SolidarityEconomy.net

by Jerry Harris, SolidarityEconomy.net

. Financial independence in Latin America

A new South American development bank may be set-up to rival the US dominated Inter-American Development Bank (IDB). The new bank has the backing of Venezuela, Argentina, Brazil, Bolivia, Ecuador, Paraguay and Nicaragua and will have a capital base of $7B. Early priorities such as loans for education and health in Bolivia have been identified with further plans to dispense with many of the conditions normally attached to World Bank and IDB lending. An insider from the IDB was reported saying, “With the money of Venezuela and political will of Argentina and Brazil, this is a bank that could have lots of money and a different political approach. No one will say this publicly but we don’t like it.” (FT, 7/23/07, p. 6)

A big factor making the bank possible is the rise in commodity prices and a flood of liquidity allowing countries in South America to build up account surpluses and strengthen reserves. Higher commodity prices have been made possible by the rise of manufacturing in China and its huge demand for industrial inputs. Thus the global growth of third world economies allows countries to cast off dependency upon Washington as transnational capitalist in the South show growing confidence.

. China pushes biotech spending

China is spending $400 million on agricultural biotech R&D, accounting for 20 percent of world totals. The government employs 2,000 scientist working across 200 government funded labs and have developed GM tomatoes, sweet peppers and papaya. With 20 percent of the world’s population but only 7 percent of the world’s arable land China fears becoming dependent on food imports, much of which currently comes from the US, Brazil and Argentina. Monsanto and other private biotech companies have expressed concern over the increasing competition and growing technological expertise in China, while environmentalist are concerned over food safety and health.

. Maoist guerrillas attack in India

When villagers protested a land grab in West Bengal police attacked and killed 14 people and wounded at least 70 more. The Maoist-backed protest was against plans by Indonesia’s Salim Group to build a large chemical complex. Maoists have played a key role in the mass movements protesting the controversial special economic zones set-up to encourage industrial projects at the expense of peasant agricultural land. The Communist Party of India (Marxist) has ruled West Bengal since 1977 and sees the industrial zones as a way to attract funds and reverse de-industrialization. But land in the crowded countryside is precious and countrywide plans for special economic zones have caused great controversy. Sonia Gandhi, head of the Congress Party, has called on the Federal government to cut-back the national project.

In retaliation for the killings Maoist guerrillas launched an attacked that killed 50 policemen in the impoverished state of Chhattisgarh, a center of the armed conflict. Maoist guerrillas are active in 25 percent of India spreading over 14 states. In response India has opted to form local militia forces similar to those in Peru developed to fight the Sendera Luminosa insurgency. In Peru such tactics lead to horrific widespread violence in villages throughout the Andes. Some argue economic development policies would be a better response to win over those living in extreme poverty. Manmohan Singh, India’s prime minister said the revolutionary situation was the “biggest internal security challenge ever faced by our country.”

. Continued racism in the US

A study by the Chicago based Woodcock Institute found home loans are more expensive for minorities in Boston, Charlotte, Chicago, Los Angeles, New York and Rochester. Blacks had a 380 percent chance of being hit with higher cost loans, while Latinos were 360 percent more likely to be offered higher cost loans. Interest rates were at least 3 percentage points above regular mortgages. The discriminatory pattern was found across minority class lines with high-income minorities having to pay six to seven times more than high income whites. The study looked at lending patterns by some of the most established mainstream banking institutes including: Citigroup, GMAC, HSBC, JPMorgan Chase, Washington Mutual and Wells Fargo.