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InfoGraph of the Day: Arab Rising

Editors — Mon, 04 Jul 2011 15:58:57 +0000

One Picture, One Thousand Words

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Libya: It’s More to It Than Following the Money, It’s About Grabbing It

Editors — Wed, 27 Apr 2011 15:53:28 +0000

Financial Heist of the Century:

Confiscating Libya's Sovereign Wealth Funds

By Manlio Dinucci

Solidarity Economy.net via Il Manifesto

April 22, 2011 - The objective of the war against Libya is not just its oil reserves (now estimated at 60 billion barrels), which are the greatest in Africa and whose extraction costs are among the lowest in the world, nor the natural gas reserves of which are estimated at about 1,500 billion cubic meters.

In the crosshairs of "willing" of the operation “Unified Protector” there are sovereign wealth funds, capital that the Libyan state has invested abroad.

The Libyan Investment Authority (LIA) manages sovereign wealth funds estimated at about $70 billion U.S., rising to more than $150 billion if you include foreign investments of the Central Bank and other bodies. But it might be more. Even if they are lower than those of Saudi Arabia or Kuwait, Libyan sovereign wealth funds have been characterized by their rapid growth. When LIA was established in 2006, it had $40 billion at its disposal. In just five years, LIA has invested over one hundred companies in North Africa, Asia, Europe, the U.S. and South America: holding, banking, real estate, industries, oil companies and others.

In Italy, the main Libyan investments are those in UniCredit Bank (of which LIA and the Libyan Central Bank hold 7.5 percent), Finmeccanica (2 percent) and ENI (1 percent), these and other investments (including 7.5 percent of the Juventus Football Club) have a significance not as much economically (they amount to some $5.4 billion) as politically.

Libya, after Washington removed it from the blacklist of “rogue states,” has sought to carve out a space at the international level focusing on "diplomacy of sovereign wealth funds." Once the U.S. and the EU lifted the embargo in 2004 and the big oil companies returned to the country, Tripoli was able to maintain a trade surplus of about $30 billion per year which was used largely to make foreign investments. The management of sovereign funds has however created a new mechanism of power and corruption in the hands of ministers and senior officials, which probably in part escaped the control of the Gadhafi himself: This is confirmed by the fact that, in 2009, he proposed that the 30 billion in oil revenues go "directly to the Libyan people." This aggravated the fractures within the Libyan government.

U.S. and European ruling circles focused on these funds, so that before carrying out a military attack on Libya to get their hands on its energy wealth, they took over the Libyan sovereign wealth funds. Facilitating this operation is the representative of the Libyan Investment Authority, Mohamed Layas himself: as revealed in a cable published by WikiLeaks. On January 20 Layas informed the U.S. ambassador in Tripoli that LIA had deposited $32 billion in U.S. banks. Five weeks later, on February 28, the U.S. Treasury “froze” these accounts. According to official statements, this is "the largest sum ever blocked in the United States," which Washington held "in trust for the future of Libya." It will in fact serve as an injection of capital into the U.S. economy, which is more and more in debt. A few days later, the EU "froze" around 45 billion Euros of Libyan funds.

The assault on the Libyan sovereign wealth funds will have a particularly strong impact in Africa. There, the Libyan Arab African Investment Company had invested in over 25 countries, 22 of them in sub-Saharan Africa, and was planning to increase the investments over the next five years, especially in mining, manufacturing, tourism and telecommunications. The Libyan investments have been crucial in the implementation of the first telecommunications satellite Rascom (Regional African Satellite Communications Organization), which entered into orbit in August 2010, allowing African countries to begin to become independent from the U.S. and European satellite networks, with an annual savings of hundreds of millions of dollars.

Even more important were the Libyan investment in the implementation of three financial institutions launched by the African Union: the African Investment Bank, based in Tripoli, the African Monetary Fund, based in Yaoundé (Cameroon), the African Central Bank, with Based in Abuja (Nigeria). The development of these bodies would enable African countries to escape the control of the World Bank and International Monetary Fund, tools of neo-colonial domination, and would mark the end of the CFA franc, the currency that 14 former French colonies are forced to use. Freezing Libyan funds deals a strong blow to the entire project. The weapons used by "the willing" are not only those in the military action called “Unified Protector.”

Il Manifesto, April 22, 2011

Translated from Italian by John Catalinotto

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Libya Bombing: The Rotten Deal Under the Perfumed Package

Editors — Sat, 02 Apr 2011 11:02:46 +0000

Exposed: The US-Saudi Libya deal

By Pepe Escobar
SolidarityEconomy.net
via Asia Times Online: April 2, 2011

You invade Bahrain. We take out Muammar Gaddafi in Libya. This, in short, is the essence of a deal struck between the Barack Obama administration and the House of Saud. Two diplomatic sources at the United Nations independently confirmed that Washington, via Secretary of State Hillary Clinton, gave the go-ahead for Saudi Arabia to invade Bahrain and crush the pro-democracy movement in their neighbor in exchange for a "yes" vote by the Arab League for a no-fly zone over Libya - the main rationale that led to United Nations Security Council resolution 1973.

The revelation came from two different diplomats, a European and a member of the BRIC group, and was made separately to a US scholar and Asia Times Online. According to diplomatic protocol, their names cannot be disclosed. One of the diplomats said, "This is the reason why we could not support resolution 1973. We were arguing that Libya, Bahrain and Yemen were similar cases, and calling for a fact-finding mission. We maintain our official position that the resolution is not clear, and may be interpreted in a belligerent manner."

As Asia Times Online has reported, a full Arab League endorsement of a no-fly zone is a myth. Of the 22 full members, only 11 were present at the voting. Six of them were Gulf Cooperation Council (GCC) members, the US-supported club of Gulf kingdoms/sheikhdoms, of which Saudi Arabia is the top dog. Syria and Algeria were against it. Saudi Arabia only had to "seduce" three other members to get the vote.

Translation: only nine out of 22 members of the Arab League voted for the no-fly zone. The vote was essentially a House of Saud-led operation, with Arab League secretary general Amr Moussa keen to polish his CV with Washington with an eye to become the next Egyptian President.

Thus, in the beginning, there was the great 2011 Arab revolt. Then, inexorably, came the US-Saudi counter-revolution.

Profiteers rejoice Humanitarian imperialists will spin en masse this is a "conspiracy", as they have been spinning the bombing of Libya prevented a hypothetical massacre in Benghazi. They will be defending the House of Saud - saying it acted to squash Iranian subversion in the Gulf; obviously R2P - "responsibility to protect" does not apply to people in Bahrain. They will be heavily promoting post-Gaddafi Libya as a new - oily - human rights Mecca, complete with US intelligence assets, black ops, special forces and dodgy contractors.

Whatever they say won't alter the facts on the ground - the graphic results of the US-Saudi dirty dancing. Asia Times Online has already reported on who profits from the foreign intervention in Libya (see There's no business like war business, March 30). Players include the Pentagon (via Africom), the North Atlantic Treaty Organization (NATO), Saudi Arabia, the Arab League's Moussa, and Qatar. Add to the list the al-Khalifa dynasty in Bahrain, assorted weapons contractors, and the usual neo-liberal suspects eager to privatize everything in sight in the new Libya - even the water. And we're not even talking about the Western vultures hovering over the Libyan oil and gas industry.

Exposed, above all, is the astonishing hypocrisy of the Obama administration, selling a crass geopolitical coup involving northern Africa and the Persian Gulf as a humanitarian operation. As for the fact of another US war on a Muslim nation, that's just a "kinetic military action".

There's been wide speculation in both the US and across the Middle East that considering the military stalemate - and short of the "coalition of the willing" bombing the Gaddafi family to oblivion - Washington, London and Paris might settle for the control of eastern Libya; a northern African version of an oil-rich Gulf Emirate. Gaddafi would be left with a starving North Korea-style Tripolitania.

But considering the latest high-value defections from the regime, plus the desired endgame ("Gaddafi must go", in President Obama's own words), Washington, London, Paris and Riyadh won't settle for nothing but the whole kebab. Including a strategic base for both Africom and NATO.

Round up the unusual suspects One of the side effects of the dirty US-Saudi deal is that the White House is doing all it can to make sure the Bahrain drama is buried by US media. BBC America news anchor Katty Kay at least had the decency to stress, "they would like that one [Bahrain] to go away because there's no real upside for them in supporting the rebellion by the Shi'ites."

For his part the emir of Qatar, Sheikh Hamad bin Khalifa al Thani, showed up on al-Jazeera and said that action was needed because the Libyan people were attacked by Gaddafi. The otherwise excellent al-Jazeera journalists could have politely asked the emir whether he would send his Mirages to protect the people of Palestine from Israel, or his neighbors in Bahrain from Saudi Arabia.

The al-Khalifa dynasty in Bahrain is essentially a bunch of Sunni settlers who took over 230 years ago. For a great deal of the 20th century they were obliging slaves of the British empire. Modern Bahrain does not live under the specter of a push from Iran; that's an al-Khalifa (and House of Saud) myth.

Bahrainis, historically, have always rejected being part of a sort of Shi'ite nation led by Iran. The protests come a long way, and are part of a true national movement - way beyond sectarianism. No wonder the slogan in the iconic Pearl roundabout - smashed by the fearful al-Khalifa police state - was "neither Sunni nor Shi'ite; Bahraini".

What the protesters wanted was essentially a constitutional monarchy; a legitimate parliament; free and fair elections; and no more corruption. What they got instead was "bullet-friendly Bahrain" replacing "business-friendly Bahrain", and an invasion sponsored by the House of Saud.

And the repression goes on - invisible to US corporate media. Tweeters scream that everybody and his neighbor are being arrested. According to Nabeel Rajab, president of the Bahrain Center for Human Rights, over 400 people are either missing or in custody, some of them "arrested at checkpoints controlled by thugs brought in from other Arab and Asian countries - they wear black masks in the streets." Even blogger Mahmood Al Yousif was arrested at 3 am, leading to fears that the same will happen to any Bahraini who has blogged, tweeted, or posted Facebook messages in favor of reform.

Globocop is on a roll Odyssey Dawn is now over. Enter Unified Protector - led by Canadian Charles Bouchard. Translation: the Pentagon (as in Africom) transfers the "kinetic military action " to itself (as in NATO, which is nothing but the Pentagon ruling over Europe). Africom and NATO are now one.

The NATO show will include air and cruise missile strikes; a naval blockade of Libyia; and shady, unspecified ground operations to help the "rebels". Hardcore helicopter gunship raids a la AfPak - with attached "collateral damage" - should be expected.

A curious development is already visible. NATO is deliberately allowing Gaddafi forces to advance along the Mediterranean coast and repel the "rebels". There have been no surgical air strikes for quite a while.

The objective is possibly to extract political and economic concessions from the defector and Libyan exile-infested Interim National Council (INC) - a dodgy cast of characters including former Justice minister Mustafa Abdel Jalil, US-educated former secretary of planning Mahmoud Jibril, and former Virginia resident, new "military commander" and CIA asset Khalifa Hifter. The laudable, indigenous February 17 Youth movement - which was in the forefront of the Benghazi uprising - has been completely sidelined.

This is NATO's first African war, as Afghanistan is NATO's first Central/South Asian war. Now firmly configured as the UN's weaponized arm, Globocop NATO is on a roll implementing its "strategic concept" approved at the Lisbon summit last November (see Welcome to NATOstan, Asia Times Online, November 20, 2010).

Gaddafi's Libya must be taken out so the Mediterranean - the mare nostrum of ancient Rome - becomes a NATO lake. Libya is the only nation in northern Africa not subordinated to Africom or Centcom or any one of the myriad NATO "partnerships". The other non-NATO-related African nations are Eritrea, Sawahiri Arab Democratic Republic, Sudan and Zimbabwe.

Moreover, two members of NATO's "Istanbul Cooperation Initiative" - Qatar and the United Arab Emirates - are now fighting alongside Africom/NATO for the fist time. Translation: NATO and Persian Gulf partners are fighting a war in Africa. Europe? That's too provincial. Globocop is the way to go.

According to the Obama administration's own official doublespeak, dictators who are eligible for "US outreach" - such as in Bahrain and Yemen - may relax, and get away with virtually anything. As for those eligible for "regime alteration", from Africa to the Middle East and Asia, watch out. Globocop NATO is coming to get you. With or without dirty deals.

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His new book, just out, is Obama does Globalistan (Nimble Books, 2009).

He may be reached at pepeasia@yahoo.com.

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CyberAllies In North Africa: Not the Main Force, But Still a Powerful Tool

Editors — Mon, 31 Jan 2011 14:35:49 +0000

How Social Media Accelerated the Uprising in Egypt

By E.B. Boyd

SolidarityEconomy.net via Fast Company

There’s been some backlash in the last few days against the idea that either Tunisia or Egypt were brought on by Twitter or a “Facebook Revolution.” And certainly, it takes a lot more than the 21st century version of a communication system to persuade people to take to the streets and risk harm, imprisonment, or death.

But that doesn’t mean social media didn’t play a role. It did. Given the magnitude of grievances in each country, revolt would almost certainly have come eventually. But social media simply made it come faster. It did so by playing a role in three main dynamics:

Organizing protests

Before Egypt shut off the Internet and mobile phones, before it even started blocking Twitter and Facebook, those tools were used to coordinate and spread the word about the demonstrations that were scheduled for January 25. Without these mass organizing tools, it’s likely that fewer people would have known about the protests, or summoned the kind of courage that’s made possible by knowing you’re not the only one sticking your neck out. Without them, fewer people might have shown up, and the Egyptian authorities might have more easily dispatched them. Chances are, we'd be waking up to today with last Tuesday’s skirmishes nothing more than a fading headline from a week long gone.

Shaping the narrative

In situations of chaos, the upper hand goes to the group that can shape a narrative and get it to stick. History is written by the victors, after all--now, even in real time. When looting began over the weekend, the narrative could easily have shifted in favor of the government: Hooligans were turning the city upside down. Order needed to be restored. Clamp down.

But word started getting out via Twitter that hastily arranged neighborhood watch groups were apprehending looters who, it turned out, had police IDs on them. This might or might not have been true—it wasn’t possible to confirm the statements—but it certainly shed a different light on the looting. Certainly, other regimes have been known to hire young men to go out and toss a city, to make it look like protestors have turned ugly, giving them an excuse to clamp down.

But the tweets belied that narrative. And indeed, on Saturday, a New York-based Egyptian blogger interviewed by CNN, suggested as much. She “appealed to the media to not fall for what she described as a Mubarak regime plot to make the protests in Egypt seem like dangerous anarchy,” according to the New York Times’ blog The Lede [1]. “I urge you to use the words ‘revolt’ and ‘uprising’ and ‘revolution’ and not ‘chaos’ and not ‘unrest," she said. "We are talking about a historic moment.” The narrative was reset. Soon thereafter, CNN changed its on-screen headlines from “CHAOS IN EGYPT” to “UPRISING IN EGYPT.”

Putting pressure on Washington

Washington presumably found itself between a rock and a hard place last week. The U.S. prefers to fall on the side of freedom and self-determination whenever possible. But Egypt is one of this country’s closest allies in the Middle East. And there certainly must be concern about a domino effect leading to even more instability in the region, should Egyptian president Hosni Mubarak fall. When faced with those kinds of tensions in the past, Washington has not infrequently found it more convenient to spin the narrative in favor of the authority in power, in the interest of maintaining stability—and an ally.

But that wasn’t possible this time. Too much information was escaping the country. Through the media, in part. But also on YouTube. And particularly via Twitter. An seemingly endless flood of details flowed out, skewing, rightly or wrongly, in favor of the protesters, giving the impression that a genuine uprising was taking place. With that deluge, Washington lost any ability to downplay events on the ground and maintain a distanced posture. It began subtly shifting its stance.

As a result, we witnessed a subtle, but incontrovertible, shifting of the U.S. position as the days wore on. Officials began speaking of a “transition.” They declined to articulate explicit support for Mubarak. Defense Secretary Robert Gates put out a call to his counterpart in Israel, presumbaly to reassure the country, which was getting skittish about the prospect of chaos on its borders should Mubarak fall. President Obama placed calls to other leaders in the region, presumably to offer similar reassurances. By last night, as the New York Times put it [2] in a piece posted that evening, “Secretary of State Hillary Rodham Clinton… [stopped] short of telling its embattled president, Hosni Mubarak, to step down but clearly laying the groundwork for his departure.”

Did social media make all this happen? No, of course not. Did it bring everything to a head much sooner than it would have, had Twitter, Facebook, and YouTube not existed? Absolutely.

Image courtesy of Al Jazeera English [3]]

E.B. Boyd is FastCompany.com's Silicon Valley reporter. Follow me on Twitter [4]. Or email [5].

Links:
[1] http://thelede.blogs.nytimes.com/2011/01/29/latest-updates-on-protests-in-egypt-2/
[2] http://www.nytimes.com/2011/01/31/world/middleeast/31diplo.html?partner=rss&emc=rss
[3] http://www.flickr.com/photos/aljazeeraenglish/5390339165/
[4] http://twitter.com/ebboyd
[5] mailto:ebboyd@fastcompany.com

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They’re Broken Men, So Don’t Let Them Take us to a New War

Henry Porter — Thu, 01 Feb 2007 06:00:04 +0000

Presidents Bush and Ahmadinejad have lost face at home; now others must forge peaceful settlements in the Middle East

by Henry Porter, Observer There is a striking likeness in the expressions of George W Bush and Mahmoud Ahmadinejad of Iran as they confront each other over the issues of uranium enrichment and dominance in the Middle East. It falls somewhere between the chastened and defiant playground bully. This is unsurprising: though not political equivalents, the two are really quite similar. Both had little experience of government or international affairs before being carried to power on a tide of populist, religious conservatism. Neither travelled abroad much, but they both had certain views about the world and the destiny of their nations. They had all the answers, yet there was also a dangerous lack of seriousness in them which has now earned them both the scorn of their people and rebuffs from their elders. We think of Bush as being the more unpopular of the two. His approval ratings are at the level of Nixon's just before he left the White House. After an unconvincing performance in the State of the Union Address, his plans for the troop surge in Iraq were rejected by the Senate Foreign Relations Committee and may now be voted down by the entire Senate. Senior Republican senators such as Chuck Hagel and John Warner are furious that sensible suggestions contained in the Iraq Study Group Report have been ignored. Although the President looked receptive when the report was delivered to him by James Baker, there has been no progress in policy, no evidence of any kind of deeper thinking in the White House. Nothing except that familiar foggy, narrow-eyed truculence of Bush Junior in a tight spot. This would be a depressing but for similar difficulties experienced by Ahmadinejad over the last few weeks. Just as the senior Republican elders have turned on Bush, so Iran's religious leaders are moving to restrain their President. They criticise his bellicose foreign policy and the exceptionally poor record on promised reforms at home. There is a sense of embarrassment among sophisticated Iranians about their President's pronouncements, which surely rings a bell with Americans. The most important sign-off disenchantment came in Jomhouri Islami, the newspaper owned by Iran's supreme religious leader Ayatollah Ali Khamenei, which said in an editorial: 'Turning the nuclear issue into a propaganda issue gives the impression that to cover up the flaws in government you are exaggerating its importance.' The paper also suggested that the President should speak about the nuclear issue less, stop provoking aggressive powers like the United States and concentrate on the daily needs of the people - 'those who voted for you on your promises'. Two weeks ago, 150 legislators sent a letter to Ahmadinejad openly attacking him for missing his budget deadline and blaming him for inflation and rising unemployment. A loss of confidence in both men at home is important because it offers us a brief opportunity to assert diplomacy over the habits of rhetoric and escalation. Although UN nuclear experts suggest the Iranians are at least five years from developing a bomb and delivery system, the Iranians are due to open a large uranium enrichment plant within a matter of weeks. If this goes ahead, a peaceful solution will be much harder to find; to decommission this new facility will require a loss of face for Ahmadinejad. So the hawks in the West will begin the slow drumbeat for a first strike. Indeed, it has already started. For some weeks, the Daily Telegraph has been running a series of what, in my opinion, are extremely dubious stories all attributed to mysterious 'European defence officials' and 'senior Western military sources'. A front-page story last week suggested that North Korea has offered to help Iran with a nuclear test within the year. Apart from these shadowy spokesmen, it could offer no evidence, which is why the story was only seriously picked up in Israel. In Israel, it is believed that the Iranians may be able to launch a nuclear warhead into its territory within three, not five, years. Former Prime Minister Binyamin Netanyahu has asked who will defend the Jews from a genocidal government in Iran if they do not themselves. Israeli historian Benny Morris contributed this chilling thought to the Jerusalem Post. 'One bright morning in five to 10 years, perhaps a regional crisis, a day or a year or five years after Iran's acquisition of the bomb, the mullahs in Qom will convene in secret session... and give President Ahmadinejad the go-ahead.' In Iran, 38 nuclear inspectors have been barred from entering the country in retaliation for the UN resolution introducing mild sanctions, and now the Iranians have installed a missile defence system (supplied by the Russians) to defend their nuclear facilities from air attacks. The Americans have responded by moving another aircraft carrier into the region and by offering Patriot missile systems to Iran's uneasy Arab neighbours. Make no mistake: this a much more dangerous situation than Iraq and it is unfolding on the watch of a couple of second-raters. It is true that few nations that have been more estranged over the last quarter of a century, but with the stakes so high, it seems extraordinary that America has no representation in Tehran and almost no contact except through the Swiss embassy. As Nicholas Kristof of the New York Times reminded us last week, in 2003, America rebuffed an advance made by the Iranians through the Swiss, which, in exchange for the lifting of sanctions, suggested the two countries work together on the capture of terrorists in Iraq, stabilising the country after invasion and coming to an agreement on uranium enrichment as well as the financing of Hizbollah and Hamas. The offer, made almost two years before Ahmadinejad was elected, was layered with insincerity and bluff, but professional diplomats are used to this. At least the two sides would have been talking and Tehran could have been held to account for some of the things that have been going on in Iraq. But the situation is not beyond hope. The West must realise that if a first strike takes place we have lost. Whatever is destroyed in Iran, the Iranians will come back and produce a bomb that they may feel more entitled to use. The clash of civilisations predicted by neocon academics for years will have moved a step closer to dominating the 21st century at the very moment when all civilisation needs to concentrate on the multiple threats presented by climate change. What we must hope for is a collective act of will in Europe, and among wiser heads in Washington DC, which says it doesn't have to be this way. This is not impossible. Only last week, representatives from 30 countries led by America and Saudi Arabia met in Paris to contribute to a Â£5bn fund to prop up Prime Minister Fouad Siniora's government in Lebanon. This was a diplomatic action taken by both Middle Eastern and Western powers to defend Lebanon against Iran's proxies in the Hizbollah terrorist organisation, and it is exactly the right way to deal with Iran. What can the British government do about Ahmadinejad? The first thing to is to recognise his failing support at home is an advantage that will be lost if the drumbeat to war is allowed to continue. There is no reason why Tony Blair should not add to the call from the head of UN inspectors, Mohamed ElBaradei, for a time out in which sanctions would be suspended. Blair still has a voice that is heard in the US. He should consider making a speech which insists that Bush initiates direct diplomatic relations with Tehran as well as a renewed effort to create the two-state solution for Israel and Palestine. He owes something to the cause of peaceful resolution and, besides, these are hardly controversial views: both have already been expressed by James Baker's Iraq Study Group. henry.porter@observer.co.uk The Observer, Sunday January 28, 2007

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Global Notes #16

Jerry Harris, SolidarityEconomy.net — Tue, 30 Jan 2007 06:00:32 +0000

by Jerry Harris, SolidarityEconomy.net . Transnational capitalists hedge US investments In November US investors bought a record number of foreign assets ($39.1B) amid fears of the weakening dollar. Wall Street Banks are also profiting from a boom in global business with international revenues growing three times as fast as their US investments. The worldâ€™s biggest bank, Citigroup, said its international revenues jumped 34 percent compared to an increase of about 10 percent in the US. For the first time operations in Europe and Asia earned more than its US investments. JPMorgan Chase saw its global investment revenues soar upwards 42 percent to $9B, almost matching its US business at $9.2B. . London passing New York as a financial center London is becoming a center of choice for raising capital challenging New York as the worldâ€™s leading financial center. In 2006 $55B was raised on the London Stock Exchange for the first time ever exceeding the amount raised on the New York Stock Exchange and Nasdaq where shares issued reached $46B. Chuck Prince, chief executive of Citigroup, says â€œI think we are going to see a diffusion away from New York as a center of financial activity. New York will not be unimportant but the rise of London, Hong Kong and Dubai and other places is going to be quite significant. People will be going to other places to raise capital.â€ London is seen as a natural hub for operations in Europe, the Middle East and Africa. London is also the center of the worldâ€™s biggest financial market, the foreign exchange or money markets. Of the $2.7 trillion traded daily about a third passes through London. All this reflects the growth of the transnational capitalist class and its patterns of global accumulation. Particularly in the financial world national centers have become less important with the free flow of money and investments across borders. . Is Islamic banking high road finance? The Koran bans both the loaning of money for interest or speculation. So in recent years Middle Eastern bankers have devised equity-style investments known as Islamic bonds or â€œsukukâ€ and Koran-compliant insurance called â€œtakaful.â€ Both are rapidly expanding in size, some estimates putting investments now at $750B. The boom has been built on a profit-sharing product model and high profitability at Islamic banks. These banks have also benefited from a shifting political environment that reflects a rise in religious and nationalist feelings since the start of the US â€œwar on terror.â€ Unlike the profit windfall from the oil booms in the 1970s and 1980s more money is staying in the Middle East rather than being placed in Western banks. European banks are jumping in with ABN Amro, Societe Generale, UBS and Deutsche Bank all now offering Islamic investment instruments. Just another sign of the lost of US financial hegemony to transnational capitalism.

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The Case for Engagement

Scott Ritter — Fri, 17 Nov 2006 05:00:38 +0000

The distance between the northern suburbs of the Iranian capital of Tehran and the nuclear enrichment facility of Natanz is roughly 180 miles. What transpires on the ground between these two geographical points has seized the attention of the international community, and in particular the government of the United States, as the world wrestles with how best to respond to the issues surrounding Iran's decision to pursue indigenous enrichment of uranium in defiance of the United Nations Security Council's resolution demanding that all such activity cease. I recently returned from a trip to Iran, where over the course of a week I made the journey from the northern suburbs of Tehran to the gates of the Natanz enrichment facility, and in doing so had my eyes opened. The Iran that I witnessed was far removed from the one caricatured in the US media. I left with the frustrating realization that, as had been the case with Iraq, America was stumbling toward a conflict, blinded by the prejudice and fear born of our collective ignorance. The first thing that becomes apparent upon arrival in Tehran is that Iran is nothing like Iraq. I spent more than seven years in Iraq and know firsthand what a totalitarian dictatorship looks and acts like. Iran is not such a nation. Once I cleared passport control, I was thrust into a vibrant society that operates free of an oppressive security apparatus such as the one that dominated Iraqi daily life in the time of Saddam Hussein. This does not mean there is no internal security apparatus in Iran--far from it. A visit to the cable cars operating in the mountains north of Tehran puts you next to a major communications station of the ministry, where cellphone conversations can be monitored using advanced software procured from the United States. Iran has a functioning domestic security apparatus, but it most definitely is not an all-seeing, all-controlling police state, any more than the United States is in the post-9/11 era, when the FBI and the National Security Agency use similar software to selectively monitor the conversations of American citizens. Iran is certainly not an open society that operates on a par with the West. I recently had the honor of spending some time with Shirin Ebadi, who was awarded the 2003 Nobel Peace Prize, and have heard her account of the intense repression meted out to those who challenge the political system. The theocrats who govern in Tehran have a history of shutting down media that are not obedient to the state, and the Iranian prison system is notorious for the jailing, beating and even execution of those who dare to protest publicly the rule of the mullahs. In spite of these abuses of human rights and civil liberties, Iran is not a closed society. There is a ban on satellite television dishes, but many Iranians get their news from the BBC, CNN and other international television services simply by flouting the rules, which seem not to be too widely enforced. Some, like the Revolutionary Guards I became acquainted with, disguise their dish as a flower planter. The government has tried to censor the Internet, and has targeted online journalists and blocked thousands of websites. But the Internet is heavily used by Iranians, who continue to find ways to evade government controls. And cellphones are as ubiquitous as they are here in the West. The point is that while the Iranian government often cracks down on organized public displays of dissent, the free flow of information that is vital to any dynamic society exists despite the efforts of the government to contain or control it. Ebadi is permitted to travel abroad, speaking and publishing words harshly critical of the Iranian theocracy. She has been harassed by the government but still operates freely, unlike her fellow Nobel laureate, Aung San Suu Kyi, who won the Peace Prize in 1991 and is again under house arrest in Myanmar. During my visit to the northern suburbs of Tehran, I was struck by the presence of wealth. Many ideologues in the United States, including those who currently occupy the corridors of power in Washington, conclude that this segment of society not only awaits US intervention to overthrow the regime but would actually cooperate with and facilitate any such effort. There is certainly a circle of Iranian secular intellectuals who chafe under Islamic law. Many of them are drawn from the ranks of the "old rich," those who made their fortunes during the time of the Shah and who yearn for the return of a Westernized, secular society. In conversation, these intellectuals often speculate about the possibility of US intervention, but more and more the hope of such liberation has been tempered by the ever-deepening disaster in Iraq. While most Iranians welcomed the elimination of Saddam, the horrors inflicted and unleashed by US military forces next door have left many of the old rich in Tehran with the realization that the dream of American intervention may turn into a nightmare. My trip convinced me that support for US intervention does not exist to any significant degree but rather resides solely in the minds of those in the West who have had their impressions of Iran shaped by pro-Shah expatriates who have been absent from the country for more than a quarter-century. Iran today is a fully functioning capitalist society, and in addition to the old rich, there is a larger population of wealthy Iranians who made their fortunes after the Islamic revolution and who owe their ability to sustain their wealth to the continued governance of the Islamic Republic. Likewise, those in the West who believe that the youth of Iran (more than two-thirds of the population today is under 30) share the same aspirations as the Western-oriented moneyed class will be disappointed. Those under 30 have no memory of the Iran that existed pre-theocracy and seem more willing to support a moderating change from within than a drastic change imposed from without. The vast majority of Tehran's citizens are working- and lower middle class. These people reside in the urban sprawl of southern Tehran, where out-of-control population growth strains the resources of municipal government and the Islamic Republic as a whole. The province of Tehran has expanded from 6.8 million people a decade ago to a current official count of 10.5 million; the actual population may be closer to 12 million, with more arriving every day. Unemployment is rampant (the official figure for the country is 12.4 percent, but it's probably closer to 20 percent), and there is a growing level of dissatisfaction that has manifested itself politically in recent years. The political center of Iran used to rest in northern Tehran. However, the 2005 presidential election saw a dramatic shift to the southern neighborhoods, whose voters helped elect one of their own, Mahmoud Ahmadinejad. The Western media have for the most part depicted his victory as evidence of a resurgent religious fundamentalism, but anyone who walks the streets of southern Tehran (where most Western journalists are loath to wander) and visits the workshops and markets will find a much more nuanced reality. In the motorcycle repair shop I walked into I found the owner and customers evenly divided between Ahmadinejad and his principal rival, former President Hashemi Rafsanjani. Rafsanjani actually won the most votes in the first round, but in the runoff Ahmadinejad shocked everyone by bringing over to his conservative platform the supporters of the reformist candidates. The key factor in his stunning victory was not religious fundamentalism but widespread disillusionment over the state of the economy, coupled with charges of nepotism and corruption surrounding Rafsanjani. Ahmadinejad was, more than anything, a reform candidate. This is what swept him into office, and it is on this issue that he continues to be judged today, with decidedly mixed results, by the people of Iran. For all the attention the Western media give to Ahmadinejad's foreign policy pronouncements, the reality is that his effective influence is limited to domestic issues. The citizens of Tehran I spoke with, from every walk of life, understood this and were genuinely perplexed as to why we in the West treat Ahmadinejad as if he were a genuine head of state. "The man has no real power," a former Revolutionary Guard member told me. "The true power in Iran resides with the Supreme Leader." The real authority is indeed the Ayatollah Sayeed Ali Khamenei, successor to the Ayatollah Ruhollah Khomeini. According to the Iranian Constitution, the Supreme Leader has absolute authority over all matters pertaining to national security, including the armed forces, the police and the Revolutionary Guard. Only the Supreme Leader can declare war. In this regard, all aspects of Iran's nuclear program are controlled by Khamenei, and Ahmadinejad has no bearing on the issue. Curiously, while the Western media have replayed Ahmadinejad's anti-Israel statements repeatedly, very little attention has been paid to the Supreme Leader's pronouncement--in the form of a fatwa, or religious edict--that Iran rejects outright the acquisition of nuclear weapons, or to the efforts made by the Supreme Leader in 2003 to reach an accommodation with the United States that offered peace with Israel. While Ahmadinejad plays to the Iranian street with his inflammatory rhetoric, the true authority in Iran has been attempting to navigate a path of moderation. The Supreme Leader's powers are impressive, but they are not absolute. Iran has a system of checks and balances that is played out through two primary bodies: the Guardian Council and the Expediency Council. Until recently the Guardian Council had absolute veto power over parliamentary legislation and was unchecked in the exercise of its oversight responsibilities. However, in 1997 Khamenei beefed up the role and responsibility of the Expediency Council, and it was further strengthened last year; now the decisions of the Guardian Council, if challenged by the Iranian Parliament, can be overturned by the Expediency Council. The Guardian Council is still a dauntingly authoritative body, especially when one considers that the Supreme Leader has the power to appoint half its members (and all of the Expediency Council's). Iran, after all, remains an Islamic republic, which means that the political pulse is generated not in Tehran but some fifty-five miles to the south, in the holy city of Qom. It is in Qom where many of the religious figures on the two councils reside. They teach at religious schools and have developed their own followings, comprising religious, civil and military officials who have an enormous effect on day-to-day policy. Qom is a very conservative city, and the religious figures who study there reflect this. However, this conservatism does not directly translate into the embrace of strict religious fundamentalism. There is a growing recognition among the ayatollahs who serve on the councils of the need to seek compromise on matters of religion not only to dilute internal dissent but also to better tend to the needs of the country. The greatest reform pressure on these figures comes not from religious students but rather from the traditional watchdog of the Islamic Republic, the Revolutionary Guard. The Islamic Revolutionary Guard Corps remains very much an enigmatic entity to most Western observers. Born from the tumult of the revolution that swept the Shah from power in 1979, the Revolutionary Guard was the primary defender of the Islamic Republic during its infancy, serving as the country's first line of defense after the 1980 Iraqi invasion and against anti-regime forces, in particular the guerrillas of the Mujahedeen-e-Khalq, or People's Mujahedeen (MEK). The Revolutionary Guard also served as defender of the Shiite faith abroad, playing a pivotal role in the formation of Hezbollah in southern Lebanon after the 1982 Israeli invasion. Many of the actions of the guard have been cited by the United States as evidence that Iran is a state sponsor of terrorism. The guard members I spoke with reject this characterization. "We did some pretty terrible things in our early years, but we were fighting for our national survival," one veteran member told me. "The MEK was waging a war in our cities, ambushing our forces, assassinating our politicians and killing our citizens with car bombs. We had to crush them, either in Iran or out. But if we kill an MEK operative in France or Germany, we become terrorists. If America kills an Al Qaeda operative in another country, you are counterterrorists. This makes no sense. We have never targeted or attacked Americans or American interests. We condemned the 9/11 attacks as a crime against Islam and a crime against humanity. And yet we are reviled as terrorists, or even worse, co-conspirators with Al Qaeda. Doesn't America understand that we oppose Al Qaeda and all it stands for? Do you not know that the teachings of Sunni Wahhabism are anathema to the teachings of the Shia faith?" In our haste to lash out at those who attacked us on September 11, 2001, we forget that Iran not only condemned the attacks, as did its Hezbollah allies in Lebanon, but that it nearly fought a war against Afghanistan's Taliban and their Al Qaeda allies in the late 1990s. There is no greater potential ally in the struggle against Sunni extremism than Shiite Iran, a point made over and over by everyone I talked to, especially those affiliated with the Revolutionary Guard. As one veteran told me, "Iraq is our neighbor, and of course we have a vested interest in its stability. We fought an eight-year war with Iraq, so we understand the realities of that country. We are very glad the United States got rid of Saddam. But now what America is doing only makes the region more insecure. We could help America in Iraq if only they would let us." Moving south from Qom, along modern highways interspersed with rest stops that would meet with the approval of any traveler on the New York State Thruway, I was struck by the long lines of cars at gas stations. For all its oil wealth, Iran has an energy crisis. With its economy focused on the cash business of oil export, little attention has been paid to the needs of the domestic consumer. Iran is woefully lacking in domestic refining capacity, so much so that it spends billions every year importing gasoline at world market prices, which it then discounts so that the Iranian consumer pays only some 40 cents a gallon. This makes no economic sense, but Iran's oil is already fully leveraged in the export market. With reserves shrinking and new discoveries waning, Iran faces a serious energy crisis in the coming decades unless alternative sources are developed. Some 180 miles south of Tehran lies the Natanz nuclear enrichment facility. Tucked away on the side of the road, surrounded by a makeshift berm and numerous antiaircraft artillery emplacements, the facility has the outward appearance of something dark and ominous. But the secrets concerning what lies within are well-known to the world as a result of inspections carried out by the International Atomic Energy Agency. What the inspectors say is crystal clear: There is no evidence that Iran is pursuing a nuclear weapons program. Furthermore, the enrichment program is plagued with technical problems that prevent any rapid progress. There is no imminent nuclear weapons threat from Iran, which hasn't mastered the technologies and methodologies of enrichment needed to sustain a nuclear energy program, let alone a nuclear weapons effort. The Bush Administration speaks of the need to move quickly on the issue of Iran's nuclear ambition and to roll back the forces of terror represented by the Islamic Republic. The repeated and explicit demand of the Administration is for regime change, as evidenced in the March 2006 "National Security Strategy of the United States," where Iran is named repeatedly as the number-one threat to the United States. The alleged Iranian threat espoused by Bush is based on fear, and arises from a combination of ignorance and ideological inflexibility. The path that the United States is currently embarked on regarding Iran is a path that will lead to war. (Indeed, there are numerous unconfirmed reports that the United States has already begun covert military operations inside Iran, including overflights by pilotless drones and recruitment and training of MEK, Kurdish and Azeri guerrillas.) Such a course of action would make even the historic blunder of the Iraq invasion pale by comparison. When we talk of war, we must never forget that we are talking about the lives of the men and women who serve us in the armed forces. We have a duty and responsibility to insure that all options short of war are exhausted before any decision to enter into conflict is made. On the issue of Iran, the United States hasn't even come close to exhausting the available options. The solution to this problem is clear. The most logical course would be to put Secretary of State Condoleezza Rice on a flight to Tehran, where she could negotiate directly with the principal players on the Iranian side, including Supreme Leader Khamenei. If Administration officials actually engaged with the Iranians, they would have an eye-opening experience. Of course, Rice would need to come with a revamped US policy, one that rejects regime change, provides security guarantees for Iran as it is currently governed and would be willing to recognize Iran's legitimate right to enrich uranium under Article IV of the Non-Proliferation Treaty (although under stringent UN inspections, and perhaps limited to the operation of a single 164-centrifuge cascade). Rice would undoubtedly be surprised at the degree of moderation (and pro-American sentiment) that exists in Iran today. She might also be shocked to find out that the Iranians are more than ready to sit down with the United States and work out a program for stability in Iraq, as well as a reduction of tensions between Israel and Hezbollah. In addition to significantly reducing the risk of a disastrous conflict, such a visit would do more to encourage moderation and peace in the region than any amount of saber-rattling could ever hope to accomplish. And it would do more to help America prevail in the so-called Global War on Terror than any war plan the Pentagon could assemble. In the end, that is what defines good policy--something sadly lacking in Washington today. This article can be found on the web at http://www.thenation.com/doc/20061120/ritter

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Global Notes #5

Jerry Harris, SolidarityEconomy.net — Sun, 12 Nov 2006 05:04:12 +0000

. Middle East investments soar Flooded with money from soaring oil prices there has been an explosion of investment banks, private equity funds and venture capital coming out of the Middle East. But unlike the 1970s and 1990s when both governments and investors relied on international banks to handle their wealth local transnational capitalists are now guiding their own funds. That means petrodollars aren't being recycled through New York and London but through such firms as Dubai's Istithmar and Abu Dhabi Investment Authority. Funds are expect to hit $10B by 2007. David Jackson, chief executive officer at Istithmar says, "In 2003, people hardly understood what private equity and alternative investments really were; now every other day we get wind of another fund." Says another banker, "In the past, they would just give the money and put it in the US. Now they want to do their own dealsâ€¦" . Neo-liberals advocate pay-raise for Chinese Transnational capitalists are trying to help China spend the billions of dollars sitting in State coffers. But their surprising advice is a consumption-led boost for growth. Concerned that too much investment is pouring into industry and real estate creating overcapacity and non-performing loans Martin Wolf, finance editor for the Financial Times, argues that Government spending on health, education, welfare and pensions has been "far too timid." Afterall, to pursue such policies you don't have to be a Communist, just a mild social-democrat will do nicely. In addition, Wolf says China needs "greater reliance on consumption," and one way to achieve that is raising the minimum wage in all state owned industry. His views are backed up by a recent report from the Institute for International Economics by Nicholas Lardy titled "China: Towards a Consumption-Driven Path." Joining the discussion from the Yale School of Management Jeffrey Garten calls for a Chinese Marshall Plan supporting the UN's Millennium Development goals to "reduce extreme poverty, improving health and education and ensuring environmental sustainability." Garten wants China to take $100B of its $1,000B in foreign exchange reserves and establish a fund for the Third World. This could be done by giving money to the WTO, Rockefeller Foundation and working with GE and BP for alternative energy. It might come as a surprise that such organizations need money. But of course Western capitalists can always find ways for Third World countries to manage their finances. After devastating social services and creating more poverty neo-liberals now turn to China to help solve their problems. An interesting turn of events, but as hypocritical as the calls may be, the ideas retain their merit.

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