Dictatorship and Neo-Liberalism: The Tunisian People's Uprising
by Mahdi Darius Nazemroaya
Global Research, January 19, 2011
December 2010 saw the beginning of a milestone in the Arab World. Protests in Tunisia started because of a lack of freedom, inflation, unemployment, and a decline in wages. They could lead to a new model in the Arab World.
The imposed leaders of the Arab World have taken notice of the Tunisian people's uprising, which hereto is not a full revolution.
The popular uprising in Tunisia has sent cold shivers up the spines of Arab rulers and made them fear for the continuation of their own unpopular reigns. Remnants of the old regime are also working to incorporate themselves into the formation of a new government.
An Arab Uprising Against the Hand-in-Hand Couple of Dictatorship and Neo-Liberalism
The Tunisian people's uprising is in part an answer against the vicious police state in Tunisia run by the dictator Zine Al-Abidine Bin Ali. In part, the Tunisian uprising is also an answer to the hideous neo-liberal model of economic development that was imposed by Bin Ali in Tunisia. In this regard, the U.S. and the E.U. were the primary benefactors of the harsh economic measures imposed in Tunisia by Bin Ali.
Up until 2011, Tunisia has consistently been paraded and touted as an ideal state and as a model of success and development by the U.S., the E.U., the World Bank, and the International Monetary Fund, amongst others. Never once have the human right violations, the murders, and the repression in Tunisia been criticized by any of these bodies or their officials.
Up until after Bin Ali fled (January 14, 2010), the mainstream media in North America, Western Europe, Australia, and the Arab World have mentioned nothing about the brutal repression in Tunisia. Inversely, the mainstream media has white-washed most of the Bin Ali regime's crimes and instead talked about Tunisia as a success story. The Guardian, after Bin Ali ran away to Saudi Arabia from Tunisia, gave a overview of the type of repression Bin Ali directed against Tunisians:
Confusion reigned. For the first time in the Arab world, a people had forced out a leader by spontaneously and peacefully taking to the street. But although Zine al-Abedine Ben Ali has fled, the diehards of his brutal police force have not. During the day random yellow taxi-loads of militia loyal to the ousted leader had careered through the capital and some suburbs, firing randomly into the air. Armed gangs broke into homes and ransacked them, or fired shots in the street.
In the early morning, after the curfew that shuts down Tunis at night, some residents ventured out for coffee at the few cafes that were open, often in the shadow of tanks positioned on intersections. Later, tension ran high. By lunchtime, one hospital morgue in Tunis had registered 13 dead, including five police officers. "This is being done by Ben Ali's old torturers, they have arms, they want to create chaos," said an activist from one opposition party.
In residential areas across the country, locals formed vigilante groups to defend themselves against the gangs they feared were led by Ben Ali's police. In La Marsa, a middle-class suburb to the north, streets were blockaded by old bits of broken doors, plant pots, water cans, bricks and paving slabs, to stop cars speeding through for drive-by shootings or houses being ransacked. Omar, 18, a well-dressed sixth-former who wanted to go to art college, had been standing guard until 3am as part of a hastily-formed group. "There were 30 of us, including my schoolfriends and my dad. We armed ourselves with sticks and whatever we could find, and wore white armbands so the army knew who we were." As he stood talking outside a smart shopping centre protected by a tank, a soldier warned him to move, as there had been reports of a taxi marauding through the area containing gunmen firing from its windows.
"We'll never forgive Ben Ali for unleashing his militia on the country," said one elderly lady. "More than the corruption of his regime, this is what we will never, ever forgive him for."
Meanwhile, the full horror of repression over four weeks of demonstrations is beginning to emerge. Human rights groups estimate at least 150-200 deaths since 17 December. In random roundups in poor, rural areas youths were shot in the head and dumped far from home so bodies could not be identified. Police also raped women in their houses in poor neighbourhoods in and around Kasserine in the rural interior.
Sihem Bensedrine, head of the National Council for Civil Liberties, said: "These were random, a sort of reprisal against the people. In poor areas, women who had nothing to do with anything, were raped in front of their families. Guns held back the men; the women were raped in front of them." A handful of cases were reported in Kasserine and Thala last Monday. Rape was often used as a torture technique under the regime; opposition women report they were raped in the basement of the interior ministry, as were men, too.
Rights lawyers were also gathering information on those murdered and dumped far from their villages, thrown into cemetery grounds, or offloaded at the side of the road or outside hospitals. These shootings were believed to have taken place in the past ten days. "Lots of these bodies are yet to be identified; they were purposely dumped far from their homes. Families think their young ones have been arrested. They don't know they are never coming back," said Bensedrine, who herself had been beaten and forced into exile before returning in recent days. You have to understand that under Ben Ali, it was a regime of torture, with beating, harassment and intimidation but not necessarily mass killing. The past four weeks has been different; it's a massacre, it's something else."
Ahlem Belhadj, a psychiatrist and women's rights activist, said people felt robbed of the joy of Ben Ali's departure by the chaos that had ensued. She said the spontaneous protest movement – and the unemployed undergraduate who started it by setting himself alight – had showed the desperation of a population who felt repressed, humiliated, with no chance of jobs or prospects after 23 years of despotism.
"We had become a nation of hunger strikers; there was no other political or social means of dissent.
"Then, for people to set themselves alight, was extreme: it showed there was such a fear of the 'other', the regime, that people could only turn the aggression on themselves. It was self-destruction as a way of fighting."
Khelil Ezzaouia, an orthopaedic surgeon and trade union figure tipped for a post in the interim government, hoped the chaos would be brought under control, and that commissions set up into rights abuses, political reform and corruption. He said: "There will be a temporary transition government to show the page of Ben Ali has been closed, and to send out a strong signal to reassure the population."
On national state radio, a tool of regime power until days ago, DJs spoke freely for the first time, but had to regret that the joy of a dictator's departure had been tempered by a fear of the militia attacks.
"Ours is a difficult happiness," sighed one music show presenter, before putting on another 1960s resistance song. [1]
Why the Silence from the U.S., France, the E.U., and the Arab Dictators?
While the U.S. and its allies were also quick to label and tout the Cedar Revolution in Lebanon, the Orange Revolution in Ukraine, the Rose Revolution in Georgia, the Tulip Revolution in Kyrgyzstan, the Twitter Revolution in Moldova, and the Green Revolution in Iran, they did not do the same in regards to the protests of the Tunisian people.
When there was election turmoil in Venezuela and in Iran, the U.S. and the E.U. were quick to make declarations about democracy and to criticize Caracas and Tehran. Yet, the same standards were not applied in regards to the 2009 Tunisian elections and the protests that started in December 2010 in Tunisia.
The French, the U.S., the House of Saud, and Israel have all been instrumental in sustaining the Bin Ali dictatorship. Bin Ali in reality served the interests of the U.S. and its allies. American and French "advisors" would call the shots for Tunis, especially in its financial, intelligence, security, and military fields. The U.S., France, and the E.U. also had no problems with the deeply rooted levels of corruption and nepotism in Tunis under Bin Ali.
The American and French governments, as well as Israel, have been complicit in the repression of the Tunisian people and the repression of the Tunisian demands for freedom. This is why there is a groundswell of Tunisian anger towards the U.S., France, and Israel. Protests outside of the American and French embassies are a demonstration of the awareness of the Tunisian people about the U.S. and French role in oppressing their freedom.
The White House and the U.S. State Department only made statements to the benefit of Bin Ali. Hillary Clinton, the U.S. Secretary of State, told Al-Arabiya News Channel that the U.S. government was "not taking sides" in regards to Bin Ali and his brutal repression of unarmed civilian protesters demanding freedom. The U.S. merely waited until Bin Ali fled to even acknowledge the Tunisian people's rights. Doing quite the opposite over the years, the U.S. government and its officials have continuously made statements of support for Bin Ali, as is customary of their support of any dictators who submit to U.S. economic interests.
The House of Saud, which controls a substantial amount of Arabic media through personal ownership or family ties, would use all its influence to discredit the Tunisian people's protests in an effort to manipulate Arab public opinion in favour of the dictatorial regime of Bin Ali. Later, when it was clear that there was no hope for the continuation of Bin Ali's rule, the House of Saud would invite the Tunisian dictator to Saudi Arabia.
The Old Colonial Master: Paris offers to help Bin Ali Crush the Tunisian People
Before it became obvious that the Bin Ali regime was going to collapse, France wanted to help crush the Tunisian people's demands for freedom. The French Defence Minister, Michèle Alliot-Marie, lied through her teeth about the offer days later.
The Guardian chronicles this:
The French foreign minister, Michèle Alliot-Marie, today defended her controversial offer to help Tunisia's deposed president restore order days before he was ousted.
Alliot-Marie had been summoned to explain her remarks, made last week, to the Assemblée Nationale's foreign affairs commission.
The cabinet minister had offered to share the expertise of French security forces "recognised throughout the world" to help control the uprising.
Since Zine al-Abidine Ben Ali fled Tunisia on Friday, France has attempted to distance itself from the former leader, refusing him exile and ordering a block on his family's property and money held in France.
Today, Alliot-Marie fended off opposition calls for her resignation and told parliamentarians that France, along with other countries, had "not seen events coming".
"Let's face it, we were all of us – politicians, diplomats, researchers, journalists – taken by surprise by the jasmine revolution," Alliot-Marie said.
She said her offer had been "misrepresented" and had been aimed at helping the Tunisian people, not propping up repression.
"I'd spent the night in an aeroplane, and it's possible I did not express myself well," she said. "I began to doubt myself, but afterwards I re-read my proposal to see that it was what actually what I thought and not what was being interpreted by certain people."
She added that she was "scandalised" by how her comments had been distorted.
Earlier, it had appeared that Alliot-Marie was being isolated by the Élysée Palace after an adviser of the president, Nicolas Sarkozy, suggested she was expressing "her own analysis of the situation". [2]
In reality, Paris did secretly send aid to Bin Ali. The U.S. and Israel also sent riot gear and arms.
The Mossad and Israel in Tunisia
In regards to the interests of Tel Aviv, Tunisia has been an open zone for Israeli intelligence work, killings, and data collection against Palestinian and Arab activists. Israel has helped in the repression of democratic dissent in Tunisia to keep Bin Ali in power. It has been a part of Israel's strategic initiative to prevent any democratic states from emerging in the Arab World. The same can be said about the U.S. and the E.U. in regards to preventing the emergence of real Arab democracy. The Tunisian uprising would actually force the Israeli government to make an "emergency rescue" of so-called Israeli "visitors" in Tunisia:
A group of 20 Israelis was rescued Saturday evening from Tunisia, where a violent uprising has succeeded in overturning the government.
The complicated mission was orchestrated by a number of Israeli authorities, including the Foreign Ministry. The tourists were first transferred to a third country, from where are to continue to Israel by plane. [3]
These so-called Israeli "visitors" that the Israeli government would evacuate from Tunisia were Mossad agents.
Tunisia still in the Cross-Hairs
The neo-liberal model has brought poverty and despair to Tunisia. These facts have been ignored by the U.S., France, and those that commended and lauded Tunisian economic measures. Once again, the U.S. and French governments have also exposed their contempt's for genuine democracy. Any talk by Paris and the U.S. about respecting and caring for the Tunisian people is merely two-face bravado.
Calls for democracy and fair elections were only made by the U.S. and France after Bin Ali fled Tunisia. If there were any sincerity in the U.S. and French calls for Arab self-determination then they would extend these calls to Saudi Arabia, the United Arab Emirates, Bahrain, Morocco, Egypt, Libya, Jordon, and Yemen. Beyond the Arab World, they would extend these calls to countries like NATO-garrisoned Afghanistan.
The mainstream media is also just starting to pick up on the events in Tunisia, but with a narrow focus that ignores the work of Bin Ali and his cronies as economic hitmen for the E.U. and America. Despite the fact that it has no connection to WikiLeaks and the fact that it is not hereto a full-blown revolution, the revolt in Tunisia has also begun to be dubbed as a "WikiLeaks Revolution."
Tunisia is not free yet. The Tunisian national unity government is dominated and includes many of the same characters from Bin Ali's regime. The uprising has not turned into a revolution yet.
The U.S., France, the E.U., the House of Saud, the Arab dictators, and Israel are all conspiring to ensure that a new Tunisian government that will serve their interests will take the mantle of the old Tunisian regime. The structure that kept Bin Ali in place still exists and the foreign interests that supported his rule still hold influence in Tunis. They may manage to retain power.
America and France have not forfeited their economic interests in Tunisia. Nor has the neo-liberal model been declared null and void in Tunis. In a bid to maintain the continuation of French contracts in Tunisia, the French government did not offer to Bin Ali sanctuary in France, despite the fact that he was a loyal ally of Paris until the end of his reign.
Mahdi Darius Nazemroaya is a Research Associate of the Centre for Research on Globalization (CRG).
NOTES
[1] Angelique Chrisafis, "Confusion, fear and horror in Tunisia as old regime's militia carries on the fight," The Guardian (U.K.), January 16, 2011.
[2] Kim Willsher, "French minister defends offer of security forces to Tunisia," The Guardian (U.K.), January 18, 2011.
[3] Ronen Medzini, "20 Israelisrescued from Tunisia, " Yedioth Ahronoth, January 15, 2011.
Global Research Articles by Mahdi Darius Nazemroaya
Labels: IMF, NEOLIBERALISM, WASHINGTON CONSENSUS
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Tunisia and the IMF's Diktats: How Macro-Economic Policy Triggers Worldwide Poverty and Unemployment
by Michel Chossudovsky
Global Research, January 20, 2011
General Zine el Abidine Ben Ali , the defunct and deposed president of Tunisia is heralded by the Western media, in chorus, as a dictator. The Tunisian protest movement is casually described as the consequence of an undemocratic and authoritarian regime, which defies the norms of the "international community".
But Ben Ali was not a "dictator". Dictators decide and dictate. Ben Ali was a servant of Western economic interests, a faithful political puppet who obeyed orders, with the active support of the international community.
Foreign interference in Tunisia's domestic affairs is not mentioned in the media reports. The food price hikes were not "dictated" by the Ben Ali government. They were imposed by Wall Street and the IMF.
The role of Ben Ali's government was to enforce the IMF's deadly economic medicine, which over a period of more than twenty years has served to destabilize the national economy and impoverish the Tunisian population.
Ben Ali as head of state did not decide on anything of substance. National sovereignty was foregone. In 1987, at the height of the debt crisis, the left nationalist government of Habib Bourguiba was replaced by a new regime, firmly committed to "free market" reforms.
Macroeconomic management under the helm of the IMF was in the hands of Tunisia's external creditors. Over the last 23 years, economic and social policy in Tunisia has been dictated by the Washington Consensus.
Ben Ali stayed in power because his government obeyed and effectively enforced the diktats of the IMF, while serving the interests of both the US and the European Union.
This pattern has occurred in numerous countries.
Continuity of the IMF's deadly reforms requires "regime replacement". The installation of a political puppet ensures the enforcement of the neoliberal agenda while also creating conditions for the eventual demise of a corrupt and unpopular government which has been draw upon to impoverish an entire population.
The Protest Movement
It is not Wall Street and the Washington based international financial institutions which are the direct target of the protest movement. The social implosion was directed against a government rather than against the interference of foreign powers in the conduct of government policy.
At the outset, the protests were not the result of an organized political movement directed against the imposition of the neoliberal reforms.
Moreover, there are indications that the protest movement was manipulated with a view to creating social chaos as well as ensuring political continuity. There are unconfirmed reports of armed militias conducting acts of repression and intimidation in major urban areas.
The important question is how will the crisis evolve? How will the broader issue of foreign interference be addressed by the Tunisian people?
From the standpoint of both Washington and Brussels, an unpopular authoritarian regime is slated to be replaced by a new puppet government. Elections are envisaged under the supervision of the so-called international community, in which case candidates would be pre-selected and approved.
Were this process of regime change to be carried out on behalf of foreign interests, the new proxy government would no doubt ensure the continuity of the neoliberal policy agenda which has served to impoverish the Tunisian population.
The interim government led by acting president Fouad Mebazza is currently in an impasse, with fierce opposition emanating from the trade union movement (UGTT). Mebazza has promised to "break with past", without however specifying whether this signifies a repeal of the neoliberal economic reforms.
Historical Background
The media in chorus have presented the crisis in Tunisia as an issue of domestic politics, without a historical insight. The presumption is that with the removal of "the dictator" and the instatement of a duly elected government, the social crisis will eventually be resolved.
The first "bread riots" in Tunisia date back to 1984. The January 1984 protest movement was motivated by a 100 percent hike in the price of bread. This hike had been demanded by the IMF under Tunisia's structural adjustment program (SAP). The elimination of food subsidies was a de facto condition of the loan agreement with the IMF.
President Habib Bourguiba, who played a historical role in liberating his country from French colonialism, declared a state of emergency in response to the riots:
While gunfire sounded, police and army troops in Jeeps and armored personnel carriers fanned out through the city to quell the "bread riot." The show of force finally brought an uneasy calm, but only after more than 50 demonstrators and bystanders were killed. Then, in a dramatic five-minute radio and television broadcast, Bourguiba announced that he was reversing the price hike. (Tunisia: Bourguiba Lets Them Eat Bread - TIME, January 1984)
Following president Bourguiba's retraction, the hike in the price of bread was reversed. Bourguiba fired his Minister of the Interior and refused to abide by the demands of the Washington Consensus.
The neoliberal agenda had nonetheless been instated, leading to rampant inflation and mass unemployment. Three years later, Bourguiba and his government were removed in a bloodless coup d'Etat, "on the grounds of incompetence", leading to the instatement of General Zine el Abidine Ben Ali as president in November 1987. This coup was not directed against Bourguiba, it was largely intended to permanently dismantle the nationalist political structure initially established in the mid-1950s, while also privatizing State assets.
The military coup not only marked the demise of post-colonial nationalism which had been led by Bourguiba, it also contributed to weakening the role of France. The Ben Ali government became firmly aligned with Washington rather than Paris.
Barely a few months following Ben Ali's November 1987 instatement as the country's president, a major agreement was signed with the IMF. An agreement had also been reached with Brussels pertaining to the establishment of a free trade regime with the EU. A massive privatization program under the supervision of the IMF-World Bank was also launched. With hourly wages of the order of Euro 0.75 an hour, Tunisia had also become a cheap labor haven for the European Union.
Who is the dictator?
A review of IMF documents suggests that from Ben Ali's inauguration in 1987 to the present, his government had faithfully abided by IMF-World Bank conditionalities, including the firing of public sector workers, the elimination of price controls over essential consumer goods and the implementation of a sweeping privatization program. The lifting of trade barriers ordered by the World Bank was conducive to triggering a wave of bankruptcies.
Following these dislocations of the national economy, cash remittances from Tunisian workers in the European Union became an increasingly important source of the foreign exchange earnings.
There are some 650,000 Tunisians living overseas. Total workers' remittances in 2010 were of the order of US$1.960 billion, an increase of 57 percent in relation to 2003. A large share of these remittances in foreign exchange will be used to service the country's external debt.
The Speculative Hike in World Food Prices
In September 2010, an understanding was reached between Tunis and the IMF, which recommended the removal of remaining subsidies as a means to achieving fiscal balance:
Fiscal prudence remains an overarching priority for the [Tunisian] authorities, who also see the need for maintaining a supportive fiscal policy in 2010 in the current international environment. Efforts in the last decade to bring down the public debt ratio significantly should not be jeopardized by a too lax fiscal policy. The authorities are committed to firmly control current expenditure, including subsidies,... IMF Tunisia: 2010 Article IV Consultation - Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Tunisia http://www.imf.org/external/pubs/ft/scr/2010/cr10282.pdf
It is worth noting that the IMF's insistence on fiscal austerity and the removal of subsidies coincided chronologically with a renewed upsurge in staple food prices on the London, New York and Chicago commodity exchanges. These price hikes are in large part the result of speculative trade by major financial and corporate agribusiness interests.
These hikes in food prices, which are the result of outright manipulation (rather than scarcity) have served to impoverish people Worldwide. The surge in food prices constitutes a new phase of the process of global impoverishment.
"The media has casually misled public opinion on the causes of these price hikes, focusing almost exclusively on issues of costs of production, climate and other factors which result in reduced supply and which might contribute to boosting the price of food staples. While these factors may come into play, they are of limited relevance in explaining the impressive and dramatic surge in commodity prices.
Spiralling food prices are in large part the result of market manipulation. They are largely attributable to speculative trade on the commodity markets. Grain prices are boosted artificially by large scale speculative operations on the New York and Chicago mercantile exchanges. ...
Speculative trade in wheat, rice or corn, can occur without the occurrence of real commodity transactions. The institutions speculating in the grain market are not necessarily involved in the actual selling or delivery of grain.
The transactions may use commodity index funds which are bets on the general upward or downward movement of commodity prices. A "put option" is a bet that the price will go down, a "call option" is a bet that the price will go up. Through concerted manipulation, institutional traders and financial institutions make the price go up and then place their bets on an upward movement in the price of a particular commodity.
Speculation generates market volatility. In turn, the resulting instability encourages further speculative activity.
Profits are made when the price goes up. Conversely, if the speculator is short-selling the market, money will be made when the price collapses.
This recent speculative surge in food prices has been conducive to a Worldwide process of famine formation on an unprecedented scale." (Michel Chossudovsky, Global Famine, Global Research, May 2, 2008, http://www.globalresearch.ca/index.php?context=va&aid=8877)
From 2006 to 2008, there was a dramatic surge in the prices of all major food staples including rice, wheat and corn. The price of rice tripled over a five year period, from approximately 600$ a ton in 2003 to more than 1800$ a ton in May 2008.
(Michel Chossudovsky, http://www.globalresearch.ca/index.php?context=va&aid=9191, For further details, see Michel Chossudovsky, Chapter 7 Global Poverty and the Economic Crisis in Michel Chossudovsky and Andrew Gavin Marshall, editors, The Global Economic Crisis, The Great Depression of the XXI Century, Global Research, Montreal 2010, http://globalresearch.ca/index.php?context=va&aid=20425 )
The recent surge in the price of grain staples is characterized by a 32 percent jump in the FAO's composite food price index recorded in the second half of 2010.
"Soaring prices of sugar, grain and oilseed drove world food prices to a record in December, surpassing the levels of 2008 when the cost of food sparked riots around the World, and prompting warnings of prices being in "danger territory".
An index compiled monthly by the United Nations surpassed its previous monthly high – June 2008 – in December to reach the highest level since records began in 1990. Published by the Rome-based Food and Agriculture Organisation (FAO), the index tracks the prices of a basket of cereals, oilseeds, dairy, meat and sugar, and has risen for six consecutive months." (Jill Treanor, World food prices enter 'danger territory' to reach record high, The Guardian, January 5, 2011)
Bitter irony: Against a background of rising food prices, the IMF recommends the removal of the subsidies with a view to reaching the goal of fiscal austerity.
Manipulating the Data on Poverty and Unemployment
An atmosphere of social despair prevails, people's lives are destroyed.
While, the protest movement in Tunisia is visibly the direct result of a process mass impoverishment, the World Bank contends that the levels of poverty have been reduced as a result of the free market reforms adopted by the Ben Ali government.
According to the World Bank's country report, the Tunisian government (with the support of the Bretton Woods institutions) was instrumental in reducing the levels of poverty to 7 percent (substantially lower than that recorded in the US and the EU).
Tunisia has made remarkable progress on equitable growth, fighting poverty and achieving good social indicators. It has sustained an average 5 percent growth rate over the past 20 years with a steady increase in per capita income and a corresponding increase in the welfare of its population that is underscored by a poverty level of 7% that is amongst the lowest in the region.
The steady increase in per capita income has been the main engine for poverty reduction. ... Rural roads have been particularly important in helping the rural poor connect to urban markets and services. Housing programs improved the living conditions of the poor and also freed up income and savings to spend on food and non-food items with resulting positive impacts on poverty alleviation. Food subsidies, which have been targeted to the poor, albeit not optimally, have also helped the urban poor. (World Bank Tunisia - Country Brief)
These poverty figures, not to mention the underlying economic and social "analysis", are outright fabrications. They present the free market as the engine of poverty alleviation. The World Bank's analytical framework is used to justify a process of "economic repression", which has been applied Worldwide in more than 150 developing countries.
With a mere 7 percent of the population living in poverty (as suggested by the World Bank "estimate") and 93 percent of the population meeting basic needs in terms of food, housing, health and education, there would be no social crisis in Tunisia.
The World Bank is actively involved in cooking the data and distorting the social plight of the Tunisian population. The official rate of unemployment is 14 percent, the actual level of unemployment is much higher. Recorded youth unemployment is of the order of 30 percent. Social services, including health and education have collapsed under the brunt of the IMF-World Bank economic austerity measures.
Tunisia and the World
What is happening in Tunisia is part of a global economic process which destroys people's lives through the deliberate manipulation of market forces.
More generally, "the harsh economic and social realities underlying IMF intervention are soaring food prices, local-level famines, massive lay-offs of urban workers and civil servants and the destruction of social programs. Internal purchasing power has collapsed, health clinics and schools have been closed down, hundreds of millions of children have been denied the right to primary education." (Michel Chossudovsky, Global Famine, op cit.)
The Globalization of Poverty and the New World Order
by Michel Chossudovsky
In this new and expanded edition of Chossudovsky’s international best-seller, the author outlines the contours of a New World Order which feeds on human poverty and the destruction of the environment, generates social apartheid, encourages racism and ethnic strife and undermines the rights of women. The result as his detailed examples from all parts of the world show so convincingly, is a globalization of poverty.
This book is a skilful combination of lucid explanation and cogently argued critique of the fundamental directions in which our world is moving financially and economically.
In this new enlarged edition –which includes ten new chapters and a new introduction-- the author reviews the causes and consequences of famine in Sub-Saharan Africa, the dramatic meltdown of financial markets, the demise of State social programs and the devastation resulting from corporate downsizing and trade liberalisation.
Michel Chossudovsky is Professor of Economics (emeritus) at the University of Ottawa and Director of the Centre for Research on Globalization (CRG), which hosts the critically acclaimed website www.globalresearch.ca . He is a contributor to the Encyclopedia Britannica. His writings have been translated into more than 20 languages.
Labels: IMF, NEOLIBERALISM, WASHINGTON CONSENSUS, World Bank
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Soros’ caveat on free markets
Posted By Joram Nyathi on 25 Apr, 2009 at 6:52 am
“IF we increase our production capacity from the current 7% to about 25% or increase direct revenue to US$60 million from the current US$20 million, our workers would receive proper salaries.”
Finance Minister Tendai Biti made these comments ahead of a meeting with the IMF and the World Bank in Washington this week. The government is seeking lines of credit to finance its Short-Term Emergency Recovery Programme.
Each time the IMF is mentioned, I recall the old Zimbabwe Congress of Trade Unions (ZCTU) led by Morgan Tsvangirai before it was swallowed up by the MDC. Tsvangirai didn’t stop ESAP, but he tried.
Faced with the prospect of a repeat, you would expect workers to unite and ignite. Not in Zimbabwe, where all civil authority has been ceded to a venal civic society!
The IMF and the World Bank use a template on free markets and are controlled by the same nations which have imposed sanctions on Zimbabwe. The ZCTU should know the implications of IMF prescriptions, so should the CZI, but they opt to hold down their nation for rape.
The IMF/World Bank prescription is simple but it is a fatal dose. To create a conducive environment for investment, beneficiary countries are told: privatise parastatals, remove all price controls and subsidies, devalue the currency, remove trade barriers and cut tax on profits, allow wholesale remittances and free movement of capital, relax labour laws, reverse land reform, stop empowerment policies and forget environmental protection.
After this, the government is supposed to retreat to the national border and leave business alone at the temple of laissez faire — the same capricious goddess currently raining economic fire and brimstone on her worshipping believers in Europe and the US.
For Zimbabwe, it is a full-spectrum surrender of the state to the omnipotent emperor of market forces. This is part of the Washington Consensus. Foreign and domestic firms should be allowed to compete on equal terms.
These are replica demands made of Zimbabwe under the ongoing negotiations between Europe and ACP countries for Economic Partnership Agreements (EPA) beneath the overarching regime of the World Trade Organisation.
EPAs hinge on three principles: reciprocity, rules of origin and most favoured nation status. On the surface, they are aimed at fair, reciprocal trade between the European Union and African, Caribbean and Pacific nations. Under the “rules of origin”, once imported goods enter a country, they can’t be discriminated against to protect local industry, and the “most favoured nation” principle means Zimbabwe does for Germany what it does for Brazil.
The reality of EPAs is, however, different and this is where I thought our labour movement would define its calling. It means if Zimbabwe signs a preferential trade deal on chickens with Brazil because we buy reasonably priced tractors from them, the terms must apply to all WTO members.
Biti says production capacity is at 7%. That means Zimbabwe’s industry cannot compete with Europe which already enjoys technological advances and economies of scale while Zimbabwe has been in reverse gear for the past 20 years and is saddled with obsolete equipment. How do you then raise industrial capacity utilisation to 60% by year-end under STERP when retail shops are flooded with cheaply produced merchandise from Europe? This reduces Zimbabwe to an import economy without generating the foreign currency to do so.
For industry and labour, this means de-industrialisation and loss of jobs on a massive scale. Employment rate is estimated at 10%. What market do you produce for? Why should an industrialist keep paying people who produce goods which he can’t sell? It is a travesty for anybody to pretend that Zimbabwe can achieve a sustainable economic turnaround under IMF terms.
In the blinding euphoria of reengagement with the “international community”, there are already calls for privatisation of public entities. Zimbabwe, it is claimed, would benefit.
Given the current state of most of the parastatals, how does one evaluate them for disposal? I am not even talking about ridiculously-low share prices of most listed firms. How many Zimbabweans have resources at their disposal to bid for any of the companies which the government might offer for sale? Not even the government has resources to purchase shares to warehouse for the poor. This is the equivalent of giving away the family silver for a meal.
An ill-executed disposal of national assets in the name of STERP would be worse than the land reform programme and will benefit only foreign bargain hunters.
There is need for caution and less haste to meet unrealistic election pledges or agenda-driven timelines as is already evident in the new constitutional debate. Deadlines have become of the essence, more important than content.
They say possession is 9/10 of the law. That is what the coalition government should be to Zimbabwe. This is the darkest hour before the dawn. This should be, to quote Winston Churchill at England’s darkest hour in 1940, be our “finest hour” in terms of national redefinition. Zimbabwe needs to speak loudly — it needs fair trade. What it doesn’t need are sanctions or IMF and World Bank enslavement.
To unthinking believers in the god of free markets, George Soros has a sobering caveat. He observed prophetically in a 1997 paper: “Although I have made a fortune in the financial markets, I now fear that the untrammelled intensification of laissez-faire capitalism and the spread of market values into all areas of life is endangering our open and democratic society.”
To those who expect a Utopian Zimbabwe before the lifting of sanctions, Soros warns from the experience of his own “open society” movements in Eastern Europe, set up to undermine the Soviet Union.
With the collapse of communist rule in 1989, says Soros, the “foundations (of civic society) shifted from a subversive task to a constructive one — not an easy thing to do when the believers in an open society are accustomed to subversive activity”.
I fear there are still too many forces against the coalition government crying “wolf!” everyday. Fortunately, some nations have begun to see through this wolf.
Labels: GEORGE SOROS, IMF, JORAM NYATHI, MDC, NEOLIBERALISM, SAP, WASHINGTON CONSENSUS
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