst Samoan Civil WarSecond Samoan Civil War. US forces were landed to protect American citizens and the consulate during a native civil war.

1891 – Chile. US forces protected the American consulate and the women and children who had taken refuge in it during a revolution in Valparaíso

1894 – Rio de Janeiro Affair. A display of naval force sought to protect American commerce and shipping at Rio de Janeiro during a Brazilian civil war.

1846–48 – Mexican-American War  US has annexed Texas in 1845. war ended with the Treaty of Guadalupe Hidalgo, Treaty gave the U.S. states of California, Nevada, Utah, and parts of Colorado, Arizona, New Mexico, and Wyoming.

1852–53 Argentina.  US Marines landed and maintained in Buenos Aires to protect American interests during a revolution.

1853–54 Japan. Commodore Matthew Perry made a display of force leading to the “opening of Japan.”
1854 – China.  American and English ships landed forces to protect American interests in and near Shanghai during Chinese civil strife.[

1853 Nicaragua. US forces landed to protect American lives and interests during political disturbances

1855 – Uruguay. United States and European naval forces landed to protect American interests during an attempted revolution in Montevideo
1856 – Panama, Republic of New Grenada. U.S. forces landed to protect American interests during an insurrection.
1859 – Paraguay. Congress authorized a naval squadron to seek redress for an attack on a naval vessel in the Paraná River during 1855. Apologies were made after a large display of force.
1868 – Colombia. US forces protected passengers and treasure in transit at Aspinwall during the absence of local police or troops on the occasion of the death of the President of Colombia
1898 – Spanish-American War US declared war with Spain. The war followed a Cuban insurrection, the Cuban War of Independence against Spanish rule and the sinking of the USS Maine in the harbor at Havana.
1899–1913 Philippine IslandsPhilippine-American War US forces protected American interests following the war with Spain, defeating Filipino revolutionaries seeking immediate national independence and colonized the Philippines
1918–20 Soviet Union. Marines were landed at and near Vladivostok in June and July to protect the American consulate and other points in the fighting between the Bolshevik troops and the Czech Army which had traversed Siberia from the western front.
These are just a tiny samples of countries that have been repeatedly invaded.
The dropping of 2 atomic bombs, carpet bombing of Germany, North Korea, Viet Nam, Afghanistan, Iraq and the usage of defoliant Orange chemicals, depleted Uranium ammunition, phosphoric bombs and most weapons banned by the UN and collateral damages in successions, practicing tortures at a grand scale without anyone being tried at The Hague Tribunal for crimes against humanity is mind boggling of the violent brutality of US military engagement.
Mind you that England and France surrounded the US during the civil war (in Canada and Mexico) and the House of Rothschild blackmailed the US with exorbitant interest rates until Lincoln decided to issue the Green Buck.
If it were Not for Russia that came to the rescue with its naval fleet and securing gold reserve, the world have been much better off with a divided USA

Odious Dept: IMF sustained by developing countries interests on loans

When presidents and the oligarchies in developing States are extended liquidity at high interest loans from international creditors and are used for their own benefit instead of investing the money in public infrastructure, whose debt is it? The president’s or the people’s?

This question has led to increasingly charged discussions between indebted countries and economists at institutions like the World Bank and the International Monetary Fund (IMF). Especially in post-revolutionary countries like Egypt and Tunisia, people are asking: Why should we pay a debt that went straight to the pockets of a dictator, or worse, financed a security apparatus that oppressed us?

Actually, these kinds of loans are categorized as Foreign Aid disbursed to governments, instead to particular communities or institutions.

Raphael Thelen posted on NOw this Feb. 8, 2013

Philip Rizk and other activists are leading the Drop Egypt’s Debt Campaign to make the issue public.

“We want to open the accounting books of the Mubarak regime. Many of those credits aren’t legitimate, because the IMF worked with the old regime, even though they knew that the money would not benefit the people.”

Several members of Mubarak’s regime were sentenced for corruption last year. The clique of young businessmen surrounding his son Gamal famously embezzled funds and oversaw opaque deals that involved the privatization of public companies and natural resources.

These “market-friendly reform programs”, dubbed neoliberal policies, were part of the prescribed structural adjustments that came as conditions for the IMF loan.

The Odious Debt concept was first tested in Ecuador in 2008.

After an audit by an international commission, the country’s democratically-elected President Rafael Correa declared that 30% of the debt had been contracted illegally by the previous administration. The findings led to a debt reduction of $3 billion. “As a president I couldn’t allow us to keep paying a debt that was obviously immoral and illegitimate,” Correa said.

The World Bank, IMF and Western analysts predicted that the Ecuadorian economy would take a hit, saying that foreign investors would refrain from making deals with the country. Instead, Correa used the money that would have gone into debt service and invested it in public infrastructure projects and education.

In 2010, two years after the debt audit, the economy had grown by 3.6 percent, and in 2011 by 6.5 percent. Poverty rates dropped from 36.7 percent in 2008 to 28.6 percent in 2011. Annual income per capita rose from $3,540 in 2008 to $4,200 in 2011.

Two years later international investors are investing in Ecuador again.

Nick Dearden from the human rights group Jubilee Campaign sees Ecuador as a role model for other countries. “If you look at the countries that defaulted on their debts, they are doing much better now. They have thrown Western institutions out and now are using their own resources,” he said.

Tunisia, where the Arab Spring originated, is pursuing a similar course.

A bill that is being prepared to be presented to the parliament asks for a debt audit and cancellation of debts that had been illegitimately contracted under ousted dictator Zine el-Abidine Ben Ali. The Tunisian government’s external debt is currently $14.6 billion, or 33 percent of the country’s GDP. Foreign debt payments are $1.9 billion a year, or 15 percent of government revenue. Though it is not clear how much, a part of the foreign debt was taken by Ben Ali’s regime, and debt audit activists say they might be odious.

As in Egypt, Ben Ali and his cronies were known for their corruption.

A letter signed by 100 members of the European Parliament is calling “for an immediate suspension of EU debt repayment by Tunisia (with frozen interests) and an auditing of the debt.” Belgium’s parliament as well has called for a similar suspension of all bilateral debts. Ecuador has offered the Tunisian government its experience in auditing its debt.

So far, Tunisia’s post-revolutionary government is cooperating with the IMF and the World Bank and has continued Ben Ali’s market-friendly economic policies of low taxes for corporations, the privatization of public firms and resources, as well as the flexibility of the labor law.  The resulting widening gap between rich and poor has sparked protests across the country.

In the difficult economic conditions of post-revolutionary countries like Tunisia, the easiest way to gain liquidity or repay existing debts is to take on new debts. But this only pushes the problems into the future, while the influence of institutions like the IMF grows along with indebtedness.

The IMF depends on the interest payment on debt of developing countries.

“This way the form of democracy might be preserved, but the people lose their decision-making power over their economy. They won’t be able to influence the country’s economic policies in a way that reduces poverty,” says Dearden. “The way out of this is a debt audit and a cancellation of its illegitimate

Note: On IMF failed mission

Perpetrators of financial crisis reap the benefits, politically and financially! Any other cause of social upheavals?

Since WWII and till the fall of the Berlin Wall (end of the Soviet Union empire), the capitalist States, especially the USA and England, made it a fantastic profitable business of borrowing money.

You might think that when you borrow at high interest rate, you are really in great trouble:  That is correct on the individual level and for small enterprises.

On a State level, particularly powerful States, with the right of issuing currency and the power of influencing inflation, the US and England managed to generate 6.3% of their GNP just by keeping inflation over 4% during this entire period.

How that?

Lenders or buyers of State treasury bills discovered that inflation actually resulted in negative return on the interest rate they expected to earn “while sleeping”:  The dept of the States were automatically reduced by more than a 50% because of the frequent devaluation of the currencies.   For example, the public dept of the US of 116% dropped effectively to 66%, and the public dept of England dropped to 138% from the high of 216%.

How that again?

The States reimbursed the nominal value that kept being reduced every year from the inflation level.  Practically, an interest rate of 5% is repaid with a currency devaluing at a 10% rate!  It is the State borrower that pocketed the difference in profit.  The end result was that you deposited your money in banks that lent to the State at rates lower than effective inflation rate.

Why investors grudgingly accepted to be fleeced out of their expected profit? 

It appears investors with cash surpluses had no viable alternatives due to capital control and nationalization of banks policies.

The other risky alternative, against the law and liable of prison terms, was to dispatch bag full of gold bars to foreign banks.

Actually, since 1968, the dollars was constantly floating and ceased to be linked to gold reserve:  The European countries had to cover up for the dollar frequent fluctuations since the dollar was the international currency in the “Free World“, fighting this survival battle with communist Soviet Union!

The dollar was the problem of the other productive “Free countries” and never affected the economic well-being or development of the USA.

During that period, developed States instituted vast social network coverage in health care, early retirement and excellent saving retirement plans…:  People in developed countries can go on extended vacation trips with pocketful of money.

Things have changed quantitatively in the 80’s:  Salaries were reevaluated at the rhythm of inflation, still within capital control policies.

Thus, developing States could no longer generate profit from borrowing extensively, though borrowing was still an excellent means of covering larger public dept.  The current US public dept is about 14 trillion or 14,000 billion and increasing like mad.

Things have changed qualitatively in the 90’s:

The power shifted from States to multinational financial institutions.  States covered up the deficits of banks (bankruptcies) under the excuse that economic chaos will befall society if banks are not salvaged by using people tax money!

After the 2007 financial crisis, most developed States extensively salvaged irredeemable banks with practically no financial preconditions.  The States are bankrupts and entirely reliant on banks and international monetary institutions to cover up budget deficits.

For example, the IMF, World Bank, Europe Central Bank and powerful international financial companies are not reluctant in abusing of blackmailing tactics, unbearable constraints, and issuing ultimatum to less developed borrowing States such as Greece, Portugal, Ireland…

The poorer borrowing States are pressured to balance budgets, and specifically by targeting the previously acquired social network  rights, and the reduction in salaries and retirement benefits…

Liberal capitalism was hardly able to force social democratic States to tampering with a single social right acquisition.

Currently, States are hitting all these social network benefits at the same time, as a national requirement for a “package deficit reduction plan“! State Parliaments are happy satisfying inhuman and brutal constraints set by non-elected, unregulated, and uncontrolled foreign financial institutions.

Liberal capitalists  expect the rights of the richest 10% classes to remain intact!  Unemployment is increasing drastically and free paid jobs are the trend, named “extended training periods“…

The irony is that most chairmen of finance ministries, central banks, and public monetary regulation institutions are former high officers in private international financial companies. 

Tax laws and loopholes are vastly privileging the rich classes.  Indignation is mounting:  It is no longer a matter of financial techniques and gimmicks, but a political and social struggle to redress power imbalance. 

The people and their representatives have to regain the political power and start giving priority to the welfare and the due rights of the common working people.

Note: The colonial wars in the previous centuries were undertook under the excuse that the borrowing nations failed to repay their debts. Spain lost its colonies in Cuba, Philippine… to the USA.  The far eastern countries such as Viet Nam, Laos, Cambodia, Thailand, Burma… were captured militarily by France and England for failing to repay their debts…

What is the definition of a State: Beside Taxing the people?

Money printing is meant to facilitate internal commerce and expanding trades.  Taxing people for doing business in the Land is viewed as a logical and reasonable endeavor.  Consequently, the more a State print fictitious money, not covered by gold or anything of sustainable values, whatever tax is collected will never be enough to catch up with inflation.

Karl Marks wrote: “Tax is the foundation of a State”.

Sound correct, but I like to get to the root of the taxing concept.

What if “Printing money is the basis for any State“?  In any case, the State is imposing and collecting taxes as an indirect way of demanding a sizable percentage for the money printing monopoly.

We all know from movies and stories that mafia and gangs gather taxes from private enterprises, in return for providing security…

What kinds of security is needed when the gang has the sole monopoly of force in the region? Obviously, mafia and gangs are not in the business of providing health and social security for the people:  People have got to scramble for such kinds of luxuries.

Question:  What can be a discriminating factor between a gang with monopoly of force  and a State that does not consider offering health and social security to its citizens as an integral part of its business?

You may know the revolutionary adage: “No taxing without representation”.

What about the larger majority who pay taxes but are not equitably represented?  Is it the more you pay taxes the better representation you are entitled to?

Is it the better you transfer and turn-over printed money (financial institutions), the more eligible you are to represent the government interests? Is that the way it works?

If we turn the adage around and say: “No representation without paying taxes“; would that sentence smack as conservatism, and a pretty fair concept, socially and organizationally?  For example, if you are in the tax bracket of people earning less than the minimum yearly cut-off level for not paying taxes, would you feel very ashamed to demanding reforms and changes, simply because you didn’t contribute to the State’s treasury?  Is it the way it works?

For example, people in the oil rich producing countries of absolute monarchies and oligarchies (such as Saudi Arabia, Gulf Emirate States, Kuwait, Qatar, and even in Iran and Libya…) don’t have to pay taxes and the cost of gas for cars is minimal because the government do not take any percentage on gas consumed…  By the by, these regimes got it in their mind that their “citizens” are not entitled to significant representation at any level in the government.   Things are changing now in the Arab World.

If the population need social and health security, would these programs be categorized as charity programs in the budget?  

Or only the 20% of the poorest classes in the population should feel gratitude for their bigger brothers in their capability of turning over more money?

Is it how people are currently feeling in Europe with gimmicks of balancing budgets problems? 

People are demonstrating in mass and turning violent, because the governments are playing stupid by eliminating social and health programs, while giving bonus gifts to multinational corporation in tax laws.

The US has been imposing to the least developed States, in the last two decades, the economics constraints of the “Washington Consensus” ideology of the World Bank that says:  “Least developed nation governments should not invest their budgets on health and social programs, and they have to open their markets to foreign products, goods, and money…”

Least developed nations were demanded to just open up their markets to foreign trades and loosen up all laws on the flow of money handled by financial multinationals.

The Republican party in the US, and their allies, want to balance an impossible budget with their fundamental ideology that says: “It is not the business of a State to extending health and social benefits of any kinds to communities.”  Should a State governance emulates how gang operates?

What about privatizing the printing of money and eliminating the concept of State?

Anyway, the powerful financial institutions in the USA have de facto privatized the printing of money.

Four years after the financial crisis, and no resolutions have been contemplated or executed.

Two-head world presidency: Time to bite the bitter pills

Global institutions for trade, commerce, and finance have faltered after the latest financial crisis, and the world superpowers were unable to remedy for the dwindling economic production and market stability.

Every powerful nation is acting on his own to stabilizing its internal problems:  cooperation in the many economic and financial summits proved to be weak and short-sighted.

Most powerful States know that soon the world will be led by the two-headed presidency: The US and China. 

The US, supported by the western powers and Japan, will be responsible for the planning and providing the know-how; while China, supported by the Far Eastern countries will be responsible for the execution of the programs and production. 

The emerging powers (vast lands and large population) such as Russia, India, Brazil, Turkey, Nigeria, and Indonesia will play the current role of the US:  Mainly absorbing the excesses in production and exporting the needed raw materials.

Why the US and China?

The US currently dominate the world’s institutions such as the World Bank, the International Monetary Fund, the World Trade and Commerce organization and the most powerful multinational financial institutions; it has the institutions and the know-how for setting the programs in this Capitalist market.

China has the cheap manpower and a dictatorial central power to moving and transferring millions of workers to far away locations in order to quickly execute programs that “democratic” political structures are slow to perform within tight schedules.

Currently, several members of the old club of the G8 (specifically the US and England), within the G20 of the States that grab 80% of global commerce, had implicitly agreed to resume their old-time preferred method for quick money generation: by accelerating speculations on overvalued currencies and higher interest rates in banks of emerging nations such as Brazil, Turkey, South Africa, Argentina, South Korea, Russia, and China.

Thus, the US and England got their money printing machine in full gear, producing liquidity that far exceeds the need of their internal trade market.  They lend money at reduced interest rates (1 to 2%)  to speculative financial institutions so that they invest the money in emerging State banks.

The old club of the G8 are instituting harsh budget cuts affecting primarily the lower middle class in their societies, this class that consumes 70% of internal trade and effectively shoulders the economy.  Thus, economies in the G8 are not to experience any improvement.

The two-head world power system is inevitable; but for this new world order to be swallowed, a major war is to be created for effective demonstration of its feasibility.

Consequently, WikiLeaks has targeted the diffusion of so-called secret foreign policies that are meant to point out the main next enemy (agreed upon by most powerful States such as US, China, and Russia):  Iran.

The North Korean conflict is but a smokescreen or preliminary military joint maneuver by the major States and ironing out the sphere of influence.

Note:  Current currency speculation by major powers has the following consequences:

First, it destabilizes the financial order in the emerging nations and slows down the expansion of its economy with the implicit political message: “You have accelerated your economic plans to counter-weight the political clout of the G8 club.  This policy is premature and done at the wrong timing.  Take a deep breath before confronting us head on so quickly”

Second, the major drawback for the G8 is that their internal trades will be handicapped since liquidity is not infused to the small and medium industries and enterprises that account for real changes in economic development.

Can Capitalism be reformed? Part 1 of 4

Capitalism is based on four  foundations:

1. Private property of means of production;

2. free exchange (products, services…);

3. open free market for commerce;

4. and availability of a vast pool of people willing to work for salary.

The main driving force is that the owner of the means of production (the bank, the partners, the shareholder, or the family)  should earn as much as the total salary that all workers receive.

Consequently, an employee is hired when the owner can generate profit, at least as equal to the total salary of the hired worker. Actually, members of the Board of Directors, owners of majority of share, and the highest in the hierarchy get first cut on 20% of the total revenue, and not on the gross profit basis as employees, workers…have to negotiate on.

The foundations of capitalism have proven not to function except within strong State institutions, which are almost totally controlled by the capitalist classes.

The judicial system obeys laws decreed by parliaments that are dominated by the richest classes, and the executive is intrinsically dominated by the aristocratic class.

This whole political system is called “capitalist democracy“, where people have the illusion of electing their representatives for a duration.  After election, people are to behave as spectators:  Any serious disturbances are crushed in the name of Law and Order.

Communism tried to abolish the first foundation by claiming that all means of production belong to the State (community property of means of production was a smoke screen and never taken seriously).  Communism also abolished the notion of internal market free exchange by the communes and State institutions:  the central plan or economic program for five years must be met at any cost to pain, suffering, and famine of the population.

Communism went even a step further by eliminating the right of citizens to quit the factory assigned to, move, and relocate to other places in the nation.  Basically, communism drastic economic ideology ended up destroying the foundations of capitalism until it was too late to changing people’s inclination to relying completely on State planning and resource distribution.

In this century, Western European States learned to reform capitalism by involving the government in instituting equitable wealth disparity (tax increase on the rich), encouraging barons of industries to negotiating seriously with syndicates, regulating the liberty of patrons in firing employees, and supporting unemployed until they find a substitute job.  These European economic capitalist systems are labelled “socio-democratic capitalism“.

China has reformed its communist economy one step at a time.  First, it allotted lands to family peasants to exchange the produce with the community; it worked and frequent famine occurrences receded.  Then, communist China allowing private ownership of means of production (and the subsequent financial facility supports) and then encouraging limited internal free exchange and commerce.  Workers are still not free to choosing where to work and to moving to other cities:  Movement of people are regulated.

Rural China is paying the heavy tax in hunger and suffering from the diversion of water and electrical power to the cities and industries and the building of giant projects that pollute and contaminate water resources.

The one foundation that all developed economic systems share is free global trade, which means the liberty to exploiting the developing countries in natural resources and cheap labor.  The developed States are allowed to subsidize their agriculture but the developing nations are not to do it and they cannot even if they witness the need to do it .  The developed States are to flood the markets of developing countries with affordable products with no “legal rights” for the developing nations to increasing import taxes in order to safeguarding their own means of productions.

The developed States can find financial resources at low-interest rates but not the developing nations.  In return for blatant exploitation, the developed States agree “voluntarily” to setting aside a small fraction of their GNP to developing the infrastructures in the poorer States; mainly, self-serving their interests to improving and facilitating exploitation efficiently.

Worst, all “international” institutions such as World Bank, International Monetary Fund, Commerce Trades are dominated by the US and a few European States; thus, transparency and access to timely information and intelligence data are denied the developing nations, or leaked slowly after persistent demand from conscious States.

Fact is, financial institutions (banks, insurance companies…) are the real owner of means of production in capitalist systems.  They own 30% of the total wealth of a nation and represent only 1% of the population.

This is NOT acceptable.  Fact is, financial institutions generate three times more money than the combined tax collected by the government.

This is NOT acceptable.  Any reforms should first target the level of profit that financial institutions are permitted to generate.  “Effective” interest rates should be lowered accordingly and tougher regulations imposed of these behemoths.  Community banks with excellent transparency in decision process and lending policies should be the norm.  The current status of financial institutions is generating abnormal profit with no risks whatsoever.

If capitalism needs salaried people it must secure the fundamental right to work, a wide range of jobs that satisfy varied opportunity, access to affordable education, safe workplace, universal health coverage, caring for the elderly, and justice for people who worked most of their life for a comfortable retreat.  Has capitalism satisfied the basic needs of its workforce?

States should start taxing according to the number of employees hired and to net revenue:  These two criteria are the most objective representatives of net profit and are easy to investigate and account for.

This gimmick of taxing on “net profit” is an accounting fraud that is not objective or fair.  Companies relocating for cheaper workers must be taxed according to the original “national wages” of the workers.  Companies substituting workers for robots should be taxed according to the number of workers substituted.  States will then be able to subsidize unemployed people until they find jobs and be imaginative enough to opening up newer job opportunities.

There is a trend for owners with strong ethics and moral to including employees as shareholders and participating in management decisions:  These companies are doing very well and not suffering from financial crashes.  Institutions and companies for profit are amoral and do not deal in ethical conducts.

Ethics and morality are individual characteristics:  the more such individuals gather in groups to reclaiming fairness and justice in actions the more institutions will be reminded of what is best for society.

The crux for any serious changes in capitalist system is revamping the election laws and processes that will extend much better odds for middle and lower classes to being elected into representative chambers.  (To be continued)

International financial institutions, backed by the US government, created vast operations of fraudulent mortgage schemes as witnessed since 1990.  First, the Saving and Loans banks were “saved” by Bush Sr. infusing $500 billions with tax payers money.  The mortgages were estimated to have 100% probability of losing their entire values.  The federal government and the Saving and Loans banks knew what they were doing. The two powers knew that homeowners would never be able to pay the interest.  Then, a new scheme was invented called “re-financing”

Those junk mortgages were re-sold on the world market and packaged “as sure as treasury bonds”.  This re-packaging scheme was called “derivatives” (as drifting money operations).  James Kenneth Galbraith, professor at the university of Texas, labeled these schemes as “identical to forging money, no more no less”

First, the tax payers (the honest hard-working citizens) paid for the saving and Loans banks in 1990, then they re-paid these fraudulent “faked money” mortgages in 1997, and then, after the Big Financial Crash.  Over one trillion dollars covered the fraudulent operation under the knowledge and ascent of the successive US Administrations.

The US government have been forging dollars since Nixon uncovered the dollars that was seemingly supported by gold reserves. It is not over.  The forging of dollars is going strong and private investors are being scammed every day.

Every time, the US Treasury states that the US economy is strong; when the federal Reserve governor states that the financial state is stable; when the president states during the State of the Union that the US status is strong and secure then, you may say that the government is still forging dollars.

The dollars is disseminated by political pressures; because the US Administration controls the “World bank” and the “International Monetary Fund”; because the US aircrafts carriers roams all oceans and seas.

Wall Street is going strong and hiring.  Over new 160,000 jobs were opened by Wall Street that covers 20% of the budget of the State of New York and 12% of the City of New York.

How Globalization can function adequately for the poorer countries? 

            Globalization is functioning according unilateral “rules of the games” in international institutions. Joseph Stieglitz, Nobel Prize for economics, had written a book in 2002 “The great disillusion” where he critiques the function and ideology of the international institutions such as the World Bank, the International Monetary Fund, and the World Trade Organization.  I have already published reviews in two parts of the book.

 This post focuses on Stiglitz’s recommendations for the international institutions (supposed to be public institutions) to reform in order to give a chance for Globalization to effectively comes to the rescue of the developing States. Thus, in order for world economy and financial stability be the norm then, three urgent reforms are needed.

            First, the international institutions such as the World Bank, the International Monetary Fund, and the World Trade Organization have to focus on collective global problems that require collective participation.  For example, when global market economy is not running satisfactorily; when one State harms others and gets away with it (no indemnization procedures) then there are over production of certain commodities and under production of others. We have to tackle defense spending that does not generate any public benefits. 

For example, public education sectors must be financed by international institutions since private sectors have failed to consider that urgent facet in states’ economy.  For example, we have the environment, oceans, atmosphere, CO2 emissions and the other harmful gases, sanitary challenges and discharges, clean water sources, diffusion of contagious diseases, famine, and natural calamities are becoming global problems that require global resolutions and cooperation.  All the global problems are interrelated: poverty leads to degraded environment and deforestation which in return increases poverty.  There are financial interventions that are beneficial locally in reducing local pollution.

            Second, the mode of governance such as control, management, decision-making and administration of international institutions has to be drastically reformed.  The economic and financial interests of developed States have established unilateral set of rules and regulations on how to be applied globally without any serious input from the concerned parties in the developing countries. Developing States were targeted for hegemony behaviors. For example, in the IMF administration it is the finance ministers of the developed States and their central banks governors who are presiding as decision makers. In the World Trade Organization it is the ministers of commerce in the developed countries that run the show: they have particular perspective in matters of global trade.  Who has the right of vote in these international institutions? The poor States and the workers have no representatives in these institutions to offer pertinent alternative feedback as to their difficult situations. The voting rules and representation around the table of decision makers have to be reformed drastically.  The fact is that the IMF is rich because it is the developing countries that are reimbursing their debts at high interest rates.

            At least, reforms in the structures of official direction in the IMF and WB can help in the short-term. For example, African delegates should be allowed to participate and be listened to even if they still cannot vote. Participation in meetings can aid the developing State representatives gather pertinent information and intelligence on world problems may partially fill the gap in intelligence dissemination. The IMF and WB should invest in developing “think tanks” institutions in the developing countries in order for their representative to be at par with ongoing discussions.

            Third, transparency within the international institutions administrations have to be made public since they are public. Public pressures should be directed toward greater transparency in management and decision processes; on time data should be available for the concerned parties and not only for the multinationals and the developed State governments. There is urgent need to open the working environment to independent and free press and researchers of developing countries.  Transparency is best catalyst to encouraging democratic tendencies in developing States and fair availability of information in a timely fashion.

            Thus, favoritism in behavior and focus on the interests of the richer States must be examined and expressed by the public before conditions escalate to global problems. As deliberations in international institutions become accessed directly to larger audiences, instead of being held in closed chambers, then the environmental challenges and the interests of the poorer sections in world societies will be heard and discussed openly. The current decision processes are not critiqued and analyzed by the public on a timely manner: it is generally too late to critique wrong decisions before they are applied.  Public access to timely information and intelligence would pressure the IMF and WB to reconsider their debatable economic assumptions and ideology; so far, what is decided is restricted on “what is good to the financial institutions”. 

Mass protests in World Forums were mainly targeting the secrecy and opacity of the decision processes. So far, the disseminated information by the current structures of the international institutions is viewed with great suspicion by the poor States; so far, reforms were lukewarm and basically the kind of talked intent for reforms but not effective in practice.




May 2023

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