Editor's Note

Editor’s Note SUPERFICIALLY viewed, the global economy appears there are higher returns to be had elsewhere. to be in great shape. Last year, global gross domestic When such a reversal takes place, the impact on product (GDP) growth was at its strongest since 2011, the economy of the host developing country can be at 3.8%. Despite some headwinds, most pundits expect devastating. The collapse of prices, the fall in the value it to register a respectable growth rate this year. Even of the national currency and the crippling of economic those who concede that US President Donald Trump’s activity because of the climate of uncertainty will trade war is bound to have a dampening effect on growth debilitate the country’s economy. And in a globalised as a result of the climate of uncertainty it engenders are world, where developing-country economies are already still hopeful that it will still be a good year, even if not integrated into the global system, the impact cannot be quite as good as the last. confined to a single country. The turmoil in financial However, such a sanguine view appears to ignore markets will send shockwaves throughout the global some of the underlying fragilities that render the global economy and may well plunge the world into a financial economy more vulnerable than may seem apparent. Many crisis. developing countries are deeply in debt and the situation Developing countries experienced a foretaste of is reminiscent of the 1980s, which have gone down in this sort of shock impact recently. Western investors and history as ‘the lost decade’. There are 119 countries speculators, taking advantage of the low interest rates around the world in dire financial straits, weighed down imposed by their banks, have been using such loans for by massive debt, says a report published by debt relief speculation on stocks and properties in the South. advocates Jubilee Germany and the Catholic aid However, when fears grew that the US Federal Reserve organisation Misereor. Their coffers are empty, the threat was about to raise interest rates, there was a rush for the of bankruptcy looms large. exits. Thus in May foreign investors pulled $12.3 billion Many of these countries are still highly dependent from emerging-market economies – the largest outflow on commodities to sustain their economies. since November 2016. And in just the one week after Unfortunately, since 2014, prices of commodities have the Federal Reserve announced an interest rate hike in been falling. To add to their woes, the value of their June, foreign investors pulled about $5.5 billion out of currencies is also falling, thus whittling any prospect of emerging markets. extricating themselves from their dire predicament. All this should serve as a red alert to developing Though the pundits are reluctant to admit it, the countries on the dangers of liberalising their financial truth is that the global economy is confronted with a sector and making their economies vulnerable to such debt crisis. Thanks to the opposition of the US and some external shocks. Instead, they should seriously consider other industrialised countries, moves to establish a the measures they should take to avoid being dragged multilateral legal framework for sovereign debt into the next financial maelstrom. restructuring to meet such contingencies have made little In our cover story for this issue, we draw attention headway. to the reemergence of global debt. Although it is true However, an even greater threat looms ahead. Some that many developed countries are also wallowing in debt, indebted countries like Jordan and Argentina have turned our primary concern is the plight of the developing to the International Monetary Fund (IMF) for financial countries as they have few options. In the circumstances, assistance and the economic programme which the Fund it is incumbent upon civil society groups to revive the has imposed as a condition for its loans involves campaign to compel the US and other recalcitrant deregulation of the borrower country’s economy, opening developed countries to end their opposition to up its markets to trade and capital, shrinking the state establishing a multilateral legal framework for sovereign and privatising its enterprises. The downsizing of the debt restructuring. state entails savage cuts in public spending and the As for the more serious danger of a financial crisis, resulting regime of austerity has sparked off protests, the only panacea is the establishment of a new financial strikes and revolt in these countries. architecture to replace the current non-system. On this Under the thrall of neoliberalism, the dominant issue, resistance is bound to be fierce as there are many ideology of the West, many other developing countries vested groups profiting from the current financial which were not under the tutelage of the IMF have disorder. However, memories of the 2008 financial crisis adopted a similar agenda of deregulation, liberalisation have not faded into oblivion. Hence a sustained mass and privatisation of their economies. campaign which enlists the many in the West who By opening up their markets indiscriminately and suffered and continue to suffer its consequences in permitting free entry and exit of capital, developing alliance with the people can be a formidable force on countries are courting economic instability. Capital this issue. In the meanwhile, developing countries should inflows may have a temporary buoyant effect on a institute some capital control measures to protect their country’s economy by pushing up the value of the economies. domestic currency and the prices of assets such as stocks and real estate. But any such gains are ephemeral as such – The Editors capital is speculative and will take flight en masse when Visit the Third World Network website at: www.twn.my

THIRD WORLD RESURGENCE No 329/330 Third World RESURGENCE www.twn.my No 329/330 2018 ISSN 0128-357X

A protest in Buenos Aires against Argentina’s loan agreement with the IMF. As countries across the South grapple with the problem of onerous debt burdens, the even larger threat of a global financial crisis looms. 12 ECOLOGY decade after – Anis 43 The day the US became an Chowdhury and Jomo empire – Charles Pierson 2 US investment spurs land Kwame Sundaram 45 The US Air Force’s strange theft, deforestation in Brazil, 16 The new debt crisis – Jürgen love for the new B-21 say experts – Alicia Prager Kaiser bomber – William J Astore and Flávia Milhorance 21 Credit agency says some 48 No, AMLO is not Mexico’s 6 The anti-Sterlite protests in African countries’ debt Trump – Richard Seymour India: How copper came a worrying – Paul Redfern cropper 22 The return of a housing HUMAN RIGHTS bubble – CP Chandrasekhar 51 Threats to journalists are now and Jayati Ghosh HEALTH & SAFETY omnipresent – Nava Thakuria 24 The IMF is back in Argen- 8 40 years after the Alma Ata tina – interview with Eric WOMEN Declaration, let’s remember Toussaint that health care is a global 26 Jordan: ‘Do you know who 52 Beyond suffrage: Indonesian right – Matthew Bramall governs us? The damned women’s activism – Devi Monetary Fund’ – Sara Asmarani ECONOMICS Ababneh 31 IMF to muddle through crisis VIEWPOINT 10 South Africa’s original ‘state again? – Yilmaz Akyüz 54 Looking at the World Cup capture’ – Sampie 34 Debt justice prevails: Bel- Terreblanche through Galeano’s eyes – gian vulture funds law Joel Sronce survives challenge – Bodo COVER Ellmers and Antonio TRIBUTE Gambini The Global Economy: From 57 A portrait of Felicia Langer debt crisis to financial crisis? WORLD AFFAIRS – Faiza Rady 12 Warnings of a new global 36 Myths of the Six-Day War – POETRY financial crisis – Martin Ilan Pappé Khor 40 No way home – Nara 60 Twenty years later – 14 Global economy vulnerable a Milanich Jibanananda Das THIRD WORLD RESURGENCE is pub- THIRD WORLD RESURGENCE is pub- Publisher and Chief Editor: S.M. lished by the Third World Network, an in- lished monthly by Third World Network, 131 Mohamed Idris; Managing Editor: Chee ternational network of groups and individu- Jalan Macalister, 10400 Penang, Malaysia. Yoke Ling; Editors: T Rajamoorthy, Lean als involved in efforts to bring about a Tel: 60-4-2266728 Fax: 60-4-2264505. Ka-Min, Evelyne Hong; Contributing Edi- greater articulation of the needs and rights Email: [email protected] tors: Roberto Bissio (Uruguay), Charles of peoples in the Third World; a fair distri- Printed by Jutaprint, No. 2, Solok Sungai Abugre (Ghana); Staff: Linda Ooi (Design), bution of world resources; and forms of de- Pinang 3, 11600 Penang, Malaysia. Lim Jee Yuan (Art Consultant), Lim Beng velopment which are ecologically sustain- Cover Design: Lim Jee Yuan able and fulfil human needs. Copyright © Third World Network Tuan (Marketing), Yap Bing Nyi (Editorial) E C O L O G Y US investment spurs land theft, deforestation in Brazil, say experts During the global financial crisis of 2007-08, international investment firms, when faced with turbulent financial markets, increasingly turned towards rural farmland speculation in developing nations, regarding it as a relatively safe asset. This investigation reveals one example, showing how international financial capital is used to adversely impact the people and forests of Brazil.

Alicia Prager and Flávia

Milhorance Alicia Prager Alicia

EDJARSSON Cardoso places folders full of documents – some more than 20 years old – on the pool table of a dimly lit bar in the rural Brazil- ian town of Riachão das Neves. With him stand seven other men who wish to prove their right to use farmland, a place they called home, stolen from them all those years ago. One by one, all of them were driven off the land where they once grew their food. After changing ownership for decades, today that property belongs to a Brazilian subsidiary Gradually, small farmers were driven off the land they occupied via threats of vio- of Harvard University’s endowment lence and intimidation. Since then, they’ve taken legal action, seeking the return of fund. their property. Along the way, the farmers have collected and safeguard every legal It appears that Harvard’s $37.1 document in the hope that these papers would one day establish the validity of their billion endowment fund and its man- claims. ager Harvard Management Company (HMC) has invested in the Brazilian agribusiness frontier – investments impact the people and forests of Bra- Bahia, Brazil. Today, the 140,000- steeped in past accusations of forged zil. At the heart of this particular dis- hectare area (where the Cerrado and land titles, illegal deforestation and pute is a land parcel covering 140,000 Caatinga biomes meet) is occupied by violent expulsion of small-scale farm- hectares – an area bigger than Los An- the Campo Largo farm, a minimally ers from their homes. geles – that was acquired through al- productive operation that grows some This is not an isolated case of fi- legedly illegal, and sometimes vio- eucalyptus trees and grazes cattle. But nancial investments fuelling land lent, means, according to a Bahia state in the early 1990s, that land was held grabbing. During the global financial report to which we gained access. by the Brazilian government (terras crisis of 2007-08, international invest- devolutas) and was being settled le- ment firms, when faced with turbu- Threats lead to expropriation gally by 240 small-scale farm fami- lent financial markets, increasingly lies. turned towards rural farmland specu- A small part of this 140,000-hect- Those families took out loans to lation in developing nations, regard- are parcel was lost by the men stand- build their homes on the land, and ing it as a relatively safe asset. ing around the pool table – land which started growing corn, beans, rice and This investigation reveals one they are trying to regain, located on manioc for their own consumption. example, showing how international the left bank of the Rio Grande in the They also began paying the taxes due financial capital is used to adversely municipality of Cotegipe, Western on the land, and awaited legal regu-

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larisation and recognition by the government. They lacked ownership titles, a common situation in rural Bra- zil where the government holds onto Prager Alicia large land blocs until small-scale farmers, known as posseiros, lay claim to it by putting it into cultiva- tion. Previously, most of the families had worked for large-scale farms. But they were on track to earning economic independence for themselves and their families. Instead they faced threats and violence – intimidation aimed at making them abandon their land claims. ‘Armed people started arriving there, putting [up] fences, burning our A view of the Brazilian Cerrado, a vast savannah whose native vegetation is fast crops, destroying our houses,’ remem- being converted by industrial agribusiness into croplands and pastures. Brazil suf- bers Cardoso, leader of an associa- fers from a large-scale plague of land theft, driven by large infusions of foreign in- tion representing 22 families, each vestment capital, a situation of which many US small- and large-scale investors are likely unaware. claiming 50 hectares. Cardoso fled his farm back in the 1990s and settled in Riachão das Neves, a neighbouring rural town, where he now lives fru- confirmed one death due to the con- es would have serious social side ef- gally on a state pension. flict, but has not revealed further de- fects,’ said the chief prosecutor of the Many others, fearing violence, tails of that fatal incident. PGE administrative office, Bárbara likewise gave up their land. But 22 ‘This constitutes – in territorial Camardelli Loi, in a statement. families kept fighting to reclaim their extension – the biggest [discrimina- The prosecutor adds that the collectively owned total of 1,100 hect- tory action] ever done in [Bahia] property’s current owner, Caracol ares, a small portion of the Campo state,’ wrote Bahia prosecutor Está- Agropecuária LTDA, has not man- Largo farm’s vast holdings. cio Marques Dourado in a case sum- aged to verify its ownership through ‘We don’t ask much. We just mary. Marques Dourado forwarded documents and, ‘even less, [explain want to put an end to the gunslingers, the finding to the State Prosecutor’s how] it managed to form the latifun- and have the right to come and go. I Office (PGE), asking it to cancel the dio [large property] registered in the myself was threatened by armed men ‘forged, irregular and, therefore, ille- name of the company today’. That, back then,’ remembers Antônio Au- gitimate’ private titles. she says, is the reason that ‘the at- gusto França. ‘We have been suffer- However, the case never went to tempt [at mediation] did not succeed’. ing the consequences [of the land court. In February 2018, Camardelli Loi thieves] for 24 years. We are all poor, ‘I can say there has been pressure recommended the opening of a law- old, tired, and sick today.’ from agribusiness politicians for the suit against Caracol, which should [legal] process to stop,’ says Mauri- happen soon, according to the PGE. Forged titles and illegal cio Correa, a member of the Associa- If Caracol loses the case, the 140,000- deforestation tion of Lawyers of Rural Workers in hectare Campo Largo farm could see the State of Bahia. Now, the lawyers’ its reintegration as land belonging to After receiving reports of esca- association plans to pressure the PGE Bahia state. lating violence, the state of Bahia de- to reopen the case. cided to intervene. It mapped out the The Mongabay environmental International ownership contested properties and document- news site contacted the CDA, but ed the alleged land conflicts. In 2014, Marques Dourado no longer holds a The lands allegedly seized by vi- the government’s agrarian department position there, and we were unable to olence and intimidation have been (CDA) issued a Rural Discriminato- locate him. The PGE responded that passed from one owner to another, ry Action. The state investigation con- the case is indeed pending. To date, first from a Bahia state deputy named cluded that the farmland was indeed the institution has sought a conflict Márcio Cardoso, then to a large-scale taken from the state via ‘absurd nota- mediation. farmer, José Oduvaldo Oliveira Sou- ry irregularities’, and via the expul- ‘This issue transcends a land lit- za, and ultimately to Caracol sion by physical violence of rural igation, and involves the region’s Agropecuária LTDA, a company workers, along with ‘worrying envi- main economic activity, which creates from southern Brazil. This last trans- ronmental distress’. The CDA also jobs, and [the lawsuit’s] consequenc- fer of ownership occurred on portions

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purchase process, says Martin Mayr, from 10envolvimento, an NGO with knowledge of the case. Mayr explains Alicia Prager Alicia that the previous property owner was known to have offered the small-scale farmers financial or material remuner- ation in order to vacate the land before selling it to Caracol. ‘Those who didn’t agree became targets of threats and violence through gunslingers,’ Mayr says. None of the 240 families is living on the disputed land today. In addition to the allegations surrounding the land purchase, Caracol has been fined by IBAMA, Brazil’s (L-R) Antônio Augusto Fabrício França, Juseli José do Rego, Celio Rodrigues Silva, environmental agency, R$123,000 Edjarsson Magalhães Cardoso, Graciano da Silva, Nelson Carvalho dos Santos and ($37,000) for illegal deforestation Pedro dos Santos Serpa are united in keeping alive a fight to get their lands back. occurring in 2013. While many other families have left the area, these men refuse to give up. Part of a global trend

of the disputed farmland between ing the properties it acquires – both The 240 families who originally 2008 and 2012. environmentally and socially. laid claim to the land now occupied The capital that Caracol used to Devlin Kuyek, a researcher with by the Campo Largo farm lost their buy the land has been traced to its GRAIN, is critical of the implemen- land years ago. Today, they and other foreign partners by GRAIN, an inter- tation of these policies. ‘Many com- small-scale farmers and traditional national non-governmental organisa- panies deliberately set up structures people like them face a different sort tion (NGO) that supports small-scale that make it hard to track them,’ says of battleground – an unlevel playing farmers and social movements. Car- Kuyek. Complex ownership networks field tipped even more steeply against acol Agropecuária LTDA is apparent- are often developed as a means of cir- them due to the investment of large ly owned by the endowment fund of cumventing Brazilian legislation reg- amounts of foreign capital. Harvard University, though not direct- ulating foreign investments, he adds. ‘Land grabbing is an historical ly. A university subsidiary, the Har- In 2010, in an effort to restrain process, but the dynamics of that pro- vard Management Company, manag- an escalation in the purchases of ru- cess has changed. Today there are ines the $37.1 billion Harvard endow- ral properties by foreigners, the Bra- ternational investment structures be- ment. HMC, which oversees approx- zilian government tightened restric- hind these [property] violations. This imately 12,000 funds, is believed to tions on international land acquisi- is something very new,’ says Fábio own Caracol through two subsidiar- tions. Today, the law says that sever- Pitta, from Rede Social de Justiça e ies: Guara LLC and Bromelia LLC, al distinct foreign investors can own Direitos, an NGO. according to leaked tax documents. no more than 25% of the land within The acquisition by international Both Guara LLC and Bromelia any particular municipality, while in- investors of farmland in the develop- LLC have active registration on the vestors of the same nationality can ing world intensified into a major Secretariat of Federal Revenue of own a maximum of 10% of a munic- trend after the global financial crisis Brazil, but work in the US, at the same ipality’s lands. Caracol’s farmland in 2007-08, as noted by the World address as HMC: 600 Atlantic Ave- purchases account for well above Bank. According to Land Matrix, an nue, Boston. We were unable to lo- those limits, at 35% of the Cotegipe independent land monitoring initia- cate either Guara or Bromelia online, municipality’s area. tive, 26.7 million hectares of devel- not even through their official Bra- In addition, under Brazilian law, oping-world farmland were trans- zilian registration. Mongabay contact- ‘Caracol and the Harvard fund have ferred to foreign investors between ed HMC three times and asked spe- the obligation to make sure that land 2000 and 2016. cifically about its subsidiaries. The they acquire is free of conflict. If they Looking for stable returns, finan- institution replied that it does not don’t do that, it is their fault,’ Kuyek cial corporations found less risk, and comment on specific investments. says. high yields, with agricultural land However, HMC did send us a link to In fact, Caracol was informed purchases made in developing coun- its official policy pertaining to natu- early on regarding the problematic tries. They discovered that once land ral resource investments, which em- ownership of the land they were seek- was deforested and converted into phasises the fund’s goal of improving to acquire, during the real estate agribusiness-scale crop production, or

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received infrastructure improve- off the land, then sell it to internation- taken over by native vegetation, she ments, the value of the property in al investors, who turn the property says; she didn’t spot any armed men question tended to rise. This value over to large-scale agribusiness. This guarding the farm. also can fluctuate according to how appears to be the sequence of events Yet, the situation remains tense much private or public investment that occurred to establish the 140,000- as ever. Stefano attended a meeting flows into a region. In short, after hectare Campo Largo farm. between the community and Granflor, 2007-08, farmland itself became an This often illegal process has ad- the firm managing the farm for Cara- asset, with the income earned from verse outcomes for conservation, as col. ‘When the company representa- harvested crops serving as a second- it accelerates the pace of deforesta- tive was asked whether Caracol knew ary stream of return. tion and the conversion of native veg- that there was a conflict [with the Despite its restrictions, Brazil is etation into farmland and cattle ranch- small-scale farmers] before buying it, among five nations in the world to- es in the Cerrado – a Brazilian biome he left the room,’ she says. Neither day seeing the highest rate of foreign that accounts for 5% of the world’s Caracol nor Granflor responded to purchases of farmland. The Latin biodiversity and whose rivers and our requests for comment before pub- American nation is popular among lication. aquifers help supply much of Brazil investors because its lands are acces- According to the Bahia state gov- and Latin America with water. sible and because Brazil is seen as a ernment investigation, the men gath- Harvard’s endowment fund isn’t safer investment due to its political ered around the Riachão das Neves the only US financial actor active in stability as compared with many oth- pool table had their livelihoods and Brazil’s agricultural sector. Another er countries, Kuyek explains. ‘But properties taken from them via an il- is TIAA-CREF, the Teachers Insur- there are many land conflicts and hu- legal land acquisition, or grilagem, as ance and Annuity Association – Col- man rights violations connected to it is called in Portuguese. ‘The land [these farmland investments],’ he lege Retirement Equities Fund. It is is now there, unproductive, and we adds. one of the largest US investment firms can’t do anything about it,’ says Pedro and it manages US, Canadian and dos Santos Serpa. ‘The only thing I’m Cerrado under pressure Swedish pension funds, among oth- eager to hear is: look, take it, it’s your ers. TIAA-CREF came under pres- land, you can produce there.’ The states of Maranhão, To- sure in 2015 for not disclosing the Edjarsson Cardoso picks up one cantins, Piauí and Bahia – collective- location of its investments in Brazil; of the folders on the pool table and ly known as Matopiba, at the heart of there were indications of human opens it. Every document has been the Cerrado, the vast savannah biome rights violations associated with those carefully sorted chronologically and – are the latest frontier of industrial investments. Contacted by Mong- stored in a plastic case. He flicks agribusiness expansion in Brazil. abay, TIAA-CREF acknowledged our through the folder one last time be- As such, Matopiba is now a request but had no further comment. prime target for land speculation, ac- fore he says goodbye to us and leaves cording to a report by Rede Social. Not much is happening on the the bar. Cardoso is holding on to ev- The four states are highly attractive land today ery relevant piece of paper firmly, in to foreign investors, as land can be the forlorn hope that these documents acquired cheaply, and property values Of its 140,000 hectares, the Cam- will one day be legally recognised, are projected to rise quickly as large- po Largo farm today uses less than justifying at last a return to the place ◆ scale soy, corn and cotton growers 300 hectares to produce corn, beans, he calls home. move in, with transnational commod- soybean and eucalyptus trees, accord- ities companies like Cargill and ing to a 2014 state report. Another Alicia Prager is a freelance journalist and Bunge eager to buy up crops for ex- worked for various Austrian as well as in- 14,000 hectares was used as pasture ternational media outlets. She studied Jour- port. for 3,200 cows. Year after year, the nalism, Politics and International Develop- However, according to the Rede farm has apparently become less pro- ment in Vienna, Aarhus, Sydney and Amster- Social report, the increased purchase dam. Flávia Milhorance is a Brazilian inde- ductive. of properties by international inves- pendent journalist based in Rio de Janeiro. Rede Social’s Daniela Stefano With 10 years of experience as a reporter and tors is ‘outsourced’ and, as a result, went to Cotegipe in March 2017 and editor, she won or was nominated for nine indirectly linked to the expropriation journalism awards. She holds an MA in Jour- of land from small-scale farmers, tra- was able to get onto the Campo Lar- nalism, Media and Globalisation from an ditional communities and indigenous go farm. She confirms that not much Erasmus joint programme with City Univer- seems to be happening there, with sity of London (UK), Aarhus University and groups, who often have lived on their the Danish School of Journalism (Denmark). properties for decades or in some cas- cattle grazing and eucalyptus grow- The above article is reproduced from es centuries, but who do not possess ing the only significant activities. Mongabay.com (https://news.mongabay.com/ legal land titles. Also, the farm’s employees decreased 2018/03/cerrado-u-s-investment-spurs-land- from 84 a few years ago to 50 today. theft-deforestation-in-brazil-say-experts/) In such cases, local elites often under a Creative Commons licence (CC BY- drive small landholders or squatters Large parts of the property have been ND 4.0).

THIRD WORLD RESURGENCE No 329/330 5 E C O L O G Y The anti-Sterlite protests: How copper came a cropper For more than two decades the inhabitants of a district in India’s Tamil Nadu state had endured the pollution caused by a copper smelting complex known as Sterlite Copper. In May this year, their anger boiled over as the human casualties of the pollution mounted along with the destruction of the livelihood of local fishermen as the breeding ground of the fish they harvested had become irreparably polluted.

ON 22 May, the anger of locals over Board (TNPCB) under the Air Act gaseous effluents discharged from the the pollution that industries in and Water Act. The Supreme Court, copper-manufacturing unit. And this Thoothukudi in India’s Tamil Nadu in its April 2013 order, slapped a fine anxiety, fear and anger brought the state were spewing reached a flash- of a billion rupees on Sterlite, apply- people together against the mega point. In the six days following the ing the polluter-pays principle. On a project.’ protest and police firing, the town re- couple of occasions, allegations of The earliest of the notable pro- mained on the boil. The district au- gas leak from Sterlite could not be tests happened on 20 March 1996, thorities are still trying to build con- confirmed as there were other indus- when about 500 fishermen laid siege fidence among the people. Twice trial units in the vicinity that had the to cargo ship MV Reesa that was car- shot, literally, the locals, who are potential to cause pollution. rying raw materials for Sterlite. The mourning the death of 13 of their own, ship had to be rerouted to Kochi from have begun to see the administration Fear and anger where copper ore was transported to as adversaries. Thoothukudi by road. The fishermen The problem, though, goes back In the last few months, the slo- had their own fears. Having witnessed to the arrival of the Sipcot Industrial gan ‘Copper for Sterlite, cancer for the effects of fly ash, the effluent dis- Estate over an area of 1,083 acres in people’ has been heard in villages charged by the Tuticorin Thermal 1994. It marked the beginning of a around the Sipcot complex in Power Station (TTPS) into the sea saga of struggle by the locals as the Thoothukudi. On the face of it, there initially, they too opposed Sterlite air over Thoothukudi was no more seems to be no immediate provoca- Copper. ‘Our country boat fishermen clean. Pollution levels started to go tion for the revival of the anti-Sterlite used to harvest the delicious kooni up and fishing, the mainstay of the agitation, which began in 1994, in A. iraal [baby prawn] in areas where the town, was threatened. Kumareddiyapuram. There was how- fly ash was dumped by TTPS initial- A research paper published in the ever, activists allege, much pent-up ly. As the dumping of the hot and pol- July 2017 issue of the journal of the anger and frustration of the people luting waste continued over a decade, Geological Society of India said nu- over their inability to stop the open- the breeding ground of kooni iraal at merous large- and small-scale indus- ing of new units or expansion of ex- this point vanished. Apart from this, tries in Thoothukudi had affected isting ones (Sterlite Copper, in this a few more tasty small-fish varieties water quality by dumping effluents. instance) that, in their perception, too disappeared from this area,’ re- It pointed out that the concentration would pollute the environment fur- calls S Manoharan, a mechanised boat of certain elements in groundwater ther. The agitation slowly attracted driver from Tharuvaikulam, a coast- exceeded the standard values pre- people from South Veerapandi- al hamlet near Thoothukudi. scribed by the World Health Organi- apuram, Pandarampatti, Silverpuram, Though the fishermen of sation (WHO). It even named the pol- Madathur, Meelavittan, Ayyanadaip- Thoothukudi and nearby coastal ham- luting units, including Sterlite, Heavy pu, Sankaraperi and Mappillaiyoora- lets had directly experienced the ill- Water Plant and Nila Sea Foods. ni. effects of TTPS, the first coal-based The National Environmental En- J Veerapandi, a postgraduate in power plant to come up in the region, gineering Research Institute reports chemistry and a local, claims: ‘These they did not intensify their protest. of 1998, 1999, 2003 and 2005 on villages situated close to Sterlite Cop- But they had to pay a hefty price for Sterlite Copper, the factory in the eye per have been witnessing deaths it as they lost the revenue they could of the current storm, showed that the caused by cancer and respiratory dis- get by harvesting kooni iraal and oth- plant was polluting the environment eases, birth of children with congen- er varieties of fish. Though fly ash is through emissions that did not con- ital disorders and increased instances now used for a range of purposes to form to the standards laid down by of miscarriage. The villagers suspect give additional income to the project the Tamil Nadu Pollution Control that these are caused by liquid and proponents, the damage already

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caused to the environment is immea- ter and land of Thoothukudi and its Fuelling protests surable, they add. surroundings. A document authored When a fertiliser unit near in 2010 by Mark Chernaik of the En- More than the proliferation of Thoothukudi recently released inad- vironmental Law Alliance Worldwide chemical units in the Sipcot industri- equately treated water with huge con- categorically states that ‘copper al complex, what worries residents is tent of ammonia into the sea, it killed smelting facilities have adverse envi- the manner in which they get envi- several tonnes of fish that were ronmental impacts that can extend for ronmental clearance or resume oper- washed ashore. Though the TNPCB, several tens of kilometres’. ations after mandatory suspension. with the help of the Fisheries College The document demonstrates how Sterlite Copper had to be shut down and Research Institute, Thoothukudi, the smelting complex in Thoothuku- at least five times in the past on charg- could prove that the ammonia present di ‘is endangering human health and es of violations or gas leak. But what in the effluent at the hazardous level the environment and contaminating added new vigour to the current agi- had killed thousands of fish, the fer- water supplies’. It also found toxic tation is the Centre’s approval for tiliser unit was let off with a warning. quantities of arsenic, cadmium, nick- expansion of the copper smelter. ‘Industrial heavyweights, for el and sulphates in soil samples from Fatima Babu of Thoothukudi, an augmenting their revenue, are wiping villages adjoining Sterlite Copper. environmental activist, contends in a out our livelihood with their improp- These poisonous substances were public interest litigation petition filed erly treated effluents. All this cannot found to have caused the death of before the Madurai Bench of the be tolerated anymore. That is why the livestock and adverse effects on the Madras High Court that Sterlite Cop- anti-Sterlite protest has united every- health of local villagers, even at that per obtained the sanction for expan- time, he argues. sion ‘by availing exemption from one here; they see it as a voice against When the copper smelter came public consultation by misrepresent- pollution in their area,’ says S James, into existence in 1996, local people ing location as being within a “noti- a fish trader from Poobalarayarpuram. thought the industrial development fied industrial estate/complex”’. She Salt manufacturers also have a would provide job opportunities for claims that the location of the second tough time with the effluents. ‘The local youth. But the cost of develop- copper smelter is within the Sipcot suspended particulate matter coming ment has been disproportionate to any Thoothukudi Industrial Park, which down from the thick black smoke bil- benefit it had for the local communi- is still at the planning stage and await- lowing from the nearby private coal- ty, they say. ing necessary environmental clear- based thermal power plant seriously K Kanagaraj of the Communist ances. affects the quality of salt produced in Party of India (Marxist) says the ini- Documents obtained by her un- my pan. As the black particles settle tial euphoria of having a factory near- der the Right to Information Act re- down on salt, its quality is compro- by wore off pretty quickly. On 5 July veal that the survey numbers of land mised and, consequently, I get a low- 1997, about 100 women workers of a needed for copper smelter expansion er price for my product,’ says A Ant- nearby artificial flower plant fainted fell within the land earmarked for the ony Dhanaraj, a salt producer near and were hospitalised. The cause proposed industrial park, she claims. Tharuvaikulam. could not be attributed to Sterlite since The expansion plan also fuelled ‘Now, the circle is complete with there were other units in the area with the current bout of protests. There are industrial pollution becoming a com- polluting potential. many people who question the ratio- mon thread to link people from vari- On 20 August 1997, some em- nale behind allowing an industrial ous sections of an otherwise divided ployees of the Tamil Nadu Electrici- estate of chemical units at a distance society. When the dots are connect- ty Board who were working in a near- of 14 kilometres from the ecological- ed, it became a full-fledged protest by sub-station were affected by con- ly sensitive Gulf of Mannar Biore- against “one” of the polluters,’ ob- tinuous emission of concentrated sul- serve, against the mandatory 25 kilo- serves A Joseph Prem Anand of Man- phur dioxide. A blast that occurred at metres. The complex is also in close the unit on 30 August 1997 killed two proximity to habitations of the coast- ickapuram, who now lives in North contract workers and caused damage al town. Carolina. He coordinates the anti- to an adjacent building and equip- In this context, they point out that Sterlite protests in the US. ment, he recounts. the industrial complexes in Manali/ The incidence of cancer in- Ennore, Ranipet, Cuddalore, Mettur Welcome worn out creased in Thoothukudi in 2009, 2010 and Thoothukudi have become ‘en- and 2011, he claims, going on to vironmental hotspots’. ◆ Prem says that for more than two charge hospitals with not maintaining decades, Sterlite Copper has been a proper reports. The gas leak from the First published in The Hindu (India) on 27 major polluter – a description ac- plant on 23 March 2013 sparked pub- May 2018. Reprinted with permission. This knowledged by the Supreme Court. article was written by a special correspon- lic outrage and fears that Thoothuku- dent for The Hindu, with inputs from S An- Over the years, the toxic waste from di would turn into the Bhopal of the namalai, P Sudhakar and J Praveen Paul the industry has polluted the air, wa- south. Joseph.

THIRD WORLD RESURGENCE No 329/330 7 H E A L T H & S A F E T Y 40 years after the Alma Ata Declaration, let’s remember that health care is a global right In September 1978 a major international conference on primary health care was held in the Kazakh city Alma Ata (now renamed Almaty). The Alma Ata Declaration called for ‘Health for All by 2000’. Matthew Bramall recounts the radical goals of the Declaration – and how they were undermined by neoliberalism and structural adjustment policies.

2018 is an incredibly important year for health: the UK’s National Health Service (NHS) turns 70 years old. This is an opportunity to both celebrate ‘the most civilised step any country had ever taken’ and renew our attention on overcoming the problems – underfunding, privatisation, ‘private finance initiative’ – that threaten its existence. At the same time, but with less fanfare, the World Health Organisa- tion (WHO) is celebrating the 40th Anniversary of the Alma Ata Decla- ration. Like the founding of the NHS, the Alma Ata Declaration was a wa- The Alma Ata Declaration came out of the first International Conference on Primary tershed moment in (global) health – Health Care in 1978. and it continues to nourish and inspire social movements around the world determinants of poor health – water, South, lending its support to, and due to its positive, holistic and radi- food, nutrition – and placing health drawing inspiration from, the calls for cal approach to health. central to social and economic devel- a New International Economic Order The Alma Ata Declaration came opment. It’s a far cry from top-down (NIEO). out of the first International Confer- vertical, technological fixes which It’s a staggeringly utopian and ence on Primary Health Care in 1978. dominated the global health agenda powerful document, built on years of It was a landmark moment that called in the 1950s and 60s, and which con- research that had demonstrated that for ‘Health for All by the year 2000’ tinue to dominate today. Quick, cost- primary health care approaches were – and it is worth revisiting for a whole effective, public health interventions the best way to improve health. And variety of reasons. became the norm as they are an easi- like the founding documents of the Firstly, it signalled a shift towards er sell than building health systems NHS, it is a reminder of how far we a social model of health. This meant and empowering communities, and have been blown off course over the promoting primary health care as the taking the necessary preventative last 40 years. means for achieving ‘health for all’, measures to ensure health for all. In the same way that the NHS for all countries. Primary health care Secondly, Alma Ata called for a vision of universal public health care sounds familiar, but it’s much more political response to ensure the goal has been progressively undermined, radical than the name suggests, put- of achieving health for all was rea- so has the inspiring vision of the Alma ting community involvement at the lised. To achieve this, the official dec- Ata Declaration. Both have been pro- heart of health services. laration, signed off unanimously by gressively weakened by neoliberal- This framework recognises the all members of WHO, explicitly rec- ism, backed into a more corporate and need for culturally and technological- ommends a shift from militarisation less ambitious model of health care. ly appropriate health services, and to peace, and a redistribution of power As we rightly renew our calls for the focuses on the social and economic from the Global North to the Global NHS to be restored, we must renew

THIRD WORLD RESURGENCE No 329/330 8 H E A L T H & S A F E T Y our commitment to the same lofty ambitions for global health too. Almost immediately after it was signed off, the Alma Ata Declaration and the commitment to primary health care were attacked. A year later, at a meeting of international donors and WHO/Christopher Black aid agencies, the concept of ‘selec- tive’ primary health care appeared, re- introducing top-down, technologically driven health programmes and public health interventions. These could be measured, evaluated – and controlled – by donor governments and agencies much more easily than the Nutrition counselling at a primary health centre in Rajasthan, India. The primary health more nebulous primary health care care framework recognises the need for culturally and technologically appropriate approach which insisted on commu- health services. nity participation and intersectoral approaches. And whilst the rhetorical commitment to primary health care global health governance becomes vate sector in health for decades. The was arguably never matched with clear when we compare the draft parallels with the UK are obvious. funding commitments and reforms, it Alma Ata 40 declaration due to be Whilst politicians commit to main- never really had the chance to get off presented later this year and the orig- taining the NHS, utilising its spirit for the ground. inal declaration. Gone are the calls for political gain, they often fail to chal- Not long after this, the idealism a New International Economic Order lenge the fundamental ideologies that of the Alma Ata Declaration was sub- and reducing the gap between the undermine it. sumed as rising inflation, debt crises ‘haves’ and the ‘have-nots’, and gone Fortunately, there are activists and recessions across the Global are the calls for reduced military around the world keeping the spirit South resulted in the imposition of spending. Whilst the draft Alma Ata of Alma Ata alive. This year, the Peo- structural adjustment policies. This 40 does reaffirm its commitment to ple’s Health Movement (PHM) will reduced health budgets and forced primary health care, which is to be convene in Bangladesh for the 4th governments to adopt an approach to applauded, it does so in the context People’s Health Assembly. There, health care that was a far cry from of achieving the Sustainable Devel- activists will again reaffirm the words Alma Ata’s commitment to social jus- opment Goals (SDGs) and the Uni- of Halfdan Mahler, the WHO Direc- tice. It’s a story familiar to most of versal Health Coverage (UHC) 2030 tor-General responsible for the radi- us: the crisis of US hegemony was agenda, which themselves have been cal Alma Ata Declaration, who con- quickly averted and neoliberalism subject to criticism for failing to take tinued to insist that ‘unless we all be- won out, to the detriment of the account of the very imbalances of come partisans in renewed local and world’s poor and the prospects of gen- power that are fundamental to the global battles for social and econom- uine human development. analysis underpinning the original ic equity in the spirit of distributive The triumph of neoliberalism in Alma Ata Declaration. justice, we shall indeed betray the Whilst the draft future of our children and grandchil- Alma Ata 40 docu- dren’. ment commits to re- So whilst the NHS celebrations versing the ‘unreg- get the headlines in the UK, we should ulated expansion’ join the activists at the People’s of the private sector Health Assembly and learn from them and rising costs, it’s as they continue the struggle to highly unlikely that achieve health for all, recognising that this will translate this is impossible without tackling the into action when the biggest obstacle to health justice – UHC 2030 agenda neoliberalism and unjust global pow- is dominated by the er imbalances that create and recre- likes of the World ate poverty and poor health. ◆ Bank which have promoted ‘health The above is reproduced from the website of Red Pepper magazine Halfdan Mahler was the Director-General of WHO at the time sector reform’ and (www.redpepper.org.uk). the organisation co-organised the Alma Ata conference. the role of the pri-

THIRD WORLD RESURGENCE No 329/330 9 E C O N O M I C S South Africa’s original ‘state capture’ The co-optation of the African National Congress South Africa has been plagued by dangerous levels of corruption, nepotism, inequality and poverty, especially under the regime of President Jacob Zuma. While his successor Cyril Ramaphosa may be able to effectively tackle some of these serious problems, Sampie Terreblanche argues that there is a need to revisit the elite compromise made over 20 years ago if there is to be real social change in the country.

AFTER the ascendancy of Cyril Ra- maphosa to the presidency of South Africa’s ruling African National Con- gress (ANC) and subsequently to the presidency of the country, it is vital to understand the deep structural barriers that prevent South Africa’s achievement of desperately needed socio-economic justice. The ideological shifts that took place in the ANC’s economic views from 1990 can only be described as breathtaking: from an explicitly so- cialist, redistributive approach to- Supporters of the ruling African National Congress at a party rally. In the 1990s the wards embracing the American ide- ANC’s economic views saw an ideological shift from a redistributive approach to- ologies of neoliberal globalism and wards embracing neoliberal globalism and market fundamentalism. market fundamentalism. From 1990 Nelson Mandela and industrial baron Harry Oppenheimer tween white politicians and capital- national Monetary Fund (IMF). The met regularly for lunch or dinner and ists under the leadership of the MEC, ‘statement on economic policies’ in the main corporations of the miner- a leadership core of the ANC, and the IMF deal committed the TEC to als energy complex (MEC) met reg- American and British pressure neoliberalism and market fundamen- ularly with a leadership core of the groups. talism. ANC at Little Brenthurst, Oppenhe- From February 1990 until early There can be little doubt that the imer’s estate. When other corporate 1992, all the ANC policy documents secret negotiations between the MEC leaders joined the secret negotiations emphasised the need for ‘growth and a leadership core of the ANC on the future of South African eco- through redistribution’. But when a were mainly responsible for the par- nomic policy, the meetings were shift- reworked economic document of the ty’s ideological somersault. It was, ed to the Development Bank of ANC entitled ‘Ready to Govern’ was however, not the influence of the Southern Africa during the night. published in May 1992, the phrase MEC alone. There was also pressure Although I was involved in the ‘growth through redistribution’ was and persuasion from Western govern- ‘talks about talks’ from 1987 until conspicuously omitted. Since then the ments and from the IMF and World 1989, I did not take part in the 1990- ANC has never again emphasised the Bank and global corporations. A large 94 negotiation process. I have been need for a comprehensive redistribu- group of leading ANC figures re- told that at the time senior individu- tion policy. ceived ideological training at Ameri- als attached to the Sanlam Group of The secret negotiations reached can universities and international corporations were very much against a climax in November 1993. At that banks. my involvement because of my pref- stage South Africa was preparing for In the years after the Soviet erence for social-democratic capital- interim government by the Transition- Union imploded in 1991, an atmo- ism. al Executive Council (TEC), which sphere of triumphalism reigned su- During these meetings an elite decided that South Africa needed a preme in American political and eco- compromise gradually emerged be- loan of $850 million from the Inter- nomic circles: the ‘American eco-

THIRD WORLD RESURGENCE No 329/330 10 E C O N O M I C S nomic model’ triumphed and every country in the world could survive and prosper only if it adapted as quickly and completely as possible to anti-statism, deregulation, privatisation, fiscal austerity, market fundamentalism and free trade. Promises were made to the ANC that as soon as the new government implemented this model, conditions would be conducive to a large influx of foreign direct investment, higher growth rates, higher employment and a trickle-down effect to alleviate pov- Poverty in South Africa. ‘A dangerous triangle has emerged between three groups in erty. The role of the American pres- South Africa: the old white elite, the new black elite, and the impoverished bottom sure group was, however, not restrict- 40%.’ ed to exaggerated promises, but also included subtle threats that the US tunities would be created for the come a neocolonial satellite of the had the ability (and the inclination) emerging ANC elite to join the white American-led neoliberal empire. Al- to disrupt the South African econo- capitalist elite to become rich enough though the ANC has been the gov- my if the ANC should be recalcitrant to maintain the same consumerist lif- ernment of South Africa since 1994, and not prepared to cooperate. estyle as the white elite. we could allege that it is still not With the adoption of the Growth, The elite compromise emphati- ‘ready to govern’. Employment and Redistribution cally excluded the possibility of a It is very much in doubt whether (GEAR) programme in 1996, the comprehensive redistribution policy, the South African project is still via- ANC and the American pressure which was regarded as unaffordable ble, given this context. Dangerous group succeeded in Americanising the after preference was given to address- levels of corruption, state capture, South African economy. In biblical ing the interests of the old white cor- inequality, poverty and inefficiency idiom, we have every reason to lament porate elite and the emerging black under the administration of Ramapho- the fact that the ANC was deceived elite, and after the conditionalities sa’s predecessor Jacob Zuma may on such a massive scale by false prescribed by the American-led perhaps be turned around under prophets who led South Africa not to neoliberal empire were accepted. The strong leadership. But structurally, a the promised land but into a desert in fact that taxation and expenditure dangerous triangle has emerged be- which the poorer part of the popula- were fixed by the elite compromise tween three groups in South Africa: tion was doomed to live permanently deprived the ANC government of the the old white elite, the new black elite, in a systemic condition of abject pov- ability to implement a comprehensive and the impoverished bottom 40%. erty. redistributive policy. This conflict may yet lead to an im- On 11 February 1990, the day of The most harmful consequence plosion of the country. It is therefore Nelson Mandela’s release from pris- has been deindustrialisation through vital to revisit the decision made 20 on, he made the following statement: South Africa’s obligation to imple- years ago by the neoliberal elites with- ‘The white monopoly of political ment a free-trade policy. This has had in the ANC government to reject the power must be ended, and we need a a devastating effect on many indus- proposal of a wealth tax for redistrib- fundamental restructuring of our po- tries that operated for decades behind utive purposes. ◆ litical and economic systems to ad- tariff walls. The clothing, textile and dress the inequalities of apartheid and footwear industries were almost de- Sampie Terreblanche was professor emeritus create a genuine democratic South stroyed by the import of cheap prod- at Stellenbosch University in South Africa, Africa.’ ucts. But while the free-trade policy and also spent time at Harvard and the Uni- versity of the Free State. His work as politi- But the new politico-economic was harmful for manufacturing, it was cal economist and public commentator over system turned out to be highly dys- to the advantage of the MEC. These 60 years was marked by sharp and contro- functional. A neoliberal politico-eco- corporations were later given the ad- versial shifts to the left of his Afrikaner na- nomic system was institutionalised to ditional privilege of shifting their tionalist roots. Terreblanche served on sev- main listings to London and New eral public commissions and as deputy chair- serve the narrow interests of the old man of the South African Broadcasting Cor- white elite and the emerging black York, and to become independent poration. He authored 13 books and hun- elite. The enabling conditions of the transnational corporations. dreds of papers and public lectures, with a new system were moulded in such a While the ANC operated on the focus since the 1990s on inequality and its way that the imperial aspirations of moral high ground during the anti- underlying wealth problem. Among many awards, he received three honorary doctor- the American-led neoliberal empire apartheid struggle, since 1994 they ates. Terreblanche passed away on 17 Feb- would be satisfied. have slipped into a sleazy underworld ruary 2018 aged 84. The quid pro quo between the where corruption, nepotism and mon- The above article is reproduced from Af- corporate sectors and the ANC lead- ey squandering are the order of the rican Agenda (Vol. 21, No. 1, 2018), a publi- ership core was that lucrative oppor- day, so that South Africa could be- cation of Third World Network Africa.

THIRD WORLD RESURGENCE No 329/330 11 C O V E R Warnings of a new global financial crisis Warnings have been sounded of ‘ticking time bombs’ in the global financial system waiting to explode because of the reckless and wrong policies of the developed countries. Martin Khor warns developing countries to take measures to withstand the coming financial storm.

THERE are increasing warnings of place. abilities as a percentage of gross do- an imminent new financial crisis, not Soros’s prediction may not be mestic product (GDP). only from the billionaire investor widely shared, however. ‘Honestly I In particular, the United States George Soros but also from eminent think that’s ridiculous,’ said James has an irresponsible fiscal policy economists associated with the Bank Gorman, the head of investment bank which it has exported to other G7 for International Settlements, the Morgan Stanley, commenting on So- countries apart from Germany. bank for central banks. ros. The US administration has ex- The warnings come at a moment panded new expenditure and tax cuts, when there are signs of international ‘Ticking time bombs’ with no funding other than more debt. capital flowing out of some emerg- This ‘reckless behaviour’, leading to ing economies, including Turkey, The Soros warning reminded me a US fiscal deficit projected to be Argentina and Indonesia. of a South Centre debate held in around $1 trillion in 2019, was made Some economists have been Geneva in April, when we hosted two possible by the permissive monetary warning that the boom-bust cycle in eminent main speakers to launch their policy conducted by the US Federal capital flows to developing countries book, Revolution Required: The Tick- Reserve since 2009, the silence or will cause disruption when there is a ing Time Bombs of the G7 Model. complacency of the big three US- turn from boom to bust. All it needs The authors were Peter Dittus, based ratings agencies, and the bless- is a trigger, which may then snowball former Secretary-General of the Bank ing of the International Monetary as investors head for the exit door in for International Settlements (BIS), Fund (IMF). herd-like manner. Their behaviour is and Herve Hannoun, former Deputy The G7 central banks have also akin to a self-fulfilling prophecy: if General Manager of the BIS. become the facilitators of unfettered enough speculative investors think A club of 60 central banks, the debt accumulation, according to the this is the time to move back to the BIS is known as the bank for central authors. The near-zero or negative global financial capitals, then the ex- banks and also famous for the quali- nominal interest rates are a huge in- odus will happen, as it did in previ- ty of its research. You can’t get a more centive to borrow, and extreme mon- ous ‘bust’ phases of the cycle. respected conservative establishment. etary policies have destroyed any in- Soros recently told a seminar in Yet the two recently retired top centive to fiscal rectitude. Paris: ‘The strength of the dollar is BIS leaders wrote a book in simple G7 total debt in the third quarter already precipitating a flight from direct language warning of ‘ticking of 2017 was around $100 trillion. emerging-market currencies. We may time bombs’ in the global financial Together, the US, the UK, Canada, be heading for another major finan- system waiting to explode because of Japan and the eurozone account for cial crisis. The economic stimulus of the reckless and wrong policies of the 64% of the world total debt. The authors assert that the G7 a Marshall Plan for Africa and other major developed countries. Nothing extreme monetary policies since 2012 parts of the developing world should short of a revolution in policy is re- have undermined the foundations of kick in just at the right time.’ quired to minimise the damage of a the market economy. There are now If Soros is right about an immi- crisis that is about to come, they say. centrally planned financial markets nent crisis, its trigger could come At the Geneva meeting, Dittus and the break-up of key elements of from another European crisis. Or it and Hannoun pointed to several prob- the market economy model. Long- could be outflow of funds from sev- lems or ‘time bombs’ that had devel- term interest rates are manipulated, eral developing countries. Some had oped in the developed countries, with valuations of all asset classes are received huge inflows when returns potential to harm the world. deeply distorted, sovereign risk in were low or even zero in the rich The main problem is what they advanced economies is deliberately countries. With US interest rates and call the G7 debt-driven growth mod- mispriced, and all these do not reflect bond prices going up, the reverse flow el. The G7 major developed econo- fundamentals. is now occurring and it is only the mies, except Germany, have lax fis- Dittus and Hannoun warn that the start, with more expected to take cal policies with high government li- unprecedented asset price bubble en-

THIRD WORLD RESURGENCE No 329/330 12 C O V E R gineered by G7 central banks is a tick- Akyuz, the South Centre’s chief econ- ing time bomb that is ready to burst, omist and author of the book Playing after seven years of near-zero inter- with Fire. est rates and speculative excesses in Akyuz goes further, in analysing bonds, stocks and real estate. The the impact a global crisis will have on Federal Reserve has dealt with the developing countries. Since the 2009 bursting of every asset bubble of the global crisis, the developing countries last 20 years by creating another, larg- have built up new and increased vul- er bubble. nerabilities to global financial shocks. They also warn that the quantita- Their financial sector has established tive easing policy of recent years may even more and deeper links to inter- shift to a worse policy of government national financial markets, as shown, debt monetisation. for example, by the high percentage Although central banks have of ownership by foreign funds and in- made it very clear that large-scale vestors in the domestic stock markets government bond purchases are a and in government bonds of develop- temporary measure taken for mone- ing countries. tary policy reasons, they are slipping Therefore, if there is a significant into a different concept – that of a or big outflow of these foreign funds, permanent intervention of central the same economies may suffer from banks in government bond markets. loss of foreign reserves, currency de- This is seen as a way to solve the Revolution Required warns of ‘ticking preciation, higher external debt servic- sovereign debt crisis in major ad- time bombs’ in the global financial sys- ing, higher import prices, falling pric- vanced economies, by transferring a tem. es of houses and equities and, in worse growing part of government debt to cases, an external debt crisis. the central bank: 43% of G7 govern- A few developing countries are ment bonds in major reserve curren- could well be the worst financial cri- already facing crisis and seeking IMF cies are now held by central banks and sis ever experienced, as the level of bailouts. other public entities. G7 central banks debt and the artificial level of asset Many developing countries still are at risk of heading towards the slip- prices have no precedent. have strong economic fundamentals. pery slope which ultimately leads to But an even worse systemic cri- But in many cases, their economies are government debt monetisation. sis would result from the continuation weakening in one way or another, and of current unconventional policies the worsening global economic pros- G7 central banks at the leading central banks to cross the ru- pects (including the real possibility of crossroads bicon of government debt monetisa- a trade war) do not augur well. The tion. The perpetuation of these poli- conditions for an external debt prob- The G7 central banks are facing cies, with their zero or negative in- lem have increased. a dilemma, Dittus and Hannoun point terest rates and large-scale purchases It would thus be wise for them to of government debt, would encour- out. They have to choose between monitor and analyse what is happen- age fiscal deficits and the continued highly risky scenarios: policy normal- ing globally, as this will significantly expansion of public debt. isation or government debt monetisa- Public debt monetisation, affect the economy. Scenarios should tion? through the transfer of ever more gov- be established on what may happen For the time being, the Federal ernment bonds on G7 central banks’ externally, including the onset of a new Reserve and the Bank of Canada are balance sheets, would destroy the global crisis, and how this may affect leaning towards normalisation, albe- market economy as it would pave the the economy in various ways, so as to it at a slow pace, while the European way for an unlimited expansion of the prepare for various measures that can Central Bank and the Bank of Japan public sector, say the authors. be taken. are dangerously heading towards a The above shows why the former Crisis prevention and crisis aver- continuation in one way or another BIS officials believe a new financial sion should now be a priority. Dealing of the debt monetisation experiment. crisis is brewing. Changing the recent with the domestic economic issues Here is the dilemma: policy nor- policy will lead to an explosion, but should go together with preparations malisation is the only option consis- continuing with the same policy while to cope with changing external situa- tent with the central banks’ mandate buying time will lead to an even big- tions. and with a return to the rules of a ger crisis. Though we may not be able to market economy. But when the G7 control what happens abroad, we can central banks eventually exit from Impact on developing take measures to respond appropriate- their unconventional policies, they countries ly. ◆ will contribute to the bursting of the Martin Khor is adviser to the Third World asset price bubbles engendered by Their analysis of the crisis in the Network and former Executive Director of the their monetary experiment. This G7 countries matches that of Yilmaz South Centre.

THIRD WORLD RESURGENCE No 329/330 13 C O V E R Global economy vulnerable a decade after More than a decade after the world’s worst economic downturn since the 1930s’ Great Depression, the world economy remains vulnerable. Anis Chowdhury and Jomo Kwame Sundaram explain.

systemic problems of the international financial ‘non-system’. First, ‘its fantastic in- flationary proclivities, leading to world reserve increases eight times as large over a brief span of fifteen years’ since the breakdown of the Bretton Woods system. Second, ‘skewed investment pattern of world reserves, making the poorer and less capitalised countries of the Third World the main reserve lenders, and the richer and more capit- Concerns have long been expressed about the use of a national currency – the US dollar – as alised industrial countries the major reserve currency. the main reserve borrowers of the system’. Third, ‘crisis-prone TEN years ago, deteriorating confi- rency as the major reserve currency. propensities reflected in the ampli- dence in the value of US sub-prime International liquidity provision tude’ and frequency of financial cri- mortgages threatened a liquidity cri- using the US dollar required the US ses such as the 1980s’ debt crisis caus- sis. The US Federal Reserve injected to run balance-of-payments deficits, ing developing countries’ ‘lost de- considerable capital into the market, ensuring US monetary policy spill- cades’. but could not prevent the 2008-09 overs to the world economy while Other critics have identified fur- global financial crisis (GFC). eroding confidence in the greenback. ther flaws. The 2008 meltdown exposed the The Bretton Woods system was First is the ‘recessionary bias’, extent of finance-led international under increasing strain from the late due to the asymmetric burden of ad- economic integration, with countries 1960s, as US President Johnson fund- justment to payments imbalances. more vulnerable to financial conta- ed the increasingly unpopular Viet- While deficit countries are under gion and related policy ‘spillovers’ nam War by issuing debt, rather than great pressure to adjust, especially exacerbating real economic volatili- through higher taxes. The system fi- when financing dries out during cri- ty. nally broke down when the Nixon ad- ses, surplus countries do not face cor- It also revealed some vulnerabil- ministration unilaterally cancelled the responding pressures to correct their ities of the post-Second World War US commitment to dollar (gold) con- own imbalances. US-centred international financial vertibility in August 1971. What Second is the cost of the per- ‘architecture’ – the Bretton Woods emerged was a ‘non-system’ for Trif- ceived need of emerging and devel- system – modified after its breakdown fin. oping countries to ‘self-insure’ in the early 1970s. Since then, the US dollar, issued against the strong boom-bust cycles Robert Triffin, the leading inter- by fiat, has relied on the greenback’s of global finance by building up large national monetary economist of his own credibility and legitimacy to con- foreign exchange reserves and fiscal generation, had long expressed continue as de facto world currency. resources, especially after the 1997- cerns about the use of a national cur- In 1985, Triffin identified three 98 Asian financial crisis.

THIRD WORLD RESURGENCE No 329/330 14 C O V E R

omy. Major monetary authorities do not have much policy space left after long pursuing unconventional expansionary policies. Meanwhile, developing countries have been subject to increasing international integration, e.g., through global value chains, foreign financial institutional investments and increased short-term capital flows induced by the unconventional monetary policies of the US Federal Reserve, Financial vulnerabilities have been compounded by growing trade protectionism. European Central Bank and Bank of Japan, while debt-sustainability concerns for Such precautionary measures The UN also called for a ‘multi- some are growing again. enabled emerging market economies lateral legal framework for sovereign These vulnerabilities have been to undertake strong counter-cyclical debt restructuring’. Without a fair, compounded by growing trade pro- measures during the GFC. But they legally binding, multilateral sovereign tectionism and dwindling precaution- have huge opportunity costs as such debt workout mechanism, developing ary reserve holdings of many devel- reserves are generally held as presum- countries remain vulnerable to private oping economies as global trade has ably safe, liquid, low-yielding assets, creditors, including vulture funds. slowed. Even before President such as US Treasury bonds. There were also renewed hopes Trump’s election, developed coun- Hence, Triffin complained that for trade multilateralism and early tries had effectively killed the Doha ‘the richest, most developed, and successful completion of the Doha Development Round, not least by most heavily capitalised country in the Development Round of the World opting for bilateral and plurilateral world should not import, but export, Trade Organisation (WTO), giving instead of multilateral free trade deals. capital, in order to increase produc- developing countries better access to Trump’s more explicit rejection tive investment in poorer, less devel- external markets, seen as vital for of multilateralism in his efforts to oped, and less capitalised countries balanced global recovery and devel- eliminate major US bilateral trade ... [The] international monetary sys- opment. The promise to keep inter- deficits is now expected to further set tem is at the root of this absurdity.’ national trade open echoed G20 lead- back prospects for world economic ers’ unfulfilled commitment to es- recovery. Despite pious declarations Reform appeals chew protectionism. to the contrary, most national policy- However, only a few of the mod- makers typically turn from rhetoric There were renewed calls for re- est promised reforms have been im- about international cooperation to form of global economic governance plemented, with limited changes in focus on domestic issues. in the wake of the GFC, especially international financial governance, It has not been different this last by the 2009 UN Conference on the still dominated by the G7 leading in- time. A decade after the worst eco- World Financial and Economic Cri- dustrial economies. After all, every nomic downturn since the 1930s’ sis and Its Impact on Development. financial crisis is followed by appeals Great Depression, the world econo- Governance reform of the Inter- for reforms, with complacency setting my remains vulnerable. – IPS ◆ national Monetary Fund (IMF) and in with hints of recovery. the World Bank should ensure fairer, Anis Chowdhury, Adjunct Professor at West- more equitable representation of de- Less coping capability ern Sydney University (Australia), held se- veloping countries. This should im- nior United Nations positions in New York prove the accountability and credibil- Most developed-country govern- and Bangkok. Jomo Kwame Sundaram, a former economics professor, was United Na- ity of the Bretton Woods institutions, ments are now more heavily indebt- tions Assistant Secretary-General for Eco- enabling them to better address cur- ed than in 2008, when they bailed out nomic Development, and received the Wassi- rent financial and economic challeng- large financial institutions but failed ly Leontief Prize for Advancing the Frontiers es in the world. to sustainably revive the world econ- of Economic Thought in 2007.

THIRD WORLD RESURGENCE No 329/330 15 C O V E R The new debt crisis In the following analysis of the debt situation of countries of the Global South, Jürgen Kaiser, warns that since 2010 the situation has worsened significantly for many countries. As a result, out of the 141 countries examined, some 119 are critically in debt.

IN the analysis that follows, which was undertaken for the ‘Global Sov- ereign Debt Monitor 2018’ report, three dimensions are used to evalu- ate the debt situation of countries in the Global South: (i) the debt situation, i.e., the level of debt indicators as at 31 December 2016; (ii) the trend, i.e., the change in this debt situation over a period of four years; and (iii) any suspension of debt service payments by individual countries is taken into consideration.

Debt situation Governments often keep up with their debt service obligations at the expense of Low- and middle-income coun- social services such as public education. tries’1 external debt increased in 2016 by 4.1% to $6.877 trillion. Of this, only a modest $121.3 billion pertains Since 2010, the situation has Who is critically in debt? to low-income countries, $1.775 tril- worsened significantly in many coun- lion pertains to lower-middle-income tries (see Figure 1). However, the Currently, 119 out of a total of countries and $4.981 trillion to upper- trend is not uniform for all countries 141 countries examined are critically middle-income countries. examined. On the one hand, there are in debt.4 A country’s debt situation is This would not be problematic if countries with improving or stable considered critical if at least one debt the economic performance of the in- indicators such as Jamaica, which, as indicator shows a level of risk (see debted countries grew at the same rate in the previous year, has the highest box) or if the International Monetary as their debt. It is therefore important debt indicators but no longer falls into Fund (IMF) has confirmed in its most to consider relative debt, which in the the highest risk level for all indica- recent debt sustainability analysis that present analysis is measured on the tors. On the other hand, there are there is at least a ‘moderate’ risk of basis of five debt indicators describ- countries which combine strong ris- debt distress. Countries with particu- ing the relationship between debt and es in their indicators with already high larly high debt indicators include Ja- economic performance (see box). levels of debt: these include, for ex- maica, Mongolia, Bhutan and For example, the indicator mea- ample, Mozambique, Armenia and Mozambique. suring the ratio of external debt to Cape Verde. Compared with last year’s ‘Glo- gross national income (GNI) [or gross New lending has risen to all bal Sovereign Debt Monitor’, an ad- domestic product (GDP)] positions country income groups except the ditional seven countries now have to the total external debt of a country group of the poorest countries.2, 3 On be considered critically indebted be- relative to its annual economic per- the donor side, bilateral public lend- cause in 2016 they reached a level of formance. The analysis shows that at ing has grown the most, doubling risk for at least one debt indicator. Six the reporting date, over half of all low- year-on-year to $84 billion. Howev- of these countries are in Africa: and middle-income countries have a er, this is not attributable to the tradi- Namibia, Nigeria, Ethiopia, Benin, debt-to-economic-performance ratio tionally important creditor countries Liberia and Uganda. The seventh of more than 40%, and 20 of them such as Germany, the US or Japan, country is Azerbaijan. exceed 80%. This means that theo- but is primarily the result of increased If one recalls that Ethiopia, Be- retically they would have to spend South-South lending. Large emerging nin, Liberia and Uganda had been more than 40% (or in the latter case, economies, especially China, are relieved of their debt between 1997 80%) of their annual economic out- playing an increasingly important role and 2010 under the multilateral debt put to repay their entire debt. as new lenders. relief initiative for Heavily Indebted

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Poor Countries (HIPC), it becomes clear that one-off debt relief does not Figure 1. External debt 2010 to 2016 protect countries from falling into In relation to the gross national income of low- and middle-income countries debt crises again, as long as the same structures that led to the last crisis persist. Unlike in last year’s Debt Moni- tor, middle- and low-income countries that are member states of the Euro- pean Union have been excluded from consideration, as questions of overcoming future debt crises are somewhat different for them than for most countries of the Global South. There- fore, Bulgaria, Romania, Croatia and Cyprus are no longer listed. Compared with the already dramatic scenario of 2015, as presented in the ‘Global Sovereign Debt Moni- Source: World Bank: ‘International Debt Statistics 2018’ tor 2017’, the situation at the end of 2016 worsened – with the number of namics can be observed in the affect- Somalia and Sudan. Countries outside countries critically in debt rising from ed countries in the North Africa/Mid- the international financial system, 116 to 119. Although this appears to dle East region. Although only a such as Cuba and North Korea, are be only a modest increase, if one takes handful of countries in the region are also included in this category. into account that four (EU) countries critically in debt, none of these coun- In addition, and most worrying- have not been included in the latest tries has improved on even one of the ly, 11 countries have been added analysis for formal reasons – and not five debt indicators. The Europe/CIS which have had to cease payments to because their debt situation has im- region is similarly affected. Both in external creditors since 2015, either proved – there has in fact been a rise terms of present debt levels and the temporarily or permanently, as a re- of seven countries, representing an trend of the debt indicators, the listed sult of external shocks and/or politi- increase of around 6% for critically countries in Asia and the Pacific are cal instability. Currently, Venezuela, indebted countries in the Global the least susceptible to over-indebt- Angola, South Sudan, Chad and South. In addition, the countries in edness. Mozambique are in this position. The critical debt tend to be deeper in debt first four became insolvent mainly as than in previous years.5 Overall, it Countries in default a result of the fall in oil prices. Due should be noted that global debt has to its civil war, Yemen also has to be reached a worryingly high level. The most dramatic outcome of added to this list. The Republic of the debt crisis, which has been wors- Congo, Belize and Gambia, all also Trend ening for years, is that a wide range on the list, have, with the support of of countries have now had to cease the IMF, been able to make up for Whereas an overwhelming ma- all or part of their debt servicing (see defaulted payments to their foreign jority of the countries in the Global Table 2). Instead of continuing to is- creditors during 2017, albeit at the South are already critically in debt, sue warnings that a new wave of debt cost of new multilateral debt and re- the medium-term trend towards fur- crises is looming in the Global South, lated adjustment measures. Mean- ther indebtedness continues. As in the it has to be said that the crisis is al- while, the Caribbean island nation of previous year, there is an average of ready here. Grenada has signed rescheduling 3.6 debt indicators that have deterio- Detailed analysis shows that agreements with its bilateral creditors, rated by at least 10% over the last four countries that default on payments which are now gradually being im- years, for every one that has im- include, on the one hand, countries plemented. proved. (See box for an explanation that have been insolvent for several Three countries – Cambodia, Iraq of how the indebtedness trend is de- years, such as Zimbabwe, which has and Ukraine – are considered to be in termined.) In 87 countries, there was been in default since the mid-1990s. default because they refuse to satisfy a general worsening of the debt situ- This category also includes those of claims that they consider unlawful. In ation over the period 2012-16, com- the Heavily Indebted Poor Countries Ukraine, this applies to a loan from pared with an improvement in 21 (HIPCs) which formally have access the Russian Federation to the pro- countries. There was no obvious trend to the debt relief initiative but for Russian ex-president Viktor Yanuk- in 11 countries. which a decision on debt relief has ovych; while in Cambodia this goes The strongest negative debt dy- not yet been made: namely Eritrea, even further back to the financing of

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Table 1: Levels of over-indebtedness (in per cent) • Commodity exporters: Coun- tries that pursue an extractivist development model and, after a fall in commodity prices, face the choice of significantly limiting public spending or financing the resulting budgetary gaps through loans. Examples include Angola, the Republic of the Congo and Venezuela. • Small states: Countries that are particularly vulnerable to natural di- sasters because of their small size and/ or location, including Cape Verde and, to some degree, Belize. • Countries with a combination the regime of General Lon Nol by the model,7 a particularly affected region, of factors: Finally, a group where a US government in the 1970s. Iraq and or the result of a particular type of worsening of the debt situation can- Kuwait are arguing over the validity external shock. In the group of coun- not be attributed to a single major fac- of Saddam-era claims and the inter- tries which are already in the critical tor, but is due to several factors such pretation of the 2004 rescheduling range for most of the indicators and as internal instability, questionable agreement. which also show strong negative dy- borrowing in the past, the conse- A total of 31 other countries have namics, both low- and middle-income quences of climate change and other payment arrears vis-à-vis bilateral countries are represented. These in- external shocks. These presently in- public or private creditors. They are clude countries that belong to the clude, in particular, Latin American not listed individually in Table 3 be- group of least developed countries as middle-income countries, such as El cause, unlike in most cases mentioned defined by the United Nations, such Salvador. above, the arrears are not the result as the Gambia, Tuvalu and Bhutan; It must be noted that the debt cri- of the (potential) insolvency of the but there are also countries that sit at sis is here, it is global, it affects very debtor but of the absence of an agree- the G20 (grouping of major econo- different groups of countries and ment between the debtor and the cred- mies) table, such as Argentina, Mex- therefore, by definition, it affects dif- itor. The largest group in this catego- ico and South Africa. ferent groups of creditors in different ry are 22 HIPCs whose rescheduling Nevertheless, one can identify countries. agreements have not yet been imple- some patterns of over-indebtedness. mented with all public and private They can serve as the basis for ap- Outlook creditors. This can occasionally be propriate strategies for overcoming related to payment problems. In gen- crises. The following groups of coun- In 2017, i.e., after the 31 Decem- eral, however, creditors are not inter- tries are particularly vulnerable: ber 2016 cut-off date of our present ested in a scheme in which they would • Fragile states: Countries that are analysis, further increases of debt lev- have to officially renounce 90% of politically unstable and therefore con- els were observed in most countries their claims, but prefer to remain in a strained in their ability to borrow re- for which more recent data is already state of persistent non-payment, with- sponsibly. These include, for exam- available. Therefore, even without out formally renouncing the claim. ple, the post-conflict country of Bu- unforeseeable external shocks, the The other nine countries are non- rundi and also Jordan, where insta- ‘Global Sovereign Debt Monitor HIPCs which are currently not servic- bility is not its own but that of its 2019’ will in all likelihood paint a ing individual – mostly private – neighbour, Syria. picture similar to this one. Unless it claims. Unregulated old debts of this kind can become a sensitive issue for Table 2: Payment suspension by low- and middle-income a debtor if a creditor decides to sell countries the debt at a high discount to a ‘vulture fund’, with the latter then seeking seizure of the debtor’s foreign assets or repayment through litigation in a third country.6

Patterns of indebtedness

The current debt crisis is not the crisis of a particular development

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is addressed politically, the crisis will persist and even worsen, not least Methodology of debt analysis thanks to initiatives to promote private capital investments.8 In this analysis, three dimensions of exports, migrant remittances or new Previous sovereign debt crises debt are taken into account: indebtedness. have shown that at some point, high • the debt situation, i.e., the • debt service/annual export debt levels create a threatening reali- level of debt indicators as at the re- earnings ty: ongoing debt servicing absorbs so porting date 31 December 2016; Is the current external debt ser- much of a country’s economic output • the trend, i.e., the change in vicing of the state, citizens and com- that it can only be sustained at the this debt situation over a period of panies so high that exports do not price of further borrowing. Countries four years (2012-16); and at present generate enough foreign are literally in a ‘debt trap’.9 exchange to pay interest and repay- • the intermediate and ongoing Over-indebtedness is not only a ments due in the current year? suspension of debt service pay- problem when it comes to the suspen- ments by individual countries. This indicator shows the ratio of sion of debt service payments. Expe- The debt indicators for the anal- annual repayment and interest pay- ysis are: ments to export earnings. It shows rience shows that governments often • public debt/gross domestic whether the annual debt service – keep up with their debt service obli- product irrespective of the overall debt level gations even though the resources are Is the government more indebt- – overstretches the current perfor- badly needed within the country. For ed at home and abroad than the ef- mance of an economy in a given the people in the affected countries, ficiency of the entire economy dic- year. this often means painful cuts in so- tates? For each of the five indicators cial services. For example, public Public debt is the explicit and above, there are three levels of risk healthcare and public education pro- (see Table 1). In line with these three implicit liabilities of the public sec- vision may deteriorate, meaning only risk levels for each of the five indi- tor – from central government to those that can pay can access quality public enterprises. Public debt also cators, each country is assigned a services. It is often the poorest who includes the debts of private com- value of between 0 and 15. For ex- panies for which the state has issued ample, if a country is at the highest suffer disproportionately from such a guarantee. risk level (i.e., third level) for all five austerity measures. • public debt/annual govern- debt indicators, it has a value of 15. The so-called ‘Third World debt ment revenue Based on these values, the debt sit- crisis’ of the 1980s and 1990s has Is the government so heavily in- uation of a country is classified as shown that it is cheaper for all parties debted at home and abroad that its follows: to reduce debt early on, because fi- income can no longer guarantee on- • 0-4: slightly critical nancing debt service with new (mul- going debt servicing? • 5-9: critical tilateral) credit amounts to the prover- • 10-15: very critical • external debt/gross domestic bial extinguishing of a fire using [Countries with a value of 0 are product petrol. 2018 is perhaps the last year Does the entire economy have categorised as having a ‘slightly crit- in which it is still possible to extin- more payment obligations vis-à-vis ical’ debt situation if they are deemed foreign countries than its economic by the International Monetary Fund guish a large-scale fire with a few tar- performance dictates? (IMF) to have at least a ‘moderate’ geted and not too costly debt reduc- External debt includes the lia- risk of debt distress.] tions. ◆ bilities of both the public and private The trend for each debt indica- sectors of a country vis-à-vis foreign tor is determined by seeing whether Jürgen Kaiser is co-founder and coordina- creditors. This indicator points to the it has changed (i.e., increased or de- tor of the German Debt Crisis Network and overall economic burden, i.e., creased) by at least 10% in the four Jubilee Germany (erlassjahr.de). years from 2012 to 2016. An aggre- The above is extracted from the ‘Global whether an economy produces Sovereign Debt Monitor 2018’ report pub- enough goods and services to ser- gated debt trend based on all five lished by Jubilee Germany and Misereor. The vice its debt. indicators is then calculated for each full report, which includes the debt figures • external debt/annual export country. If more debt indicators have for individual countries, is available on Ju- earnings improved than deteriorated over the bilee Germany’s website (erlassjahr.de/en/). Are the external debts of the four-year period, the general debt state, citizens and companies so trend is presented as an improve- Notes high that exports cannot generate ment. If more indicators have dete- enough foreign exchange to pay the riorated than improved, the general 1. The World Bank divides countries debts? debt trend is said to have deteriorat- into four groups according to their In most cases, external debt ed. per capita gross national income: cannot be repaid in local currency. The situation regarding suspen- high-income countries, upper-mid- Debt servicing requires the genera- sion of debt service payments is dle-income countries, lower-mid- tion of foreign exchange through presented in Table 2. ◆ dle-income countries, and low-income countries.

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2. Defined as those countries that only get low-interest loans from the World Bank International Develop- ment Association (IDA). 3. World Bank: International Debt Statistics 2018, p. 7. Popularly known as EPW, the journal began its existence in 1949 4. The starting point of the analysis is as The Economic Weekly and since 1966 as Economic & Political the list of all low- and middle-income countries as defined by the Weekly. World Bank. In order to keep the focus on indebted countries in the Published from Mumbai, India, by Sameeksha Trust (an inde- Global South and the European pendent and registered charity), EPW is an institution that periphery, all countries that are enjoys a reputation globally for its independent scholarship and members of the OECD or the Eu- for fostering critical inquiry in the social sciences. ropean Union have been excluded from this analysis. Included, on the EPW is a unique left-leaning journal that devotes space for other hand, were the high-income critical commentary on current events and policy debates countries Uruguay, Antigua and alongside rigorous academic research. Barbuda, Bahamas, Barbados, Sey- chelles, and St. Kitts and Nevis; the Why subscribe to EPW? first of these because of its recent history of debt relief, which sug- • Easy-to-access Archives from 1949 to date (The Economic gests the need for further observa- Weekly and EPW) tion; the rest because they belong to the group of Small Island De- • An indispensable resource for researchers working on veloping States (SIDS) and are therefore exposed to a special risk India and South Asia of over-indebtedness. 5. The average value in determining • A new initiative called with features for the how critical a country’s debt situa- digital era tion is has increased from 5.7 to 5.9 (see box for an explanation of how • Digital subscription plans that fit your needs this value is calculated). 6. On the ‘vulture fund’ business model, see Kaiser, J: ‘Geierfonds – was sie tun, warum es sie gibt, und was man gegen sie tun kann’ (in Ger- man), in: erlassjahr.de and Kinder- nothilfe: Schuldenreport 2015, pp. 63-68. 7. Development models are strategies aimed at specific economic dynamics. These strategies can be, for example, domestic or foreign trade- oriented, import-substituting, or focused on exporting raw materials. 8. See ‘Unverzichtbare Chance oder unkalkulierbares Risiko? Der Com- pact with Africa als Ergebnis der deutschen G20-Präsidentschaft – ein Pro und Contra’ (in German), in: erlassjahr.de and Misereor: Schuldenreport 2018, pp. 33-39. 9. It is difficult to predict at which lev- 320-22, A to Z Industrial Estate, Ganpatrao Kadam Marg, el of debt exactly the trap will be Lower Parel, Mumbai, 400 013, India. sprung, and generalisations are of little use. To assess the risk of a debt Phone: +91-22-40638282 crisis, it is therefore necessary to Website: www.epw.in Contact: [email protected] take a closer look at the respective countries. The present analysis shows in which cases this is especially necessary.

THIRD WORLD RESURGENCE No 329/330 20 C O V E R Credit agency says some African countries’ debt worrying Servicing of debts owed by 11 African countries that were part of the World Bank’s Heavily Indebted Poor Countries (HIPC) Initiative of the 1990s is now back at pre-crisis levels.

A NEW report from international duce the debt of some poor countries credit agency Standard & Poor’s Paul Redfern as they were unlikely to repay in full. (S&P) lists Uganda, Rwan- In total, 11 countries were da and Ethiopia among the relieved of $99 billion of 11 countries where it says debt, cutting their govern- the HIPC Initiative has ment debt from an average failed. of 100% of GDP to around It says that more than 24% by 2008. two decades after HIPC, Although the debt for- debt-servicing costs are giveness initiative succeed- back to pre-crisis levels and ed in offering ‘respite for have been increasing since many years’, it has ‘failed 2011. to permanently reduce debt ‘Does this mean that the service burdens’, accord- World Bank’s aim to ensure ing to S&P. that the world’s poorest Headquarters of the Bank of Uganda, the country’s central bank, The warnings come on countries were not burdened in Kampala. The Bank has said the rising costs of servicing the back of a report from by unmanageable or unsus- Uganda’s debt could hit economic growth because of reduced the Organisation for Eco- tainable debt has faltered? public investment. nomic Co-operation and Arguably, yes,’ the report Development (OECD) that says. the impact of tax evasion Uganda’s national debt has near- has returned to the crisis levels of that across sub-Saharan Africa has be- ly trebled in the past three years to time. come colossal. more than 50% of gross domestic As a result, ‘fiscal accounts are It says that more than $50 billion product (GDP), creating a risk of de- burdened by the same or higher debt- per year is being lost to African gov- fault, since nearly two-thirds of that service costs relative to revenues as ernments through illicit flows out of borrowing is external, the central pre-[bailout],’ S&P said. the continent, a sum well in excess of bank said recently. The HIPC Initiative was devel- all the funds received through aid. ◆ The Bank of Uganda said the ris- oped by the World Bank, the Interna- ing costs of servicing the country’s tional Monetary Fund (IMF) and oth- This article was originally published in The $15.1 billion debt could hit econom- er creditors from 1996 onwards to re- East African (2 June 2018). ic growth because of reduced public investment. Three years ago, Ugan- da’s debt was just $6 billion. The debt is mostly a result of a ramping up of borrowing, mostly from China, to fund infrastructure projects including roads, power plants, fibre-optic cable networks and an airport expansion. Across sub-Saharan Africa, government debt rose to 53% of GDP last year, compared with just 11% in 2011. The S&P report adds that while Africa’s debt is not at the same level A 1999 photo of then World Bank President James Wolfensohn being greeted by debt as in the 1990s, debt servicing as a relief advocates. The HIPC Initiative launched by the World Bank and other creditors percentage of government revenues in 1996 ‘failed to permanently reduce debt service burdens’.

THIRD WORLD RESURGENCE No 329/330 21 C O V E R The return of a housing bubble Asset price inflation has been generated by the liquidity created by central banks in the advanced countries to address the recession they were experiencing. That implies, in turn, that many developing countries are prone to an unwinding of unsustainable asset prices in ways that can be damaging. In the long run, regulation to limit interdependence seems to be necessary to reduce vulnerability and enhance policy space.

EVEN while optimistic assessments CP Chandrasekhar and In the event, across countries, of growth trends in the global econo- Jayati Ghosh developed and developing, the avail- my proliferate, concerns that the un- ability and use of mortgage loans, and winding of inflated asset price mar- the resulting demand in the residen- kets could abort the recovery are be- tor was an increase in lending for tial property market, has resulted in a ing expressed. housing investments, with implica- degree of buoyancy in real (consum- Interestingly, there appears to be tions for the residential property mar- er price inflation adjusted) residential a substantial degree of agreement on kets. In the case of the United States property prices, as captured in statis- the cause for such uncertainty, which for example, mortgage loans that had tics from the Bank for International is an excessive dependence on mon- peaked at $9.29 trillion in the third Settlements. In both the US and the etary measures in the form of quanti- quarter of 2008 fell to $7.84 trillion euro area, property prices have risen tative easing and the associated ex- in the second quarter of 2013, but sharply in recent years – since 2012 tremely low interest rate environment have since risen once again to touch in the case of the US and 2014 in the to address the post-crisis recession. $8.94 trillion in the first quarter of case of the EU. As a result, real resi- That lever was not the most effective 2018. Interestingly, over these dates dential property prices are way above from the point of view of lifting the share of mortgage loans in total their post-crisis troughs and slowly growth. While the early resort to fis- debt of households had fallen from approaching their pre-crisis peaks. cal stimuli delivered a sharp recov- 73.3% to 70.3% and further to 67.7%. However, within Europe there are ery, the retreat from fiscal triggers and The main reason for this was an in- countries in which real residential reliance on monetary measures led to crease in the share of student loans property prices have been stagnant a reversal and a new normal of low and credit card debt. But an overall (France) or falling (Italy), where in increase in lending triggered by the growth that has lasted almost a de- others they have been rising (Germa- excess liquidity in the system result- cade. ny). ed in an increase in mortgage debt On the other hand, the large-scale This is curious because an im- outstanding. infusion of cheap liquidity that this pression has gained ground that be- It is no doubt true that the quan- form of intervention triggered saw cause of common drivers affecting titative easing policy has been explic- increased activity in asset markets of asset markets in all countries, there is itly pursued by developed-country different kinds, especially equity, now a high degree of synchronisation central banks, especially the US Fed- bond and property markets. Two fac- of housing price movements. The In- eral Reserve, the European Central tors played a role here. First, punters ternational Monetary Fund (IMF)’s Bank and the Bank of Japan. But in of various kinds accessed cheap mon- April 2018 edition of the Global Fi- ey to invest in assets that were expect- all these cases, the excess liquidity so nancial Stability Report, for example, ed to deliver returns significantly generated has found its way to asset argues: ‘The international transmis- higher than the cost of capital. This markets in some of the developing sion of financial conditions, such as affected bond, equity and property countries, as punters attempt to ex- those occurring because of a change markets, where the sheer influx of li- ploit carry-trade opportunities. Devel- in monetary policy in one large coun- quidity resulted in the realisation of oping countries chosen as targets by try, usually occurs through capital the punters’ expectations. Second, these punters, who tend to move in flows. These flows do not need to go excess liquidity triggered credit ex- herd-like fashion, also show evidence directly into housing investments as pansion, resulting in a revival of credit of excessive asset price inflation re- long as they affect credit availability access even for those households sulting both from direct investments and mortgage rates in the receiving which had not deleveraged fully to of foreign capital and from the credit country. In addition, an increase in the reduce the burden of debt accumulat- driven by the liquidity created by for- global demand for safe assets may ed prior to the crisis, which too was eign capital entry. Not all countries compress the rates of sovereign bonds triggered by the last lending and bor- ‘benefit’ from such inflows, but there considered as low risk, thereby hold- rowing spree. are many that do and show signs of ing down mortgage rates and support- Associated with the revival of overall buoyancy when net inflows ing booming house prices across credit provision to the household sec- are high. many countries at once.’

THIRD WORLD RESURGENCE No 329/330 22 C O V E R

This case for synchronisation of housing price trends originates from Bonn Climate News Updates evidence from emerging markets like (April-May 2018) China and India, where too real property prices, as captured by the data- base of the Bank for International This is a collection of 18 articles Settlements, have risen – interesting- prepared by the Third World ly, far more sharply and for a longer Network for and during the period in India than in China. But, recent United Nations Climate even among so-called ‘emerging mar- Change Talks – the forty-eighth kets’, the trend has not been so clear- sessions of the Subsidiary Body cut. There have been many in which prices have been sticky if not stag- for Implementation (SBI 48) and nant. the Subsidiary Body for This only reflects the fact that Scientific and Technological even if massive liquidity infusion trig- Advice (SBSTA 48) as well as gers capital movements into countries the fifth part of the first session across the world, not all countries are of the Ad Hoc Working Group on targets. Countries which are chosen for specific reasons as targets for cap- the Paris Agreement (APA 1-5) ital flows are the principal beneficia- – in Bonn, Germany from 30 ries of the inflow either directly into ISBN: 978-967-0747-25-5 64 pp April to 10 May 2018. their asset market or through interme- diaries who leverage that capital to provide credit, which in turn flows Price Postage into asset markets. Combine that with Malaysia RM10.00 RM2.00 the fact that performance varies Developing countries US$6.00 US$3.00 (air) across advanced-country economies, Others US$8.00 US$4.00 (air) and capital flows to asset markets vary Orders from Malaysia – please pay by credit card/crossed cheque or postal across countries. order. In sum, global housing markets reflect two tendencies in the current- Orders from Australia, Brunei, Indonesia, Philippines, Singapore, Thailand, UK, USA – please pay by credit card/cheque/bank draft/international ly globalised world. An overall aver- money order in own currency, US$ or Euro.If paying in own currency or Euro, age tendency for residential property please calculate equivalent of US$ rate. If paying in US$, please ensure that prices to rise because of the surfeit of the agent bank is located in the USA. liquidity in search of returns. And an Rest of the world – please pay by credit card/cheque/bank draft/international unequal distribution of the rise in res- money order in US$ or Euro. If paying in Euro, please calculate equivalent of idential property prices across coun- US$ rate. If paying in US$, please ensure that the agent bank is located in the tries within the developed world and USA. outside it. All payments should be made in favour of: THIRD WORLD NETWORK But under this complex scenario BHD., 131 Jalan Macalister, 10400 Penang, Malaysia. Tel: 60-4-2266728/ lies the reality that this asset price in- 2266159; Fax: 60-4-2264505; Email: [email protected]; Website: flation has been generated by the li- www.twn.my or visit our online bookstore at www.twnshop.com to order. quidity created by central banks in the I would like to order ...... copy/copies of Bonn Climate News Updates advanced countries to address the re- (April-May 2018). cession they were experiencing. That I enclose the amount of ...... by cheque/bank draft/IMO. implies, in turn, that many developing countries are prone to an unwind- Please charge the amount of US$/Euro/RM ...... to my credit card: ing of unsustainable asset prices in ways that can be damaging. In the Visa Mastercard long run, regulation to limit interde- A/c No.: Expiry date: pendence seems to be necessary to reduce vulnerability and enhance pol- Signature: icy space. ◆ Name: CP Chandrasekhar and Jayati Ghosh are economics professors at Jawaharlal Nehru Address: University in New Delhi, India. The above is a revised version of an article that was originally published in Business Line (7 May 2018).

THIRD WORLD RESURGENCE No 329/330 23 C O V E R The IMF is back in Argentina After more than a decade of official ‘distance’ from the International Monetary Fund (IMF), Argentina has knocked on the doors of the world’s financial police. The $50 billion credit granted by the organisation in June sets an international record and will directly impact the economic and social situation of this South American country. Historian and economist Eric Toussaint, an eminent specialist in this field and spokesperson for the Belgium-based Committee for the Abolition of Illegitimate Debt (CADTM), pointed this out in an interview with Sergio Ferrari.

Q: Why did the Argentine government turn to the IMF, in full view of Argentina’s relations with this international organisation in the late 1990s and their dire political consequences? Is the financial top brass of the administration of Pres- ident Mauricio Macri despairing? Eric Toussaint (ET): Since the Macri government assumed office in December 2015, its policies have led to a critical situation. A sharp reduction in export taxes has brought down tax revenues and the debt servicing expenditure has been significantly increased (100% higher in 2018 than in 2017). The country is running out Argentine Treasury Minister Nicolas Dujovne (right) and Central Bank President Fe- of dollars. Currency reserves fell by derico Sturzenegger at a 7 June news conference where they spoke about Argenti- $8 billion earlier this year. Macri na’s loan agreement with the IMF anounced that day. needs this IMF loan to continue debt servicing. Private international lenders require such a loan as a prerequi- that a high growth rate and a viable loan, before commanding a com- site for continued credit to Argenti- debt would be ensured by paying the fortable position in the October na. A very large chunk of the IMF loan debt – between end-2015 and early 2019 elections. will be used directly to repay foreign 2016 – and by compensating the vul- ET: I would not like to engage in creditors in dollars. ture funds, in keeping with [a US far-fetched political speculation. I pre- Q: If we look at the Argentine court verdict in a case involving Ar- fer facts. I have read the contents of history of the 1990s, this seems to gentine sovereign debt]. He knelt be- the agreement signed with the IMF be a scheme of playing with fire... fore the vulture funds. But the facts and it has imposed a severe reduction ET: Yes, of course. But I would confirm that this plan did not work. in general social benefits and wages like to further explore the background Debt rose at a whirling pace and it’s of public servants. Public investment of this appeal to the IMF... startling to see how fast it snowballed. will be almost wiped out and it will Q: Please go ahead! As a result, it became impossible to lead to an economic depression. Debt ET: This shows that the govern- convince the creditors that Argentina repayment will increase and the IMF ment’s policy is an abject failure: with could repay its debt in the future. charges high interest rates. The gov- a peso that devalued fast; with the That’s why Macri is asking for this ernment will impose taxes with ele- interest rate set at a high 40% by the $50 billion credit. We must remem- vated rates on the public to repay the Argentine central bank; with the $8 ber that when Greece received $30 debt, while continuing to hand out fis- billion reduction in international re- billion from the IMF in 2010 in the cal perks to the capitalists. The gov- serves that keep declining. And with backdrop of a dramatic situation, it ernment will encourage export of the a debt service that has increased by was a record amount! maximum number of agricultural 100% compared with 2017. Faced Q: Some analysts say that Pres- products and raw materials to the glo- with such a balance sheet, undoubt- ident Macri is trying to breathe in bal market by reinforcing the extrac- edly it is a total failure. Macri claimed some fresh air with the help of this tivist-exporting model. The IMF’s

THIRD WORLD RESURGENCE No 329/330 24 C O V E R policy will lead the country to an economic and social crisis even more serious than what it suffered before this loan was sanctioned. Let’s go back to your question. It is very likely that, politically, Macri will claim that what he is doing is not his project, but what the IMF demands from him. Q: This brings us back to the not-so-distant past: the decade of indebtedness and the IMF’s role in the 1990s that eventually led to the social outburst of 2001. Can history repeat itself without tragedy? ET: History is repeating itself in a country that is a serial debt payer. It started with the illegitimate and odious debt inherited from the military dictatorship of the 1970s. The IMF’s support was crucial for this dictator- A poster seen in Buenos Aires reads ‘No to the Macri-IMF pact’. ‘The IMF’s policy will ship to continue until the early 1980s. lead [Argentina] to an economic and social crisis even more serious than what it The vicious circle of illegitimate debts suffered before this loan was sanctioned.’ persisted during the 1990s with Pres- idents Carlos Menem followed by Fernando de la Rúa. Their allegiance thorities never wanted to do what From now on, it can be included in to the IMF’s recommendations led to Ecuador did in 2007-08: carry out a the category of odious and illegitimate the great social crisis of late 2001. debt audit with citizens’ participation, debts. An odious debt is a debt con- Adolfo Rodríguez Saá, in the few which could have defined the odious tracted against the people’s interests, days of his presidency at end-2001, and illegitimate part of the debt. This, and the creditors know that it is ille- announced the suspension of debt re- along with the inconsistency of the gitimate. Evidently a new illegitimate payment to allay popular anger. The Cristina Fernandez government’s na- and odious debt is taking shape. debt was restructured in 2005, then tional sovereignty discourse, frustrat- Q: What about future pros- renegotiated with creditors who had ed people. This partly explains Mac- pects? not participated before. It caused a ri’s electoral victory in 2015. ET: I have already spoken about crisis in the government and provoked Q: A course over several de- the deteriorating economic and social sharp criticism from the people. cades where illegitimate debts con- crisis. I hope for a strong popular re- Former minister Roberto Lavagna, dition government policies without action in the coming months. I also who had negotiated the 2005 restruc- structural solutions being found... hope that the popular forces will not turing, objected to negotiations with ET: Yes. And that has led today take too long to consolidate their outsider creditors. The Argentine au- to this new mega-loan from the IMF. strength to oppose even more vigor- ously the Macri government and the pressures of the IMF and other international creditors. ◆

Eric Toussaint is a historian and political scientist who completed his PhD at the universities of Paris VIII and Liège, is the spokesperson of CADTM International, and sits on the Scientific Council of ATTAC France, the French chapter of an international movement working towards social, environmental and democratic alternatives in the globalisation process. He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); and A Glance in the Rearview Mirror: Neoliberal Ideology from Its Origins to the Present (2012). Trans- lated by Suchandra De Sarkar, the above interview is reproduced from the CADTM website (www.cadtm.org/The-IMF-is-back-in- Argentine President Mauricio Macri. ‘Since the Macri government assumed office in Argentina-an-economic-and-social-crisis- December 2015, its policies have led to a critical situation.’ even-more-serious).

THIRD WORLD RESURGENCE No 329/330 25 C O V E R ‘Do you know who governs us? The damned Monetary Fund’ Jordan’s June 2018 rising It is not widely known that Jordan has at various periods been under the tutelage of the IMF and has been compelled to comply with the Fund’s structural adjustment programmes as a precondition for its loans. While these austerity programmes have provoked discontent, the authorities had generally been able to contain it without too much difficulty. However, the veritable explosion of popular protests that greeted the latest IMF programme was unprecedented. As Sara Ababneh explains, from 30 May to 7 June, the Jordanian people staged an uprising, not merely against specific elements of the programme, but against the whole neoliberal path on which the state had embarked.

FROM 30 May to 7 June 2018, Jor- danian protesters took the world by surprise. What had started as protests over a taxation draft law and an increase in gas prices quickly led to a popular rising against the neoliberal path on which the state has embarked. The rejection of neoliberal economic policy and the privatisation of key national industries is not new to Jordan. But the centrality in which this analysis featured in the events of June’s rising (habbit1 huzayran) is unprecedented. In June, protesters across Jordan denounced the country’s neoliberal economic pol- In the past, protests against the icies. Picture shows a protest outside the Prime Minister’s office in Amman on 5 government’s economic nahj (path) June. were most strongly felt in workers’ circles, the governorates outside Am- of the Global South have been forced nomic nahj and fighting the reign of man and a few impoverished quarters to adopt austerity measures dictated the IMF (hukm al-sanduq). inside the capital. This time, the coa- by the International Monetary Fund lition spread from the governorates to (IMF) in order to qualify for IMF and Taking on the IMF the heart of Amman, from the work- World Bank loans. Jordan’s June rising classes to middle-income and high ing should therefore be understood Since early 2018, Jordanians earners and from marginalised peo- within the broader context of the anti- have been fighting the latest wave of ple to highly visible civil society or- globalisation movement in which IMF-dictated austerity measures. ganisations and activists, most nota- hundreds of millions of people around Most prominent were the Salt protests bly women’s rights activists. Further- the world are struggling to resist the that lasted for over a hundred days, more, liberal counter-narratives of ad- economic policies that impoverish and protests that followed in Dhiban vancing political awareness as op- them personally and place their coun- and Karak. Despite the persistence of posed to what they see as simplistic tries in subservient global power re- protesters in these governorates, how- ‘economic demands’ have not been lations. More particularly, Jordan’s ever, demonstrations did not spread able to drown the voices of protest- June 2018 rising was also an exten- across the country or to Amman. This ers and their central focus on oppos- sion of the earlier Jordanian anti-aus- changed on 21 May, when the Jorda- ing neoliberal economic policies. terity and IMF protests of 1989 and nian government released a new draft The grievances that led Jordani- 1996 as well as the 2011-12 protests. income tax law. ans of so many different socioeco- Protesters insisted that the only way While the government marketed nomic backgrounds to the streets are to attain socioeconomic justice is by the law as progressive, the law low- not unique to Jordan. Many countries departing from the state’s chosen eco- ered the tax exemption cut-off rate

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from JD24,000 to JD16,000 per fam- Thirty-three unions responded to the lack of transparency during pri- ily per annum. For individuals, the the call to strike.6 On 30 May, doc- vatisation, in which companies were rate for exemption was set at JD666 tors staged a general walkout from sold to unknown buyers.8 Further- ($938) a month. The draft law also public hospitals and health centres, more, most industries were sold far no longer exempted up to JD4,000 for while continuing to provide emergen- below their market value, with some children’s tuition fees; under the old cy services. Entire markets were even being handed over for less than law, families were eligible for tax ex- closed in Irbid and Amman, especially their yearly profit margin.9 Privatisa- emptions up to JD28,000.2 While the in Amman’s downtown area. While tion thus deprived the country of both new draft law suggested increasing banks did not officially participate in its primary sources of income and its the tax brackets from three to five,3 the strike, they encouraged their em- financial independence, making the in effect taxation increased on the ployees to strike by promising that government even more dependent on lower and not higher earners: The first they would not face disciplinary con- aid rent and taxation. bracket was lowered from JD22,000 sequences. The organisers asked IMF recommendations also led to to JD13,000 per individual taxpayer strikers to head to the professional the erosion of subsidies, welfare pol- per annum, while the highest bracket unions’ complexes in their respective icies and state services. Extra taxes of 25% is JD33,000 per individual or governorates at noon on 30 May. were imposed on fuel, which in- JD41,000 per family. This change While estimates vary, at least 3,000 creased by as much as 48%. Earlier means that an annual income of protesters gathered at the syndicate in 2018, the government had raised JD33,000 is taxed the same percent- building in Amman alone. the sales tax on 164 basic products age as one of JD250,000 or even The union leadership demanded (including dairy products, fruits and JD20 million. that the government withdraw the tax vegetables) to 10%. Bread prices dou- Moreover, all businesses pay the law draft, and that both the sales tax bled, and fuel prices were increased same tax rate regardless of size or law and civil service law be revised. five times. Finally, electricity prices profit margin, and taxes were raised They demanded a progressive taxa- climbed 55% since January 2018. for some sectors. The agricultural sec- tion system in which the rich are taxed The latest protests saw a large tor, which was tax-exempt under the higher percentages than the poor. Pro- number of middle-class protesters and old law, was required to pay up to testers also demanded that the state the participation of civil society and 20% in taxes under the new law. Tax- should address budget deficits not by women’s rights organisations. Com- es on the industrial sector were in- taxing the poor, but by redressing tax pared with previous events organised creased from 14% to 20%, and banks evasion by big businesses and multi- by the union council, female and male were required to pay up to 40%. Al- national companies and tax exemp- Islamists – who had lost elections in though large parts of these sectors are tions for the latter. Protesters called the influential engineering syndicate owned by industrial magnates, they for lowering fuel and electricity pric- a month earlier – notably were absent. are also characterised by the concen- es and an end to corruption. They Most protesters in Amman and Irbid tration of national as opposed to glo- demanded the resignation of the gov- during the first days of the strike were bal capital. More significantly, they ernment and the prime minister. They white-collar workers and middle-class employ large numbers of Jordanians; also called for the dissolution of the professionals. They were joined by foreign investments, in contrast, are lower house of parliament. Central- some relatively high earners. For often tax-exempt. The dramatically many, the strike was their first expe- ly, however, protesters affirmed that 10 increased taxes on these key enterpris- their demands went beyond the taxa- rience participating in a protest. es were seen as a threat to future mid- tion law and the person of the prime Lawyers arrived in their robes, engi- dle-class employment and wage lev- minister, and that neoliberal econom- neers wore work helmets. More than els. ics in Jordan must change. half of the protesters were women, In response, the Council of Pro- with women’s rights activists joining fessional Unions (majlis al-naqabat Cross-class unity both the strike and subsequent pro- al-mihaniya) declared 30 May a day tests. In Irbid, female protesters led of general strike for all private and Protesters across the country con- and came up with chants that ad- public sector employees and anyone demned the economic reforms that dressed women in particular. affected by the government’s poli- Jordan has been following at the be- While the June protests have cies.4 Under the leadership of wom- hest of the IMF. Since the late 1980s, been both celebrated and critiqued for en’s rights activists, civil society or- Jordan has signed numerous agree- their middle-class nature, two issues ganisations released a declaration re- ments with the IMF, most recently at bear emphasising. First, while mid- jecting the income tax draft law and the outset of Prime Minister Hani al- dle-class protesters joined the strikes asking the government to withdraw Mulki’s tenure in 2016. The early and protests in unprecedented num- it.5 The declaration affirmed that tax- 2000s saw the privatisation of almost bers at Amman’s professional asso- ation should be ‘truly progressive’ and all national resources and industries ciations complex and the Fourth Cir- that an increase in taxes had to be – from phosphate to electricity and cle (where the office of the prime coupled with improving services, es- telecommunication,7 to selling off minister is located), working-class pecially providing adequate health Jordan’s only port to pay off debts to protesters were a substantial portion and education services for all citizens. the Paris Club. Protesters criticised of the crowds. In areas such as East

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Amman’s Hayy al-Tafayla neighbour- hood and in the governorates, working-class protesters comprised the majority.11 Second, the term ‘middle class’ (al-tabaqa al-wusta) in Jordan, as in much of the Global South, does not necessarily denote someone who is financially secure. As of 2017, Jor- dan ranks 65th globally in monthly salaries, averaging JD450 ($637) – well below the poverty line12 of JD813.7 per individual.13 Low salaries are not offset by low cost of living. People stand in line to buy bread at a bakery in Amman. Bread prices in Jordan have doubled. On the contrary, The Economist has declared Amman the second most expensive city in the Middle East.14 signify the peaceful nature of their gans. 7iber, an Internet-based critical In Jordan as elsewhere, the middle demonstrations.20 At the Fourth Cir- media outlet, compiled daily reports classes live in precarity, and austerity cle, they picked up garbage before not just from the Fourth Circle, but measures threaten to sink them into returning home in the early hours of also from the Hayy al-Tafayla neigh- poverty. the morning. Protesters also sang pa- bourhood in East Amman as well as triotic anthems and asked the Darak from Irbid, Madaba, Zarqa and other The nightly Fourth Circle forces to join them in singing and cities. WhatsApp group members protests sharing their pre-fasting meals (su- kept each other informed throughout hur). the night, forwarding videos of events On the second day of protests, The number of female protesters and speculating on the reaction of the Jordanians woke to the news that the at the Fourth Circle and at the Irbid government and the monarchy. government had increased gas prices union protests was high. In Zarqa and It was not until the evening of 2 for a second month in a row.15 Many Irbid, women led chants. Female ac- June that the king responded. Upon Jordanians regarded this increase as tivists tweeted slogans specifically returning to Jordan from a visit signalling the government’s complete targeting women. Activist Ayesha al- abroad, the king called for national disregard for popular demands. In Omary countered androcentric na- dialogue. Despite rumours of the protest, Jordanians began gathering at tionalist language and connected gen- prime minister’s resignation, al-Mul- the Fourth Circle near the prime min- der to class21 in a tweet in colloquial ki did not submit his resignation un- ister’s office that evening following Arabic which read: ‘You [women] til the afternoon of 4 June.23 Omar al- Tarawih (Ramadan) prayers.16 Work- who are sitting inside the home. Nash- Razzaz, a former minister of educa- ing-class activists initially had criti- miyyat [Jordanian women patriots] tion and World Bank official, was cised the 30 May strike as benefiting should be at the [Fourth] circle. Come named the new prime minister. the middle classes and had urged out oh daughter of my uncle. The Protests continued until the blue-collar workers to refrain from place of Jordanian women is in the evening of 6 June, affirming that the participating.17 But with the gas price heart of the revolution. We are not the problem was not the person of the increase, the government drove work- sisters of men. Men are our brothers. prime minister but economic policies ing-class Jordanians to join the pro- See you today. Your role is as impor- pursued by the regime. On 7 June, al- tests the following day.18 tant as your brothers.’22 Razzaz announced that his govern- On the morning of 1 June, Prime With the exception of Ru’ya In- ment would withdraw the draft tax Minister al-Mulki froze the gas price ternet TV, official media outlets re- law and engage in a national dialogue increase at the behest of King ‘Ab- mained silent. Protesters streamed to ensure that the next law would not dallah II. This move, however, did not live recordings of the protests on Fa- fall on the shoulders of the poor. On bring the protests to an end. In Am- cebook and Twitter. After a period of the same day, the roads to the Fourth man, growing crowds attempted to relative inactivity since 2016, al- Circle were reopened, with youth ac- reach the Fourth Circle, and this time Hirak al-Shababi al-Urduni (Jordani- tivists celebrating their victory with the Darak gendarmerie forces pre- an Youth Movement), one of the pastries (kinafa) and fireworks in vented protesters from reaching the youth coalitions that formed during empty parking lots. site. Protests erupted all over Jordan, the 2011-12 protests, started report- While al-Razzaz is greatly re- and some protesters burned tyres and ing on strike-related events through spected among liberal civil society closed off roads, notably in Irbid, its Facebook page. Another Facebook activists and the middle and upper- Jarash and Madaba.19 On the whole, group, Ma3nash (We Have Nothing), middle classes, his history with the however, protesters were careful to reported on events and tweeted slo- World Bank suggests that he is un-

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likely to break with Jordan’s neolib- ian-Jordanian or a Jordanian-Jordani- in some earlier protests, they also eral economic path. If the Strategy an). On the second day of protest, a blamed the lower house and the gov- Forum – one of his initiatives before message was widely shared on social ernment for corruption. To avoid any becoming minister – is any indication, media that read: confusion (or efforts to twist the he does not take the interests of large Dear Jordanian, meanings), slogans made it clear that industries lightly.24 More important- If within the next week any of the protesters were calling for the fall of ly, the power of the prime minister in following happens, know that the gov- the government because of its ‘poli- Jordan is limited in the current polit- ernment wants to distract you: cy of impoverishment’. One chant, for ical structures, so al-Razzaz may well 1) Jordanian vs. Palestinian / example, was ‘Fall, fall, Hani al-Mul- be unable to move against IMF-im- Faisali vs. Wihdat26 / Northerner vs. ki, and may the government of imposed policies even if he wanted to. Southerner. poverishment fall’. Government here 2) Muslim Brotherhood and po- did not refer only to the Mulki cabi- The possibility of resisting litical parties, or any other stories, net. Similarly, slogans such as ‘Oh neoliberalism be careful. shame, oh shame, they have sold Jor- 3) Foreign agendas. dan for dollars’ and ‘Oh, you govern- Popular resistance against detri- 4) A successful crackdown on a ment of shame. Shame on you. [You] mental economic policies has a long potential terrorist attack / safety and have sold the land and sold the house’ history in Jordan, from the National security. primarily concern how privatisation Conference of 1928, to the Jordanian 5) Bank robbery. and the path or rule (nahj/hukm) of National Movement of the 1950s, to 6) That we fasted on the wrong the dollar guide government actors, the April 1989 protests and most re- day this year. when it should be the welfare of citi- cently the protests in Jordan in 2011 Given how often the regime had zens. and 2012 during the Arab uprisings. used the divide-and-conquer policy Indeed, most slogans criticised At each of those junctures, the regime successfully in the past, the consoli- neoliberal economic policies as serv- has responded to protests with a lib- dation of protesters across lines of ing the interests of big companies to eral discourse that separates politics class and place of origin was impres- the detriment to the welfare of the from economics, emphasising politi- sive. In the Hirak movement of 2011- Jordanian people, and as placing Jor- cal or legal solutions in isolation of 12, protesters fought identity politics dan and its people in subservient po- structural economic transformation. by organising around a wider class sitions to international power rela- The most notorious example is Jor- identity, regarding themselves as chil- tions. Among the most prominent dan’s so-called democratisation that dren of tillers (awlad al-harathin). chants were: ‘Against poverty and took place following the 1989 protests This time, however, protesters came against hunger, and against the rea- against price increases and lifted sub- from different class backgrounds. Yet, sons that make us kneel,’ and ‘Do you sidies. In response to popular de- the potential tax reforms, coupled know who governs us? The damned mands for economic rights and the with years of economic hardship and Monetary Fund. Take your money and right to economic self-determination, unemployment, showed the middle leave us alone.’ Furthermore, protest- the regime gave them limited politi- classes that they were not safe and ers chanted not against individual cal rights through which they were gave them a taste of the precarious corruption, in the liberal sense, but unable to achieve these economic conditions under which most Jorda- against what they saw as structural rights. Moreover, since 1989 a local nians have been suffering for decades. corruption: ‘Oh shame, oh shame, discourse has emerged that considers Compared with the 2011-12 pro- they have sold Jordan for dollars.’ In economic demands as somehow less tests, the message of the June rising other words, protesters regarded sophisticated than making political is harder to place within a liberal tra- neoliberalism itself as inherently cor- demands such as the reformation of jectory, as it was clearly directed rupt, justifying giving millions to in- the lower chamber of parliament.25 against the neoliberal economic path vestors in tax exemptions and mak- What distinguished the June pro- followed by the regime since 2000. ing the poor pay the costs: ‘We are tests from earlier protests was the di- The popular movement of 2011-12 not poor but were made poor, this is verse composition of the participants also primarily resisted neoliberal pol- your policy, oh dollar.’ not only geographically, but also in icies, but the voices of the protesters This understanding of corruption terms of class and gender. No leader- demanding economic reform were is in stark contrast to notions of cor- ship emerged; no group spoke for oth- often drowned out by discourses of ruption which depict the main prob- ers or dominated the discussion. liberal political reform.27 lem of post-colonial states in the Glo- When the head unionist called for an bal South as one of corrupt individu- end to the protests a week into them, Hearing the street als, rather than global economic struc- he was booed down by the crowd. tures that keep elites, leaders and pol- Protesters also resisted any attempts The slogans of the June protests icies which harm their populations. to divide them along lines of origin show that protesters placed the blame Framed this way, the problem is mis- (e.g., whether someone is a Palestin- on the economic structure as a whole; management rather than (deliberate)

THIRD WORLD RESURGENCE No 329/330 29 C O V E R structures that benefit the elite at the dan tadrab ‘an al-àmal rafdan li- state’s response to protesters in expense of the majority. At the June qanun dariybat al-dakhl’, al-Quds Amman differed greatly, however, rising, protesters explicitly rejected al-‘Arabi, 30 May 2018. from its response to protesters in the logic of granting multinational 7. The plans to privatise telecommu- the southern city of Tafila. Social corporations tax exemptions in order nication started in the second half media activists in Tafila joke that of the 1990s and were executed in the Darak forces offered protesters to increase investment, or that ex- the 2000s. water after tear-gassing them with empting the poor from taxes would 8. A company by the name of Kamil expired ammunition. amount to unfair state interference. Holding ended up buying the phos- 21. In another tweet, al-Omary referred They rejected the neoliberal logic that phate company. Initially rumours to women as the daughters of (fe- regards any investment in the welfare suggested that the owner was the male) farmers and the daughters of of the population as constituting eco- Sultan of Brunei, who denied any Akoub harvesters in reference to nomically ineffective subsidies. connection. Jordanians still do not both Jordanian-Jordanian and Pal- Any meaningful government re- know who owns Kamil Holding. estinian-Jordanian women of peas- sponse to the June protests must be 9. Retired Military Veterans, ‘al-Wa- ant backgrounds. @AyeshaOmary, about more than reform. The problem taniyya al-u’liyya lil-mutaqaideen 1 June 2018. is not that of ‘bad’ economics, or of al-a’sariyeen takshif a’n shubuhat 22. @AyeshaOmary, 1 June 2018. fasad al-khaskhasa’, Ammannet, 24 23. Al-Mulki initially claimed that Jor- economics done badly, as one blog- 28 January 2011. dan’s commitment to the IMF did ger suggested. Nor is the solution 10. Rula Hroub, ‘Hal al-hikrak al-ur- not allow the government to with- to hire highly educated ‘experts’ to duni iqisadi faqat? In i’u’bat al-um- draw the draft tax law. provide a path for reform. Because the mam’, Al Mayadeen, 6 June 2018. 24. Salma al-Nims, personal conversa- economic system works perfectly 11. Du‘aa al-‘Ali and Shakir Jarrar, tion with the author, 7 June 2018. well for those it aims to enrich, it ‘Al-’Ihtijaj al-hadari wa istithna’ al- 25. For an example of an analysis that needs more than reform. What is muhafahdat’, 7iber, 10 July 2018. prioritises so-called political re- needed is an economic system that 12. Omar Obeidat, ‘Third of Jordan’s form, see: Hisham Bustani, prioritises the welfare of Jordanians population lives below poverty line ‘La’hdat al-tagheer al-hasima, kay- instead of investors. This requires in- at some point of one year,’ The Jor- fa nu’awel ‘ihijajat ‘idrab al-urdun’ vestment in an economically indepen- dan Times, 2 July 2014. ila makaseb sh’abiyya?’, 7iber, 4 13. Laila Azzeh, ‘Kingdom’s average June 2018. dent welfare state. ◆ monthly salary stands at $637 – 26. Al-Faysali and al-Wihdat, the two report,’ The Jordan Times, 7 April main football teams in Jordan, are Sara Ababneh is assistant professor at the Center for Strategic Studies at the Universi- 2017. generally supported by Jordanian- ty of Jordan. This article is reproduced from 14. The Data Team, ‘Asian and Euro- Jordanians and Palestinian-Jorda- the website of the Middle East Research and pean Cities Compete for the Title nians, respectively. Information Project (MERIP) of Most Expensive City,’ The Econ- 27. This is not to say that no one sug- (www.merip.org). omist, 15 March 2018. gested political solutions to the 15. Riham Zayydan, ‘Al-H’ukuma tar- uprising. Former foreign minister Notes fa’ Asa’ar al-Mahroukat min 4.8 ila Marwan al-Mua’sher and research- 5.5%,’ Al Ghad, 31 May 2018. er Mohammad Abu Rumman both 1. In Jordanian dialect, the singular is 16. Mohammad al Irsan, ‘Al-urdun ‘ala have argued that political disen- habeh, which more precisely means safeeh sakhen, riyah al-‘ihtijaj ahub franchisement is the main problem ‘outburst’. In the context of the pro- fi kul makan,’ Arabi 21, 1 June which Jordanians face. These accounts, however, are a continuation tests, the term carried a meaning 2018. 17. Du‘a’ al-‘Ali and Shakir Jarrar, of the writers’ previous ideas and closer to ‘rising’. do not build directly on the de- ‘Jordan’s Strike and Uprising: No 2. Feminists have criticised the law for mands of the street. From Marwan privileging men by allowing hus- Alternative to Alliances from Be- al-Mu’asher, see ‘La dara’ib duna bands to claim these tax exemp- low,’ 7iber, translated by Siwar tamtheel,’ al-Ghad, 30 May 2018 tions rather than their wives. Masannat, 3 June 2018. and ‘Hal n’amal fi tagheer nahj?’, 3. The previous law had three 18. Curtis Ryan, ‘Why Jordanians are al-Ghad, 6 June 2018; from Mo- JD10,000 tax brackets. In the draft Protesting,’ The Washington Post, hammad Abu Rumman, see ‘Mu- law, a taxpayer would move up a 4 June 2018. faraqat al-duwar al-rabe`,’ al-Ghad, bracket after each additional 19. For a critique of the classist analy- 4 June 2018; ‘“Andama yaksab al- JD5,000 earned. sis of the peaceful nature of the pro- jamee”,’ al-Ghad, 5 June 2018; 4. ‘Al-Naqabat, almuhnya tadù kaf- tests, see Du‘a’ al-‘Ali and Shakir ‘Al-ibiad ‘an ‘hafat al-hawiyya,’ al- at muntasbiha li al-idrab youm al- Jarrar, ‘Al-’Ihtijaj al-h’adari wa is- Ghad, 7 June 2018; and ‘Manifes- arbià’ ihtajajan ‘ala ta`dilat al- tithna’ al-muhafadat,” 7iber, 10 to al-shabab al-urduni,’ al-Ghad, 8 darabia,’ al-Saraya News, 26 May June 2018. June 2018. 2018. 20. After international media started 28. Nasim al-Tarawneh, ‘Jordan’s 5. ‘Muw’assasat a-mujtma` al-madani paying attention to the protests Gabba3at Moment, Protests, ta`lan al-adarab’, Sawalif, 29 May around the fourth day, the regime Strikes, How We Got Here and 2018. was eager to appear tempered and Where We’re Going,’ The Black 6. ‘Al-Naqabat al-mihniyya fi al-ur- benevolent in its response. The Iris, 4 June 2018.

THIRD WORLD RESURGENCE No 329/330 30 C O V E R IMF to muddle through crisis again? The economic outlook for many developing countries is bleak, says Yilmaz Akyüz. Many of them are heavily indebted and have become dependent on short-term capital flows to balance their books. However, when a reversal occurs, the stampede of capital out of the country will do irreparable damage to the country’s economy. Turning to the IMF is not much of an option given its dismal record in treating such patients. In any case, in view of the scale of the debts and the number of countries in distress, the Fund may not have enough funds to provide assistance.

cial crisis, as to IMF approach to crisis persistently be- management nign global financial conditions re- In typical IMF interventions in sulting from ex- previous crises, liquidity support was ceptional mone- provided mainly to keep debtor coun- tary policies in the tries current on their payments to in- US, Europe and ternational creditors and to maintain elsewhere in ad- an open capital account. As a result, vanced economies obligations to private creditors were and favourable translated into debt to the IMF. Simul- global risk appe- taneously, austerity was imposed on A man walks past the IMF logo at the Fund’s headquarters in tite. debtors by means of hikes in domes- Washington. ‘By failing to establish an orderly and equitable Even though tic interest rates, fiscal retrenchment, system of crisis resolution, the IMF may very well find its role there has been no and cuts in employment, wages and significantly diminished in the management of the next bout fundamental re- pensions in order to achieve a sharp of crises in emerging economies.’ versal of these pol- turnaround in the current account, pri- icies, the arrival of marily through import compression, IT is now more than a decade and a a Minsky moment appears to be im- and to restore confidence among in- half since the last severe currency cri- minent, with markets, in expectation ternational creditors and investors. sis in a major emerging economy – of normalisation of monetary policy This approach to crisis manage- that was in Argentina in 2001-02 fol- in the US, getting nervous about the ment was widely criticised on sever- lowing a series of crises in Russia, risks they have taken by investing al grounds. A strong case was made Turkey and Brazil. heavily in emerging economies with that the combination of debtor aus- It is now common knowledge poor economic fundamentals in terity and creditor bailout would lead that such crises generally occur when search of yield in conditions of low to inequality between debtors and countries fail to manage surges in cap- global interest rates and ample sup- creditors in the incidence of the bur- ital inflows so as to prevent build-up ply of liquidity. den of the crisis, create moral hazard of fragility including currency appre- The first serious signs have ap- by allowing creditors to avoid the full ciations, large and persistent current peared in Argentina with the recently consequences of the risks they have account deficits, increased leverage elected government of President taken and are paid for, and endanger and currency and maturity mismatch- Mauricio Macri knocking on the the financial integrity of the Fund. es in balance sheets. doors of the International Monetary Inequalities could also be creat- The absence of a major crisis in Fund (IMF). But Argentina is perhaps ed among creditors; in the event of a the Global South since the early years only the tip of an iceberg. Several oth- default and restructuring, those who of the new millennium owes not so er emerging economies are equally or exit first could escape without hair- much to judicious management of the even more susceptible to sudden stops cut, leaving the others to take the full surge in capital inflows that had be- and reversals of capital flows and brunt of debt write-offs. Profit oppor- gun in the early 2000s and continued currency and balance-of-payments tunities are also created for vulture with full force after the global finan- crises. funds at the expense of genuine cred-

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nism was proposed for bailing in the private creditors in the event of failure of a voluntary agreement. In such an event, as long as the IMF stood firm in refusing lending without private sector involvement, the debtor would have had no option but to impose unilateral standstills on its obligations to private creditors, but without any statutory protection against litigation. Although various propos- als were made outside the Fund to address the holdout problem and pro- A meeting of finance ministers and central bankers from the ASEAN+3 countries. The tect debtors against litigation, the ASEAN+3’s Chiang Mai Initiative Multilateralisation and other South-South multilateral arrangements for liquidity provision are not expected to provide adequate sup- matter was once again put aside with- port to emerging economies in the event of a financial crisis. out being resolved. itors as well as the debtor, as seen in However, this did not elicit adequate Potential for crisis the case of Argentina. support and had to be abandoned. The Considerable scepticism was also issue was soon forgotten with a rapid The stakes are now getting high- expressed within the Fund about the recovery of capital inflows to emerg- er because of massive amounts of wisdom of using public money to bail ing economies and bounce-back of external liabilities that emerging out private creditors and investors. economic activity in crisis-hit coun- economies built up in the past 10 During the earlier episodes of crisis, tries. years. These are not only in debt con- the IMF Board recognised the need However, private sector involve- tracted in reserve currencies, notably for involving the private sector in ment in crisis resolution was back on by private corporations, but also un- forestalling and resolving financial the agenda again with the onset of the precedented amounts of foreign hold- crises, but insisted on voluntary mech- eurozone crisis. The Fund turned its ings in local deposit, bond and equi- anisms, notably collective action attention to sovereign debt restructur- ty markets. clauses (CACs) and automatic rolling after misjudging the sustainabili- Furthermore, most emerging over clauses in debt contracts and in- ty of the Greek debt, very much in economies have eliminated or signif- formal negotiations between debtors the same way as it had done with Ar- icantly reduced restrictions over cap- and creditors. gentina about a decade earlier, pour- ital outflows by residents. However, as these proved inef- ing in money to bail out private cred- Consequently, exit of non-resi- fective and some advanced econo- itors. dents from local markets and capital mies started to oppose bailouts, the It restarted seeking ways and flight by residents now constitute big- IMF Board agreed that in extreme cir- means for involving the private sec- ger sources of potential drain on re- cumstances, if it is not possible to tor in crisis resolution so as to ‘limit serves of emerging economies than reach agreement on a voluntary stand- the risk that Fund resources will sim- external debt contracted in reserve still, members may find it necessary, ply be used to bail out private credi- currencies. as a last resort, to impose one unilat- tors’ and to ensure that private credi- Emerging economies are widely erally, and that since there could be a tors made some concessions and took commended for the large amounts of risk that this action would trigger cap- some losses on their holdings as a international reserves they have ac- ital outflows, a member would need condition for Fund lending. cumulated in the new millennium. to consider whether it might be nec- Subsequently it was suggested However, in the large majority of cas- essary to resort to the introduction of that the sovereign approaching the es these came from capital inflows more comprehensive exchange or Fund for assistance be asked to find rather than current account surplus- capital controls. ways of rolling over all bonds and es. No protection against litigation commercial loans falling due within Cumulatively, all G20 emerging was offered, but it was suggested that the life of the Fund programme. This economies except China and Russia the Fund could signal its acceptance would be necessary whether external have registered current account defi- of a standstill imposed by a member payments difficulties are perceived to cits since the beginning of the mil- by lending into arrears to private cred- be of liquidity or solvency, which is lennium, at a total amount of some itors. often difficult to identify with a rea- $2 trillion, while their external liabili- The Fund staff went further and sonable degree of precision ex ante. ties have increased by over $4 trillion. proposed a formal Sovereign Debt This so-called ‘re-profiling’ was Reserves accumulated are less Restructuring Mechanism (SDRM) to again to be market-based and volun- than a quarter of the increase in total facilitate sovereign bond workouts. tary. However, no statutory mecha- liabilities while the rest of capital in-

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flows (new liabilities) of-payments pressures has been used for fi- is not within the Fed’s nancing current ac- mandate and therefore is count deficits or private a complete non-starter. acquisition of assets China has swaps abroad – assets that with over 30 countries. would not necessarily But these are mostly return at times of inter- with advanced econo- ruption and reversal of mies and designed to non-resident capital in- support trade and inflows. vestment and to pro- As of end 2016, on mote the international average, the reserves of use of the renminbi rath- deficit G20 emerging er than boost reserves. economies were less To sum up, as rec- than one-third of their A trader at his desk on the floor of the Borsa Istanbul. Turkey, one of ognised by the IMF, the total non-FDI external the most vulnerable emerging economies, is likely to approach China, global financial safety liabilities including Russia or some Gulf states with strong reserve positions rather than net including interna- debt issued internation- the IMF if its currency goes into a freefall. tional reserves, Fund really and non-resident sources, bilateral swap holdings in local deposits, bonds and arrangements and regional financing equities. tion (CMIM) of East Asian countries arrangements is ‘fragmented with un- In many cases these holdings plus and the Contingent Reserve Arrange- even coverage’ and ‘too costly, unre- short-term forex debt reach or exceed ment (CRA) of the BRICS grouping. liable and conducive to moral hazard’. These are not only small in size international reserves. In most cases Given the aversion of emerging but also have design problems. The reserves would be totally inadequate economies to the IMF and unilateral to provide a reliable buffer against a CMIM has never been called upon, even during the global crisis. It does debt standstills and exchange con- generalised exit of non-residents and trols, the next crisis is likely to be even widespread capital flight by residents. not include a common fund but a series of promises to provide liquidity, messier than the previous ones. Some countries may seek and succeed in Limited options with each country reserving the right not to contribute to the specific re- getting bilateral support from China or some reserve-currency countries Given the dismal record of the quest by a member. Its size is $240 IMF in crisis intervention and man- billion and access beyond 30% of according to their political stance and agement, many emerging economies quotas is tied to an IMF programme. affiliation. For instance, one of the are loath to go back to the Fund in The CRA is also designed to most vulnerable emerging economies, the event of a severe currency and li- complement rather than substitute the Turkey, is likely to approach China, quidity crisis, except those such as existing IMF facilities. Its size is even Russia or some Gulf states with Argentina whose neoliberal policies smaller, $100 billion, and access be- strong reserve positions rather than are strongly supported by the IMF. yond 30% is also tied to the conclu- the IMF if its currency goes into a In any case, at some $800 billion, sion of an IMF programme. Thus, freefall. In such cases, crisis interven- the lending capacity of the IMF would these regional arrangements do not tion would become even more politi- provide escape from IMF condition- be too small to take on the task. The cised than in the past and a lot less ality and surveillance. level of liquidity that may be needed reliant on multilateral arrangements. That leaves bilateral swaps by many emerging economies in the By failing to establish an orderly among central banks and bilateral and equitable system of crisis res- event of capital reversals exceeds by lending by governments of reserve- a large margin what the IMF could olution, the IMF may very well find currency countries, notably the US, its role significantly diminished in the provide under exceptional financing. and surplus emerging economies with management of the next bout of cri- Most emerging economies would ample international reserves such as ses in emerging economies. In other also be highly reluctant to resort to China. unilateral debt standstills and ex- A very large part of bilateral words, multilateralism, however im- change controls in view of their ex- swaps established by the US Federal perfect, could face another blow in posure to creditor litigation and Reserve is with other advanced econ- the sphere of finance after trade. – ◆ chronic dependence on international omies. Those with emerging econo- IPS lenders and investors. mies (Brazil and Mexico) are too On the other hand, not much re- small to provide much relief. In the Yilmaz Akyüz is chief economist with the South Centre in Geneva and former Director lief could be expected from South- words of former chair of the US Fed- of the Division on Globalisation and Devel- South multilateral arrangements for eral Reserve Janet Yellen, expanding opment Strategies at the United Nations Con- liquidity provision, notably the the swap lines to serve as a safety net ference on Trade and Development Chiang Mai Initiative Multilateralisa- for countries encountering balance- (UNCTAD).

THIRD WORLD RESURGENCE No 329/330 33 C O V E R Debt justice prevails: Belgian vulture funds law survives challenge Vulture funds thrive on the misery of indebted nations. A recent Belgian court decision may prove to be a setback to their predatory activities.

Bodo Ellmers and Antonio Gambini Eurodad

IN a landmark ruling on 31 May, the Belgian Constitutional Court upheld the country’s anti-vulture-funds law, rejecting a legal challenge by a particularly notorious fund. NML Capi- tal, an opaque vulture fund listed in the offshore financial centre of the Cayman Islands, had tried to shelve the Belgian law and intervene in democratic decision-making in Belgium. The ruling means the law remains in force, and agreements by the Euro- pean Parliament and the United Na- tions imply that it is on the way to becoming an example for a worldwide solution to the challenges that vulture funds pose to the fair and In a landmark ruling on 31 May, the Belgian Constitutional Court upheld the country’s anti-vulture-funds law, rejecting a legal challenge by a particularly notorious fund. speedy resolution of debt crises. Picture shows a demonstration in support of the law. NML Capital gained notoriety when it undermined sovereign debt restructuring in Argentina in the discriminatory, respectful of Bel- ment capacity of the crisis state. When 2000s, using the US court system to gium’s EU and international commit- this happens, the vulture funds litigate obtain a ruling that enforced its claims ments and not in violation of any con- against the debtor state, demanding – resulting in a return on investment stitutional right. full payment of the nominal value plus of over 1,200%. This and other dras- fines and penalty interest. If they find tic cases of vulture fund litigation How does the vulture fund a court in an influential country that prompted the Belgian Parliament in business work? rules in their favour – the US or more 2015 to pass legislation that would precisely New York courts have re- make such litigation economically un- Vulture funds are specialised cently been particular enablers of the attractive, at least on Belgian soil. hedge funds that use predatory meth- vulture fund business – they can make NML Capital saw the threat to its ods vis-à-vis countries in debt crises, profits in excess of 1,000%. predatory business model and litigat- and vis-à-vis the countries’ other cred- Vulture funds thus pose a tremen- ed at the Belgian Constitutional itors. Their business model is to buy dous danger to countries in debt dis- Court, claiming that the Belgian law holdout debt – junk bonds – of crisis tress, as well as to the debt restruc- was unconstitutional. countries on secondary markets when turing regime. Their actions delay With the 31 May ruling, the Con- their market value is far below the debt restructuring processes and thus stitutional Court made it clear that this nominal value. Ultimately, they refuse prolong debt crises and the suffering is not the case, meaning the Belgian to participate in a coordinated debt of the indebted countries’ popula- vulture funds law is judged to be ful- restructuring process, but speculate tions. They cause high litigation costs ly in line with the Belgian Constitu- that other creditors will participate, and, if they win, buyout costs for the tion. As such, it is judged to be non- thus restoring the solvency and pay- debtor country. They also free-ride on

THIRD WORLD RESURGENCE No 329/330 34 C O V E R

zens, they also know the damage that vulture funds cause due to their longstanding en- gagement in poverty eradica- tion and debt justice. They coordinated the public support and even formally joined the defence through their lawyer Olivier Stein.

From Belgium to the EU and the UN

The Belgian law is also seen as a key step for effective The Addis Ababa Action Agenda adopted by the third International Conference on Financing solutions to debt crises by the for Development in 2015 (pic) encouraged UN member states to follow the example of the international community at Belgian vulture fund law. large. In 2015, the United Na- tions adopted the Addis Aba- ba Action Agenda on Financing for other creditors’ backs, as they specu- previous UK legislation which is, Development which already encour- late that cooperation by some credi- however, less far-reaching than its aged its member states to follow the tors will pave the way for huge prof- Belgian equivalent. The Belgian leg- Belgian example. This coincided with its for them, resulting in obviously un- islation already has some Europe- an initiative of the UN General As- fair burden sharing. wide repercussions as it protects the sembly in the same year that led to It is no surprise that they are Euroclear payment system which is the ‘Basic Principles on Sovereign viewed unfavourably, and attempts to based in Brussels. One method that Debt Restructuring Processes’. These principles establish the sovereign’s stop them have been made at differ- vulture funds use to collect money is ent levels including via the UN Gen- right to restructure debts, ‘which by trying to intercept payments that should not be frustrated or impeded eral Assembly, the International Mon- the debtor makes to other creditors. etary Fund and even the Internation- by any abusive measures’. For Europe, these go through the Eu- al Capital Markets Association. None Better late than never, the Euro- roclear system, which is now protect- of these efforts were fully effective, pean Parliament picked up the issue ed. however, which is where the Belgian in early 2018. In its resolution on ‘En- The Belgian law had been adopt- hancing developing countries’ debt legislators stepped in. ed almost unanimously by a large sustainability’, the European Parlia- cross-party majority of parliamentar- ment ‘calls on the [EU] Member The essence of the Belgian ians. Needless to say, the attempt by States to adopt, on the [European] law a Cayman Islands-based ‘investment Commission’s initiative, a regulation vehicle’, ostensibly controlled by US based on the Belgian law on combat- Belgium is one of only three billionaires, to shelve the law has been ing vulture fund debt speculation’. countries that currently have vulture considered a somewhat awkward and The European Parliament unfortu- fund legislation of some sort. The inappropriate foreign intervention nately cannot take the initiative itself, Belgian law promises to be an effec- as in the EU the right to legislative into a democratic legislative process. tive remedy due to a simple clause: it initiative lies with the European Com- It caused a public outcry. limits the amount of money that vul- mission. The defence at the Constitution- ture funds can get through litigation It is now time for the Commis- al Court was therefore strongly sup- to the amount they paid when they sion to act and make clear that it exe- ported by the Belgian public at large, bought the junk debt for a discount- cutes the will of European citizens. and in particular by Belgian non-gov- ed price on the secondary markets. As Belgium was an example for Eu- ernmental organisations (NGOs) and This should prevent predatory spec- rope, the EU can become an example social movements such as the Com- ◆ ulation because it renders it econom- for the rest of the world. mittee for the Abolition of Illegitimate ically unattractive, while still ensur- Debt (CADTM) and member organi- Bodo Ellmers is Policy and Advocacy Man- ing fair treatment (you get what you sations of the European Network on ager at Eurodad (European Network on Debt paid). Debt and Development (Eurodad) and Development). Antonio Gambini is with The Belgian law has already in- the Belgian NGO platform CNCD-11.11.11 11.11.11 and CNCD-11.11.11. Not and is Chair of the Eurodad board. This ar- spired neighbouring France to pass a only do these organisations represent ticle is reproduced from the Eurodad web- vulture fund law, itself building on a broad constituency of Belgian citi- site (eurodad.org).

THIRD WORLD RESURGENCE No 329/330 35 W O R L D A F F A I R S Myths of the Six-Day War Few wars have changed the political complexion of the Middle East as significantly as the 1967 Six-Day War between Israel and the Arab countries. It resulted in occupation by Israel of the West Bank, Gaza, East Jerusalem, the Golan Heights and the Sinai Peninsula. More critically the war also introduced dramatic changes for the Palestinians living in Gaza and the West Bank. Previously governed by Egypt and Jordan, after the war they found themselves under Israeli control. Had Arab leaders been determined to launch an attack on Israel? Were Israeli leaders willing to seek peace after their stunning military victory? New scholarship easily challenges the falsehoods long prevalent in Western circles.

Ilan Pappé

FIFTY years after the Arab-Israeli war of June 1967, we have new material to better understand the origins and impact of that landmark event and thus a much better historical perspective. The common narrative, still prevalent in Western political circles, is composed of twin myths. One myth is that the war was imposed on Israel, and the second myth is that after Isra- Israeli forces on the Sinai front during the Six-Day War. ‘[T]he 1967 war and its after- el’s stunning victory it was willing to math should be seen as a direct continuation and the consequence of the Zionist achieve peace with all Arab countries colonisation of Palestine since 1882...’ and the Palestinians. Both myths can now more easily be challenged and take by force these two areas in 1958 ment had well prepared for a swift debunked. and 1960. The threat of such an ac- takeover of the West Bank and the The Israeli capture of the West tion, as well the expansion of Israeli Gaza Strip.1 This is not surprising. Bank and the Gaza Strip in 1967 was work on diverting the Jordan River, Israel already possessed a system of an accident of history that Israel had prompted Egyptian President Gamal control over a large number of Pales- the great fortune to exploit. Ever since Abdel Nasser to dispatch forces to the tinians (the system of military rule the birth of Israel in 1948, the coun- Sinai Peninsula (a move he would imposed on the Palestinians in Israel try’s political and military elite felt take again during the 1967 crisis). since 1948) that could be reimposed that Israel had missed a valuable op- The looming threat of an Israeli on another Palestinian group. portunity during the war of indepen- attack on Syria and Jordan in 1967 is The decisions taken by the Israe- dence to create a Jewish state through- downplayed by mainstream historiog- li government following the 1948 war out historical Palestine. The regret raphy in the West, which tends to por- reinforce the impression that the lead- was that the army did not occupy the tray Nasser as an irresponsible leadership of the state was searching for West Bank and the Gaza Strip in 1948 er who took his country into an as- the opportunity to expand the geo- when it seemed that it had the mili- sured disaster. However, we should graphical space of the Jewish state. tary capacity and opportunity to do remember that war could have erupt- This Israeli behaviour is better under- that. ed in 1960, but it did not mainly be- stood if we accept the recent scholar- Since then, there had been a cause David Ben-Gurion, Israel’s ly tendency to define Zionism as set- strong military and political lobby prime minister at the time, did not tler colonialism and Israel as a settler inside Israel that pushed for the oc- wish to launch a military adventure. colonial state. The definition is apt if cupation of the West Bank (and to a By 1967, he had been ousted from the we consider Zionism to be an ideo- lesser extent the Gaza Strip). The lob- Israeli political elite. logical movement that pushed Euro- by comprised powerful people who, A review of documents in the Is- peans (who felt unsafe in Europe) to according to my research based on the rael State Archives as well as contem- resettle in faraway locales in search Israel State Archives, nearly succeed- poraneous press reports make it pos- of not only a home but a homeland. ed in convincing the government to sible to see how the Israeli govern- This search encountered an indige-

THIRD WORLD RESURGENCE No 329/330 36 W O R L D A F F A I R S nous population that more often than not became victims of genocide at the hands of the settlers. In Palestine, ethnic cleansing and segregation (hafra- da in Hebrew) has been and remains the principal means by which the settler colonial project hopes to turn the whole of Palestine into a Jewish state. As the great scholar of settler colonialism Patrick Wolfe has put it, settler colonialism is a structure, not an event. Thus, the 1967 war and its aftermath should be seen as a direct continuation and the consequence of A Jewish settlement in the West Bank. Israel has moved to a unilateral policy with a the Zionist colonisation of Palestine cleaver strategy not only of dividing the West Bank into Jewish and Arab parts, but also of striving to annex officially to Israel the ‘Jewish’ parts. since 1882 and the Palestinian nakba (catastrophe) in 1948. Israel went of their political composition. This the end of the 1967 war gave serious knowingly, and well prepared, to war government was the most consensu- consideration to repeating the mass in 1967, and had contemplated long al that Israel had ever had, or would expulsion of inhabitants carried out before the war the occupation of the have. Every political party and ideo- in 1948, but this was ruled out. It was West Bank and the Gaza Strip. logical shade was represented, which decided that the Palestinians would The second myth of the constant enabled the government to act with by and large be allowed to stay (which Israeli search for peace is also chal- unprecedented authority when it did preclude some massive expul- lenged given what we know with the made its decisions.2 sions from the Greater Jerusalem area passage of time and exposure of more The first decision the government and in the Jordan Valley). evidence. The current Israeli strategy took was to keep the West Bank and This second decision triggered for the West Bank and the Gaza Strip the Gaza Strip within Israel’s rule. the need to make a third decision. If should be seen in the wider context There was then, and there is today, a the territories were to be kept under of some key strategic decisions taken tactical debate over how best to Israeli rule and the people would re- by the Israeli leadership immediately achieve this goal. The options are ei- main, what would their future be? The after the 1967 war. ther direct or indirect rule. With time, deliberations show that the policy- There was a distinct difference this tactical discussion was miscon- makers quite consciously decided that between the way the Israeli political ceived by many outsiders as a genu- the inhabitants of the West Bank and elite viewed, in the wake of the war, ine debate between peace and war the Gaza Strip would not be Israeli the West Bank and the Gaza Strip, on camps within the Israeli political elite. citizens but would be without any cit- the one hand, and the Egyptian Sinai This misconception helped to com- izenship, and hence without any ba- Peninsula and Syrian Golan Heights, modify Israel as the only democracy sic civil rights. There was also a rec- on the other. From the moment the in the Middle East when nonetheless ognition among the leaders of Israel war ended, it transpired that the first faced with the most blatant proof that that citizen-less status would be kept two areas were not open for negotia- it was not: a harsh occupation im- for a very long time (in fact, that re- tion, while the two other areas were posed on millions of people. With mains the case today). at least considered by some ministers time, we learnt that indirect rule The greatest challenge facing the as a possible trading card for future meant Judaising parts of the West 13th government of Israel was how bilateral peace. With time, it would Bank and the Gaza Strip (areas that to commodify these three decisions take the war in 1973 to reach a deal did not have a dense Palestinian pop- to the international community at with Egypt, despite the beginning of ulation). In 2005, indirect rule meant large, and to the United States, Isra- intensive Jewish colonisation in the withdrawing Jewish settlers from the el’s important ally, in particular. The north and south of the Sinai. Peace Gaza Strip and ghettoising it with international community through the with Syria was never achieved, and siege and closure. United Nations demanded that Israel Jewish colonisation there became Government documents show a withdraw from the 1967 territories in more intensive and was followed by clear determination to keep the West return for peace (as expressed clear- de jure annexation. Bank under Israeli control forever and ly in UN Security Council Resolu- In a series of meetings around 19 to permanently demarcate the Jordan tions 242 and, later, 338). The issue and 20 June 1967, right after the end River as Israel’s natural border. Keep- of Jerusalem became an additional of the war, the 13th government of ing this territory required an addition- bone of contention. The Israeli gov- Israel took a few decisions that would al decision: what to do with the mil- ernment decided shortly after the end be respected and adhered to by all lions of Palestinians living there? The of the 1967 fighting to annex East subsequent governments, regardless Israeli cabinet in the early days after Jerusalem into the State of Israel. Is-

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rael had already violated a 1949 UN However, those who represented the midst of Palestinian communities, decision to internationalise Jerusalem the custodians in the military and po- Gush Emunim settled according to an by moving its governmental offices litical elite succumbed easily to the imaginary biblical map in the heart from Tel Aviv to Jerusalem (this is pressure of the redeemers, fearing of the Palestinian areas. Their pres- why hardly any country has its em- being depicted as unpatriotic. More ence disrupted the more orderly col- bassy in Jerusalem). In June 1967, this importantly, within Rabin’s Labour onisation from above, and created was an official and de jure annex- Party there was a hard core of redeem- hotbeds of fanaticism and violence ation, accompanied by the expulsion ers who talked the talk of the custo- that physically antagonised the Pal- of Palestinians in the Old City and the dians but walked the walk of the re- estinians around them. expropriation of private land around deemers. While speaking of the need Another tactical change occurred the city. to keep the territories as a card for when Israel decided to withdraw its This annexation might have been peace, they initiated facts on the settlers from the Gaza Strip and be- stopped had the United States chosen ground that rendered it impossible to siege and ghettoise it instead. How- to block it. The American government achieve any future peace agreement. ever, the strategy’s methodology re- did privately voice its dissatisfaction The political elite, whether on the mained the same: partition and more but was willing to turn a blind eye left or right, has adhered to the same partition, so as to expand Jewish towards these serious violations of in- strategy as it emanated from the gov- space, downsize the contiguous space ternational law. The same American ernment’s decisions in 1967. That of the Palestinians, and bifurcate the attitude later provided a cover for the strategy was implemented immediate- West Bank into small enclaves, sepa- colonisation of the West Bank and ly in June 1967 and its methodology rated from each other by roads, mili- Gaza Strip. With the exception of the is still affecting the lives of millions tary bases and Jewish settlements. George H W Bush administration, no of Palestinians on the ground. The These territorial arrangements American government has dared, or methodology involves territorial par- were accompanied by a regime of wished, to curb let alone stop the Ju- tition as a means of control and seg- oppression that Nobel Peace Prize daisation project. regation. Using partition as a means laureate Desmond Tutu once singled These three decisions became the of oppression (while praising it as a out as tantamount to apartheid South cornerstone of Israeli strategy towards ‘peace process’) is in keeping with the Africa. The oppression was also used the West Bank and the Gaza Strip. concept of settler colonialism as a as a means of deterring resistance With American consent, a ‘peace pro- structure and not an event. Zionists from the local population. The meth- cess’ was conceived in 1967 suppos- accepted the United Nations Partition odology includes the practice of in- edly to implement the principle of Plan of 1947 as a peace proposal, and creasing oppression in the face of ‘land for peace’ sanctioned by the its rejection by Palestinians has long Palestinian resistance and, more im- United Nations, which in practice was been seen as evidence of Palestinian portantly, extending and deepening a charade that provided international intransigence towards opportunities colonisation in the case of the West immunity for the implementation of for peace. Yet native populations sub- Bank and tightening the siege in the Israeli strategy on the ground. jected to the perils of colonisation case of Gaza. These decisions were not known never consent to partition as a substi- to public opinion in Israel at the time. tute for liberation. Power of complacency There was a genuine debate between Partition was used once more in what can be called ‘redeemers’ and strategising the Israeli matrix of con- The Israeli methodology has ‘custodians’. The redeemers asserted trol over the West Bank and Gaza adapted itself well to changing cir- that the West Bank and to a lesser Strip. The basic idea was to divide cumstances, notably the Oslo peace extent the Gaza Strip belonged to the these parts of Palestine into Jewish process and the emergence of the heart of ancient Israel that was ‘re- and Arab spaces. Jewish settlements Hamas government in the Gaza Strip. deemed’ in 1967. They advocated the were meant to be built in less dense The first Palestinian uprising in 1987 full annexation of these territories to Arab spaces, and serve as buffers be- convinced some Israeli leaders that, Israel. The custodians, on the other tween Arab and Jewish spaces while to perpetuate the methodology of par- hand, saw these territories as bargain- bisecting the Arab spaces themselves. tition as the best means of keeping ing chips in negotiating bilateral What began on a small scale in 1967 the territories while trying to pacify peace agreements, first with Jordan has evolved to a monumental scale a the local population and world pub- and later with the Palestinians. Until half-century later. lic opinion, Israel needed to devise a the assassination of Prime Minister The separated-spaces strategy more acceptable face of colonisation. Yitzhak Rabin in 1995, one can say was challenged by Gush Emunim, a They found a willing and disempow- that the custodians had a presence in messianic settler movement that grew ered Palestinian partner, the Palestine Israeli politics, press and academia. and was nurtured in the religious Zi- Liberation Organisation (PLO), for In a way, Rabin headed this camp onist field. While governments from this ploy. Of course, the PLO had its when he decided to support the Oslo 1967 onwards colonised the territo- own agenda and aspiration when it I Accord in 1993. ries strategically, avoiding settling in agreed to sign the Oslo I Accord in

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September 1993. However, at the end Gaza Strip since 2006. The method- and not part of the historical conflict. of the day, it played into the hands of ology of partition could not work well The complacency has allowed the the overall Israeli strategy on the in such a small territory. Thus, under government to take unilateral mea- ground. That strategy has upgraded then-Prime Minister Ariel Sharon, sures in implementing its strategy. In the idea of partitioning the West Bank Israel decided to remove the settlers recent years, public opinion polls and the Gaza Strip between densely and incorporate Gaza into Area A show that an equal number of people and more sparse Jewish colonisation under Palestinian Authority control. support the two-state solution (or a into so-called ‘Palestinian-controlled It did not work according to plan. The very uncompromising Zionist version areas’ and ‘Israeli-controlled areas’. Islamist Hamas group, first through of it) and full annexation of the West The discourse suggests that this democratic elections and then through Bank. The colonisation of the territories is a genuine attempt to resolve the more violent means, took over gov- and dispossession of the Palestinian conflict as a whole and to allow for ernance of the Gaza Strip. However, inhabitants is now in its 50th year. The the creation of a Palestinian state in this unexpected development did not implementation of the three strategic the West Bank and Gaza Strip. In alter the Israeli strategy nor require a decisions the 13th government of Is- practice, the 1993 Oslo agreement, change of methodology. Besieging rael took in June 1967 unfolded be- and in particular the Oslo II agree- Gaza and reacting brutally to Hamas’s fore the world’s eyes. The reasons ment of 1995, enabled Israel to per- resistance to ghettoisation – in a pol- behind the international community’s fect the partition scheme for the West icy verging on genocide – is aligned inaction are complex. What is impor- Bank. The region was dissected again with the original 1967 strategy. tant in this context is that the interna- and again, with an apartheid wall con- Israeli policies in the future will tional community led by the United structed in 2003, to make life even seek to maintain the status quo creat- States accepted a narrative that ab- more unbearable. Movement between ed by the 1967 war. Israeli leaders will solved it from interference and en- Palestinian villages and towns is al- find immediate solutions to changing couraged it to provide international most impossible today; the so-called circumstances without abandoning immunity for Israeli actions. autonomous Palestinian space, under the settler colonial project of displac- The narrative is based on the per- the jurisdiction of the Palestinian ing Palestinians and maintaining the ception that the reality on the ground Authority, is constantly invaded by land under indefinite Israeli control. is temporary and that the chance for Israeli forces seeking resistance ac- It is noteworthy how Israeli pub- a solution is real and imminent. This tivists or whoever is on their black- lic opinion enables Israel’s political perception includes the conviction, lists. Under Oslo, Israeli settler colo- elite to adamantly continue with the genuine or cynical, that Israeli viola- nialism became even more oppres- settler colonial policies despite the tions of human rights will stop once sive. drastic deterioration in Israel’s inter- ‘peace’ is achieved. Since peace is The demise of the Oslo I Accord national image. The redeemers-cus- ‘just around the corner’, there is no forced Israeli strategists to adapt once todians debate petered out after the need for international pressure on Is- more to a changing reality. Israel has Oslo I Accord was signed. There was rael. The world has thus enabled Is- moved to a unilateral policy with a a false sense among custodians, rael to create daily facts on the ground clearer strategy not only of dividing which we better understand in hind- that have rendered impossible any the West Bank into Jewish and Arab sight, that their moment of truth ar- peace process based on a two-state parts, but also of striving to annex rived in 1993. The failure of the Oslo solution. ◆ officially to Israel the ‘Jewish’ parts. process was evident quite soon after Oslo II had divided the West Bank the accord was signed. Ilan Pappé is professor of history and direc- into three zones: Area A (under the Since the mid-1990s, there has tor of the European Centre for Palestine rule of the Palestinian Authority), been no debate in Jewish public opin- Studies at the University of Exeter. His latest book is Ten Myths about Israel. He is the Area B (joint Palestinian and Israeli ion about the fate of the territories author of The Idea of Israel: A History of control) and Area C (under exclusive (and, in the public’s mind, Gaza was Power and Knowledge; The Ethnic Cleans- Israeli rule). Israel now strives to an- taken out of the equation with the ing of Palestine; The Modern Middle East: A nex Area C (more than half of the withdrawal of settlers in 2005). The Social and Cultural History; and A History West Bank) into the State of Israel. non-settler Jewish society has no ac- of Modern Palestine: One Land, Two Peoples. The above article was first published in The This final blow to prospects for es- cess to the occupied territories any- Cairo Review of Global Affairs (No. 25, tablishing an independent Palestinian more; in fact, the territories are for- Spring 2017, www.thecairoreview.com). state, though met with indifference by mally a no-go area for Jewish citizens. political elites in the West, triggered This complacency has been re- Notes unprecedented outrage in global civ- flected in the very low priority that 1. Government meeting, 11 and 18 il society manifested in part in the the occupation received in party elec- June 1967, Israel State Archive. See Boycott, Divestment and Sanctions tion platforms in recent years. The government meeting from 11 and (BDS) movement against Israel. conflict has been resolved in the eyes 18 June 1967, ISA, Government The settler project has also adapt- of the Jewish electorate. There is a meeting, 8164/7-A. ed itself to the reality unfolding in the clash with Gaza, but it is with ‘Islam’ 2. Ibid.

THIRD WORLD RESURGENCE No 329/330 39 W O R L D A F F A I R S No way home Trump’s zero-tolerance immigration policy, which separates parents from their children, is a cruel strategy to curb the flow of immigrants and asylum seekers arriving in the United States. Here’s why it’s bound to fail.

Nara Milanich

IN May, US Attorney General Jeff Sessions announced the Trump administration’s new zero-tolerance policy of seizing children at the border in order to detain and prosecute their parents. ‘If you don’t want your child separated, then don’t bring them across the border illegally. It’s not our fault that somebody does that,’ Ses- sions declared. Immigrant rights groups had already raised the alarm about a quickening tempo of family separations in recent months, and The New York Times had documented hundreds of separations. But Ses- Immigrants who turned themselves in to US border patrol agents after crossing into sions’s announcement heralded a dra- the country from Mexico. Many such migrants seek to flee communities wracked by matic escalation of the practice. Since gang and domestic violence. then, 2,000 children have been forcibly removed from their parents. Meanwhile, those crossing into the country specially outfitted for gest that the policy of family separa- the United States have been treated immigrant mothers with children. The tion will fail. to a mounting litany of horrors. The vast majority of the women and chil- The circumstances that drive mi- administration claims that border pa- dren detained there are Central Amer- grants to leave – what lawyers call the trol agents take children because their icans apprehended at the US south- ‘fact pattern’ that characterises Cen- parents crossed the border illegally, ern border. In other words, these are tral American asylum claims – are by but there are documented cases of precisely the families targeted by the now well known. Those who arrive parents who have had their children new separation policy. at the United States’ southern border taken despite presenting themselves At the detention centre, I worked seeking asylum hail overwhelmingly at legal points of entry. Meanwhile, for a pro bono project that provides from the Northern Triangle countries, many of the so-called ‘illegal entrants’ legal services for women being held El Salvador, Guatemala and Hondu- are in fact asylum seekers from Cen- in immigrant detention. The project’s ras. They come fleeing communities tral America whose right to seek asy- main task is to prepare asylum seek- wracked by gang and domestic vio- lum is protected under domestic and ers for a credible fear interview, which lence. international law. they must pass in order to be freed Many of these migrants are moth- from the prison and allowed to pur- ers, and sometimes fathers, with chil- The mouth of a shark sue their asylum claim in immigration dren. They flee dangers to their own court. Volunteers sit down with indi- lives, to those of their children, and The same week Sessions an- vidual women and the conversation often to both. A Salvadoran woman I nounced the zero-tolerance policy, I begins: ¿por qué tiene miedo de volv- spoke to describes the day her hus- was visiting an Immigration and Cus- er a su país? (‘Why are you scared to band, a taxi driver, arrived home cry- toms Enforcement (ICE) detention return to your country?’). Over the ing after a gang ordered him to deliv- facility near San Antonio, Texas. The course of the week, I met with some er some weapons. He fled, and she South Texas Family Residential Cen- 50 individual women and asked this remained behind with their children ter in Dilley is the largest immigrant same question. In past visits to the tending a juice stand. Then they came prison in the United States, with 2,400 facility, I’ve spoken with dozens of for her brother-in-law, who refused to beds. It is also one of three prisons in others. The answers women give sug- pay the cuota, the extortion fee that

THIRD WORLD RESURGENCE No 329/330 40 W O R L D A F F A I R S gangs routinely demand. ‘He left seven children. Seven children,’ she sobs, describing his murder. There is the evangelical Sunday school teacher who was accosted by gang members at her daughter’s birthday party. The mother who finds dis- embowelled animals on her doorstep and a note that her children will be next. The woman weeps as she describes miscarrying an almost full- term baby after a brutal beating by her partner. ‘Señora,’ the horrified doctor told her, ‘your baby has bruises and broken bones.’ Women pull back sleeves and roll up cuffs to reveal the scars on their bodies: the time he threw a chair, the incident with the A 4-year-old Honduran girl walking with her immigrant mother after both were re- machete. They finger the scars on the leased from detention. Immigrant mothers in family detention in the US have at least bodies of their children. They lower one child with them, but many have left behind other children at home. their voices and look at the floor as they recount rapes: ‘I never told anyone this before.’ dren, so they have engaged in a kind ments’ in border and immigration Such journeys are propelled by of parental triage. In some instances, policy act as pull factors that encour- desperate circumstances, and mi- the choice is clear: they opt to bring age illegal immigration. Among the grants do not make the decision to the child most in danger – the daugh- lures, he cited sanctuary cities, the come to the United States lightly or, ter recruited by a local gang member possibility of employment and ‘the in many cases, willingly. ‘I never as a ‘girlfriend’, the son targeted by right to due process at great taxpayer imagined myself going to the United the gang for refusing to join, the child expense’. By closing the loopholes, States,’ the Salvadoran woman with threatened by a violent stepfather. In by creating deterrents like forcibly the murdered brother-in-law says. other cases, they bring the youngest appropriating their children, the ad- ‘But one by one the doors closed on – the child most in need of maternal ministration will supposedly stem ref- me. This was the only option left.’ care – or the oldest – the one most ugee flows. Such stories show why even the able to make the journey north. They The story of ‘loopholes’ and ‘en- most punitive of border policies, in- leave the remaining children with ticements’ ignores the appalling con- cluding family separation, will not their fathers, with grandmothers, with ditions that already greet migrants alter migrants’ behaviour. Such poli- aunts. once they cross the border. These con- cies overlook the reasons migrants Assuming these women pass ditions include an abusive border pa- leave in the first place. their credible fear interviews and are trol that illegally turns away asylum ‘No one leaves home unless/ allowed to pursue their asylum cas- seekers and verbally and sometimes home is the mouth of a shark,’ writes es, it will likely be years before they physically mistreats migrants. Wom- the British Somali poet Warsan Shire. see those children again (US immi- en in Dilley describe the degrading Central American asylum seekers gration courts are backlogged by epithets hurled at them, and sleeping now flee the mouth of the shark only years, and petitioners are not allowed children prodded awake with the toe to find themselves in the mouth of a to bring their children unless they win of a boot. They describe the horrific wolf. Yet no matter how vicious the asylum). Their decisions cannot be conditions of the so-called perreras wolf, they will keep coming. Desper- described as ‘free’ in any meaningful (dog pens) and hieleras (ice chests), ation is more powerful than deter- sense. But in the face of desperate the infamous bunkers where migrants rence. Between death and separation, circumstances, they have already are held before being transferred to they will choose separation. made the wrenching decision to sep- detention facilities like the one I vis- In a sense many migrants have arate from some family members in ited in south Texas. already made that choice. Mothers in order to save others. The ‘loophole’ allegation also family detention have at least one ignores the daunting long-term pros- child with them, but the majority of ‘Loopholes’ pects that greet asylum seekers, who those I spoke with had left behind one face years of separation from family or more other children at home. For ICE Acting Director Thomas back home and long odds in obtain- many people the journey is too ex- Homan recently declared that ‘loop- ing asylum. Nationally, about 50% of pensive to make with all their chil- holes’ in immigration law and ‘entice- asylum cases are successful, but the

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indicate that officials intend to dramatically scale up these facilities. In mid-June representatives from the Department of Health and Human Services toured Fort Bliss near El Paso, Texas, to assess the feasibility of a ‘tent city’ for children. The camp would house up to 5,000 beds. Meanwhile, the long-term fate of the children consigned to sleep in those beds remains unclear. Some will likely be deported with their parents. Others will be placed with family members in the United States, although the administration’s promise to prosecute undocumented relatives Lining up for a meal at the South Texas Family Residential Center, the largest immi- creates a powerful disincentive for grant detention facility in the US and one of three in the country specially outfitted for them to come forward. Still others immigrant mothers with children. may wind up in foster care and government-run shelters permanently. A policy idea that in spring of rates vary radically; in Charlotte, 7% ernment has nearly unlimited power 2017 had to be hastily retracted to- of cases receive asylum and in Atlan- to inflict harm and suffering on peo- day is rapidly expanding and threat- ta, effectively zero do. ple once they cross the border, its abil- ens to become normalised. Its defend- These adverse conditions, inci- ity to convince them not to come in ers include Kelly in his current role dentally, long predate Trump and have the first place is limited. Spend time as White House Chief of Staff, Home- done nothing to discourage refugees in Dilley speaking with women and land Security Secretary Kirstjen from coming. The most recent Cus- it quickly becomes clear that, in the Nielsen, Press Secretary Sarah Huck- toms and Border Patrol statistics ac- calculus between shark and wolf, it’s abee Sanders and Attorney General tually show a sharp increase in the the shark – the violence, fear and im- Sessions (the latter two quoting, ex- numbers of families apprehended at punity they face at home – that dic- traordinarily, the Bible as justifica- the border: from February to May, the tates migration decisions. The dan- tion). As usual, feckless Congression- number increased almost fivefold gers of the wolf – the gross human al Republicans have dithered, with compared with the same period last rights abuses at the border, the daunt- some moderates expressing murmurs year. It was purportedly these num- ing odds of ever getting asylum in of dissent only as it becomes clear that bers that angered Trump and drove many jurisdictions, and now, the pros- wrenching nursing infants from their him to adopt the separation policy. pect of losing their children – are sec- mothers will play poorly to suburban The administration’s emphasis on ondary. women voters. Many prominent con- supposed pull factors is also misguid- servatives, meanwhile, remain silent. ed because it ignores the push factors. Relentless criminalisation Family separation is as good a In this it demonstrates an utter lack gauge as any to track just how far and of understanding, or perhaps a strate- Ultimately, family separation is fast immigration policy is mutating gic misrepresentation, of the motives a ghastly measure of just how far we under this administration, and how that induce people to leave their jobs, have come in the relentless criminal- effortlessly the Republican Party, and homes, families and, yes, even their isation of migrants. In March of last the country, can adapt to new horrors. children, in the first place. Deterrence year, then-Secretary of Homeland And it begs the question: just how far policies assume that US border poli- Security John Kelly appeared on will it all go? A year from now, where cy determines migrants’ decisions, CNN and first publicly floated the will we be? ◆ rather than the conditions from which idea of removing migrant children they flee. Such policies reflect the from their parents. Following a huge Nara Milanich is a Professor of History at administration’s radically inflated public outcry, Kelly hastily back- Barnard College, Columbia University in the sense of its own power to shape mi- pedalled, falsely claiming he had nev- US, and author of Children of Fate: Child- grants’ behaviour. In other words, the er proposed such a policy in the first hood, Class, and the State in Chile, 1850- 1930 and the forthcoming Looking for the forcible removal of children from place. Father: The Elusive Quest for Paternity. She their parents exemplifies not just this Just over a year later, we watch is a volunteer with the CARA Pro Bono administration’s astonishing cruelty as the government converts Walmarts Project at the South Texas Family Residen- but also its monumental hubris. and military bases into internment tial Center. The above article is reproduced from the website of the North American Con- The fact is that while the US gov- camps for children. Ominous signs gress on Latin America (nacla.org).

THIRD WORLD RESURGENCE No 329/330 42 W O R L D A F F A I R S The day the US became an empire In the following article, Charles Pierson traces the evolution of the US empire, locating its origins in the annexation of Hawaii in 1898.

ing from America’s fields and factories. Abundance ought to be welcome in any society. But not capitalist society. It is a mark of the per- versity of capitalism that it makes abundance a problem. The home market, Lenin observed, cannot absorb the ‘superabundance of capital’ and goods.3 Hence: ‘As long as capitalism remains what it is, surplus capital will be utilised not for the purpose of raising the standard of living of the masses in a given country, for this would mean a decline The US flag flown at a military base in Hawaii. The US annexed Hawaii in 1898. in profits for the capitalists, but for the purpose of increasing profits by exporting FOR half a century, the United King- disenfranchised ethnic Hawaiians to capital abroad to the backward [sic] dom celebrated 24 May, the birthday the benefit of wealthy Whites. By countries.’4 of the late Queen Victoria, as ‘Em- 1893, with US support, American and Lenin’s theory of imperialism pire Day’. The US ought to have its European businessmen on the islands explained the war which had begun own Empire Day and it should be on had staged a coup d’êtat, overthrow- two years earlier, in 1914. Lenin 15 June. It was on 15 June 1898 that ing the monarchy1 and establishing a showed that the war was imperial in the US became an empire. On that Republic of Hawai’i; from there, they origin. In order to survive, capitalism day, the US House of Representatives manoeuvred for Hawaii’s annexation is forced to look beyond the nation- voted 209 to 91 to annex Hawaii. (The in 1898. That same year, Cuba, the state to the world market. Inevitably, US Senate followed on 6 July, voting Philippines, Puerto Rico and Guam this brings nations into conflict with 42 to 21 in favour of annexation.) would be gathered into the fledgling each other. Lenin demonstrated that One could argue that the US has American Empire, fruits of the US imperialism was not separable from always been an empire. Thomas Jef- victory in the Spanish-American War. capitalism, but was capitalism’s ferson called the US an empire, but ‘highest stage’. Lenin thought that an ‘empire of liberty’ dedicated to Why imperialism? revolution would inevitably follow. spreading freedom around the globe. He did not foresee that once capital- Tell that to the Native Americans During the 1896 presidential ism had reached its ‘highest stage’, it killed and dispossessed by White set- campaign, Republican William would remain there in an indefinite tlers. Tell that to the Mexicans. The McKinley, who went on to win in holding pattern.5 US seized a third of their country November, was asked how the US through war. Still, it wasn’t until 1898 could avoid a replay of the cata- ‘Little brown brothers’ that the US acquired its first overseas strophic 1893 depression.2 McKinley colony. answered, ‘We want a foreign mar- Belief in White racial superiori- Hawaii had been an independent ket for our surplus products.’ ty acted as a spur as well as a brake nation. In 1887, American planters in McKinley could have said ‘abun- on America’s imperial expansion. the islands had forced a change to the dance’ rather than ‘surplus’. Abun- Some members of Congress opposed Hawaiian Constitution which largely dance aptly describes the wealth pour- imperialism because it was contrary

THIRD WORLD RESURGENCE No 329/330 43 W O R L D A F F A I R S to the ideal of self-government set out US did not annex Cuba but forced the Racism pays cash dividends. in the Declaration of Independence. drafters of the Cuban Constitution to Even before the devastation wrought But there was also strong opposition adopt a provision (the Platt Amend- by Hurricane Maria, Puerto Rico stag- to bringing the non-Whites of Hawaii ment) which gave the US carte gered under the weight of a $123 bil- and Cuba and the Philippines into blanche to intervene in Cuba in the lion government-debt crisis.10 Since what was seen as a White man’s re- future.7 Maria, Puerto Rican suffering has public. On the other hand, imperial- grown. What Naomi Klein calls ‘di- ists argued that it was the White man’s The neoliberal rape of saster capitalists’ have redoubled their duty (or ‘burden’) to provide leader- Puerto Rico efforts to privatise Puerto Rico’s elec- ship to our ‘little brown brothers’, as trical grid, privatise schools, foreclose William Howard Taft, US Governor- The Filipinos would not finally on homes, impose deregulation and General of the Philippines and a fu- be rid of the Americans until 1946. ramp up economic inequality, all ture president, would call them, inas- American hegemony over Cuba only while cutting billions from the public much as they were incapable of gov- ended with the victory of the Cuban sector. Look me in the eye and tell erning themselves. me that colonialism is a thing of the One incident in particular illus- Revolution in 1959. Puerto Rico remains a US possession to this day, past. trates this attitude vividly. The Filipi- Happy Empire Day, everyone. ◆ nos fighting against Spanish rule be- subject to Uncle Sam’s loving care. Puerto Ricans have been US citizens lieved that the US had promised to Charles Pierson is a lawyer and a member liberate the islands. Instead, the US since 1917, yet are not treated like of the Pittsburgh Anti-Drone Warfare Coali- took Spain’s place as the Filipinos’ Americans. Puerto Ricans have no tion. This article is reproduced from colonial overlords. vote for president or representation in CounterPunch.org. Why this turnaround? As he told Congress, nor do they receive the full a group of clergy visiting the White protection of the US Constitution. Notes House, McKinley had asked God Last October, Hurricane Maria 6 1. Stephen Kinzer, The True Flag: what to do about the Philippines. devastated Puerto Rico. Researchers Theodore Roosevelt, Mark Twain, God responded in a series of bullet at Harvard have estimated the death and the Birth of American Empire points. America had four options. toll at 4,645 – 70 times higher than (2017), page 45. Three of these – Filipino indepen- the official count. The hurricane crip- 2. Id. at 25. dence, returning the islands to Spain, pled electrical service and access to 3. V I Lenin, Imperialism, the High- or turning them over to ‘our commer- clean water for months, the catastro- est Stage of Capitalism (1916), Chapter IV. cial rivals’ France or Germany – phe made worse by incompetent di- McKinley rejected. McKinley con- 4. Ibid. saster relief efforts by the US govern- 5. This is why I wince every time I cluded that ‘there was nothing left for ment.8 hear that we are living in the era of us to do but to take them all and to Would Puerto Ricans have been ‘late capitalism’. Capitalism has educate the Filipinos, and uplift and left to twist slowly in the wind if they endured longer than anyone on the civilise and Christianise them…’. left expected. What if capitalism had been White? The disaster has The US also provided lofty mo- lasts another 500 years? For all we highlighted Puerto Rico’s colonial tives for imposing its hegemony over know, we may still be living in the Cuba. The US justified the 1898 war domination by the US. Award-win- era of ‘early capitalism’. ning Puerto Rican filmmaker Frances 6. Howard Zinn, A People’s History with Spain, at least in part, as a hu- of the United States (1980), pages manitarian intervention avant la Negrón-Muntaner writes: ‘[A]lthough it has become liberal 312-13. lettre. The US would bring freedom 7. Id. at 311. to the Cubans and end Spanish atroc- sport to insist on how different Trump 8. Justine Calma, ‘The US could have ities. Nevermind that the Spanish is from everything and everyone that avoided Puerto Rico’s water crisis’, atrocities were largely fabricated by preceded him, the president’s re- Grist, 20 October 2017. the jingoist newspaper publisher Will- sponse to the hurricane is consistent 9. Frances Negrón-Muntaner, ‘The with American colonial history. This crisis in Puerto Rico is a racial is- iam Randolph Hearst, the Roger Ailes sue. Here’s why’, The Root, 12 of his day. When the USS Maine sank is manifested in both the slowness and October 2017. in Havana Harbour on 15 February limited scale of assistance during 10. To his credit, on 3 October 2017, 1898, Hearst and the rest of the yel- Hurricane Maria, and by the fact that President Trump suggested that low press blamed Spain, adding to the when local leaders criticised him for Puerto Rico’s government debt inducements to war. it, Trump defended himself by invok- should be cancelled. However, to ing century-old stereotypes of Puerto quote the old Mary Tyler Moore In the end, the US double-crossed Show, ‘When a donkey flies you Ricans as lazy and ingrates who Cuba. Now nominally independent don’t expect him to stay up long.’ following Spain’s defeat, Cuba be- “wanted everything to be done for Trump soon retracted the sugges- came a de facto colony of the US. The them”.’9 tion.

THIRD WORLD RESURGENCE No 329/330 44 W O R L D A F F A I R S The US Air Force’s strange love for the new B-21 bomber The US Air Force is looking to mark a new generation in stealth technology by developing a B-21 Raider bomber able to elude even the most sophisticated air defences in the world. This stealth bomber is being built by Northrop Grumman, one of the leading military contractors. Such is the power of the military-industrial complex that there is no way of challenging the need for this bomber or its astronomical cost. William J Astore comments.

DID you know the US Air Force is working on a new stealth bomber? Don’t blame yourself if you didn’t, since the project is so secret that most members of Congress aren’t privy to the details. (Talk about stealthy!) Known as the B-21 Raider, after General Doolittle’s Raiders of World War II fame, it’s designed to carry thermonuclear weapons as well as conventional missiles and bombs. In conceptual drawings, it looks much like its predecessor, the B-2 Spirit stealth bomber, all wing and no fuse- lage, a shape that should help it to penetrate and survive the most hos- tile air defence systems on Earth for A rendering of the new B-21 stealth bomber. The US Air Force plans to buy as many the purposes of a ‘global strike’. as 200 B-21s, which would cost over $100 billion. (Think: nuclear armageddon.) As the Air Force acquires those Déjà vu all over again ed little to the nation’s nuclear deter- future B-21s, the B-2s will be retired rent? In addition, that cancellation along with the older B-1B bomber, A long time ago (1977, to be ex- was meant to send a message to the although the venerable B-52 (of the act), in a country far, far away, Presi- military-industrial complex – that he Cold War era), much modified, will dent Jimmy Carter did a brave thing: would neither be beholden to nor in- remain in service for the foreseeable he cancelled a major Pentagon weap- timidated by defence hawks who tout- future. At $550 million per plane (be- ons system just before it was due to ed each and every new weapons sys- fore the inevitable cost overruns even start production. That was the B-1 tem, no matter how expensive or re- kick in), the Air Force plans to buy as bomber, a plane with sophisticated – dundant, as ‘essential’. many as 200 B-21s. That’s more than that is, expensive – avionics designed I was then a teenager with a yen $100 billion in procurement costs to allow it to penetrate Soviet airspace for American warplanes. I’d even alone, a boon for Northrop Grumman, in the event of a nuclear war and sur- made a model of the B-1, complete the plane’s primary contractor. vive. Carter cancelled it for the most with ‘variable geometry’ wings that If history is any judge, however, sensible of reasons: it wasn’t needed. could be extended forward for low- a boon for Northrop Grumman is like- The Air Force had already devel- speed flight and swept backward for ly to prove a bust for the American oped air-launched cruise missiles that high-speed, supersonic flight. In my taxpayer. As a start, the United States allowed bombers like the B-52 to mind’s eye, I can still see it, almost has no real need for a new, stealthy, strike enemy targets with precision all white like the prototype that Rock- super-expensive, nuclear-capable, from hundreds of miles away. It was well International, its primary con- deep-penetrating strategic bomber for also, like all modern weapons sys- tractor, actually built. In a symbolic use against ‘peer’ rivals China and tems, outrageously expensive. Why act of protest against Carter’s action, Russia. But before tackling that issue, spend vast sums on a new bomber, I took my model, taped a couple of a little history is in order. Carter reasoned, when the plane add- firecrackers to it, and dropped it from

THIRD WORLD RESURGENCE No 329/330 45 W O R L D A F F A I R S the top floor of our house, blowing it fences. eration’ bomber, it also wants a new up in a most satisfying way. So much Meanwhile, the Air Force, never fighter jet to escort it on deep pene- for the B-1, I thought. a service to say no to expensive, high- trating missions into China, Russia or I was too young to know better. tech weapons systems, no matter how other countries. Think here of the leg- When Ronald Reagan became presi- redundant, was hard at work on a endary P-51 Mustangs, which accom- dent in 1981, as part of a massive de- stealthy bomber that would achieve panied US strategic bombers deep fence buildup (that Carter, ironically its vision of ‘global reach, global into Nazi Germany during World War enough, had actually begun), he re- power, and global strike’. What II. In other words, the Air Force’s vi- vived the B-1. The Air Force soon emerged was the B-2 Spirit, a stealth sion of future aerial war bears an ee- committed itself to buying 100 of bomber so expensive ($2.1 billion a rie resemblance to the action scenes them at a then-astronomical $280 pop) that only 21 were ever built. It in the classic 1949 war movie Twelve million each. The B-1B Lancer (as it was also pricier than the B-1 to oper- O’Clock High, except instead of the became known) has served in the Air ate and less reliable thanks to its frag- B-17s and P-51s of World War II, Force for the last three decades, nev- ile ‘stealth’ coatings, which required fifth-generation bombers will join er (thankfully) fulfilling the purpose lengthy, high-cost maintenance. In with sixth-generation fighters to claw for which it was built: a nuclear at- other words, both planes proved ex- their way through enemy airspace. tack. Plagued by accidents, high op- pensive disappointments that, fortu- Of course, Pentagon officials erating costs and maintenance issues, nately, were never tested on the pri- have an array of talking points to sup- the B-1 has been a disappointment to mary mission for which they were port their case for the B-21. These an Air Force now eager to replace it built: incinerating millions of people include: maintaining parity, if not su- with an entirely new bomber, more in a nuclear war. premacy, vis-à-vis China or Russia or or less guaranteed to have a similar Enter the B-21, whose very name some future, ill-defined enemy, and history. is supposed to indicate its cutting- the need of our heroic troops for the However much I loved the pro- edge nature, as the first bomber of a latest and best in weaponry. They spective plane as a teenager, I felt new century. It’s already being read- emphasise that cancelling a major quite differently once I was myself in ied to reprise the grim, predictable weapons system like the B-21 is tan- the Air Force. As a young lieutenant histories of its predecessors. tamount to unilateral disarmament, in 1986, I even wrote a paper for a that it would betray weakness to ri- contest within the service in which I Will the bomber go the way vals and foes, and that manned bomb- argued that the concept of a manned, of the dodo? ers provide maximum flexibility ‘penetrating’, strategic nuclear bomb- since, unlike missiles, they can be re- er was deeply flawed. In essence, I Old ideas and hallowed traditions called or redirected after being took the Carter position, suggesting die hard, especially when they’re so launched. that the other ‘legs’ of America’s nu- lucrative for the military-industrial- In truth, however, Twelve clear triad (ballistic missiles launched congressional complex. Just look at O’Clock High scenarios look increas- from silos and similar missiles on the staying power of the disastrously ingly ridiculous and outmoded in the nuclear submarines) were more than overpriced F-35 stealth fighter, pro- 21st century. But don’t tell that to the enough to deter and defeat enemies jected to cost $1.45 trillion over the US Air Force. When its strategists (no less destroy the world), and that life of the programme. Put bluntly, visualise bombers, all they see is po- new ‘precision’ technologies like today’s future-driven Air Force still tential, promise and even fulfilment. cruise missiles rendered risky manned wants to be capable of taking the fight But history shows us something else: bombing missions deep into enemy to the enemy in a manned bomber, just the potential for widespread and in- airspace not just obsolete but antedi- as in the past. It still wants its air crews discriminate destruction and massive luvian. to put bombs on target. At a time when casualties. If anything, since World Not surprisingly, my paper didn’t remotely piloted drones like the Pred- War II, America’s arsenal of bomb- win and the B-1B did. But it was an ators and Reapers are rendering re- ers has emboldened the US to strike absurd addition, even by Air Force dundant so many human fighter pi- in places and in ways clearly coun- standards, given that the US had an lots sitting in real cockpits, the Air terproductive to just about any defi- overwhelming arsenal of missiles at Force has no intention of allowing its nition of national security, even as its command, together with a fleet of strategic bombing force to go the way untold numbers of innocents have B-52s that, though lacking in speed of the dodo. Its leaders will always perished from the ordnance fired or and stealth, was aging rather well. In fight for manned strategic bombers dropped from those planes. The Viet- fact, B-52s are still flying today, because it fits their image of them- nam War – during which the US which isn’t that surprising when you selves: dodging enemy fighters, mis- dropped seven million tons of bombs consider the development of highly siles and flak, and taking the fight to – is a perfect example of this. accurate missiles that allow such a the enemy’s doorstep. Here’s the nightmarish reality of plane to ‘standoff’ from targets and In fact, not only does the Air actually bringing such weapons sys- so limit its exposure to enemy air de- Force want the B-21 as its ‘fifth gen- tems online: when the US military

THIRD WORLD RESURGENCE No 329/330 46 W O R L D A F F A I R S

develops a capability, it seeks to use blow up your B-21s anytime soon. other parts suppliers will be needed, it, even in cases where it’s wildly in- Rest assured that the real thing is com- and they’ll be carefully allocated to appropriate. (Again, think of the mas- ing. If the Air Force wants to ensure as many Congressional districts as sive B-52 bombings in Vietnam, Laos that it has a new bomber, in the name possible. Final assembly of the plane and Cambodia in a counterinsurgen- of blasting America’s enemies to will likely take place in Palmdale, cy campaign classically meant to win oblivion, so be it. It worked (partially California, integrating components ‘hearts and minds’.) Fielding a new and at tremendous cost) in 1943 in supplied from sea to shining sea. Who strategic bomber for global strike, the flak- and fighter-filled skies of says America’s coastal enclaves can’t including potential thermonuclear at- Nazi Germany, so why shouldn’t it join with the heartland to get things tacks, will not so much enhance na- work in 2043 over the skies of Who- done? tional security as potentially embold- knows-where-istan? Even if President Trump wanted en future presidents to strike when- Why does ‘your’ Air Force think to cancel the B-21 – and given his ever and wherever they want in a fash- this way? Not just because it loves big recent speech to graduates of the Na- ion devastating to human life. The B- bombers, but also because its biggest 21 isn’t a force-multiplier. It’s an ar- rivals aren’t in Russia or China or val Academy, the odds are that there mageddon-enabler. some ‘rogue’ state like Iran. They’re isn’t a weapons system anywhere he right here in ‘the homeland’. I’m talk- doesn’t want to bring to fruition – Flying high in our B-21s ing, of course, about the other mili- chances are that in today’s climate of tary services. Yes, interservice rival- militarism he would face enormous pushback. As a colleague who’s still Having marketed himself as a ries remain alive and well at the Pen- on active duty in the Air Force puts savvy military critic, is there any pos- tagon. If the US Navy can continue it, ‘What makes today worse than the sibility that Donald Trump will have to build breathtakingly expensive nu- Carter days is our flag-humping, mil- the smarts of Jimmy Carter when it clear-powered aircraft carriers (like itary-slobbering culture. We can’t comes to the B-21 programme? Will the much-troubled USS Gerald R even have a discussion of what the he save America at least $100 billion Ford) and submarines, and if the country’s needs are for fear of “of- (and probably far more) while elimi- Army can have all its tanks, helicop- fending” or “disrespecting” the nating yet another redundant weap- ters and associated toys, then, dam- troops. Today, Carter would be paint- ons system within the Department of mit, the Air Force can have what tru- ed as disloyal to those troops he was Defense? Fat chance. Even if he want- ly makes it special and unique: a new consigning to an early death because ed to, The Donald doesn’t stand a stealthy strategic bomber escorted by every procurement decision centres chance against the Pentagon these an even newer long-range stealthy on a “grave” or “existential” threat to days. fighter. national security with immediate and Flush with billions and billions And don’t just blame the Air of new taxpayer dollars, including deadly consequences.’ Force for such retrograde thinking. Its funds for those F-35s and for new And so the Air Force and its fly- leaders know what’s easiest to sell to nukes from a bipartisan coalition in boy generals will win the fight for the Congress: big, splashy projects that an otherwise riven Congress, Ameri- B-21 and take the American taxpayer entail decades of funding and create ca’s military services will fight for any along for the ride –unless, that is, we tens of thousands of jobs. As Congres- and all major weapons systems, the somehow have the courage to pry the sional representatives line up to push B-21 included. So, too, will Congress, control sticks from the cold, dead for their pieces of the action, military especially if Northrop Grumman fol- hands of hidebound military tradition contractors are only too happy to lows the production strategy first and lobbying firepower. Until we do, oblige. As the lead contractor for the employed by Rockwell International it’s off we go (yet again), into the B-21, Northrop Grumman of Falls with the B-1: spreading the plane’s wild blue yonder, flying high in our Church, Virginia, has the most to gain, subcontractors and parts suppliers to B-21s. ◆ but other winners will include Unit- as many states and Congressional dis- ed Technologies of East Hartford, tricts as possible. This would, of A retired Air Force lieutenant colonel, Will- Connecticut; BAE Systems of iam Astore taught history for 15 years at the course, ensure that cuts to the B-21 Nashua, New Hampshire; Spirit Air Force Academy, the Naval Postgraduate programme would impact jobs and so School, and in Pennsylvania at a technical drive votes in Congress in its favour. Aerosystems of Wichita, Kansas; Or- college. He’s never forgotten his visit to the After all, what Congressional repre- bital ATK of Clearfield, Utah, and Trinity site in Alamogordo, New Mexico, Dayton, Ohio; Rockwell Collins of where the first atomic device was tested in sentative would be willing to vote 1945, nor his time in Cheyenne Mountain against high-paying jobs in his or her Cedar Rapids, Iowa; GKN Aerospace Complex, hunkering down under 2,000 feet own state or district in the name of of St Louis, Missouri; and Janicki of granite, waiting for a nuclear war that Industries of Sedro-Woolley, Wash- never happened. He is a regular contributor American security? to TomDispatch.com, from which this article So here’s my advice to young ington. And these are just the major is reproduced. His personal blog is Bracing model-builders everywhere: don’t suppliers for that aircraft; dozens of Views (bracingviews.com).

THIRD WORLD RESURGENCE No 329/330 47 W O R L D A F F A I R S No, AMLO is not Mexico’s Trump Equating Mexico’s president-elect Andrés Manuel López Obrador with Donald Trump may be absurd, but that hasn’t stopped mainstream media from running with it.

Richard Seymour

MEXICO’s answer to Donald Trump. Let’s say that again: Mexico’s answer to Donald Trump. Mexico’s Donald Trump. More than a passing political resemblance to Donald Trump. Mexico is electing its own Donald Trump. Mexico’s ‘tropical messiah’ is a Trump-style politician. These are the headlines and hot takes regarding the winner of Mexi- co’s presidential election. Andrés Manuel López Obrador, the left-wing candidate of the National Regenera- Mexico’s president-elect Andrés Manuel López Obrador. tion Movement (MORENA), took a lead of some 31% over his nearest rival. What, then, makes him like lowed police to use ‘death squad tac- patched to take control of Congress. Trump, who lost the popular vote? tics’ against a number of drug sus- It is less clear that the 2012 election There are many reasons. López pects, illustrating the symbiosis be- was stolen but there was a great deal Obrador is a left-populist who is talk- tween drug lords and state repression. of fraud. And in this election, there ing about rolling back aspects of the So, part of what has happened is a has been an unprecedented number of Washington Consensus, and redistrib- popular rejection of brutal cartel pol- murders of local candidates and par- uting a degree of wealth and power itics. ty workers, and a great deal of asso- to poor and indigenous people. This López Obrador’s coalition is ciated theft of ballots and ballot box- doesn’t, however, include any nation- rather heteroclite, even including es. alisations, nor does it mean withdraw- right-wing evangelicals, and his am- To put it concisely, this election ing from the North American Free bitions are ultimately limited by the was about whether or not Mexico is Trade Agreement (NAFTA). system within which he will have to a democracy: it never has been be- He attacks the political establish- work. Nonetheless, it is a near mira- fore. ment, especially the corrupt, murder- cle that he was permitted to actually So, again, why is the new Mexi- ous, cartel-linked Institutional Revo- win. can president like Trump, who de- lutionary Party (PRI) whose monop- In the history of Mexican poli- scribed Mexican immigrants as rap- oly on Mexican state power only be- tics, there are several ways in which ists and murderers, and shrugged off gan to break down in 2000. He talks leftist challengers have been dealt the killing of migrants by his support- about ending the drug war, through with, but fraud, murder and assassi- ers? Trump, who is in favour of death- which these corrupt alliances between nations have been foremost among squad justice, especially in dealing counterinsurgent governors and drug them. As recently as 1994, ruling-par- with drugs? Trump, whose gangster cartels have been forged. ty defector Donaldo Colossio was capitalist links are far more like those As an example of this, look at the murdered. of the PRI? Well, there is this one mass graves coming up in Veracruz In 2006, the election was stolen thing. state, representing up to 20,000 bod- – from the likely winner, Andrés Man- As one of the snarky pieces com- ies in total. These are evidence against uel López Obrador. It was so close a paring him to Trump puts it, López former state governor, the PRI’s Jav- thing that the military was prepared Obrador refuses to accept ‘adverse ier Duarte. The same governor al- for a coup, with a special unit dis- results in consecutive presidential

THIRD WORLD RESURGENCE No 329/330 48 W O R L D A F F A I R S

very sensitive to the ideological consensus they both form and, through laughter, police. Oliver is, to that extent, very observant. The idea that López Obrador and his supporters are in some sense ridiculous subtends a lot of the coverage. Notwithstanding ritual, senti- mental observations about how the Mexican people deserve much better – ‘cough, cough, no, good luck to ‘em, bless ‘em, lol, wonderful people the Mexicans, ahem’ – there is a basic underlying racist contempt, much as there was for Aristide and Chavez, both of whom were ‘clowned’ by the US media when they were not being incorrectly identified as ‘General’ in order to convey that López Obrador’s supporters celebrate his election victory in downtown Mexico City. they, and not their military opponents, were tyrants. In the case of López Obrador, the elections’. Why? Well, he has this and 2012, ‘his supporters occupied idea is that he is a cult leader for his thing about rigged something some- the city’s central square for months, stupid followers. (The New York thing, I don’t know. It’s ridiculous. and that is ridiculous’. Lol at people Times: ‘something of a messiah’. The The New York Times reports that protesting rigged elections. That Atlantic: ‘messiah complex’. Finan- he ‘refused to accept the result’ in makes them just like Donald Drumpf cial Times: ‘messiah complex’. And 2006, which election was definitely the Big Orange Mean Poo-Poo Head. so on.) The complex political debates rigged, accusing ‘the political and I’m not throwing in John Oliver in Mexico, the ways in which hetero- economic elite of rigging the elec- merely to have a gratuitous pop. The geneous groups have been arguing tion’, which they definitely did. The late-night talk show hosts are all po- and vying over electoral and social clown. litically timid mummy-birds, puking mobilisation strategies for years, cul- John Oliver, patron saint of Cen- up pre-masticated ideas, plucked from minating in this moment, are not re- trist Dads everywhere, described Ló- brain-dead newspapers, into the wide, ally of interest in this coverage. The pez Obrador as Mexico’s Donald expectant beaks of their audience. So idea that López Obrador’s supporters Trump. Among the reasons, he chor- that’s absolutely not a gratuitous pop. have a complex relationship to any tled that in response to defeats in 2006 But they tend, on that ground, to be electoral candidate, and may have ambitions and strategies of their own, hasn’t been on the radar for years, so why should it be now? Such debates may as well be taking place in a Mar- tian dialect. No. It’s very simple. X is a bad man/woman (because boo). All bad men/women are Trump. X is Trump. X is lulz. The syllogism to which all enlightened persons of good faith are to defer in these troubled times. Keep it in mind at all times. Whenever there is trouble, disruption, a hitch in the normally smooth functioning of things, this is your catechism. ◆

Richard Seymour is the author of several books, including Corbyn: The Strange Re- A forensic worker at a mass grave site in Veracruz state, where ‘death squad tactics’ birth of Radical Politics. He blogs at Lenin’s were used in the drug war. López Obrador has talked about ending the deadly drug Tomb (leninology.blogspot.com). The above article is reproduced from the website of Ja- war. cobin magazine (www.jacobinmag.com).

THIRD WORLD RESURGENCE No 329/330 49 W O R L D A F F A I R S

tary John F Kelly and then-Mexican US sending guns, crime to Interior Minister Miguel Angel Oso- rio Chong reportedly discussed the Mexico flow of guns across the border. Then- US Secretary of State Rex Tillerson highlighted the issue as an area of cooperation between the two coun- Sarah Kinosian and Eugenio gun laws, relying in part on straw tries during his visit to Mexico a few Weigend purchases. A ‘straw purchase’ is when weeks later. And Trump even signed a person who is prohibited by federal an executive order in February 2017 law from buying firearms contracts a claiming he would ‘strengthen en- ON a visit to Mexico City in August third party to buy them on their be- forcement of Federal law’ related to 2016, then-US presidential candidate half. Because there is no limit on fire- illegal gun trafficking. Donald Trump said, ‘No one wins in arm transactions in many states in the But if the Trump administration either country when human smug- US, anyone who can pass a back- actually wants to solve the problem, glers and drug traffickers prey on in- ground check may buy multiple mili- it needs to change laws, not just en- nocent people, when cartels commit tary-grade firearms in a single visit – force them. The same mechanisms acts of violence, when illegal weap- which they can then pass along to that allow for guns to be trafficked ons and cash flow from the United criminals. within the United States – unregulat- States into Mexico.’ Sometimes firearms traffickers ed gun shows and online sales, bad Since then, Trump has continued do not even have to lie to purchase a actor gun dealers and laws that allow to complain that Mexicans bring weapon. Although licensed US fire- people to buy dozens of military- crime northwards, while studiously arms dealers must conduct back- grade assault weapons and privately ignoring the very real threat that US ground checks and maintain records, resell them without documentation – firepower flowing in the other direc- among other measures, unlicensed are the same mechanisms that make tion poses to Mexicans. dealers at gun shows, flea markets and it so easy for Mexican criminals to Although Mexico has some of other private venues may sell guns arm themselves. the strictest gun laws in the world, without conducting a background In the United States, trafficking Mexican criminal organisations have check, inspecting a buyer’s identifi- guns is a high-profit, low-risk activi- no trouble buying firearms, which cation or documenting the sale in any ty. There is no federal law against gun they use to control territory, extort way. trafficking within the country, and business owners, and threaten citizens The business of violence can be although some convicted straw pur- as well as members of the security highly profitable, and the American chasers could get prison time, more forces. The consequences are lethal. gun industry is cashing in, with US often than not they merely face com- In 2002, there were more than 2,600 sellers and manufacturers arming munity service or a year of probation. murder investigations involving fire- both sides of Mexico’s conflict. Re- arms. By 2016, that number had in- search from the University of San Many factors have contributed to creased to nearly 13,000. Diego has shown that half of US gun violence in Mexico. The river of iron Most of the weapons used by dealers benefit financially from the from the United States, however, criminal groups in Mexico originate US-Mexico illegal gun trade, to the plays a key role in the country’s high in the United States. Each year, an tune of $127.2 million in 2012. death toll. Just as a multibillion-dol- average of 253,000 firearms cross the Meanwhile, manufacturers also lar border wall will do little to stop border, the overwhelming majority of sell weapons and ammunition to Mex- the tide of drugs coming into the US, which come from the Southwest ican security forces as they fight well- it will do nothing to prevent military- states of California, Texas and Ari- armed criminal organisations. Be- grade weapons from pouring out of zona. From 2009 to 2014, more than tween 2015 and 2016, US-based gun it. 70% of firearms – nearly 74,000 – manufacturers signed nearly $276 If Trump is concerned about or- seized by Mexican authorities and million in commercial firearms deals ganised crime and violence in Mexi- then submitted for tracing by the US with Mexico. Other US defence com- co, he might want to address the Unit- ◆ Bureau of Alcohol, Tobacco and Fire- panies signed agreements worth more ed States’ role in arming it. arms came from the United States. than $560 million during that period Sarah Kinosian is a programme officer cov- Many of these guns were semi-auto- in planes, helicopters and other equip- ering arms trafficking, US defence policy and matic rifles such as the AR-15 and ment to outfit Mexico’s military and citizen security at the Washington Office on AK-47, cartel favourites that Mexi- police. Latin America. Eugenio Weigend is a senior can citizens cannot buy legally. The US government knows policy analyst for the guns and crime policy team at the Center for American Progress. To stock their arsenals, Mexican there’s a problem. In February 2017, The above article was first published in the criminal organisations exploit lax US then-US Homeland Security Secre- Los Angeles Times (2 March 2017).

THIRD WORLD RESURGENCE No 329/330 50 H U M A N R I G H T S Threats to journalists are now omnipresent Journalists across the globe, and not only those in conflict zones, are increasingly endangered.

AS we entered the second half of Nava Thakuria have been targeted by fundamental- 2018, shocking news came from the ists for his free-thinking comments. United States, the professed home of Various international rights bodies free speech on earth. condemned his murder and urged the A gunman stormed into the news- cident took place. authorities to launch a genuine probe room of a Maryland newspaper and Then, well-known Kashmiri jour- to find the culprits. killed five media employees, includ- nalist Syed Shujaat Bukhari was shot According to the Committee to ing editors, reporters and a sales per- dead in Srinagar on 14 June by a Protect Journalists (CPJ), over 260 son. The shootings at the Capital Ga- group of militants. The proprietor and scribes were facing imprisonment in zette in Annapolis are a reminder that chief editor of Rising Kashmir, Shu- 2017 for their work. Turkey, for the journalists across the globe, not only jaat earlier faced similar attacks in those in conflict zones, are increas- 2000 and 2006. The brave and out- second successive year, emerged as ingly endangered. spoken journalist had since been pro- the country with the highest number If the grand democracy of the US vided government security. But this (73) of reporters imprisoned, fol- has recently turned dangerous for time, both of his security guards, Ha- lowed by China (41). South Asia re- scribes, the world’s largest democra- mid Chaudhary and Mumtaz Awan, ported the imprisonment of around 25 cy continues to uphold its status as a also died facing the bullets of violent media employees, where Bangladesh hazardous place for journalists. Islamist forces. has 10 people imprisoned followed by India reported the murder of four Starting his career at the Kash- five in Myanmar. Besides imprison- journalists in the last six months, a mir Times, Shujaat shifted to The Hin- ment, many media persons are being pattern reflected in its troubled neigh- du as its Kashmir correspondent. Lat- abused and physically assaulted in bour Pakistan where two have been er he established Kashmir Media different countries for their journal- killed in 2018. Bangladesh has seen House that publishes English daily istic activities. the murder of one editor-publisher Rising Kashmir, Urdu-language dai- While international media rights since 1 January, whereas other coun- ly Buland Kashmir and Kashmiri dai- bodies like Reporters Without Bor- tries on the subcontinent have avoid- ly Sangarmal. ders (RSF), CPJ and the Internation- ed murders of journalists. Shujaat left behind his parents, al Federation of Journalists (IFJ) have India lost three journalists in wife and two young children. He was called for justice to all slain media mysterious accidents within 12 hours buried on Eid at the end of the holy persons, the media fraternity in the in Madhya Pradesh and Bihar states Muslim month of Ramadhan. Indian subcontinent continues to pur- on 25 and 26 March. Sandeep Shar- Pakistan lost Anjum Muneer sue an action plan to safeguard the ma was a dedicated 36-year-old News Raja, who used to work in Urdu dai- journalists akin to military, police and World reporter in Bhind, deliberately ly Qaumi Pukaar, to assailants on 1 doctors on duty. mowed down by a truck in the morn- March. Raja, 40, was shot dead by the They have raised their arguments ing hours. He later succumbed to in- miscreants in Rawalpindi locality, loud and clear that if nations want juries in hospital. Sandeep used to while he was on his way home in the contribute media reports against the late evening. journalists to do risky jobs in the name sand mafia and had long received of public interest, their security along The second case in Pakistan was ◆ threats. reported on 27 March, when Zeeshan with justice must be ensured. On the previous night, Navin Ashraf Butt, a journalist from anoth- Nava Thakuria is a journalist who has been Nischal and Vijay Singh were hit by er Urdu daily Nawa-i-Waqt, faced covering northeast India for various local, a luxury vehicle in the Bhojpur local- bullets. Butt, 29, was allegedly target- national and international media outlets ity of Bihar and died on their way to ed by the chairperson of a local gov- since 1990. He primarily writes on socio- the hospital. The 35-year-old Navin, ernment. political and environmental issues in the re- who used to work for Dainik Bhaskar, Bangladesh saw the murder of gion, and has developed a special interest in media matters. and 26-year-old Vijay, who was as- Shahzahan Bachchu on 11 June in its This article is reproduced from the Asian sociated with a Hindi magazine, were Munshiganj locality. Editor of Amad- Correspondent website riding on a two-wheeler when the ac- er Bikrampur, Bachchu is thought to (asiancorrespondent.com).

THIRD WORLD RESURGENCE No 329/330 51 W O M E N Beyond suffrage: Indonesian women’s activism More than a century has passed since Putri Mardika, Indonesia’s first ever women’s organisation, was established, but similar challenges remain in the efforts to influence national politics to bring progress to all women.

LIKE many countries with a colonial Devi Asmarani sition. past, it was not suffrage that first ig- At the core of its ideology, the nited early women’s activism in what New Order expected women to per- is now Indonesia. Rather it was na- led by Sukarno, Indonesia’s founding form their motherly duty to ensure tionalistic aspiration and basic wom- president, declared the independent social stability, implement develop- en’s empowerment issues such as ed- Republic of Indonesia. It was fol- ment plans and reduce the high birth ucation and women’s rights in mar- lowed by the struggle in subsequent rate. Wives’ organisations thrived, riage that mobilised the movement. years to maintain control over the ar- epitomised by the massive Dharma Indeed, Indonesian women’s chipelago as the Dutch tried to re- Wanita organisation for the wives of movement emerged alongside the claim its colony. civil servants, whose activities were nationalist movement under the But the new republic showed a linked to the state-sponsored Family Dutch colonial rule, and remained clear democratic and egalitarian Guidance Movement. mostly a part of that movement for stance on gender, proclaiming in the But by the 1980s, new indepen- the first half of the 20th century until 1945 Constitution that all citizens dent women’s organisations emerged, independence. were equal before the law. This, how- many with a strong human rights bent. Education was seen as crucial in ever, did not always translate to gains The women’s non-governmental or- elevating women’s status, so early for women’s rights in practice. ganisations included: Kalyanamitra, women’s organisations were mainly Though women’s organisations which focused on developing a cen- involved in activities such as literacy flourished in the 1950s, the emphasis tre of information and communication campaigns and courses on domestic on their role to support nation-build- for women; the legal rights organisa- sciences or sewing. Some also issued ing and as mothers continued to chal- tion for women LBH APIK; the An- publications that disseminated ideas lenge efforts to assert individual nisa Swasti Foundation, which orga- on women’s emancipation. rights. The organisations were high- nised women workers; Rifka Annisa, The various women’s groups ly diverse too, divided into religious, which worked on reproductive health only began to work together to political party-affiliated, wives’ or issues; and Solidaritas Perempuan achieve common gender objectives professional organisations, making it (Women’s Solidarity), which worked on 22 December 1928, when the first difficult to become a unified political to empower and organise women mi- women’s congress was held. Involv- bloc. In addition, the friction between grant workers. Their work was impor- ing 1,000 delegates from 30 women’s religious and secular organisations tant amid continued government sup- organisations, the congress aimed at over matters like polygamy contin- pression of civil society. discussing important gender issues ued. The end of the New Order and and creating a united voice to repre- So despite the political rights and Suharto’s resignation in 1998 led to sent Indonesian women. political space, the post-independence the growth of new women’s organi- It led to the formation of a na- Indonesian women’s movement failed sations. There was more recognition tional women’s federation that lasted to capture the political agenda. Wom- for the importance of gender issues, until the three-year occupation by the en were keen to vote, but few were as seen in the shift in the role of the Japanese from 1942. But on the im- elected. The campaign for a marriage Ministry of Women’s Empowerment. portant issue of polygamy, the feder- law that would grant women more Suharto’s fall had been preceded ation was split between the secular or- rights also continued to fail until three by race riots, during which dozens of ganisations that wanted to ban it, and decades later – and even then the de- ethnic Chinese women became vic- Islamic associations that refused to mand to ban polygamy was not met. tims. The tragedy mobilised women’s condemn it. In the end, the women’s Under the three-decade New Or- groups to push for government ac- groups agreed to set aside the issue der administration under the country’s countability, leading to the establish- and focus on the needs of the nation, second president Suharto who came ment of the National Commission on a compromise that would continue for to power in 1967, the women’s move- Violence Against Women, or Komnas many decades to come. ment was subverted as the regime Perempuan. On 17 August 1945, nationalists suppressed any vocal political oppo- Indeed, violence against women

THIRD WORLD RESURGENCE No 329/330 52 W O M E N became one of the most important fields of work for Indonesian wom- The Management of Capital Flows in Asia en’s organisations in the post-1998 period, helping unite women in push- Edited by Yilmaz Akyüz ing for crucial laws like the 2004 Law on Domestic Violence. THE 1997 Asian financial crisis brought home Another important legal initiative to the region’s economies the importance of was the campaign for the 30% quota managing capital flows in order to avert financial shocks. This book looks into whether for women candidates imposed since and how this lesson was taken on board by 2003 on political parties contending policy makers in Asia, and, accordingly, how in legislative elections. This and the capital account regimes in the region evolved introduction of direct regional elec- in the post-crisis period. tions provide more opportunities for The early years of the new millennium saw a strong surge of capital flows into Asian women’s representation in politics. emerging markets amid conditions of ample The last two decades of post-New global liquidity. In response to the influx of Order democratisation have also giv- funds, these countries generally chose to keep en women more space to participate their capital accounts open to inflows, dealing in public decision-making processes, with the attendant impacts by liberalizing to make planning and budgeting more resident outflows and accumulating foreign exchange reserves. While this approach enabled ISBN: 978-967-5412-50-9 240pp gender-responsive. them to avoid unsustainable currency 16.5 cm x 24 cm Year: 2011 But a lot remains to be done. appreciations and external deficits, it did not Despite an increasing number of prevent the emergence of asset, credit and Network research project on fi- women holding top government po- investment bubbles and domestic market nancial policies in Asia – exam- vulnerability to external financial shocks – as ines the above developments in sitions such as Cabinet minister, su- the events following the 2007 subprime crisis relation to the region in general preme court justice and governor, would prove. and to four major Asian devel- politics has remained the domain of This book – a compilation of papers written oping economies: China, India, men overall. Political parties are still in 2008 for the first phase of a Third World Malaysia and Thailand. run under a system of highly patriar- chal patronage and, in general, they Price Postage do not show much interest in advanc- Malaysia RM30.00 RM3.00 ing gender equality. Developing countries US$14.00 US$7.00 (air) In addition, the emergence of Others US$20.00 US$10.00 (air) political Islam, increasing religious Orders from Malaysia – please pay by credit card/crossed cheque or postal order. conservatism and widespread sharia- Orders from Australia, Brunei, Indonesia, Philippines, Singapore, Thailand, based bylaws of the past few years UK, USA – please pay by credit card/cheque/bank draft/international money order in own currency, US$ or Euro.If paying in own currency or Euro, please calculate have posed a major setback for wom- equivalent of US$ rate. If paying in US$, please ensure that the agent bank is en across Indonesia. It has led to in- located in the USA. creasing efforts to emphasise wom- Rest of the world – please pay by credit card/cheque/bank draft/international money en’s domestic role, and to limit wom- order in US$ or Euro. If paying in Euro, please calculate equivalent of US$ rate. If paying in US$, please ensure that the agent bank is located in the USA. en’s mobility and regulate sexuality. More than a century has passed All payments should be made in favour of: THIRD WORLD NETWORK BHD., 131 Jalan Macalister, 10400 Penang, Malaysia. Tel: 60-4-2266728/2266159; Fax: since Putri Mardika, Indonesia’s first 60-4-2264505; Email: [email protected]; Website: www.twn.my ever women’s organisation, was es- I would like to order ...... copy/copies of The Management of Capital Flows tablished, but similar challenges re- in Asia. main in the efforts to influence national politics to bring progress to all I enclose the amount of ...... by cheque/bank draft/IMO. women. Only when united in a mas- Please charge the amount of US$/Euro/RM ...... to my credit card: sive and organised way – the way they were over the domestic violence leg- Visa Mastercard islation – can women’s groups over- come these challenges. – IPS ◆ A/c No.: Expiry date: Signature: Devi Asmarani is co-founder and Editor-in- Chief of Jakarta-based feminist webmagazine Magdalene. This article was first published Name: in the Friedrich Ebert Stiftung blog FES- CONNECT (www.fes-connect.org/popular- Address: posts/detail/fighting-the-colony-women-activism-beyond-suffrage/).

THIRD WORLD RESURGENCE No 329/330 53 V I E W P O I N T Looking at the World Cup through Galeano’s eyes The 2018 World Cup is now over but one of the most passionate lovers of the game – the Uruguayan social critic and activist Eduardo Galeano – did not live to see it. For him: ‘The fiesta of soccer, a feast for the legs that play and the eyes that watch, is much more than a big business run by overlords from Switzerland. The most popular sport in the world wants to serve the people who embrace it. That is a fire police violence will never put out.’ In this article, Joel Sronce attempts to use Galeano’s writings as a guide to the game’s darkness and lights.

‘Years have gone by and I’ve finally learnt to accept myself for who I am: a beggar for good soccer. I go about the world, hand outstretched, and in the stadiums I plead: “A pretty move, for the love of God.” And when good soccer happens, I give thanks for the miracle and I don’t give a damn which team or country performs it.’ – Edu- ardo Galeano, Football in Sun and Shadow

THE 2018 World Cup is now upon us, promising to call forth heartaches, hallelujahs and wonder as part of a universal, even unifying passion. Yet the joy that millions take in it is polluted by foul, for-profit priorities, violent classism and discrimination. Eduardo Galeano: ‘[S]occer never stops being astonishing.’ As left-wing soccer fans plot a course between these duelling com- power that is always deciding in the plains: ‘Memory of Fire is a kind of ponents, there’s no better guide to name of humanity who deserves to be secret history of the Americas, told navigating the game’s darkness and remembered and who deserves to be in hundreds of kaleidoscopic vi- lights than the late Uruguayan author forgotten ... We are much more than gnettes that resurrected the lives of and activist Eduardo Galeano. we are told. We are much more beau- campesinos and slaves, dictators and tiful.’ scoundrels, poets and visionaries. Commitment to remembering This understanding lit within Memoirs, novels, bits of poetry, folk- Galeano a commitment to the impor- lore, forgotten travel books, ecclesi- Galeano, whose work has in- tance of remembering – a fierce re- astical histories, revisionist mono- spired generations of revolutionaries, possession of a kidnapped memory graphs, Amnesty International reports was a writer ‘obsessed with remem- and consciousness. In an article ho- – all of these sources constituted the bering’, he once proclaimed, ‘with nouring the late writer after his death, raw material of Galeano’s sprawling remembering the past of America and Khury Petersen-Smith wrote: ‘Above mosaic.’ above all that of Latin America, inti- all, Galeano was committed to re- Galeano remembers soccer in the mate land condemned to amnesia’. membering. His defence of what same way. His book El fútbol a sol y When a Guardian columnist Howard Zinn called “people’s histo- sombra (Football in Sun and Shad- asked him what’s responsible for hu- ry” was key to understanding a world ow) was first published in 1995. He manity’s amnesia – for being blind, that begs to be changed.’ calls the book an ‘homage to soccer, in Galeano’s words, to small things Even what many consider Gale- celebration of its lights, denunciation and small people – the writer respond- ano’s magnum opus is titled Memory of its shadows’. It shares Memory’s ed: ‘It’s not a person. It’s a system of of Fire. Writer Scott Sherman ex- kaleidoscopic structure – its 270 pag-

THIRD WORLD RESURGENCE No 329/330 54 V I E W P O I N T

es contain 150 chapters, the strike against Bolivia’s mili- longest of which is a few pag- tary dictatorship, and soon, all es, the smallest no more than Bolivia would be on a hunger two paragraphs. strike: the dictatorship was Here, the scoundrels are falling. The Argentine military FIFA (soccer’s governing dictatorship, in contrast, was body) monarchs like João enjoying good health and, to Havelange and Joseph Blatter, prove it, was playing host to guilty of transforming every the eleventh World Cup.’ player into an advertisement Galeano remembers that in motion, while prohibiting a few miles from Buenos them from wearing any mes- Aires’s Monumental Stadium, sage of political solidarity; or ‘prisoners were being thrown Nike and Adidas, who lust af- alive from airplanes into the ter the commodification of sea’. He remembers that ‘spe- passion and identity. cial guest Henry Kissinger The poets are the game’s predicted, “This country has rebels and dissenters: Diego a great future in all ways”’. Maradona, the disobedient Yet Galeano’s book isn’t rascal who protested the dic- only a stage-setter of broader tatorship of television over the political and historical con- sport and fought unflinching- texts, but an homage to the ly for players’ labour rights; people who play and beautify or the French star Raymond the sport: children, poor and Kopa, a former coal miner, working-class players, the who led other French players game’s rebels and political Galeano calls his book Football in Sun and Shadow an to join the rebellion of May figures, those whose daily ‘homage to soccer, celebration of its lights, denunciation 1968 when Paris barricades of its shadows’. struggle preserves the soul of rattled the world. soccer and makes it worthy of The folklore is a penalty- a celebration of its lights. kick save by Ernesto Guevara, not yet the kind of society we deserve to live Even some of the working people ‘Che’, on the banks of the Amazon in in.’ whom others might call the scoun- Colombia; the suicide of faded Uru- Football in Sun and Shadow re- drels receive Galeano’s sympathy – guayan star Abdón Porte, who in 1918 constructs a people’s history. The his- they are products of an environment shot himself at midnight at the centre torical perspective through which that itself must receive the blame. of the Nacional Stadium; or the ene- Galeano heralds each World Cup – Galeano advocates for a sport and my fan who in 1937 buried a toad in from the first in 1930 through 2010, a world where its greatest athletes Brazilian soccer club Vasco da the last one written about for the 2013 aren’t ‘pressed by the law of produc- Gama’s playing field on a very rainy edition before his death in 2015 – is tivity to win by any means necessary’. night, calling down a curse of a dearth of paramount importance for reclaim- He laments how ‘many anxious and of championships for a dozen years. ing what, and who, deserves to be re- anguished players become running The Amnesty International remembered. drugstores’ and how fans’ violence ports are Amnesty International re- In introducing the 1954 World ‘grows in direct proportion to social ports. Cup, Galeano writes, ‘While in Swit- injustice and the frustrations that peo- zerland, the national anthems of six- ple face in their daily lives ... torment- Mirror teen countries were being sung to in- ed by a lack of jobs and lack of hope’. augurate the fifth World Cup, in Gua- Galeano points his finger up the For Galeano, sports were a mir- temala, the victors were singing “The social hierarchy, at the shadowy fig- ror of all things. Reclaiming the mut- Star-Spangled Banner” and celebrat- ures who exploit the game and its fans ed history surrounding them – including the fall of President Arbenz, in the name of wealth, as well as at ing the stories that maintain the fire whose Marxist-Leninist ideology had global capitalism itself. of resistance and forge sports into a been laid bare when he touched the ‘The morals of the market,’ Gale- tool of hope – is inseparable from the lands of the United Fruit Company.’ ano writes, ‘which in our days are the fight for a better world. As Shaun Similarly, Galeano remembers morals of the world, give a green light Harkin wrote similarly in an article that, as the 1978 World Cup got un- to all keys to success, even if they’re about the 2014 World Cup in Brazil, derway: ‘Domitila Barrios and four burglar’s tools. Professional soccer ‘The struggle for the soul of football other women from tin-mining com- has no scruples because it is part of is synonymous with the struggle for munities were launching a hunger an unscrupulous system of power that

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year’s World Cup, Galeano released the following statement: ‘As far as I’m concerned, the explosion of indignation in Brazil is justified. In its thirst for justice, it is similar to other demonstrations that in recent years have shaken many countries in many parts of the world. ‘Brazilians, who are the most soccer-mad of all, have decided not to allow their sport to be used any more as an excuse for humiliating the many and enriching the few. The fiesta of soccer, a feast for the legs that play and the eyes that watch, is much more than a big business run by overlords from Switzerland. The most Uruguayan supporters at the 2018 World Cup in Russia. Soccer’s ‘allure... comes popular sport in the world wants to from the joy and sorrow of the fans who love and embrace it’. serve the people who embrace it. That is a fire police violence will never put out.’ buys effectiveness at any price.’ of the United States. Around the As this World Cup gets under- As the book comes to a close, world, right-wing regimes were scur- way, let’s borrow a page – let’s bor- Galeano concludes his own duelling rying after his shadow, while work- row every page – from Galeano’s views of the sport he loves: ‘A bit of ing people were rallying in resistance. book. insanity worthy of a better cause? A Syria was suffering as a battle- Let’s reclaim the memory of who primitive and vulgar business? A bag ground for imperial powers, while is worthy of celebration, and be un- of tricks manipulated by the owners? those same powers were keeping its deniably visible on the side of what’s I’m one of those who believe that soc- chances of democracy, as well as its worth fighting for. Let’s celebrate the cer might be all that, but it is also refugees, at bay. Transnational soli- ways in which soccer remains a sport much more ... Professional soccer darity was reverberating in move- of the people, maintains its energy of does everything to castrate that ener- ments for justice; when Brazilian so- happiness – and most of all, let’s ac- gy of happiness, but it survives in cialist Marielle Franco was assassi- tively remember the people’s history spite of all the spites. And maybe nated in the streets of Rio de Janeiro, that surrounds the beautiful game. that’s why soccer never stops being signs in the protests that followed Let’s resist the status quo de- astonishing.’ were demanding: Vidas Negras Im- manded by those who exploit the soul portam. of modern soccer, yet refuse us a bet- Into present times In the United States, a player of ter history, a brighter present and fu- a different kind of football was tak- ture. The FIFA monarchs and bureau- Galeano believed in memory ‘not ing a knee in order to stand with the crats, the TV contracts and advertise- as a place of arrival, but as a point of oppressed, and his stance was receiv- ments, the anthems and nationalism departure – a catapult throwing you ing international solidarity. – they do nothing to make the game into present times, allowing you to Israel was maintaining its ethnic beautiful. imagine the future instead of accept- cleansing, massacring scores of Pal- Its allure comes from its drama, ing it’. estinians who were calling for their its elegance from the awe-striking He passed away in 2015, so this right to return to their homeland, expressions of human potential dis- is the first men’s World Cup after his while it was blaming the victims’ played by those on the field, even death. But remembering his convic- deaths on anything but its own apart- those paid by the millions. And far tion, we can catapult Galeano’s own heid state. And yet a week before the more than that, it comes from the joy approach into the present. We can World Cup got underway in Russia, and sorrow of the fans who love and imagine how he would have set the the Argentinian team was sending a embrace it. stage of the 2018 World Cup and con- message that the Boycott, Divestment After all, we are much more than sider what’s important to remember and Sanctions movement was gain- we are told. We are much more beau- about the people’s history happening ing ground. tiful. ◆ around us: In 2014, when protests erupted in His blatant racism and bigotry Brazil due to the corruption, profiteer- This article is reproduced from were not enough to keep Donald ing and impending collateral damage SocialistWorker.org (http:// socialistworker.org/2018/06/14/looking-at- Trump from being elected President that went with playing host to that the-cup-through-galeanos-eyes).

THIRD WORLD RESURGENCE No 329/330 56 T R I B U T E A portrait of Felicia Langer Felicia Langer, a Holocaust survivor who dedicated her whole life to fighting for the Palestin- ian cause, died in June this year. She was one of the first Israeli lawyers to defend Palestin- ian political prisoners and for this, she was vilified, ostracised and even threatened with death. Despite this, she continued her fight in Israeli courts for her Palestinian clients for some 23 years until 1990 when she finally decided to close her legal practice. Explaining her decision to cease legal practice, she said ‘I realised that all this time, by bringing Palestinians to the courts, I had been legitimising the system, but the system had not brought the Pales- tinians any justice. And I decided I couldn’t be a fig leaf for this system anymore.’ She emigrated to Germany where she received many international awards as she continued her fight for the Palestinian cause until her death at the age of 87. To mark her passing, we reproduce below a profile article that was first published in 1998.

A BEAUTIFUL, petite woman with Holocaust survivor. Unimpressed intense blue eyes, Felicia Langer ra- Faiza Rady with Zionism and happily settled in diates extraordinary strength and de- Poland, the young couple emigrated termination. She needs to. Langer, an to Israel in 1950 for personal reasons Israeli of Polish-Jewish origin who is – Langer wanted to join her mother, married to a Holocaust survivor, spent who had settled there. close to 23 years of her life working Deeply disturbed by the racism as a defence lawyer in the Occupied and class-based inequalities inherent Territories, representing Palestinian in Israeli society, both Langer and her political prisoners. Though she now husband joined the Israeli Communist lives in self-imposed exile in Tübin- Party, which offered them an alterna- gen, Germany, where she lectures at tive vision and a channel for political the university, her life is still dedicat- activism. ed to the cause she first took up in ‘1967 was a hard winter, as if 1967. nature wanted to add to the catastro- Back in Jerusalem to address a phe that had befallen the Palestinians,’ conference, Langer has lost none of Felicia Langer (1930-2018). recalls Langer in her autobiography. her disillusionment with the policies By then, she had decided to ‘become of the state. pirations to national self-determina- active’; having resigned her job in a ‘The failure of the peace process tion, which has precluded any hope Tel Aviv law office, she established a was already inscribed in the Oslo for the establishment of a Palestinian private practice in Jerusalem to assist Accords,’ she said. ‘The “peace of the state and peace between the two peo- Palestinian political prisoners. brave”,’ she added bitterly, ‘brought ples. Her first clients that winter were the Palestinians the Israeli bulldozer.’ ‘How do you define your love of an imam and his wife whose son had Bitterness and anger at continu- country?’ a journalist from the Israeli been jailed in Hebron for ‘membering Palestinian dispossession by Is- daily Hadashot asked Langer some ship in a Palestinian resistance organ- rael are not new emotions to the 68- years ago. ‘My love of country fulfils isation’. As he explained the case to year-old lawyer. Her autobiography, itself in hatred of the occupation,’ she Langer, telling her how he had fetched aptly entitled Fury and Hope, ex- replied, without a moment’s hesita- his son’s blood-stained shirt from jail, presses her alternating states of be- tion. the man’s eyes suddenly filled with ing as an Israeli who has adopted the Fury and rage are powerful emo- tears and his wife broke down, sob- Palestinians’ suffering as her own. tions running as a leitmotif through bing. ‘There was silence in the room Fury at the senseless killings of Langer’s tale, motivating her work as ... And what I feared, happened: tears Palestinian resisters, the razing of an act of resistance and defiance, and came to my eyes, and instead of radi- entire villages, the bulldozing of defining her solidarity with the strug- ating authority, strength and confi- houses, the wide-scale confiscation of gle of the Palestinian people. dence, I cried with them. So there we land, the thousands of administrative Born in Poland in 1930, Langer sat, three adults crying over the fate detention orders slapped on Palestin- fled her native country for the Soviet of a tortured son.’ Looking back on ian youths – but most of all, rage at Union after the outbreak of World this episode, Langer believes it was the continued occupation of Arab land War II. Returning to Poland after the necessary to break down the barriers and the denial of the Palestinians’ as- war, she married Mieciu Langer, a between her and the people she want-

THIRD WORLD RESURGENCE No 329/330 57 T R I B U T E ed to represent – ‘creating a bond of Shortly following the Nablus celebra- screams. “Get out of this house,” they trust and closeness, crucial for both tion, a Jewish terrorist group booby- shouted, “we won’t stand for you to sides’. trapped the mayor’s car. Barely escap- live here. You want to plant flowers Over two decades of representing with his life and gravely injured, for this Arab? You can have some of ing Palestinian political prisoners in Shaka’s legs were amputated. As these here on your grave.” And they the Occupied Territories, Langer re- Langer left her friend on his hospital pointed to the well-kept flower beds lentlessly worked at consolidating this bed in Nablus, he told her: ‘I am here growing in my part of the yard.’ bond in solidarity with the Palestin- and the struggle is just beginning.’ Throughout the years, recalls ian people. In effect, a major part of ‘What stuff are you made of, Bas- Langer, her every step was followed her autobiography consists of docu- sam?’ she wondered as she left the by piercing hateful stares, accompa- menting cases of flagrant Israeli hu- ward. nied by the occasional insult. ‘I man rights violations in Palestine. Yet Langer herself is made of walked by with my head held up high, Recording the history of the occupa- equally ‘strong stuff’. An extraordi- although each and every time some- tion, the writer testifies lest people narily courageous and resilient wom- thing inside me would shrivel,’ she should ever forget. Since the early an, she kept on working despite ap- wrote. ‘When I was lucky, I didn’t days of her work as a defence attor- palling conditions, social ostracism, bump into those groups of youths who ney, Langer has turned to writing – death threats and even physical as- would spit in my direction whenever writing everywhere: in taxis, in pris- saults. I walked by.’ on yards while waiting for her clients, In 1968, when Langer first start- More ominous than the daily ha- she used the written word to express ed publishing articles in the Israeli rassment and aggression were the her personal anguish at the effects of press to denounce the occupation, she occasional death threats. ‘We are a the occupation. was castigated by the average Israeli. terror organisation against those re- Throughout her 23-year-long She became an outcast and an alien. sponsible for terrorist acts. If you struggle against the Israeli military It all began with the demolition don’t stop working, you will have a court system, Langer was driven by a of Hamdi Tukan’s house in Nablus. bad and bitter end,’ warned a sinister stubborn sense of hope, seemingly Tukan’s father had shown Langer the voice over the phone on a warm June against all odds. Motivated by the bulldozed concrete rubble in the midst night in 1974. Ten years later the powerful need to crack the system of which she could still see the ves- message was much the same, though open – even if only fleetingly – so as tiges of flowers stubbornly sprouting more political in tone. ‘Felicia Langer to be able to defend her clients be- among the debris. is a PLO whore. The day of your yond the available token legal ma- Standing on the Nablus hills death is near,’ the Jewish Defense noeuvres, Langer relentlessly fought overlooking the ruins, Langer felt an League, a fascist terrorist group es- her way to the Israeli Supreme Court overwhelming urge to tell Tukan that tablished by Rabbi Meir Kahane, time and again. Basing her claims on ‘this was not the only face of her peo- spray-painted on the door of Langer’s the legality of binding international ple’. She did so in an open letter ad- Jerusalem office. treaties, Langer cited countless vio- dressed to ‘my brother Hamdi Tukan’, Beyond the humiliating daily lations of the Geneva Conventions – published in the Arabic-language wear and tear of social ostracism and to which Israel is a signatory – fight- weekly Al-Ittihad and the Hebrew Zo the real fear for her life, Langer was ing an uneven and usually losing bat- Haderech. ‘The day would come,’ constantly harassed by the authorities. tle, with a few notable exceptions. wrote Langer, ‘when Tukan would be From denying and delaying her right Overturning Bassam Shaka’s ex- able to build a new house and plant to consult and meet with her clients, pulsion orders in November 1979 was new flowers that will bloom with a to dismissing her petitions, to over- such an exception and counted among myriad of colours.’ ruling her defence arguments in court, Langer’s most important victories – The reaction to Langer’s article her work was obstructed at every step ‘the most important of all’, she recalls. was swift and to the point. Returning of the way. The celebrated nationalist mayor of home to Tel Aviv from her Jerusalem But slapping down her clients Nablus, Shaka had been one of the office one night, she was startled by with inordinately severe prison sen- most vocal and vehement opponents a growing commotion coming from tences was the most dramatic way of of the Camp David Accords. As a re- one of her neighbours’ balconies. punishing the Israeli lawyer for de- sult, the military governor of the West ‘Look at her, look at this piece of shit, fending Palestinian political prison- Bank accused Shaka of inciting ter- this traitor. This dirty Arab is her ers. Langer recounts the case of one rorist attacks and sheltering their per- brother! Let her go to Nablus, we client, Tawfik Aharam, who was sen- petrators, arrested him and signed an don’t need her here,’ a woman tenced to 10 years in jail for member- expulsion order against him. When screamed at Langer. ship of an ‘illegal terrorist organisa- the Supreme Court overruled the ‘I went out to my balcony with tion’. Since Aharam had never active- mayor’s deportation, the whole town Michael [her son] who had turned ly opposed the occupation, his sen- of Nablus celebrated along with white. My neighbours’ faces were dis- tence should not have exceeded two Langer, who at that time was briefly torted by a hatred I had never seen years. ‘My client’s father was proba- able to believe that ‘reality may some- before. I tried to say something, but bly right when he told me: “Felicia, times surpass our wildest dreams’. my words were drowned out by a you are the one who is being sen- But the joy was to be shortlived. flood of insults and hysterical tenced here”,’ she recalls.

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In Aharam’s case, as in similar cases, Langer appealed such sentenc- The Financial Crisis and Asian Developing es with a measure of success. Deter- Countries mined to defend her clients and often driven by the sheer will to survive, Langer bravely continued to fight her Edited by Yilmaz Akyüz battles against the occupation – until The world was plunged into the most severe 1990, the third year of the Intifada. economic and financial crisis of post-war times in During the Intifada the military 2008-09, and even the most dynamic growth region, Asia, was not spared from its effects. This court system had broken down com- book examines how the developing economies of pletely, becoming a total travesty of Asia were hit by the turmoil, the measures they justice, with hundreds of prisoners took in response and the policy lessons to be drawn herded into daily sentencing sessions from this experience. lacking even a minimal decorum. Said From its epicentre in the major advanced Langer: ‘They made justice into a farce economies, the shockwaves of the crisis were transmitted to Asia via trade and finance. To deal and I refused to provide them with a with these damaging effects, most of the regional stamp of legality ... They still hadn’t economies adopted expansionary fiscal and understood that nothing matters when monetary policies, which have largely proved a people fight for their freedom, which effective in stabilizing conditions and promoting recovery. to them is dearer than life.’ ISBN: 978-967-5412-52-3 352pp Whether this recovery will be sustainable, 16.5 cm x 24 cm Year: 2011 She goes on, ‘I was supposed to however, will depend on how the developing represent clients I had never met be- countries of Asia address the structural fragilities on financial policies in Asia, the fore, so I could not prepare myself to the crisis has exposed in their economies. As this papers collected in this book look defend them. It came to the point book makes clear, the region’s economies should at the crisis and its implications where I was no longer physically able seek to rebalance domestic and external sources of for the region from a broad growth, as well as pursue strategic rather than full- standpoint and also in relation to to walk into a courtroom and address blown integration with global financial markets. selected individual countries from the judge as “your honour”, I felt I just Written for the second phase, commencing east, Southeast, South and West couldn’t say the words anymore. As a 2009, of a Third World Network research project Asia. gesture of protest I closed my Jerusa- lem law office and left the country.’ Price Postage Malaysia RM40.00 RM4.00 Are things any different now? Developing Countries US$18.00 US$9.00 (air) ‘Absolutely not,’ replies Langer vehe- Others US$25.00 US$12.50 (air) mently. Her visit to Jerusalem has merely reinforced what she knew and Orders from Malaysia – please pay by credit card/crossed cheque or postal order. Orders from Australia, Brunei, Indonesia, Philippines, Singapore, Thailand, felt already. ‘The time has come to tell UK, USA – please pay by credit card/cheque/bank draft/international money order the truth about the myth of the Israeli in own currency, US$ or Euro.If paying in own currency or Euro, please calculate system of justice. Since 1993, Israeli equivalent of US$ rate. If paying in US$, please ensure that the agent bank is forces have killed and injured hun- located in the USA. dreds of Palestinians, destroyed the Rest of the world – please pay by credit card/cheque/bank draft/international money homes of over 500 families, taken order in US$ or Euro. If paying in Euro, please calculate equivalent of US$ rate. If paying in US$, please ensure that the agent bank is located in the USA. away the rights of over one thousand people to live in Jerusalem, arrested, All payments should be made in favour of: THIRD WORLD NETWORK BHD., imprisoned and tortured thousands of 131 Jalan Macalister, 10400 Penang, Malaysia. Tel: 60-4-2266728/2266159; Fax: 60-4-2264505; Email: [email protected]; Website: www.twn.my people, leaving other thousands home- less.’ I would like to order ...... copy/copies of The Financial Crisis and Asian If anything, the rate at which Pal- Developing Countries. estinian dispossession is proceeding I enclose the amount of ...... by cheque/bank draft/IMO. has increased since the Oslo Accords. Please charge the amount of US$/Euro/RM ...... to my credit card: ‘The pace of settlement has actually spiralled since then,’ says Langer. ‘The Visa Mastercard Labour government headed by Nobel Peace Prize recipient, Yitzhak Rabin, A/c No.: Expiry date: provided three times as much financial support for the building of settle- Signature: ments in the Occupied Territories as the Likud coalition government had Name: done in the past.’ ◆ Address: This article was first published in Al-Ahram Weekly (weekly.ahram.org.eg) in 1998.

THIRD WORLD RESURGENCE No 329/330 59 P O E T R Y

Jibanananda Das (1899-1954) was a Bengali poet, writer, novelist and essayist. Though overshadowed by literary giants like Rabindranath Tagore, he has over the years gained recognition as one of the greatest poets in the Bengali language.

Twenty years later

Jibanananda Das

If I meet her again twenty years from now! Again in twenty years – Beside a sheaf of grain, perhaps, In the month of Kartik – When the evening crow goes home – the yellow river Flows softened through reeds, kash-grass into the fields!

Perhaps no grain is left in the field; There is no need for haste. Straw from the nest of the goose, Straw from the nest of the bird Is scattered – night, winter, dew at Mania’s house.

Our life has traversed decades – If suddenly I meet you again on a country road! Perhaps the midnight moon emerged from behind massed leaves, Slim dark branches across its face, Sirish or plum Casuarina, mango; Then after twenty years I think of you no more!

Our life has traversed decades – If we suddenly meet again on a country road! Then, perhaps, the owl ventures down to the field In the darkness of the acacia lane, In gaps of the peepul windows – Where does it hide itself? Descending as quietly as eyelids, where do the kite’s wings rest –

Golden, golden kite – the dew has hunted down the kite – Twenty years from now, if suddenly I meet you in that mist!

Translated by Mary Lago and Tarun Gupta month of Kartik: a fall month overlapping September and October. In the ancient and exact Bengali calendar, the dates of the month change according to lunar calculations. kash: long stemmed grass that in the fall bears beautiful white flowers which throw a cloud-like sheen along the river banks and the edges of rice-fields in Bengal. sirish: a Bengal tree that blazes with massive red flowers in the spring and summer months.

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