Sunday, October 31, 2010
Friday, October 29, 2010
Bahrain-based Saudi-financed "Islamic" bank Arcapita doing rich business with Israel military
This expose from Electronic Intifada highlights the reality of the shariah compliant finance sector and its complete embarrassment as a challenge to traditional financial structures and realities. Here an "Islamic" Bank is caught funding the Israeli military. An important post that challenges all to call for more transparency with regard to Islamic banking institutions and for a scrutinous review of those scant public records that do exist. Link to article HERE:
This blog reported on 9 October that American Task Force on Palestine (ATFP) Board Member Marwan M. Atalla and his investment firm NEST U.S.A. Inc. are shareholders in Cirrus Design Corporation, an aircraft manufacturing firm which does millions in business with Israeli military contractors closely tied to the Israeli military establishment. (See "Board member of Ziad Asali's ATFP does millions in business with Israeli military firm" )
As the earlier post explains, Cirrus has a long history of working with Israeli companies and recently chose an Israeli military contractor called TAT Technologies to supply $10 million worth of aircraft parts. TAT Technologies is run by Israeli military officers, including a former commander of Israeli occupation forces in southern Lebanon, and its factory is built on the land of the ethnically-cleansed Palestinian village of Yasur.
Since publishing that post, I have received new information from a former employee who is also a current minority shareholder at Cirrus. According to this individual Atalla was an active board member of Cirrus until 2001, but was forced to resign along with other independent board members when another investor, the First Islamic Investment Bank of Bahrain took a majority stake in Cirrus. Atalla and his firm NEST U.S.A. Inc. remain shareholders of Cirrus as of this time, according to NEST's own website.
In 2005, the First Islamic Investment Bank of Bahrain changed its name to Arcapita. Arcapita is financed by investors in Kuwait, Qatar and Saudi Arabia and is well-connected to those countries' ruling families.
The Arcapita website states on its current corporate investments page that it acquired a stake in "Cirrus Design Corporation" in 2001, but does not say how big the stake is. A 2007 report on aviation industry website AVweb, put Arcapita's stake at a controlling 58 percent.
While the AVweb report mentions that Arcapita was seeking to divest from Cirrus, in fact it has become more deeply involved. An April 2009 press release from Cirrus stated that Arcapita had pumped even more money into the company during the global financial crisis.
As an Islamic investment bank, all of Arcapita's investments are screened by its Shariah Supervisory Board which currently includes a religious scholar and former judge from the Supreme Court in Mecca, Saudi Arabia, as well as religious scholars from Pakistan and Bahrain. Such advisory boards are supposed to screen investments to make sure they comply with Islamic banking standards -- typically avoiding interest, or investments in alcohol or pornography.
But for Arcapita, at least, there seems to be nothing un-Islamic about profiting from deals with the Israeli military establishment -- the same military that has slaughtered more than nine thousand Muslims, Christians and others and injured and permanently maimed tens of thousands more in Palestine and Lebanon in the past decade alone in what numerous international investigations have termed war crimes and crimes against humanity.
Needless to say, Arcapita-controlled Cirrus' business with the Israeli military establishment is a gross violation of the Palestinian civil society call for boycott, divestment and sanctions (BDS) on Israel.
Thursday, October 28, 2010
Mar. 17, 1924 - Time covers the Deposal of the final Khaliph
Calif Out
Monday, Mar. 17, 1924
At Angora, capital of Turkey, the Grand National Assembly passed a bill providing for the deposal of the Calif, Abdul Medjid Effendi, and the abolition of the Califate.
At Constantinople, Vali (Governor) Dr. Adran Bey, went to the Dolma Baghche Palace, home of the Calif. He there demanded to see the Calif in the Throne Room. When the Calif arrived, the Vali ordered him to ascend the throne, read the decision of the Grand National Assembly to him, ordered him to descend the throne and pack his things.
One hour later the deposed Calif, his wife, daughter, two members of his harem and his private secretary left the country for Switzerland
After examination of his papers, the Swiss Government gave him permission to stay in the country, provided he would promise to abstain from doing anything that would embarass Switzerland. The ex-Calif was expected to go on to France.
Aside from Turkey, the Moslem world finds itself in Africa, Arabia, Persia, Russia, Afghanistan, India, China. In fact 95% of the 220,000,000 Mahammadans in the world live outside of Turkey.
The Califate, which came into existence in 632 A. D. on the death of Mahammad, is the highest office of the Moslem religion. To some extent, although it cannot be compared to it, the Califate occupied the same position as the Vatican: The Calif (meaning successor, with to the Prophet understood) was the pontiff of Mahammadanism.
Last week the question of setting up a new Califate rapidly absorbed all the Moslem world. The King of Egypt, the Sultan of Morocco,* the Aga Khan of Bombay, all had their hopes of being recognized.
The most serious claimant to the Califate was King Hussein of the Hedjaz. The Arabs of Mesopotamia, Transjordania and the Hedjaz proclaimed King Hussein Calif, a title which the King was pleased to accept. For some time, the Arabs have been agitating to make Hussein Calif, thereby displaying their dislike for the conditions with which the Nationalist Turks surrounded the Califate. It was by no means certain that any of the other Moslem countries would recognize King Hussein as the head of Islam. He is, however, more fitted to the Califate than most other candidates, because the blood of Koreish, tribe to which Mahammad belonged, runs through his veins; this, according to the Sunni Moslems is an indispensable condition to be fulfilled by a Calif. Then, again, the holy cities of Mecca and Medina (the former associated with Mahammad's birth, the latter with his death) are both within the territory of Hedjaz.
Said The Times, London, apropos of the Calif's ouster: "Of all vast changes wrought by the war, the downfall of Habsburgs, Romanoffs and Hohenzollerns, the resurrection of ancient States and the rise of States unknown before, the evolution of novel forms of government and the emergence of new ideas and new feeling among mankind, no single change is more striking to the imagination than is this; and few, perhaps, may prove so important in their ultimate results."
After deposing Sultan Mahammad VI in 1922, the Angora Government elected Abdul Medjid Effendi to the Califate. Now it has deposed him. The meaning of this sudden change of countenance was said to be that the Calif proved himself not pliable enough to the Government; he, therefore, had to go.
One of the surest results of abolishing the Califate in Turkey—and it seems clear that 5% of the Mahammadans could not abolish it for Islam— is that it is certain to reduce Turkey's hitherto predominant position in Islam. If the Islamic world splits, Turkey may not suffer much, owing to her military strength; if it be unified under King Hussein, then Turkey's position in the eyes of other Moslems will indeed be low.
But Turkey just now is turning her head to the West and forgetting the East; in which case, loss of prestige in Islam may not mean so much to her.
Wednesday, October 27, 2010
Thanks to InformationClearingHouse.info
Staff at IslamPolicy.com would like to extend our appreciation to Information Clearing House for publishing our article High Time Progressives Support the Insurgency and End this War on their website. The website receives hundreds of thousands of reads daily and it allows us to see how a predominately non-Muslim audience reacts to our opinions. We encourage any readers of this blog to subscribe to the newsletter HERE and if possible to make a donation or leave a comment on the article link HERE, in support of their willingness to publish the views of a diverse array of writers with a disparity of ideas sometimes perhaps even different than their own.
Tuesday, October 26, 2010
Pursuing an Islamic Metamorphosis
The Muslim world faces a decline similar to that of medieval Europe; a potential rebirth requires a new consensus. Mohamed El-Moctar El-Shinqiti
SOURCE In his book, The Autumn of the Middle Ages, Dutch historian Johan Huizinga describes the decline of the medieval world as a process of "dying and rigidifying of a previously valid store of thought".
The main thesis of Huizinga’s book is that, by the fourteenth and fifteenth centuries, the cultural forms and norms on which medieval Europe was based became overused and exhausted. When any ideal becomes exhausted, it fails to be a source of inspiration; rather it becomes an artificial burden.
From Huizinga’s perspective, the European world of the late middle ages was a world of artificial vanity and self-deception, a ruin of a world that had died a long time before.
I think that the abstract aspect of Huizinga's thesis on cultural forms is enlightening, and can be extended to explain transitional moments in other cultures, including contemporary Islamic culture. The cultural legacy modern Muslims inherited from their ancestors is exhausted, and - with lack of self-criticism - much of this legacy is becoming a burden rather than a source of inspiration.
The Islamic world is going through a deep metamorphosis. The lessons of history from the American and French revolutions show that these kinds of transitive moments are sometimes bloody and painful. At this moment, Muslims need new ideas and ideals that transcend their divisions and heel their wounds.
One of these deep wounds is the conflict between secularists and Islamists, and that is what we will explore here.
State and religion
At the heart of the crisis of Muslim societies today is the lack of consensus about the social contract on which society should be based, especially in terms of an agreed understanding for the relation between religion and state.
Secularism can be seen from an institutional, legal or ideological angle. In the western experience, it is also important to distinguish between the Anglo-Saxon 'soft' secularism which basically means positive neutrality of the state towards religion, and the French 'hard' laïcité that goes beyond neutrality to negative intervention against religion.
Institutional separation between religious and political organisations is not difficult to accept in the Islamic world. It is indeed in compatibility with the Islamic historical experience, where religion was never institutionalised as a political competitor with the state, the way it was in medieval Christianity.
But ideological secularism the French way, and legal secularism that excludes Islam as a source of legislation, will never take root in Islamic culture.
Historical potential
Muslims cannot, however, continue ignoring new developments in the morality of all humanity regarding the religion-state relations. First, the foundation of the modern state is geographical, not faith-based.
Second, the equality of all citizens in political rights is, theoretically at least, unquestionable in any respected modern state. Third, every nation needs to consider the laws and legislation of other nations.
Fortunately for modern Muslims who are deeply rooted in their cultural heritage, there are potentials in their inherited culture that might help. First, Muslim societies have always been open to religious diversity.
The unbroken existence of Christian minorities in the Middle East from the birth of Islam until today is a good illustration of this potential. Second, Islamic law is very flexible and open to perpetual interpretation and adaptation, and it is easy to incorporate most modern laws within the Islamic legal vision.
Three players
A closer look at the conflict over religion and state in the Islamic world reveals the existence of three players who have a stake in the outcome of this conflict. These players are the Muslim majorities, the non-Muslim minorities, and the non-practising Muslims. Each one of these players has its own set of concerns.
The Muslim majorities see Islam as an essential part of inspiration in public life, and they don't want their value system to be compromised. They are also afraid of foreign manipulation of the minority’s case.
Some people among these majorities believe that the issue of secularism is irrelevant. We have no church, they argue, and secularism, by definition, is "the separation between the state and the church".
Some would even go as far as saying that Islam is a secular religion, and we are already secular, because we have no clergy who have a claim on being God's legate on earth.
The non-Muslim minorities don't want to be treated as second class citizens, and they don't want their religious freedom restricted. They are not willing to accept less than equal rights and responsibilities in their land of birth.
As for non-practising Muslims, Islam is acceptable as an individualistic observance, but not a social or political system. They believe the state should avoid legislation of morality, especially religious morality.
Towards a compromise
The three players in this Islamic metamorphosis need to come to a historical compromise that will save much time and energy, and help produce a swift transition of the Muslim societies to democracy and modernity.
Non-Muslim minorities and non-practising Muslims need to accept the fact that Islamic law is too rich and too important to be discarded. The historical analogy with Western experience is misleading, since there was never a universally subscribed to "Christian law" that governed societies and states. Unlike the Islamic law that has been the law of many Muslim states and empires throughout the last 1400 years, the medieval Canon law was to govern the Church, not the state or the society at large.
Muslim majorities need to accept that faith is no longer the basis for a social contract; geography is the new basis.
They must also guarantee the political and legal equality of their non-Muslim and non-religious citizens. Any legalisation of discrimination against non-Muslim citizens in terms of constitutional and political rights is absurd. Unfortunately that is what we still have today in many Arab countries—including the very secular ones, where constitutions deprive non-Muslim citizens from running in presidential elections (good for them anyway, since the elections are never fair or transparent).
Institutional secularism that prevents rulers from misusing religion, and guarantees freedom of conscience for all, should be accepted by all. Ideological secularism that chases religion away from public life should be rejected by all, because it is pure coercion.
Legal secularism that ignores the centrality of Islamic laws is meaningless. However, a great reinterpretation and adaptation of Islamic laws is necessary to help this compromise take place. These laws are flexible, and there has never been a monopoly in interpreting them.
Rule of law
Those who complain about Islamic laws need to shift their discourse to a more positive and practical formula: what should matter for them should be equality before the law, more than the source of the law.
As I told my friends at a Texas church a few years ago, I don't care if US law is drawn from a biblical source or a Roman source; what I care about is that the law does not discriminate against me as a Muslim.
The three players in the debate over religion and politics in the Islamic world need to be focusing on the rule of law instead of fighting over what kind of law should rule.
The Islamic world has suffered a lot from the lack of consensus on the social contract within Muslim societies.
It is time to explore new roads towards this necessary consensus. Both Islamists and secularists share the responsibility to achieve common ground through mutual respect and compromise.
A creative synthesis that is seen by Islamists as 'Islamic', and by secularists as 'secular', is very possible. After all Islam never accepted splitting the human personality into spiritual and material parts, and the Islamic ideal was never the self-absorbed asceticism, but the practical ethicality.
Mohamed El-Moctar El-Shinqiti is an author in political history and history of religion. He is a research coordinator at the Qatar Foundation in Doha, Qatar. The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.
Council of Foreign Relations Discussion - Can Americans Think Strategically?
No embed code for this video, but the LINK IS HERE...
In this discussion with Kishore Mahbubani, Dean and Professor in the Practice of Public Policy, Lee Kuan Yew School of Public Policy, National University of Singapore, the realistic queston is asked and elaborated on....
Sunday, October 24, 2010
PDF - Contesting the Saudi State - madawi al Rasheed
Madawi al-Rasheed, "Contesting the Saudi State: Islamic Voices from a New Generation"
(Cambridge Middle East Studies)
Cambridge University Press (2007) | English | ISBN: 0521858364 | 335 pages | PDF | 2.25 MB
The terms Wahhabi or Salafi are seen as interchangeable and frequently misunderstood by outsiders. However, as Madawi al-Rasheed explains in a fascinating exploration of Saudi Arabia in the twenty-first century, even Saudis do not agree on their meaning. Under the influence of mass education, printing, new communication technology, and global media, they are forming their own conclusions and debating religion and politics in traditional and novel venues, often violating official taboos and the conservative values of the Saudi society. Drawing on classical religious sources, contemporary readings and interviews, Al-Rasheed presents an ethnography of consent and contest, exploring the fluidity of the boundaries between the religious and political. Bridging the gap between text and context, the author also examines how states and citizens manipulate religious discourse for purely political ends, and how this manipulation generates unpredictable reactions whose control escapes those who initiated them.
Especially Recommended Must Read: Chapter 2 - Re-enchanting Politics: Sahwis from Contestation to Co-optation
Abu Hanifa's Advice on Running a Business - Hisham al Awadi talks on the 4 Imams
LINK TO THIS GREAT LECTURE COLLECTION HERE
Saturday, October 23, 2010
Innaugaration of a True Leader - Abu Bakr (RA) quoted by Ibn Hisham
O people! I have been put in charge over you, but I am not the best of you. If I act well, then help me, and if I act badly, then put me right. Truthfulness is a trust and lying is treachery. The weak among you is strong in my sight until I restore his right to him, Allah willing. The strong among you is weak in my sight until I take the right from him, Allah willing. People do not abandon jihad in the way of Allah but that Allah afflicts them with humiliation. Shamelessness does not spread in a people but that Allah envelops them in affliction. Obey me as long as I obey Allah and His Messenger. If I disobey Allah and His Messenger, you owe me no obedience.
(Sira Ibn Hisham)
Friday, October 22, 2010
New Book - How the War on Terror is Bankrupting the World
U.S. Wars Are Bankrupting the World
Politics / US Politics
Oct 22, 2010 - 05:14 AM
By: Global_Research
David Swanson writes: The endless and infinite "war on terra" is bankrupting the planet. I don't mean moral bankruptcy; that goes without saying. I mean financial bankruptcy. And don't take my word for it. This is the argument made in a new book called "Terrorism and the Economy: How the War on Terror Is Bankrupting the World," by Loretta Napoleoni, a financial reporter for Internazionale, l'Unita, il Caffe, Mondo e Missione, El Pais, Vanity Fair Spain, and Vanity Fair Italy.
Perhaps Napoleoni is insufficiently subservient to Wall Street to write for U.S. newspapers -- unlike, say, the United States government: "Washington needs Wall Street's help to keep international investors funding the U.S. debt," the author explains, "which in turn provides the $1.6 billion needed each month to keep troops in Iraq and Afghanistan." Which explains the lack of criminal prosecutions and serious regulation of Wall Street.
Napoleoni traces some surprising changes in the world financial system over the past nine years to the latest U.S. warmaking spree: "Though it may sound implausible, as soon as the West focused its attention on the war on terror, the United Arab Emirates and the rest of the Persian Gulf began experiencing an unprecedented economic boom. Money started to flow toward their economies." The U.S. government did not investigate the sources of terrorist funding, but did put restrictions in place through the PATRIOT Act that led money launderers to take their business to Europe, which suffered from that transfer as well.
The U.S. claimed it wanted to cut off the terrorists' lifeline, but Napoleoni finds little evidence of action behind the claim. Instead she sees Bush's failure to pursue bin Laden's bankers as in line with his failure to try to prevent 9-11 or to capture or bring bin Laden to trial. The 9-11 attacks were Bush's excuse for war, and war was what he wanted.
Napoleoni sees the "war on terror" as a response to Islamic jihad and draws a comparison to Saladin's jihad as a response to the Christian crusades. The Pope's call to "liberate" the holy land in 1095, Napoleoni writes, was for "the starving masses of Europe . . . a way of feeding themselves and an escape from a life of misery and suffering. For the knights and nobility, it offered an opportunity for economic expansion. . . . Europe was a colony of Islam. Today the Muslim world feels equally subjugated to the West."
One of the ultimate aims of the Islamic insurgency, Napoleoni writes, is "to bleed the American economy until it is bankrupt." Bin Laden has "even calculated the amount of profits that Americans have accumulated from the sale of Arab oil. For every barrel sold over the last twenty-five years, he claims they pocketed $135. The total loss of income adds up to a staggering $4.05 billion per day, which he describes as the greatest theft in history."
U.S. actions these past nine years have tended to self-inflict the economic wounds bin Laden desires, while simultaneously building al Qaeda into a more powerful and efficient enterprise. The United States had tended to tolerate money laundering because it benefitted the economy and the domestic money supply. The PATRIOT Act imposed regulations on money laundering and therefore on international banks, which immediately began advising their clients to avoid and divest from dollars. International crime syndicates took their money laundry to Europe. The war on terra also drove the price of crude oil through the roof. But it was the otherwise unregulated free-for-all on Wall Street that did the most damage to the U.S. and world economies. "The likelihood that bin Laden will destroy us is extremely low," writes Napoleoni, "the likelihood that finance will do so is, on the other hand, extremely high, a virtual certainty."
U.S. propaganda "magnified al Qaeda's power exponentially. . . . On 9/11, few knew that this was nothing more than political theater and that few Muslims had ever heard of al Qaeda. . . . Saddam Hussein's Iraq had no ties whatsoever to bin Laden. . . . [T]he invasion of Afghanistan decimated al Qaeda. Yet we believed what politicians told us." Our policies -- destabilizing Iraq, Indonesia, Pakistan, and the Horn of Africa -- created shell states and easy recruitment for terrorism, which we thereby helped make more affordable. "The 9/11 attacks cost al Qaeda $500,000, while the Madrid massacre cost only $20,000, and the London suicide bombings less than $15,000. Osama bin Laden no longer operates costly training camps but relies upon the proliferation of jihadist websites to indoctrinate and train a new generation of jihadists at rock-bottom prices." The U.S. has spent trillions on war, while Iraqis have successfully fought back for less than $200 million.
We can't waste money this way without Wall Street, which is "as free and unregulated as it was before the credit crunch." We'd transferred "bad risk accumulated by the private sector to the balance sheet of the state," rather than eliminating it as needed. "In March 2009, the share prices of companies and banks 'saved' by governments were all below the levels at which the state had purchased them. . . . The desire to maintain, at any cost, a damaged and anachronistic system will only bring ruination."
Instead, Napoleoni suggests, we should restructure the financial system, nationalize the banking sector, prune all the deadwood that does not serve the real economy, outlaw damaging products like derivatives, and preserve insurance operations while allowing gambling operations to collapse. We might learn from Islamic economics, which Napoleoni describes as "the opposite of capitalism":
"In the Eastern world, the selfish behavior of each individual, aimed at maximizing profits and minimizing costs, is not believed to miraculously enrich entire nations. In the short shadow of the minarets, wealth comes from cooperation and joint ventures between banks and clients." Drawing on this source, we might require that money always be invested in the real economy, thereby banning speculation on securities not tied to the underlying companies.
And instead of paying people to do nothing, through unemployment compensation, Napoleoni argues we should pay people, the unemployed and recent graduates, to convert our industries to clean energy, build infrastructure, and redesign our manufacturing base. Sounds like a plan that would even take care of the much bemoaned enthusiasm gap.
Wednesday, October 20, 2010
Michael Hudson: Capital controls will follow the weak dollar
Financial Times
Two weeks ago Brazil moved to deter speculators from pushing up its currency, doubling the tax on foreign investment in its government bonds. Last week Thailand acted on similar lines by no longer exempting foreign investors from paying a tax on its bonds, with the Thai finance minister warning of more to come. As the dollar falls and developing nations see speculators push up their exchange rates, other countries are also discussing more stringent restrictions. A damaging age of capital controls seems likely.
Indeed, moves by speculators purchasing assets and taking currency positions in China, Brazil and much of Asia now threaten to make this new era a self-fulfilling prophecy. Such speculative inflows contribute little to capital formation or employment. But they do price exporters out of foreign markets, and can be suddenly reversed if speculators pull out, disrupting trade patterns.
With the likelihood of further falls in the dollar, central banks in developing countries face a capital loss if they try to stabilise exchange rates by buying dollar-denominated assets – as the Bank of Japan did when it recently bought $60bn of dollar securities to hold down the yen’s rise. These modest acts set rates through the open market, but their cost is now threatening to drive these economies towards more formal capital controls.
Such a trend would be grim news for the US, but its financial policymakers have only themselves to blame. By lowering interest rates to almost zero and giving clear hints of another imminent round of quantitative easing, the Federal Reserve is providing speculators (and the banks) with yet more cheap credit – much of which is being used to speculate against the dollar.
The problem is that “QE2” will quickly spill over into currency markets, prompting foreign defensive moves to defend against currency raids that push up exchange rates against the dollar. Easy credit policies in the US and Japan will further fuel speculation in the currencies of developing economies in strong balance-of-payments positions. And the largest speculative prize of all remains an anticipated upward revaluation of China’s renminbi, followed by other Asian currencies.
Here we see echoes of the 1997 Asia crisis, but in reverse. That period of panic saw speculators swamp developing markets with sell orders, emptying the central bank reserves of countries that tried to keep their exchange rates stable. Today, these same countries are those likely to find capital controls attractive, but this time they are blocking speculators from buying their assets and currencies, not selling them. The economies targeted by speculators are now those that are strong, not ones that are weak.
Developing nations are thinking seriously about how to use controls to protect themselves. Malaysia led the way in 1997, by blocking sales of its currency. In recent weeks it is Chinese officials who have been discussing tactics to isolate their financial markets from further dollar inflow. The simplest way would be for them to stop exchanging renminbi for dollar payments for non-trade transactions. This would lead, in effect, to a dual exchange rate – one for trade and another for financial transactions – a common arrangement from the 1930s into the 1960s.
The real threat is a world broken into two competing financial blocs, one centred on the dollar, the other on the Bric nations of Brazil, Russia, India and China. Tentative steps in this direction occurred last year when China, India and Russia, along with Iran and members of the Shanghai Co-operation Organisation took early steps to use their own currencies for trade, rather than the dollar. China took a simpler path last month when it supported a Russian proposal to start direct trading using the renminbi and the rouble. It negotiated similar deals with Brazil and Turkey.
To deter this the US and Japan should refrain from QE2, even at the cost of lower US growth. An even better response, however, would be new regulations stopping western banks from speculating in foreign currencies, by using heavier reserve requirements or a short-term tax on foreign currency trades and options. Without such steps other countries will soon move to protect their currencies. If they do it will have been US policy short-sightedness, conducted without concern for its effect on developing economies, that will ultimately have isolated the dollar and its users.
Two weeks ago Brazil moved to deter speculators from pushing up its currency, doubling the tax on foreign investment in its government bonds. Last week Thailand acted on similar lines by no longer exempting foreign investors from paying a tax on its bonds, with the Thai finance minister warning of more to come. As the dollar falls and developing nations see speculators push up their exchange rates, other countries are also discussing more stringent restrictions. A damaging age of capital controls seems likely.
Indeed, moves by speculators purchasing assets and taking currency positions in China, Brazil and much of Asia now threaten to make this new era a self-fulfilling prophecy. Such speculative inflows contribute little to capital formation or employment. But they do price exporters out of foreign markets, and can be suddenly reversed if speculators pull out, disrupting trade patterns.
With the likelihood of further falls in the dollar, central banks in developing countries face a capital loss if they try to stabilise exchange rates by buying dollar-denominated assets – as the Bank of Japan did when it recently bought $60bn of dollar securities to hold down the yen’s rise. These modest acts set rates through the open market, but their cost is now threatening to drive these economies towards more formal capital controls.
Such a trend would be grim news for the US, but its financial policymakers have only themselves to blame. By lowering interest rates to almost zero and giving clear hints of another imminent round of quantitative easing, the Federal Reserve is providing speculators (and the banks) with yet more cheap credit – much of which is being used to speculate against the dollar.
The problem is that “QE2” will quickly spill over into currency markets, prompting foreign defensive moves to defend against currency raids that push up exchange rates against the dollar. Easy credit policies in the US and Japan will further fuel speculation in the currencies of developing economies in strong balance-of-payments positions. And the largest speculative prize of all remains an anticipated upward revaluation of China’s renminbi, followed by other Asian currencies.
Here we see echoes of the 1997 Asia crisis, but in reverse. That period of panic saw speculators swamp developing markets with sell orders, emptying the central bank reserves of countries that tried to keep their exchange rates stable. Today, these same countries are those likely to find capital controls attractive, but this time they are blocking speculators from buying their assets and currencies, not selling them. The economies targeted by speculators are now those that are strong, not ones that are weak.
Developing nations are thinking seriously about how to use controls to protect themselves. Malaysia led the way in 1997, by blocking sales of its currency. In recent weeks it is Chinese officials who have been discussing tactics to isolate their financial markets from further dollar inflow. The simplest way would be for them to stop exchanging renminbi for dollar payments for non-trade transactions. This would lead, in effect, to a dual exchange rate – one for trade and another for financial transactions – a common arrangement from the 1930s into the 1960s.
The real threat is a world broken into two competing financial blocs, one centred on the dollar, the other on the Bric nations of Brazil, Russia, India and China. Tentative steps in this direction occurred last year when China, India and Russia, along with Iran and members of the Shanghai Co-operation Organisation took early steps to use their own currencies for trade, rather than the dollar. China took a simpler path last month when it supported a Russian proposal to start direct trading using the renminbi and the rouble. It negotiated similar deals with Brazil and Turkey.
To deter this the US and Japan should refrain from QE2, even at the cost of lower US growth. An even better response, however, would be new regulations stopping western banks from speculating in foreign currencies, by using heavier reserve requirements or a short-term tax on foreign currency trades and options. Without such steps other countries will soon move to protect their currencies. If they do it will have been US policy short-sightedness, conducted without concern for its effect on developing economies, that will ultimately have isolated the dollar and its users.
Tuesday, October 19, 2010
U.S. Military Aid Far Outpaces Democracy Assistance
WASHINGTON, Oct 19, 2010 (IPS) - Desperate to secure supply routes to Afghanistan, the United States has been spending at least six times more on military aid for the mostly authoritarian states of Central Asia than on efforts to promote political liberalisation and human rights in the region, according to a new report released here by the Open Society Foundations (OSF).
The 45-page report found that the full extent of military aid controlled by the Pentagon and the U.S. Central Command (CENTCOM) and channelled through a bewildering variety of programmes is uncertain, but that it is at least three times greater than the State Department's military aid programmes which are subject to human rights and other conditions.
"Nobody really knows how much military aid the U.S. government is giving the Central Asian states," according to Lora Lumpe, the author of the report, 'U.S. Military Aid to Central Asia 1999-2009: Security Priorities Trump Human Rights and Diplomacy'.
"CENTCOM'S Directorate for Policy and Plans …is likely to have the fullest picture of U.S. military assistance to the region, but those plans are classified," she noted, adding that Congressional efforts to obtain comprehensive and timely reporting on Pentagon spending in the region have been largely unavailing.
The report, which comes six months after the violent overthrow of the corrupt U.S.-backed government of former Kyrgyz President Kurmanbek Bakiyev, is likely to spur new questions about whether the strategic benefits the military gains in securing access to bases in Central Asia outweigh the political and other costs in the long term.
In 2007, the Pentagon provided some 30 million dollars in a variety of aid programmes to the Bakiyev regime – mainly as compensation for access to the Manas Air Base, according to the report. That was roughly six times what it spent on democracy and civil society programmes.
The Pentagon also reportedly awarded exclusive fuelling contracts - now under investigation both in Bishkek and in Congress - for U.S. operations at the base to companies in which Bakiyev's cronies and son had substantial interests, contributing to the perception in Kyrgyzstan that Washington was backing a corrupt and increasingly authoritarian regime.
"Now that Bakiyev has collapsed, there are a lot of really angry voices in the new government," said Alexander Cooley, a Central Asia expert at Barnard College in New York. "The Pentagon's 'walking-around money' …may not actually guarantee access (to the bases) over the long term."
The "oversized impact" of the Pentagon - as opposed to the State Department - on U.S. foreign policy has become a major concern of human rights and other critics who claim that Washington's relations with much of the developing world have become increasingly "militarised" since the end of the Cold War.
Six months ago, for example, three Washington-based groups focused on human rights and Latin America policy published a report that found that nearly half of all U.S. aid was being channelled to the region through the Pentagon and that the U.S. Southern Command (SOUTHCOM) had largely displaced the State Department as the de facto "lead actor and voice" for U.S. policy there.
And, although U.S. development aid to Africa still dwarfs military assistance, similar fears have been voiced about the Pentagon's three-year-old African Command (AFRICOM), which is providing counter-terrorist and counter-narcotics assistance to dozens of countries, primarily in the Sahelian region and in East and West Africa.
Washington has provided military and police aid at various times to the Central Asian states - Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, and Turkmenistan - virtually since their creation after the collapse of the Soviet Union in 1991.
In the early 1990s, military and police assistance focused mainly on preventing the proliferation of nuclear and biological weapons, counter-narcotics trafficking, and border control.
By the end of the decade, aid had expanded in most of the five countries, as CENTCOM – whose writ runs from Egypt to China's southwestern border – sent Special Operations Forces (SOF) to train local troops in counterinsurgency in increasingly restive Uzbekistan and Kyrgyzstan, and Uzbek and Kazakh militaries were taking part in NATO exercises.
Most of the aid during this period came through traditional military and security programmes overseen by the State Department. Such programmes are subject to Congressionally imposed restrictions that ban, for example, any assistance to militaries that commit gross abuses of human rights or that overthrow democratically elected leaders.
The Pentagon and the combatant commands like CENTCOM, however, came to see State Department programmes as unreliable, driven more by politics than by what they regarded as the strategic needs of the U.S. military, according to the report.
In a trend that accelerated sharply after 9/11, the Pentagon developed a parallel system of "security cooperation" programmes to provide various forms of assistance that would not be subject to Congressionally imposed conditions.
"In the years following the 9/11 attacks, the DOD [Department of Defense] has sought, and Congress has granted, more than a dozen new legal authorities, increasing the ways that CENTCOM (and the other regional military commands) can spend funds from the Pentagon's general coffers to provide direct assistance to foreign militaries," according to the report.
As a result, the Pentagon provided at least 103 million dollars in military-related aid to Central Asian countries in 2007 – the last year for which the Pentagon provided relatively comprehensive figures, Lumpe said.
That was nearly three times as much as was provided under the traditional military aid programmes under the State Department's control. Total U.S. military aid, including the State Department's programmes, came to nearly half of all assistance provided by Washington to Central Asia in 2007, the report concluded.
Since 9/11, most U.S. military assistance has been geared to securing rights of access to military bases used to ferry U.S. troops and material into Afghanistan. That function has become significantly more important over the past two years as the Pakistani Taliban has attacked convoys transporting supplies from Karachi to Afghanistan.
Since the creation of the Northern Distribution Network (NDN) in 2008, a land-based supply route for U.S. and allied forces that runs from Europe through Central Asia to Afghanistan, Washington has increased aid to the region's governments and militaries and, perhaps more importantly, awarded local companies – most often with close ties to local regimes – lucrative construction and supply contracts, including in Afghanistan itself.
The Uzbek military and security forces – some of them trained by the Pentagon - massacred hundreds of protesters in 2005, Washington cut off new assistance, and Uzbekistan is the one country in the region where Washington has spent more on democratisation programmes than on military assistance.
After the aid cut-off, however, the government of President Islam Karimov bought more than 12 million dollars in military equipment and training from aid credits that had already been approved. With Washington's approval, Tashkent subsequently bought more than 50 million dollars of weapons and training directly from U.S. companies, according to the report.
Despite the lack of improvements in human rights conditions, the restrictions on military aid "are beginning to be relaxed", according to the report.
The 45-page report found that the full extent of military aid controlled by the Pentagon and the U.S. Central Command (CENTCOM) and channelled through a bewildering variety of programmes is uncertain, but that it is at least three times greater than the State Department's military aid programmes which are subject to human rights and other conditions.
"Nobody really knows how much military aid the U.S. government is giving the Central Asian states," according to Lora Lumpe, the author of the report, 'U.S. Military Aid to Central Asia 1999-2009: Security Priorities Trump Human Rights and Diplomacy'.
"CENTCOM'S Directorate for Policy and Plans …is likely to have the fullest picture of U.S. military assistance to the region, but those plans are classified," she noted, adding that Congressional efforts to obtain comprehensive and timely reporting on Pentagon spending in the region have been largely unavailing.
The report, which comes six months after the violent overthrow of the corrupt U.S.-backed government of former Kyrgyz President Kurmanbek Bakiyev, is likely to spur new questions about whether the strategic benefits the military gains in securing access to bases in Central Asia outweigh the political and other costs in the long term.
In 2007, the Pentagon provided some 30 million dollars in a variety of aid programmes to the Bakiyev regime – mainly as compensation for access to the Manas Air Base, according to the report. That was roughly six times what it spent on democracy and civil society programmes.
The Pentagon also reportedly awarded exclusive fuelling contracts - now under investigation both in Bishkek and in Congress - for U.S. operations at the base to companies in which Bakiyev's cronies and son had substantial interests, contributing to the perception in Kyrgyzstan that Washington was backing a corrupt and increasingly authoritarian regime.
"Now that Bakiyev has collapsed, there are a lot of really angry voices in the new government," said Alexander Cooley, a Central Asia expert at Barnard College in New York. "The Pentagon's 'walking-around money' …may not actually guarantee access (to the bases) over the long term."
The "oversized impact" of the Pentagon - as opposed to the State Department - on U.S. foreign policy has become a major concern of human rights and other critics who claim that Washington's relations with much of the developing world have become increasingly "militarised" since the end of the Cold War.
Six months ago, for example, three Washington-based groups focused on human rights and Latin America policy published a report that found that nearly half of all U.S. aid was being channelled to the region through the Pentagon and that the U.S. Southern Command (SOUTHCOM) had largely displaced the State Department as the de facto "lead actor and voice" for U.S. policy there.
And, although U.S. development aid to Africa still dwarfs military assistance, similar fears have been voiced about the Pentagon's three-year-old African Command (AFRICOM), which is providing counter-terrorist and counter-narcotics assistance to dozens of countries, primarily in the Sahelian region and in East and West Africa.
Washington has provided military and police aid at various times to the Central Asian states - Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, and Turkmenistan - virtually since their creation after the collapse of the Soviet Union in 1991.
In the early 1990s, military and police assistance focused mainly on preventing the proliferation of nuclear and biological weapons, counter-narcotics trafficking, and border control.
By the end of the decade, aid had expanded in most of the five countries, as CENTCOM – whose writ runs from Egypt to China's southwestern border – sent Special Operations Forces (SOF) to train local troops in counterinsurgency in increasingly restive Uzbekistan and Kyrgyzstan, and Uzbek and Kazakh militaries were taking part in NATO exercises.
Most of the aid during this period came through traditional military and security programmes overseen by the State Department. Such programmes are subject to Congressionally imposed restrictions that ban, for example, any assistance to militaries that commit gross abuses of human rights or that overthrow democratically elected leaders.
The Pentagon and the combatant commands like CENTCOM, however, came to see State Department programmes as unreliable, driven more by politics than by what they regarded as the strategic needs of the U.S. military, according to the report.
In a trend that accelerated sharply after 9/11, the Pentagon developed a parallel system of "security cooperation" programmes to provide various forms of assistance that would not be subject to Congressionally imposed conditions.
"In the years following the 9/11 attacks, the DOD [Department of Defense] has sought, and Congress has granted, more than a dozen new legal authorities, increasing the ways that CENTCOM (and the other regional military commands) can spend funds from the Pentagon's general coffers to provide direct assistance to foreign militaries," according to the report.
As a result, the Pentagon provided at least 103 million dollars in military-related aid to Central Asian countries in 2007 – the last year for which the Pentagon provided relatively comprehensive figures, Lumpe said.
That was nearly three times as much as was provided under the traditional military aid programmes under the State Department's control. Total U.S. military aid, including the State Department's programmes, came to nearly half of all assistance provided by Washington to Central Asia in 2007, the report concluded.
Since 9/11, most U.S. military assistance has been geared to securing rights of access to military bases used to ferry U.S. troops and material into Afghanistan. That function has become significantly more important over the past two years as the Pakistani Taliban has attacked convoys transporting supplies from Karachi to Afghanistan.
Since the creation of the Northern Distribution Network (NDN) in 2008, a land-based supply route for U.S. and allied forces that runs from Europe through Central Asia to Afghanistan, Washington has increased aid to the region's governments and militaries and, perhaps more importantly, awarded local companies – most often with close ties to local regimes – lucrative construction and supply contracts, including in Afghanistan itself.
The Uzbek military and security forces – some of them trained by the Pentagon - massacred hundreds of protesters in 2005, Washington cut off new assistance, and Uzbekistan is the one country in the region where Washington has spent more on democratisation programmes than on military assistance.
After the aid cut-off, however, the government of President Islam Karimov bought more than 12 million dollars in military equipment and training from aid credits that had already been approved. With Washington's approval, Tashkent subsequently bought more than 50 million dollars of weapons and training directly from U.S. companies, according to the report.
Despite the lack of improvements in human rights conditions, the restrictions on military aid "are beginning to be relaxed", according to the report.
American Consumerism and Liberal Values Breed Majority Mentally Ill Teen Population
(AFP) –
WASHINGTON — Around half of US teens meet the criteria for a mental disorder and nearly one in four report having a mood, behavior or anxiety disorder that interferes with daily life, American researchers say.
Fifty-one percent of boys and 49 percent of girls aged 13-19 have a mood, behavior, anxiety or substance use disorder, according to the study published in the Journal of the American Academy of Child and Adolescent Psychiatry.
In 22.2 percent of teens, the disorder was so severe it impaired their daily activities and caused great distress, says the study led by Kathleen Merikangas of the National Institutes of Mental Health (NIMH).
"The prevalence of severe emotional and behavior disorders is even higher than the most frequent major physical conditions in adolescence, including asthma or diabetes," the study says.
Mental problems do not get the same attention from public health authorities even though they cost US families around a quarter of a trillion dollars a year, according to the study.
Around nine percent of all US children have asthma and less than a quarter of one percent of all people under the age of 20 have diabetes, according to the Centers for Disease Control and Prevention (CDC).
Merikangas and a team of researchers analyzed data from the National Comorbidity Study-Adolescent Supplement, which surveyed more than 10,000 US teens.
The study is the first to track the prevalence of a broad range of mental disorders in a nationally representative sample of US teens.
They found that nearly a third of the teens met the criteria for the most common mental disorder among US youth, anxiety disorders, which include social phobia and panic "attacks".
This class of disorder also had the earliest median onset age, occurring in children as young as six years old.
Behavior disorders, including attention deficit hyperactivity disorder, were the next most common condition (19.1 percent), followed by mood disorders (14.3 percent) such as depression.
Eleven percent of teens with a mood disorder, 10 percent with behavior disorders and eight percent who had anxiety disorders, especially social phobics, met the criteria for severe impairment, meaning their condition affected their day-to-day life and caused them great distress.
Teen mental disorder rates mirror those seen in adults, suggesting that most adults develop a mental disorder before adulthood, say the researchers, calling for earlier intervention and prevention, and more research to determine what the risk factors are for mental disorders in youth.
Saturday, October 16, 2010
CNN poll shows lowest support for Afghan War
Two important articles on the War in Afghanistan... Firstly, CNN analyst ponders the end of the War in Afghanistan here saying:
Aid workers in Afghanistan should work with the Taliban as the insurgents will play a permanent role in the country's future, a safety monitoring group said Friday.
American support for the war in Afghanistan has never been lower, according to the latest CNN polling. The low numbers just the latest figure in the complex math being calculated to determine how the US should proceed in the ten year war.
The latest poll from CNN and Opinion Research Corporation found only 37% of all Americans favor the war, 52% say the war in Afghanistan has turned into a Vietnam.
Those numbers are going down as US commitment to the war is going up, significantly. 30,000 more troops added this year. At the time the troop increase was announced, military leaders were aware it would mean a rise in troop casualties and were vocal in trying to warn Americans that it would happen.
Still the daily headlines about troop deaths is staggering. 16 NATO troops have been killed in the last three days. The US has lost 386 troops so far this year.Additionally, Aid Groups that are on the ground in Afghanistan now believe that aid organizations must accept that thr Taliban are going to play a role in the future of Afghanistan (HERE). They say,
Aid workers in Afghanistan should work with the Taliban as the insurgents will play a permanent role in the country's future, a safety monitoring group said Friday.
The insurgents, who have been fighting a brutal war for nine years, were becoming increasingly confident of returning to power, the Afghanistan NGO Safety Office (ANSO) said in a quarterly report.
With the Taliban "certain to play a permanent and increasingly political role" in Afghanistan's future -- and foreign forces increasingly sidelined -- ANSO advised non-government organisations (NGOs) to work with the insurgents.
"We recommend that NGOs start developing strategies for engaging with them rather than avoiding them," ANSO's director Nic Lee said
"We understand that the (insurgents) are increasingly desirous of this engagement and if handled correctly will respond to it coherently and non-violently," he wrote in an introduction to the report...
Some parts of the country, especially in the previously peaceful north, were "in danger of slipping beyond any control," Lee said. The report describes the Taliban as "increasingly mature, complex and effective".
The insurgents were setting up "shadow governance" structures, and leaders "are outlining tentative foreign policy, reassuring neighbours of cooperation on narcotics, the environment and commerce, while alluding to 'the upcoming system of the country'," Lee said...
"The sum of their activity presents the image of a movement anticipating authority and one which has already obtained a complex momentum that NATO will be incapable of reversing," he said.
Friday, October 15, 2010
Thursday, October 14, 2010
Here it comes: After Keynesian Stimulus and with QE2, here comes INFLATION...
...and millions die in the real wars only Islamic policy can counter.
Without understanding the processes of speculation (i.e. futures, derivatives and other mechanisms), bankers like this can deny what they well know... they kill people when they make a quick couple of million. With QE2 (Quantitative Easing II) , also known as printing dollars, coming soon inflation is bound to be the story of 2011. In Islamic models most people point to the withdrawing of interest from the equation as the most important principle of Islamic Economics. It is more important, in today's world, to highlight the prohibition of gharar, or deceit and speculation. The answer: industrial development and stimulus of Africa's farmland, turning peasants into agro-engineers, thus discarding dollars in gradual divestment and creating the architectural framework for a new economic order that erases gharar from the equation and then deals with the problem of interest. The oil's peg to the dollar must also be removed and the war in Afghanistan and Iraq would end overnight as well consequentially.
Speculators take other people's money and gamble on real economic activity they contribute nothing to. In the process the have real world effects, but only care about the bottom line. It is a war with the speculators that we should be addressing, but practically none of us understand the equations behind the contemporary reality. Here is a link to read about the process of speculation and food prices. Activists must learn how to describe the processes so that political will can formulate to make illegal these phony operations. Of course Muslim regimes pose little risk to the system today, but we must recognize the reality that the ummah still has the potential to alter the course of history and the world on a grand scale instantaneously.
Monday, October 11, 2010
The Soros Syndrome
An interesting article looking at how NGOs operate. Whilst one can't deny that some NGOs do a lot valuable work, at the same time it should be noted that many NGOs (especially that larger ones) propagate western materialistic values and further imperalist aims.Furthermore they create a culture of dependency in the countries they operate in. Muslims need to take a much more critical look at the aims and objectives of these NGOs and demand that the NGOs that operate in Islamic nation stop promoting value that contradict the teachings of Islam and that they should promote and implement policy that increase independence and self sufficiency rather then many of their current policies which foster a culture of perpetual dependency.
The Soros Syndrome
By ALEXANDER COCKBURN
George Soros announced a few weeks ago that he is giving $100 million to Human Rights Watch—conditional on the organization to find a matching $10 million a year from other donors. He’s been rewarded with ringing cheers for his disinterested munificence.
The relationship of “human rights” to the course of empire is nicely caught in two statements, the first by HRW’s former executive director Aryeh Neier: “When we created Human Rights Watch, one of the main purposes at the outset was to leverage the power, the purse and the influence of the United States to try to promote human rights in other countries.”
Set this remark, startling in its brazen display of imperial self-confidence, next to Soros’s recent statement on National Public Radio PR, that in the expansion of HRW prompted by his big new donation “the people doing the investigations won’t necessarily be Americans.… The United States has lost the moral high ground and that has sort of endangered the credibility, the legitimacy of Americans being in the forefront of advocating human rights.”
Soros the international financier made his billions as a currency speculator; he could destroy a country’s reserves, hastening its social disintegration. Then Soros the philanthropist could finance HRW’s investigations into the abuses his operations helped to induce. He offers in his single person an arresting profile of liberal interventionism in our era, in which direct economic and political destabilization (mostly calibrated in concert with the US government) has easy recourse to the moral and political bludgeon of a human rights report, which is in turn used to ratchet up the pressure for a direct imperial onslaught—whether by economic sanctions, covert sabotage, aerial bombing or a blend of all three. The role of human rights NGOs in NATO’s attack on the former Yugoslavia is a prime example.
Or take a look at Soros’s meddling in Georgia. His millions and the NGOs under his control played an active role in installing the unstable and decidedly authoritarian Mikheil Saakashvili. The Foundation for the Defense of Democracies quoted a former Georgian parliamentarian as saying that in the three months before the 2003 Rose Revolution, “Soros spent $42 million ramping up for the overthrow of Shevardnadze.” Former Georgian Foreign Minister Salomé Zourabichvili was also quoted in the French journal Hérodote explaining, “The NGOs which gravitate around the Soros Foundation undeniably carried the revolution. However, one cannot end one’s analysis with the revolution and one clearly sees that, afterwards, the Soros Foundation and the NGOs were integrated into power.” Consult Human Rights Watch’s rather muffled report on Georgia three years later, and you’ll find the statement that “U.S. backing of President Saakashvili’s government has led to a less critical attitude toward human rights abuses in the country.”
Soros created his Open Society Institute, but as a CounterPuncher seasoned in the political and intellectual topography of the region put it to me, “In East/Central Europe Soros’ outfit is anything but an ‘Open Society.’ They fund a very narrow range of intellectual production and starve those at intellectual variance with them… Many of the leading figures were members of the Cold War emigres in exile. Very reactionary, or very neoliberal if younger. On the ground they have indeed ‘privatized political action’, as you put it. They have also privatized intellectual production, as the neoliberal state has drained the pool of resources from the academy leaving only the foundations to fund it. This follows the patter set by Bill Simon in 1974, who argued that the ‘funding spigot’ needed to be turned off to the ‘wrong’ people and ‘turned on’ to the right ones. This could be best enabled by privatizing policy creation after the democratic ‘excesses’ of the 1960s and 1970s and privatizing it until the state could be recaptured.”
With Soros’s extra money, HRW will be dangling big funds at its non-American recruits. Regarding the hefty salaries that will surely follow, it’s worth raising the experience of Eritrea, which immediately got into trouble with the NGO system after independence in 1991. Eritrea-based journalist Tom Mountain tells me, “For one, Eritrea won’t allow the NGOs to pay above civil service salaries. Why? NGOs come into a country and find the best and brightest and give them salaries ten or twenty times the local rate, buying their allegiance and often turning them against their country. Two, Eritrea has implemented a 10 percent overhead policy, and all the NGOs that couldn’t or wouldn’t comply with the documentation were kicked out, about the same time Eritrea kicked out the UN ‘peacekeepers’ here.”
In other words, foundations, nonprofits, NGOs—call them what you will—can on occasion perform nobly, but overall their increasing power moves in step with the temper of our times: privatization of political action, directly overseen and manipulated by the rich and their executives. The tradition of voluntarism is extinguished by the professional, very well-paid do-good bureaucracy.
I’m still not sure why Ralph Nader, in his vast 2008 novel Only the Super-Rich Can Save Us, embraced the proposition embodied in the title (unless the whole exercise was an extended foray into irony). As an international class, the superrich are emphatically not interested in saving us, beyond advocating reforms required to stave off serious social unrest.
For many decades the superrich in this country thought that the major threat to social stability lay in overpopulation and the unhealthy gene pool of the poor. Their endowments and NGOs addressed themselves diligently to these questions, by means of enforced sterilization, exclusion of Slavs and Jews from America’s shores and other expedients, advanced by the leading liberals of the day.
More recently, “globalization” and “sustainability” have become necessary mantras, and foolish is the grant applicant who does not flourish both words. NGOs endowed by the rich are instinctively hostile to radical social change, at least in any terms that a left-winger of the 1950s or ’60s would understand. The US environmental movement is now strategically supervised and thus neutered as a radical force by the Pew Charitable Trusts, the lead dispenser of patronage and money.
As for the role of Western NGOs in the third world, I recommend a glance at the great Indian journalist P. Sainath’s classic 1996 book, Everybody Loves a Good Drought:
“Development theology holds that NGOs stand outside the establishment. They present a credible alternative to it. The majority of NGOs are, alas, deeply integrated with the establishment, with government and with the agenda of their funding bodies… They also provide white collar employment. Nepal, next door, has over 10,000 NGOs -- one for every 2,000 inhabitants. Compare that with how many teachers, doctors or nurses it has per 2,000 citizens. Funds flowing in through its 150 foreign NGOs account for 12 per cent of Nepal’s GNP.
“The trouble with the word NGO, Non-Profit or whatever,” Sainath wrote to me, “ is that they can mean anything or nothing. A football club is an NGO.I think this term came up when voluntarism died in the west. Have a look at the salaries of the top execs of the Non Profits and NGOs. Voluntarism is a much older tradition - certainly in countries like ours, going back to the days of the Buddha.
“There is undoubtedly a small percentage of them that do great work and in so doing, go way beyond those terms. I respect and admire those, but they are a very small percentage. On the other hand, you will find that every big corporate house creates its own NGO - there are tax breaks involved apart from the PR and very importantly, they can help market penetration.
“Hence an NGO ‘studying water’ and drought discovers and recommends to a state government that the best solution is drip irrigation. And it just so happens that at the time, the said corporate coyly mentions that it has imported millions of drip irrigation kits from Israel or wherever for a very modest price and these are available for the salvation of humankind.
“On the other hand, I have to say again, there are some that deserve respect and admiration. Very often, these are small groups that do NOT take corporate or foreign funding but work on local initiatives -- some old Gandhian groups, some left-wing groups, people who believe in promoting self-reliance and don’t want to transfer the dependency of villagers from government to themselves. Sometimes these become movements. But the largest group are the mainstream, white-collar employment groups.
“Another phenomenon of the liberalization-privatization period are groups that openly run on semi-corporate or corporate or entrepreneurial lines -- ‘social entrepreneurs’ and what have you. The jargon would fill a lexicon. They scorn the not-for-profit stuff.”
Many of these are into micro-credit and have pretty much destroyed what began and is a legitimate tool for poor village women to make life marginally less hard for themselves. Now giant multinational banks and corporate finance outfits have moved steadily towards capturing the micro-credit sector.
Indeed, the amazing career of “micro-credit” as a strategy for “development” is very instructive. Western NGOs and their rich donors ecstatically seized on the term. For one thing, it had something bracingly austere about it: micro-loans are by definition small, and therefore obviously eschew large political ambitions, like organizing politically to force the government into serious action or, if necessary, overthrowing the government and enforcing macro-actions like land reform and economic redistribution.
In 2006,so Sainath reports, “the government of Andhra Pradesh passed a law, enthusiastically supported in the legislature, to curb the interest-gouging activities of some NGO/non-profits and other groups. The chief minister told the House that these people are worse than moneylenders. Indeed, they were charging interest rates that effectively turned out to be between 24 and 36 per cent and even higher.”
Back at the dawn of the twentieth century Lenin and Martov were organizing their international Congresses and looking for grant money to this end. Martov, the Menshevik, told Lenin he must absolutely stop paying for the hotels and halls with money hijacked by Stalin from Georgian banks in Tblisi. Lenin reassured Martov, and then asked Stalin to knock over another bank which he did, Europe’s record bank heist up till that time. It was one way, perhaps the only way, past the grip of cautious millionaires. Then as now.
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