Under the Radar
The Haiti-Greece Connection
July 29, 2015
By Max A. Joseph
Debt is an instrument of control and other insidious motives that have been in use since ancient times. Its potency painfully felt when the debtor becomes insolvent.
European Union member and bankrupt Greece may be thousands of miles away from United Nations-occupied and destitute Haiti, but the distance doesn’t preclude these two countries from experiencing similar issues inherent to the brutal nature of the global order.
Under a narrative that exculpates perpetrators and vilifies victims, these two countries are portrayed as unsuitable to their neighborhood and, by extension, unworthy of sympathy from their more affluent and powerful neighbors. Succeeding generations of Greeks, like their Haitians counterpart, will have to deal with the nasty consequences associated with being an insolvent nation. It certainly does not help that the institutions equally responsible for the Greek debt crisis – Europe Central Bank, the giant international banks and the IMF– are the ones formulating the solution.
Let’s start with Greece, a country of 10 million inhabitants and a national debt of $380 billion. As a member of the world’s largest economic bloc, the country certainly possesses many advantages that may be appealing to lenders. However, were these “advantages” sufficient enough to warrant such vote of confidence in its ability to repay this massive debt? Absolutely not; despite a highly-educated workforce, Greece is essentially a developing economy that relies mostly on tourism and agricultural exports.
It will never be able to pay off this enormous debt.
Because the global economy is interwoven, the Greek debt crisis remains a threat to global prosperity seeing that it could usher a domino effect, engulfing other heavily indebted and much larger EU economies. That being said, shouldn’t the international lenders shoulder part of the blame and absorb some of the losses that come with Greece’s inability to fulfill its contractual obligations?
In a normal situation that would be the reasonable thing to do but in the arcane world of international finance, such mundane solution is anathema because portion of the debt are essentially investments made by states and private pension funds on behalf of retirees. Though most of the debt is nominally owed to EU governments and banks, their true ownership might be retirees from Cleveland, Ohio; Marseille, France, Manchester, England, or Munich, Germany. These retirees no doubt will not be asked to take smaller retirement checks because of bad decisions by mutual or hedge funds and banks or the Greeks’ inability to pay.
Predictably Alexis Tsipras, the Greek prime minister, was fighting a losing battle despite the popular support expressed in the July 5 referendum in which almost 62 percent of his countrymen convincingly rejected the burdensome conditions of the EU lenders and the IMF. As recently as the beginning of the twentieth century, Greece would have been invaded and occupied by national armies seeking to collect on behalf of their respective banks. Fortunately for the Greeks, that primal approach to collecting debts has been in hibernation, meaning not completely abandoned, under the 1944 Bretton Woods Accords, which created the ultimate mechanism (IMF and World Bank) for a collective and more effective control of international finance by the western powers.
Likewise Haiti, a perennial outcast in the international arena and current holder of the unenviable title of “poorest country in the western hemisphere,” was not so lucky. Its path to poverty — perpetual political turmoil and insolvency, though wholly different than that of Greece– is consistent with the characteristics of international relations. July 28 marked the hundredth anniversary of Haiti’s first occupation by U.S. Marines on behalf of U.S. corporations, which lasted nineteen years (1915-34.)
Whereas Greece’s monstrous debt originated with bad decisions by that country’s leaders and greedy international lenders, that of 1915 Haiti in contrast was the end result of bullying and robbery by France.
To sum it up, the sacrifices made by the more than one hundred thousand slaves that perished during Haiti’s war of independence (1791-1803) were nullified when France, with the backing of England, Germany, Spain and the U.S. navies, imposed a huge indemnity on the young republic in exchange for a formal recognition of its self-liberation. Apparently NATO (North Atlantic Treaty Organization) informally existed prior to its founding in 1949.
Adding insult to injury, Haiti was forced to borrow the money from French banks at an exorbitant rate, which inevitably bankrupted the country. The National City Bank of New York, aka Citibank, would later acquire the deed to that loan from under the U.S. occupation whose premise (the Monroe Doctrine) could not tolerate the presence of a European competitor.
When a comprehensive account of the April 1825 naval blockade of Haiti and subsequent U.S. occupation of that country on July 28, 1915 is finally written, preferably by non-western historians, these two episodes will rank among the most severe punishments ever meted out on a defenseless little nation by predatory powers.
Ever since ancient Greece was yanked from the Ottoman Empire by the British and resurrected in 1830, it has been unable to find it’s footing in a neighborhood infested with predatory powers. Haiti, which came into existence in the course of a hard fought struggle against slavery and colonialism, has been in a corresponding situation since its inception in 1804. Until small countries like Greece and Haiti find a way to extricate themselves from the grid, they can expect more of the same.
About Latest Posts
Max A. Joseph Jr.
Max A. Joseph Jr. is a small business owner and consultant who writes about politics.
Labels: DEBT, GREECE, HAITI, IMF, World Bank
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COMMENT - Globalisation and land theft. This is the IMF's version of land reform, land title reform instead of land redistribution. Land title reform strenghtens the ownership of land in the hands of transnational corporations, and the banks that own their debt.
(BUSINESS INSIDER) Uganda's farmers battle palm oil Goliaths for land
AFP
Amy Fallon, AFP
Jul. 25, 2015, 2:10 AM 826
Even before the bulldozers arrived life was tough for John Muyiisa, scratching a living from a rented farm on Lake Victoria's Kalangala island© AFP Isaac KasamaniEven before the bulldozers arrived life was tough for John Muyiisa, scratching a living from a rented farm on Lake Victoria's Kalangala island
Now he has almost nothing and is seeking compensation in Ugandan courts from the palm oil plantations he blames for seizing the land and destroying his livelihood.
As land grabs by local firms linked to multinationals drive small-holder farmers out of business, a rights group behind a February bid for compensation by 100 farmers says rights violations and environmental degradation are also at stake.
Muylisa, a 53-year old father of nine, had leased a 17 hectare (40 acre) plot farming coffee, bananas, cassava and potatoes on Kalangala island. But in 2011 that land was taken and cleared for a palm oil estate.
"It's like I'm starting all over again now," Muyiisa said, adding he once could earn over 1,400 dollars a year (1,300 euros) but is now struggling to survive.
"With that land, some of my children even completed university, but now I've taken some out of school, some of my daughters are doing housework to earn money."
It is a story repeated elsewhere in Africa, where large internationally-backed companies are snapping up agricultural land, and activists claim their actions deprive local farmers of basic needs.
But Muyiisa did not legally own the land he farms -- the title deeds are held by the local Sempa family.
Horatius Sempa said the 14 farmers were "illegal squatters," but acknowledged some had received payments of between $35 and $200 while others had been allowed to continue farming smaller parcels of land. Muyiisa was left with three hectares (7.5 acres).
The palm oil project is being carried out by Oil Palm Uganda, a subsidiary of local food producer Bidco Uganda. Bidco in turn is a joint venture between global palm oil giant Wilmar International -- backed by several European banks and financiers -- and other international partners.
It is also supported by the UN's International Fund for Agricultural Development (IFAD), which offers government loans at subsidised interest rates to set up plantations.
- 'Total robbery' -
Campaigners say the Kalangala case highlights a growing conflict over land rights and ownership in Africa between those who hold the legal deeds and the generations of smallholders who occupy and invest in farmland, potentially earning themselves squatters' rights to remain.
"It is happening in Liberia, Nigeria, Tanzania," said environmental campaigner David Kureeba from Friends of the Earth in Uganda, which is supporting the farmers' legal challenge.
"Expansion of palm oil will lead to food insecurity, human rights violations, environmental degradation and climate change," he argued.
Friends of the Earth this month called for Wilmar to immediately halt its palm oil development plans in Nigeria, which they describe as a "key frontier country" for palm oil expansion leading to "conflict".
Muyiisa, one of over 100 farmers in Uganda who lost their farms, are hoping the court will order the land to be handed back, along with "fair compensation" for damages.
They claim they were kicked off the land without warning and the compensation they got was derisory.
Muyiisa's mother-in-law, Magdalena Nakamya, a 64-year-old widow with eight children, depended on a three-hectare (seven acre) plot growing cassava and potatoes, earning over 250 dollars (180 euros) a month.
"Then they came and measured up, and the next I heard there was digging," said Nakamya, describing the day the bulldozers arrived. "Now I'm making very little money."
Kalangala island in the vast freshwater Lake Victoria appears idyllic, but Bidco -- which launched the ambitious Oil Palm Uganda Limited (OPUL) development in 2004, and by the end of 2012 had been given 7,700 hectares of land (17 acres) by the government -- says it was once at the bottom of the pile for economic development.
The food producer dismisses claims it has caused harm, saying the palm oil farm has instead boosted development on the island.
Bidco boasts Kalangala now is among the top 10 developed districts in the east African country, after "working harmoniously and closely with the community" on the joint public-private partnership.
Wilmar said in a statement that the court had ordered mediation, pointing out the company had played no role in buying the land.
"We are disappointed that our efforts to engage with the stakeholders concerned, that is the alleged affected communities and NGO involved, were not reciprocated," the company said.
But for Muyiisa, the case is clear.
"In the end some were scared and took anything offered," said Muyiisa, claiming some farmers were paid as little as $16, others just $33. "It wasn't much. Some were offered really poor money and refused it because they thought 'this is total robbery'."
Read more: http://www.businessinsider.com/afp-ugandas-farmers-battle-palm-oil-goliaths-for-land-2015-7#ixzz3hE0Dfp3V
Labels: GLOBALISATION, LAND REFORM, UGANDA
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COMMENT - No one apparently anticipated this, however by selling assets owned by the Zambian state to the Libyan state under the guise of Privatisation, because the private sector can run businesses sooo much better than the state can, the Libyan state ended up in the hands of islamist coup plotters. And now the Zambian government has to honor agreements made with the illegal and atrocious government of Libya, or what's left of Libya? Privatisation = Corruption. You cannot get rid of corruption, without ending these intransparant trade deals and eurobond loans.
(ZAMBIAN POST, FT) Libya firm sues Zambia over Lap GreenN assets By Financial Times | Updated: 28 Jul,2015 ,08:22:25 | 699 Views
The
Libyan Investment Authority has launched legal action against four African states, including Zambia, alleging that they
took advantage of Libya’s political turmoil to nationalise assets belonging to the $66bn sovereign wealth fund.
Hassan Bouhadi, the LIA’s chairman who was appointed by the internationally recognised Tobruk government in October, said the legal action related to technology assets in R
wanda, Zambia, Chad and Niger.
“There are some individuals every day that are trying to apply false claims against the assets of the LIA and we have a few incidents where some countries have nationalised some of our assets,” Bouhadi alleged.
The
$66bn fund was created in
2006 by
Colonel Muammer Gaddafi to invest the proceeds of Libya’s vast oil wealth, but since 2011, its assets have been frozen under international law.
In 2014, it launched two separate lawsuits against Goldman Sachs and Société Générale in London’s High Court over controversial trades.
Both banks deny any wrongdoing.
Bouhadi, a former GE and Bechtel executive, who grew up in Libya but was educated at London’s University College, said the LIA was “determined” to “regain what was squandered from the Libyan people”.
He also hopes that the lawsuits may “shed some light into some practices” within the wider banking industry.
However, the success of its high stakes litigation was thrown into serious doubt this year because of the rival factions in Libya’s bitter civil war.
Four years after the fall of Muammer Gaddafi, the country has two rival governments battling for control and is split between Islamists in Tripoli with the internationally recognised government based in Tobruk.
Each government has appointed officials at state agencies including the National Oil Corporation and the LIA itself. Bouhadi was appointed by the Tobruk government, but Tripoli-based Abdulmagid Breish also claims to be LIA chairman - which Bouhadi’s team fiercely dispute.
Breish says he was appointed as chairman of the LIA in June 2013 when the country had one government, but agreed to step aside a year later when a political isolation law was passed prohibiting Gaddafi-era officials from taking part in politics. He appealed on the grounds that the isolation law did not apply to him, and in April was reinstated by the Libyan Court of Appeal.
That month Libya’s deepening political turmoil led to the disbanding of the LIA’s litigation committee, and its longstanding law firm Enyo which had been working on the lawsuits against Goldman Sachs and SocGen, stepped down.
The confusion surrounding the LIA led one High Court judge to declare that the litigation was in a “state of chaos”. Even Mr Justice Flaux, the High Court judge, noted drily that there is “what might be colloquially described as a dog’s breakfast on the claimant’s side of the fence” and “no doubt that suits the defendants extremely well”.
Now, the litigation is firmly back on track after the lawyers of both Bouhadi and Breish jointly asked the High Court this month to appoint BDO, the professional services firm, as a receiver and litigation manager by the High Court. In future, BDO will handle the litigation, with Enyo acting as lawyers.
“These are assets of the Libyan people and we are entrusted with safeguarding these assets. It’s not a wish. It’s a duty that we need to continue,” says Mr Bouhadi.
His resolve is shared by Breish, who says the receiver’s appointment was the “best option” available. “We reached a point where the two pieces of litigation were hanging in limbo and at great risk,” Breish said.
Yet whoever is in charge at the LIA is not able to touch the assets directly until the sanctions are lifted. In 2012, the LIA had the opportunity to unfreeze the assets but decided against it until there was a more stable political process.
However, Bouhadi would like to apply to the UN and EU to be allowed to manage more efficiently the cash generated from dividends and matured bonds.
When sanctions are lifted, Bouhadi wants the LIA to play a greater role in liberalising the Libyan economy and in helping business start-ups. Another objective is to demystify the LIA for ordinary Libyans who, Bouhadi says, viewed the wealth fund as opaque and “a mystery” during the Gaddafi era.
He says: “The Libyan people are all the time asking: ‘What is it? What is it for the Libyans? What is the LIA doing for the Libyans? What are the tangible benefits for the Libyans?’”.
But the LIA knows that if it is successful in clawing back more than $2bn from Goldman Sachs and SocGen and through other lawsuits, ordinary Libyans should not need to ask that question for much longer.
- See more at: http://www.postzambia.com/news.php?id=10032#sthash.PGCFkT9g.dpuf
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COMMENT - There would be no debt at all if the government simply collected stiff Windfall Taxes from the mines. The debt is doubling, the currency is under pressure instead of increasing because of all the value flowing into the Zambian economy out of the mining sector.
Who is the lunatic now, Finance Minister Chikwanda?
Zambia’s future bleak due to incessant govt borrowing - Haabazoka By Misheck Wangwe and Stuart Lisulo | Updated: 26 Jul,2015 ,11:22:25
THE future of Zambia is bleak looking at the incessant borrowing being made by the PF government, says Copperbelt-based economist Dr Lubinda Haabazoka.
The Zambian government on Thursday issued a US$1.25 billion Eurobond, the highest ever, to be repaid in 10 years.
The facility, which was over-subscribed by US$500 million, is the third that Zambia has issued under the PF regime, at 9.37 per cent interest annually.
But Dr Haabazoka, who is also a senior lecturer of business studies at the Copperbelt University, said looking at the expenditure by allocation, much of the borrowed money might even go to consumption.
“No country in the history of economic development has ever developed on borrowed funds. One might argue that governments issue treasury bonds to develop their economies but the type of borrowing that we have seen is unprecedented. In 2011, Zambia only owed US$1.2 billion in foreign debt and now it owes more than US$7 billion. The rate at which we are acquiring debt is very high,” he said.
Dr Haabazoka said what was more worrying was that the sources of income were narrowing and the country’s economy was being run on borrowed funds.
He said the government could have cut down unnecessary expenditure such as scaling down the size of government and doing away with projects of low priority.
Dr Haabazoka said thinking that borrowed money was the only source of the national budget or running government was a misplaced ideology.
“This year is going to be the worst economically, after 15 years, because of the huge budget deficit due to lack of proper planning on the way government is supposed to be run. Look at the energy crisis! It will cost businesses because Zesco and government have recorded huge losses in terms of missed revenues and opportunities. Look at the fuel sector! There are huge losses; Indeni has shut and businesses that depend on generators to backup their energy sources have huge challenges to operate. Economically, our performance is dismal as a nation,” Dr Haazoka said.
He said the state of the economy was making it extremely difficult to operate smaller businesses.
“My advice to finance minister Alexander Chikwanda is that he must make this loan his final for the next two years. Those working in government must help in coming up with a strategy on how revenue collection could be improved without burdening the already overburdened labour force and formal sector,” Dr Haabazoka said.
He said the proceeds from the Eurobond were not likely to benefit Zambia’s economy owing to the massive externalisation of financial resources in the construction sector among foreign contractors.
“I see a lot of externalisation of resources because most contractors that are going to work on these infrastructure developments are Chinese and other foreign nationals so we are basically borrowing for foreign economic participants,” Dr Haabazoka added.
He also said the government’s intention to address the widening budget deficit, which is projected to soar to around K20 billion from K8.5 billion by accumulating new debt, will actually widen it even further next year.
“In trying to solve a budget deficit by borrowing, we are actually creating a wider deficit for the next year so basically, we are not solving anything! The easiest way to solve a budget deficit is to reduce unnecessary expenditure. You have to prioritise which sectors need money most and which ones can wait for the future,” said Dr Haabazoka.
- See more at: http://www.postzambia.com/news.php?id=9995#sthash.QdS8Zj5Q.dpuf
Labels: ALEXANDER CHIKWANDA, DEBT, EUROBOND, LUBINDA HAABAZOKA, NEOLIBERALISM, PF, WINDFALL TAX
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