Category Archives: World Bank

Agrarian Crisis: Father of Green Revolution in India Rejects GM Crops as Farmers Demand Justice in Delhi

Genetically modified (GM) cotton in India is a failure. India should reject GM mustard. And like the Green Revolution, GM agriculture poses risks and is unsustainable. Regulatory bodies are dogged by incompetency and conflicts of interest. GM crops should therefore be banned.

You may have heard much of this before. But what is different this time is that the claims come from distinguished scientist P.C. Kesaven and his colleague M.S. Swaminathan, renowned agricultural scientist and geneticist and widely regarded as the father of the Green Revolution in India.

Consider what campaigner and farmer Bhaskar Save wrote in his now famous open letter in 2006:

You, M.S. Swaminathan, are considered the ‘father’ of India’s so-called ‘Green Revolution’ that flung open the floodgates of toxic ‘agro’ chemicals, ravaging the lands and lives of many millions of Indian farmers over the past 50 years. More than any other individual in our long history, it is you I hold responsible for the tragic condition of our soils and our debt-burdened farmers, driven to suicide in increasing numbers every year.

Back in 2009, Swaminathan was saying that no scientific evidence had emerged to justify concerns about GM crops, often regarded as stage two of the Green Revolution. In light of mounting evidence, however, he now condemns GM crops as unsustainable and says they should be banned in India.

In a new peer-reviewed paper in the journal Current Science, Kesaven and Swaminathan state that Bt insecticidal cotton has been a failure in India and has not provided livelihood security for mainly resource-poor, small and marginal farmers. These findings agree with those of others, many of whom the authors cite, including Dr K.R. Kranthi, former Director of the Central Institute for Cotton Research in Nagpur and Professor Andrew Paul Gutierrez and his colleagues.

The two authors conclude that both Bt crops and herbicide-tolerant crops are unsustainable and have not decreased the need for toxic chemical pesticides, the reason for these GM crops in the first place. Attention is also drawn to evidence that indicates Bt toxins are toxic to all organisms.

Kesaven and Swaminathan note that glyphosate-based herbicides, used on most GM crops, and their active ingredient glyphosate are genotoxic, cause birth defects and are carcinogenic. They also note that GM crop yields are no better than that of non-GM crops and that India already has varieties of mustard that out-yield the GM version which is now being pushed for.

The authors criticise India’s GMO regulating bodies due to a lack of competency and endemic conflicts of interest and a lack of expertise in GMO risk assessment protocols, including food safety assessment and the assessment of environmental impacts. They also question regulators’ failure to carry out a socio-economic assessment of GMO impacts on resource-poor small and marginal farmers.

Indeed, they call for “able economists who are familiar with and will prioritize rural livelihoods, and the interests of resource-poor small and marginal farmers rather than serve corporate interests and their profits.”

In the paper, it is argued that genetic engineering technology is supplementary and must be need based. In more than 99% of cases, the authors argue that time-honoured conventional breeding is sufficient. In other words, GM is not needed.

Turning to the Green Revolution, the authors say it has not been sustainable largely because of adverse environmental and social impacts. Some have argued that a more ‘systems-based’ approach to agriculture would mark a move away from the simplistic output-yield paradigm that dominates much thinking and would properly address concerns about local food security and sovereignty as well as on-farm and off-farm social and ecological issues associated with the Green Revolution.

In fact, Kesaven and Swaminathan note that a sustainable ‘Evergreen Revolution’ based on a ‘systems approach’ and ‘ecoagriculture’ would guarantee equitable food security by ensuring access of rural communities to food.

There is a severe agrarian crisis in India and the publication of their paper (25 November) was very timely. It came just three days before tens of thousands of farmers from all over India gathered in Delhi to march to parliament to present their grievances and demands for justice to the Indian government.

According to the Charter of Indian Farmers, released to coincide with the farmers’ march in Delhi:

Farmers are not just a residue from our past; farmers, agriculture and village India are integral to the future of India and the world.

Successive administrations in India have, however, tended to view Indian farmers as a hindrance to the needs of foreign agricapital and have sought to run down smallholder-based agriculture – the backbone of Indian farming – to facilitate the interests of global agribusiness under the guise of ‘modernising’ the sector, thereby ridding it of its ‘residue’ farmers.

To push this along, we now have a combination of World Bank directives and policies; inappropriate commodity cropping; neoliberal trade and a subsequent influx of (subsidised) agricultural imports; and deregulation, privatisation and a withdrawal of government support within the farm sector, which are all making agriculture economically unviable for many farmers.

And that’s the point, to drive them out of agriculture towards the cities, to change the land laws, to usher in contract farming and to displace the existing system of smallholder cultivation and village-based food production with one suited to the needs of large-scale industrial agriculture and the interests of global seed, pesticide, food processing and retail corporations like Monsanto-Bayer, Cargill and Walmart. The aim is to lay the groundwork to fully incorporate India into a fundamentally flawed and wholly exploitative global capitalist food regime.

And integral to all of this is the ushering in of GM crops. But as Kesaven and Swaminathan imply, GM agriculture would only result in further hardship for farmers and more difficulties.

Of course, these two authors are not the first to have questioned the efficacy of GM crops or to have shown the science or underlying premises of GM technology to be flawed. Researchers whose views or findings have been unpalatable to the GMO industry in the past have been subjected to vicious smear campaigns.

Despite the distinguished nature of the two scientists (or more likely because they are so distinguished and influential) who have written this current paper, we may well witness similar attacks in the coming days and weeks by those who have a track record of cynically raising or lowering the bar of ‘credibility’ by employing ad hominem and misrepresentation to suit their pro-GMO agenda.

And that’s because so much is at stake. India presents a massive multi-billion-dollar market for the GMO industry which already has a range of GM crops from mustard and chickpea to wheat, maize and rice in the pipeline for Indian agriculture. The last thing the industry wants is eminent figures speaking out in this way.

And have no doubt, GM crops – and their associated chemical inputs – are huge money spinners. For example, in a 2017 article in the Journal of Peasant Studies, Glenn Stone and Andrew Flachs note that Indian farmers plant the world’s largest area to cotton and buy over USD 2.5 billion worth of insecticides yearly but spend only USD 350 million on herbicides. The potential for herbicide market growth is enormous and industry looks for sales to reach USD 800 million by 2019. Moreover, herbicide-tolerant GM traits are the biotechnology industry’s biggest money maker by far, with 86 percent of the world’s GM acres in 2015 containing plants resistant to glyphosate or glufosinate. However, the only GM crop now sold in India is Bt cotton.

If we move beyond the cotton sector, the value capture potential for the GMO biotech sector is enormous. Clearly, there is much at stake for the industry.

The negative impacts of the Green Revolution can be reversed. But if commercial interests succeed in changing the genetic core of the world’s food supply, regardless of warnings about current failures of this technology and its unintended consequences at scientific, social and ecological levels, there may be no going back. Arrogance and ignorance passed off as ‘scientific’ certainty is not the way forward. That was a salient point when Bhaskar Save outlined his concerns about the impacts of the Green Revolution to Swaminathan back in 2006.

Scientists can and do change their views when presented with sufficient evidence about the flaws and negative impacts of technologies. This is how science and debate move forward, something which seems lost on the industry-backed scientists and ideologues who tout for GM.

It also seems lost on politicians who seem more intent on doing the bidding of foreign agricapital rather than listening to Indian farmers and following a more appropriate agroecologically-based route for rural development.

Approaching Development: GMO Propaganda and Neoliberalism vs Localisation and Agroecology

What people communicate is a matter of choice. But what can be more revealing are the issues they choose to avoid. There are certain prominent pro-GMO activists who describe themselves as ‘science communicators’. They hit out at those who question their views or who have valid criticisms of GM technology and then play the role of persecuted victim, believing that, as the self-appointed arbiters of righteousness, they are beyond reproach, although given their duplicity nothing could be further from the truth.

Instead of being open to questioning, they attempt to close down debate to push a flawed technology they have a vested (financial-career) interest in, while all the time appealing to their self-perceived authority, usually based on holding a PhD in molecular biology or a related discipline.

They relentlessly promote GM and industrial agriculture and unjustifiably cast critics as zealots who are in cahoots with Greenpeace or some other group they have a built-in dislike of. And they cynically raise or lower the bar of ‘credibility’ by ad hominem and misrepresentation so that studies, writers and scientists who agree with them are commended while those who don’t become subjected to smear campaigns.

Often with ties to neoliberal think tanks, pro-GMO lobbyists call for more deregulation and criticise elected governments or regulatory bodies which try to protect the public interest, especially where genetic engineering and associated chemical inputs (for instance, glyphosate) are concerned. The same people push the bogus idea that only GM agriculture can feed the world, while seeking to discredit and marginalise alternative models like agroecology and ignoring the structural violence and injustices brought about by global agricapital interests (from whom they receive funding) which help determine Codex, World Bank, IMF and WTO policies. By remaining silent or demonstrating wilful ignorance about the dynamics and injustices of the political economy of food and agriculture, they tacitly approve of its consequences.

They also frame the GMO debate as pro-science/pro-GMO vs anti-science/anti-GMO: an industry-promoted false dichotomy that has sought to close down any wider discussion that may lead the focus to fall on transnational agribusiness interests and their role in determining an exploitative global food regime and how GM fits in with this.

This is how ideologues act; not how open discourse and science is carried out or ‘communicated’.

Broadening the debate

A participant in any meaningful discussion about GM would soon appreciate that ethical, political, environmental and sociological considerations should determine the efficacy and relevance of this technology in conjunction with scientific considerations. Unfortunately, pro-GMO advocates want to depoliticise food and agriculture and focus on the ‘science’ of GM, yield-output reductionist notions of ‘productivity’ and little else, defining the ‘problem’ of food and agriculture solely as a narrow technocratic issue.

But to understand the global food regime, we must move beyond technology. Food and agriculture have become wedded to structures of power that have created food surplus and food deficit areas and which have restructured indigenous agriculture across the world and tied it to an international system of trade based on export-oriented mono-cropping, commodity production for a manipulated and volatile international market and indebtedness to global financial institutions.

More specifically, there are the deleterious impacts of the nexus between sovereign debt repayment and the ‘structural adjustment’ of regional agriculture; spiralling input costs for farmers who become dependent on proprietary seeds and technologies; ecocide, genocide and the destruction of food self-sufficiency; the fuelling of barbaric, industrial-scale death via animal-based (meat) agriculture and the colonisation of land to facilitate it; US/EU subsidies which mean farmers in developing countries cannot achieve prices to cover their costs of production; and degraded soils, polluted oceans and rising rates of illness, etc.

If any one country epitomises much of what is wrong with the global food regime, it is Argentina, where in an October 26th 2018 article (‘Soy destruction in Argentina leads straight to our dinner plates’) The Guardian newspaper’s analysis of (GM) soy cultivation highlighted many of the issues set out above.

Whether the impacts of the global food regime result from World Bank/IMF directives and geopolitical lending strategies, neoliberal plunder ‘ease-of-doing-business’ ideology,  undemocratic corporate-written trade deals or WTO rules, we are seeing the negative impacts on indigenous systems of food and agriculture across the world, not least in India, where a million farmers intend to march to Delhi and the national parliament between 28 and 30 November.

India’s manufactured ongoing agrarian crisis is adversely affecting the bulk of the country’s 840 million rural dwellers. And all for what? To run down and displace the existing system of peasant-farmer-based production with a discredited, ecologically unsustainable (GMO) model run along neoliberal ‘free’ market lines by global agribusiness, a model which is only profitable because it passes on its massive health, environmental and social costs to the public.

Neoliberal dogma

Tim Worstall of the Adam Smith Institute in London says of India’s agrarian crisis that Indian farmers should be left to go bust because they are uncompetitive and relatively unproductive. But even where farmers in India produce world record yields, they are still heavily indebted. So why can’t they compete?

Putting the huge external costs of the model of industrial agriculture which Worstall compares Indian agriculture to aside (which he conveniently ignores), the issue is clear: a heavily subsidised US/EU agriculture depresses prices for Indian farmers both at home and on the international market.

Policy analyst Devinder Sharma says that subsidies provided to US wheat and rice farmers are more than the market worth of these two crops. He also notes that, per day, each cow in Europe receives a subsidy worth more than an Indian farmer’s daily income. He suggests: let the US and EU do away with subsidies, relieving taxpayers of such a costly burden and let Indian farmers compete properly; then see that it is the Indian farmer who produces the cheapest food; and then imagine US consumers benefitting from this cheap food.

That is the ‘free’ market which could exist. A fair one not distorted by subsidies. Not the type of market that currently exists and which is ‘free’ only within the ideological parameters set by Worstall and others who promote it.

Proponents of the ‘free’ market and GMOs are big on ‘choice’: letting ‘the market’, the consumer or the farmer decide, without anyone imposing their agenda. This is little more than rhetoric which fails to stand up to scrutiny, given the strategically embedded influence of agricapital over policy makers. If anything encapsulates the nonsense and hypocrisy surrounding this notion of choice are reports about Monsanto and its cynical manipulation of agriculture in Punjab.

According to an article in Delhi’s Sunday Guardian in late 2017 (‘Monsanto’s profits, not Diwali, creating smoke in Delhi’), India’s surplus food grain supply is an uncomfortable fact for the pro-GMO lobby. The piece notes that in 2012 the then Punjab Chief Minister asked Monsanto to set up a research centre for creating maize and, due to fears over water shortages, announced plans to reduce the area under rice cultivation to around 45% to grow maize. Fear-mongering about rice cultivation was reaching fever pitch, stoked by an advertisement campaign from a group of scientists who appealed ‘Reduce the area under rice, save water, save Punjab’.

Conveniently, Monsanto (now Bayer) offers its GM maize as a solution that will increase the level of subsoil water, although that corporation’s inputs and Green Revolution practices led to problems in Punjab and elsewhere in the first place. For instance, fertilisers and pesticides have accumulated in the ground water (causing massive health issues) and their use has also led to poor water retention in soil, leading farmers to pump excessive amounts of ground water.

Punjab’s plan to reduce the area under rice cultivation (a staple food for large sections of the Indian population) with what will most likely be GM animal feed is part of a cynical tactic. Of course, any resulting gap between supply of and demand for food in India will be conveniently filled via global agribusiness and an influx of GMO produce from abroad or by growing it in India (have no doubt, the push is on for that too).

It is reminiscent of unscrupulous attempts to undermine India’s edible oils sector in the late 1990s and current attempts to break traditional cotton cultivation pathways in India to help usher in herbicide-tolerant seeds (which have now ‘miraculously’ appeared on the market – illegally). The ability of hugely powerful corporations to flex their financial muscle and exert their considerable political clout to manufacture ‘choice’ and manipulate policies is the reality of neoliberal capitalism.

Those pro-GMO ‘science communicators’ are silent on such matters and, as with their fellow neoliberal ideologues, have nothing of any substance to say on these types of ‘market-distorting’ power relations, which make a mockery of their ‘free’ choice and ‘free’ market creed.

Indeed, a recent report in The Guardian indicates that neoliberal ‘austerity’ in the UK has had little to do with economics, having failed in its objective of reducing the national debt, and much to do with social engineering. But this is the ideological basis of modern neoliberal capitalism: dogma masquerading as economics to help justify the engineering of the world in the image of undemocratic, unaccountable corporations.

Agroecology and food sovereignty

The industrial agriculture that Worstall compares Indian farmers’ productivity with is outperformed by smallholder-based agriculture in terms of, for example, diversity of food output, nutrition per acre and efficient water use. Imagine what could be achieved on a level playing field whereby smallholder farming receives the type of funding and political commitment currently given to industrial agriculture.

In fact, we do not have to imagine; in places where agroecology has been scaled up, we are beginning to see the benefits. The principles of agroecology include self-reliance, localisation and food sovereignty. This type of agriculture does not rely on top-down corporate ‘science’, corporate owned or controlled seeds or proprietary inputs. It is potentially more climate resilient, labour intensive (job creating), more profitable for farmers and can contribute to soil quality and nutrient-enhanced/diverse diets. Moreover, it could help reinvigorate rural India and its villages.

When the British controlled India, they set about breaking the self-reliance of the Indian village. In a 2009 article by Bhavdeep Kang (‘Can the Indian farmer withstand predatory international giants?’), it is stated:

The British Raj initiated the destruction of the village communities, famously described by Lord Metcalfe as ‘little republics, having nearly everything they can want within themselves.’ India’s ability to endure, he wrote, derived from these village communities: ‘They seem to last where nothing else lasts. Dynasty after dynasty tumbles down but the village community remains the same. It is in a high degree conducive to their happiness, and to the enjoyment of a great portion of freedom and independence.

Metcalfe said this in 1830. However, since independence from the British, India’s rulers have further established ‘village India’s’ dependency on central government. And now a potential death knell for rural India is underway as India’s ruling elite, exhibiting a severe bout of ‘Stockholm syndrome’, sells out the nation to not only Western agribusiness but also to US finance and intelligence interests.

Whether it concerns India or elsewhere, to see the advantages of agroecology, there are those economists, political leaders and ‘science communicators’ who must remove the self-imposed blinkers. This would involve shifting their priorities away from promoting career-building technologies and facilitating neoliberal capitalism towards working for justice, equality, peace and genuine grass-root food sovereignty.

To do that, though, such figures would first have to begin to bite the hand that feeds them.

China: A New Philosophy of Economics

China’s economic philosophy is a far cry from that of the west.

The west consistently seeks to undermine the interests of their partners, be it for trade or political agreements; be it partners from the west, their smaller and weaker brothers; or from the east; or from the south, there is always an element of exploitation, of “one-upmanship”, of outdoing a partner, of domination. Equality and fairness are unknown by the west. Or, when the concept was once known, at least by some countries and some people, it has been erased by indoctrinated neoliberal thinking – egocentricity, “me first”, and the sheer, all-permeating doctrine of “maximizing profits”; short-term thinking, instant gratification or more extreme, making a killing today for a gamble or deal that takes place tomorrow. Futures trading – the epitome of manipulating economic values. Only in the capitalist world.

This has become a key feature of western commerce and trading. It’s manipulation and exploitation over ethics; it’s Profits Über Alles! Doesn’t it sound like fascism? Well it is. And if the partner doesn’t fall for the ruse, coercion becomes the name of the game, and if that doesn’t work the western military move in with bombs and tanks, seeking regime change, destroying the very country the west wants to dominate. That’s western brutal economics – full hegemony. No sharing.

China’s approach is quite different. It’s one of sharing, of participating, of mutual benefits. China invests trillions of dollars equivalent in developing countries – Asia, especially India and now also Pakistan, Africa, South America, largely for infrastructure projects, as well as mining of natural resources. Unlike the gains from western investments, the benefits of China’s investments are shared. China’s investment and mining concessions are not coerced, but fairly negotiated. China’s investment relationship with a partner country remains peaceful and is not ‘invasive’ and abusive, as are most of those of the west which uses threats and guns to get what they want.

Of course, the west complains about Chinese investments, lying how abusive they are, when in reality the west is upset about Chinese competition in Africa and South America, continents that are still considered part of the western domain, as they were colonized for about thousand years by western powers and empires, and as of today, African and Latin-American countries are neo-colonized, no longer (for now) with brute military force, but with even more ferocious financial strangulation, through sanctions, boycotts and embargos; all highly illegal by any international standards. But there aren’t any international laws that are upheld. International courts and judges are coerced to obey Washington’s dictates, or else… literally “or else”; and these are serious threats.

Take the case of West and Central Africa, former French colonies. The French West African zone includes eight countries: Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal, Togo; and the French Central African area comprises six countries – Cameroon, the Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon. All 14 countries have a common currency, the CFA franc (CFA = Communauté financière africaine – African Financial Community).

They are two separate currencies, though always at parity and therefore interchangeable. The Western and Central African monetary union have separate central banks, the Banque Centrale des États de l’Afrique de l’Ouest, BCEAO, headquartered in Dakar, Senegal; and the Banque des États de l’Afrique Centrale, BEAC, in Yaoundé, Cameroun. Both currencies are guaranteed by the French treasury. This means, in fact, that the economy of these 14 countries not only depends on France, but setting the value of the currency (at present one € = 655 CFA francs) is entirely the prerogative of the Banque de France (French Central Bank). This ultra-complicated setup between the two groups of former and new French colonies is not only a matter of French accounting, but foremost a means to confuse and distract the mostly innocent observer from a flagrant abusive reality.

With the French control over the West and Central African currencies, the foreign trading capacity of these countries is reduced to what France will allow. France has a de facto monopoly on these countries’ production. Should France stop buying their “former-new” colonies’ goods, the countries go broke, as they have been unable to develop alternative markets under the French yoke. Thus, they are always at the mercy of France, the IMF, World Bank and the African Development Bank. From labor slaves up to the early 1960s, they have become debt slaves of the neoliberal age.

In addition, to back this French Treasury guarantee, 85% of the countries’ foreign exchange reserves are blocked by the French Central Bank and may only be used by the respective counties against specific permission and as a loan. Imagine! The “former” French colonies have to borrow their own money from the French Central Bank. Similar debt enslaving is going on in former British and Portuguese colonies, though, none of them is as abjectly abusive as are the French.

Big wonder that Chinese investors are highly welcome in Africa. And knowing western manipulating and deranged mindsets, no wonder that China is demonized by the west as exploiting Africa to the bones, when exactly the contrary is the case. But almighty western lie-propaganda media has the brainwashed western populace believe China is stealing African natural resources. Chinese fairness is indeed tough competition against the usual western trickery and deceit.

In Africa, China is not only focusing on buying and trading natural resources, but on training and using local African brainpower to convert Africa from a western slave into an equal partner. For example, to boost African autonomy, China is using an approach, Gaddafi intended to apply – entering the wireless phone system, conquering some of the market with efficient batteries, and providing cheaper and more efficient services than the west, hence directly competing with the western exploited African telephone market. Chinese phones also come with their own browsers, so that internet may eventually be accessed in the remotest places of Africa, providing a top tool for education. Challenging the EU and US dominated multi-billion-dollar market, is just one of the reasons Gaddafi was miserably murdered by French-led NATO forces. Of course, China’s presence is a bit more difficult to kick than was Gaddafi’s.

This is just one more signal that China is in Africa – and Asia and Latin America – not just for the legendary American Quick Buck, but for genuine investments in long-term economic development which involves developing transportation networks, efficient and independent financial systems which may escape the western SWIFT and FED / Wall Street banking system through which US sanctions are imposed. This may involve the creation of government controlled blockchain currencies – see also Venezuela’s hydrocarbon-backed Petro – and linking African currencies to the Yuan and the eastern SCO (Shanghai Cooperation Organization) monetary system, freeing Africa from the dollar hegemony. With the help of China and Russia, Africa may, in fact, become the forerunner of crypto-currencies and, in the case of west-and central Africa, the 14 countries would be able to gain financial autonomy, and to the chagrin of the French Central Bank, manage their own financial resources, breaking loose from under the little-talked about French yoke. It is quite conceivable that with Chinese development assistance Africa will become an important trading partner for the east, leaving western exploiting and abusing business and banking magnates behind in the dust.

The Overseas Private Investment Cooperation (OPIC), a US private lending as well as investment guarantee agency, is upset about US investors losing out to Chinese and wants US corporations to compete more aggressively which is precisely what Africa rejects, America’s violent bombing approach to impose her trade and concession rules with the coercing help of the IMF and the World Bank. Africa is seeking – finally – sovereignty, deciding over her own financial and political destiny. This includes choosing investors and trading partners of their liking.

Many African and South American countries prefer China’s yuan-investments, rather than Washington’s US-dollar investments. It’s ‘softer’ money coming from the Chinese. For China it’s also a way of diverting the world from the US-dollar, providing incentives for countries to divest their dollar reserves into yuan reserves. That is already happening at accelerating speed.

China’s outlook at home and abroad is nothing less than spectacular. On the home front, they are building cutting-edge technology transport infrastructure, such as high-speed railways, for example, connecting Shanghai and Hangzhou, cutting travel time from one and a half hour in half. China’s high-speed bullet train connects for the first time Hong Kong with the mainland, cutting travel time Hong Kong to Beijing from 24 hours to 9 hours.

In October 2018, after nine years construction, President Xi Jinping opened the world’s longest sea crossing bridge, linking Hong Kong to Macau and the mainland Chinese city of Zhuhai. The bridge is 55 km long, about 20 times the length of San Francisco’s Golden Gate bridge. In urban development, existing and new multi-million people cities are planned, expanded and stamped out of the ground in less than a generation.

China has just built a US$ 2.1 billion AI (Artificial Intelligence) industrial park, and is not sleeping either on the environmental protection and development front, investing billions in research and development of alternative clean energies, especially solar power and its storage potential, next generation beyond lithium batteries, ranging from lithium solid state to electrolyte materials to graphene batteries and eventually to copper foam substrate. And that’s not the end of the line. Each battery technology offers increased capacity, safety and charging and discharging speed.

On the domestic and international front, the Belt and Road (B and R) Initiative – the New Silk Road – is China’s President Xi’s phenomenal geo-economic initiative to connect the world from China with several transport routes and develop in a first step Western China, Eastern Russia, Central Asia and Eastern Europe – all the way to the frontiers of western Europe. This massive economic development program includes industrial parks, trade and cultural interchanges, research and development through existing universities and new science and learning centers. Maritime routes are also foreseen entering Africa through Kenya and Southern Europe and the Middle East via the Greek port of Piraeus and Iran. A southern route is also planned to enter the southern cone of Latin America.

The endeavor is so huge, it has recently been inscribed into the Chinese Constitution. It will mobilize in the coming decades and possibly century trillions of yuan and dollar-equivalent of investments, mostly from China, Russia, the other SCO countries, as well as European partners, and foremost the Beijing-based AIIB (Asian Infrastructure and Investment Bank) which has already 70 member countries, among them Australia, Canada, Western European nations and close to 20 prospective new countries; but not the United States of America.

This giant project, is, of course, not without challenges. While the need for proof of “credit worthiness” by being tied to the IMF and World Bank of the eighties and nineties had since long faded into oblivion, China is still bound to the IMF and WB. Why?  In my opinion it proves two things, The People’s Bank of China – the Chinese Central Bank – is still controlled by the FED and BIS (Bank for International Settlement, alias, central bank of all central banks), and a strong Fifth Column that doesn’t yield an inch of their power. The Chinese leadership could implement the necessary changes towards full financial sovereignty but, why is that not happening? Western threats and their secret services have become ever more sophisticated abduction and “neutralizing” machines over the past 70 years.

The next question is what’s the Chinese lending limit to countries who have already or will subscribe to the Belt and Road Initiative to help them repay western debt and integrate into the new eastern economic model and monetary system? The question is relevant, because China’s money supply is based on China’s economic output; unlike western currencies which are purely fiat money (hot air).

Also, how will ownership of foreign assets; i.e., infrastructure funded and perhaps built, be dealt with? Will they become Chinese property, increasing China’s capital base and flow of money? Or would they be negotiated as long-term concessions, after which a country may repay to acquire sovereign ownership, or transfer part or all of the assets to China as a shareholder. These are relevant considerations, especially with regard to the huge B&R investments foreseen in the coming years. These decisions should be made autonomously by Chinese leadership, totally outside the influence of western monetary czars, like IMF and WB.

Another issue which is steadily and increasingly cropping up in the west, of course, to demonize China and discourage “western civilized” (sic) countries to associate themselves with socialist China is China’s concept of “Social Credits”. It is largely based on what the west calls a dictatorial, freedom-robbing surveillance state with cameras and face-recognition everywhere. Of course, totally ignoring the western own Orwellian Big Brother Surveillance and lie apparatus which calls itself democracy, and, in fact, is a democracy for then the elite of the plutocrats, gradually and by heavy propaganda brainwashing converting what’s left of ‘democracy’ into outright fascism, we, in the west, are almost there. And this, to the detriment of the “Silent Lambs” as per Rainer Mausfeld’s latest book, in German, “Why are Lambs Silent” (German Westend-Verlag). Yes, that’s what we have become: “Silent Lambs”.

It is too easy to demonize China for attempting to create a more harmonious, cohesive and peaceful society. Granted, this surveillance in China as in the west, demolishes to a large extent individualism, individual thinking, thereby limiting human creativeness and freedom. This is a topic which the Chinese socialist government, independent of western critique, may have to address soon to keep precisely one of the key principles of Chinese society alive – ‘social cohesiveness’ and a sense of equality and freedom.

What is the “Social Credit” system? It is a digital footprint of everything the Chinese do, as private citizens, as corporate managers in production as well as banking, workers, food sellers, in order to basically create an ambiance of full transparency (that’s the goal – far from having been reached), so as to establish citizens’ and corporations’ “creditworthiness”, in financial terms, but also assessing crime elements, political inclinations, radicalism, to prevent potential terror acts (interestingly, in the case of most western terror acts, officials say the ‘terrorists’ were known to the police which simply leaves you to conclude that they acted in connivance with the forces of order); and to enhance food safety in restaurants and by other food sellers.

In other words, the aim is to establish corporate and individual “score cards” which will work as a rewards and punishment system, a “carrot and stick” approach. Depending on the crime or deviation from the rule, you may be reprimanded and get ‘debits’ which you may wipe out by changing your behavior. Living under the spell of debits may limit, for example, your access to comfortable or speedy travel, better and speedier trains, air tickets, certain cultural events and more.

Yes, the idea of creating a stable domestic society has its drawbacks – surveillance – demolition of much of individualism, creativity, by implanting conformity. The government’s axiom is “we want a society where people don’t desire to break the rules, but the earliest stage is that they are afraid to break the rules.”

In the end, the question is, will the “Social Credits” approach to societal living, meaning a total surveillance state with every data recorded into a network of total control, be beneficial or detrimental for the Chinese goal to push ahead with her extraordinary and mostly egalitarian economic development approach, transport and industrial infrastructure, scientific research and cultural exchange – called Belt and Road, alias the New Silk Road? Only the future will tell; but the Chinese are not alone. They have solid partners in the SCO and long-term economic development endeavors never work in linear values, but with the unknown of dynamics to which humans are uniquely adapted to adjust.

• First published in New Eastern Outlook (NEO)

Brazil: Bolsonaro Towards a Military Dictatorship

   Jair Bolsonaro                   Fernando Haddad

One week before the second round of voting in Brazil, Jair Bolsonaro, the extreme right-wing candidate from the Social Liberal Party (PSL), against Fernando Haddad from the Worker’s Party (PT), Lula’s Party, for Brazil’s Presidential run-off elections, Bolsonaro leads to polls by double digits, about 58 against 42. And the gap is growing, despite the fact that as recent as end of September 2018, Brazilian women campaigned massively against Bolsonaro with the hashtag #EleNao (Not Him). His misogynist record left him with only 27% of women supporters only a couple of weeks ago. Massive cheat-and lie-propaganda increased that ratio by now to 42%. Does anybody seriously believe that Bolsonaro has changed his racist character and his women-degrading attitude?  It is mind-boggling how people fall for propaganda lies and manipulations.

The usual propaganda of deceit from the right has infiltrated every election in the last 5-10 years, starting with the sophisticated internet and propaganda fraud invented by Oxford Analytica (OA), which is largely believed having brought Trump to the White House, Macri to the Casa Rosada in Buenos Aires, Macron to the Elysée in Paris and Mme. Merkel for the fourth time to the German Federal Chanceller’s office in Berlin – among others. OA is also said having helped the BREXIT supporters. In the meantime, OA’s dirty election manipulation methods have been mainstreamed to the mainstream media – with lots and lots of corporate and banking money.

In fact, the frontrunner Bolsonaro is currently being accused by his opponent Fernando Haddad, of a ‘fraud and fake news’ campaign, and that just a few days before the run-off. The charge is that Bolsonaro is running a multi-million-dollar defamation campaign against Haddad, via Whatsapp and other social media. This means sending out literally millions of tailor-made messages to potential groups of voters. That’s the way of the of OA’s algorithms.

According to RT, Haddad told a media conference in Rio:

We have identified a campaign of slander and defamation via WhatsApp and, given the mass of messages, we know that there was dirty money behind it, because it wasn’t registered with the Supreme Electoral Tribunal.

This, after the Folha de S.Paulo newspaper uncovered a suspected election fraud. The publication alleges that a group of entrepreneurs are backing a multi-million-dollar slander campaign that would use several popular social media apps to reach out to Haddad supporters and smear his name with ‘fake news’.

We can only hope that the discovery of this slander and fraud may not be too late to stop Bolsonaro’s end run and to inform voters. Leading to an indictment of Bolsonaro is hardly a realistic chance, as he is supported by the current corrupt and fascist-type Temer Government and all the high judges who have impeded Lula’s legitimate request for running for Presidency. Only voters’ consciousness may make a difference.

Imagine what happens if Bolsonaro is elected? It is hardly fathomable. Bolsonaro has already declared that if elected he will render full power to the military. “When I’m elected, those who will command are the (military) captains”. His word  in Portuguese.

He is a fascist no doubt. There were other fascist military governments in Brazil, like Getúlio Vargas, who reigned from 1930-1945 as a military dictator mostly by decree. He abrogated the 1891 Constitution and introduced a new one in 1934 which was overturned, when finally, in 1945 Vargas was deposed and a new democratization process began with a new Constitution being introduced in 1946. But that was not all for fascism and military dictatorship in Brazil. There was more to come in the decades preceding Lula.

Another brutal military government came to power in 1964 by a coup d’état by the Armed Forces. It ruled Brazil from 1 April 1964 to 15 March 1985 by President Joao Goulart. It came to an end when José Sarney took office on 15 March 1985. What’s important to know is that both the Vargas coup of 1930, as well as the 1964 military coup were supported by the US Embassy in Brazil and the State Department in Washington. Mr. Bolsonaro has already today – after the first election round – the full support of Washington. He was immediately congratulated by the Trump government after the October 7 election results were known.

If no miracle happens within the coming week, Brazil may be slanted to go back some 90 years, into a fierce military dictatorship. Worse, today with the neoliberal doctrine being the overarching last word on economic policies, also for the military. We are looking at full privatization of everything, of social services, water and health privatization has already begun; basic and profitable infrastructure, natural resources, and the IMF, World Bank, FED-Wall Street indebtment is already well under way and its future programmed, including a devastating austerity program which under unelected Mr. Corrupt Temer has already started.

In fact, economic disaster in terms of dependence on IMF, WB and the FED, may also loom under Haddad, who has already said he would work with the financial fiefdom of Washington. As Luiz Inacio Lula did, when he was elected in 2002. He was the “golden example boy” for the IMF, following strictly the rules he was taught would bring progress to his country.  Later he realized what was actually going on within the financial sector of Brazil. He corrected some of the aberrations, but many stayed in place throughout Dilma Rousseff’s Presidency.

Brazil could become South America’s Greece – just multiplied by a factor of 100.

Just imagine the political and economic impact this would have on the Latin American region. Brazil is by far the largest economy of Latin America with a GDP of about 2.1 trillion US-dollars in 2017, a population of 210 million and a landmass 8.516 million km2 – and with the world’s largest known fresh water reserves. Trade without Brazil is unthinkable for Latin America and the world. Plus, a Bolsonaro regime would have full ideological and military support from Washington. In fact, Brazil may soon become the second South American NATO country after Colombia.

How would Venezuela feel, surrounded by two fierce militarized NATO countries? Washington could just smile and watch, while Colombia and Brazil – and their NATO command – would do the rest. Or would they?  Venezuela is on the best way to detach herself from the dollar hegemony and ally with the East. And that is not only in trade, but also in huge investments from China and Russia. Invading Venezuela would not be easy, despite NATO from the east and from the west and with the empire just across the Caribbean.

Back to Bolsonaro. It will not be as easy to thrash this fascist military doctrine, of a President, hitherto hardly known to the outside world, down the average Brazilians’ throats. Their vote and mind may be manipulated, but once they wake up – the election may be past, and the Temer policies implemented by factors of ten – social suffering will increase, à la Greece – people may simply not take it.

They will realize that this entire propaganda farce serves only a few Brazilian oligarchs, but mostly the transnational corporations and banks. Will they take to the streets? Demand another government, fight for their rights? Brazilians are not (yet) the kind to double up and shut up, as the Greeks had to do, weakened by a Government of treason, by an absence of medical and other social services and by a low-low morale that is reflected in an exponentially rising suicide rate, according to the British Lancet. Brazilians may have learned a lesson.

Brazil and the BRICS. Already under Temer, Brazil’s role in the BRICS was merely anecdotal. It was clear that politically Brazil would and could no longer adhere to the principles that was behind the BRICS association, namely, economic independence from the debt masters IMF, World Bank and FED. What with Bolsonaro? It would behoove the BRICS expulsing Brazil; sending Brazilians a warning now, before the run-off elections, that no fascist government could be admitted within the ranks of the BRICS. Fascism is the absolute antidote to the new alliances of SCO, BRICS, EEU, and newly the Caspian Sea Alliance (Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan).

But – and this is highly important – let’s not let it get out of hand. Let not Bolsonaro be elected this coming Sunday. Make the right choice now. Regardless what you are being manipulated to believe. Stand up Brazilians, Women and men – say #NAO Bolsonaro!

IMF, WB, and WTO: Scaremongering Threats on De-Globalization and Tariffs

As key representatives of the three chief villains of international finance and trade, the IMF, World Bank (WB) and the World Trade Organization (WTO) met on the lush resort island of Bali, Indonesia, they warned the world of dire consequences in terms of reduced international investments and decline of economic growth as a result of the ever-widening trade wars initiated and instigated by the Trump Administration. They criticized protectionism that might draw countries into decline of prosperity. The IMF cuts its global economic growth forecast for the current year and for 2019.

This is pure scaremongering based on nothing. In fact, economic growth of the past that claimed of having emanated from increased trade and investments has served a small minority and driven a widening wedge between rich and poor of both developing and industrialized countries. It’s interesting how nobody ever talks about the internal distribution of GDP growth that these handlers and instruments of empire and liars for the elite are boasting about; nobody ever seems to question the way these growth rates are calculated or perhaps just drawn out of hot air? Take the case of Peru, a resource-rich country that boasted in the past often an economic growth of 5% to 7%. On average, the distribution of this growth was such that 80% went to 5% of the population and 20% was to be distributed among 95% of the people. This doesn’t even address the fragmentation of the lower and higher tiers of the percentage breakdowns, but it surely creates more poverty, more inequality, more unemployment and more delinquency.

Or just look at the insane and totally unfounded IMF prediction of 1 million percent inflation of the Venezuelan new currency in 2018 and 2019?  What are they talking about? No substantiation whatsoever. The same with the prediction of dire consequences from reduced trade, when trade as we know it, has and is serving almost exclusively the corporate world of rich industrialized countries, leaving poorer developing countries behind with a burden of unfair deals and often a resulting debt trap.

Such manipulations of truth coming out of international financial and trade organizations, especially the IMF and the WB, are so flagrantly and scrupulously wrong that they cannot be backed with a shred of professionalism, yet they get away with it because of their apparent unfailable reputation, scaremongering government into doing what is against their and their peoples’ best interest, namely, caring for their own local, sovereign economy, without any foreign interference.

Time and again it has been proven that countries that need and want to recover from economic fallouts do best by concentrating on and promoting their own internal socioeconomic capacities, with as little as possible outside interference. One of the most prominent cases in point is China. After China emerged on 1 October 1949 from centuries of western colonization and oppression by Chairman Mao’s creation of the People’s Republic of China (PRC), Mao and the Chinese Communist party first had to put a devastated ‘house in order’, a country ruined by disease, lack of education, suffering from hopeless famine as a result of shameless exploitation by western colons. In order to do that China remained practically closed to the outside world until about the mid- 1980’s. Only then, when China had overcome the rampant diseases and famine, built a countrywide education system and became a net exporter of grains and other agricultural products, China, by now totally self-sufficient, gradually opened its borders for international investments and trade.  And look where China is today. Only 30 years later, China has not only become the world’s number one economy, but also a world super power that can no longer be overrun by western imperialism.

But you don’t need to look that far. North Dakota saved herself from the 2008 “crisis”, by using public banking addressing the ND State’s economic needs – not the shareholder’s greed – and planning production and service activities that guaranteed basically full employment, while the rest of the country’s unemployment skyrocketed. The State’s economy grew by close to 3% in 2008 and 2009, and is still today the State with the fastest growth rate in the country and with the lowest unemployment rate. This is mostly due to a state economic development policy that concentrates on local capacities and that banks on public banking. Today, North Dakota has still the only public bank in the country; but other States, like New Jersey, New Mexico, Arizona and others, as well as the city of Los Angeles are at the brink of creating pubic banking. The mainstream media, however, doesn’t propagate such examples, as they are not in the interest of the banking and corporate oligarchs.

Local economy with local investments for the benefit of the local population, is, of course, not what the ultra-capitalist system wants. It doesn’t fit the neoliberal economic doctrine – driving globalization forward, pushing its bitter medicine of austerity down poor governments throats, so to further exploit their people, creating more poverty, milking their social systems and steeling their natural resources.

Enough! Wake up! Whatever you may think of President Trump – and he is certainly no panacea for world peace and his abject policy of interference in foreign lands and fueling conflicts and wars in the Middle East and around the globe must be condemned – but his protectionist policies, the “tariff wars” are a welcome sword into the belly of globalization, of the very neoliberal doctrine that has for the last thirty years brought more misery to 99.99% of the planet’s population than any other economic doctrine since Adam Smith. Trump may or may not know what he is doing, but certainly his handlers and advisers, hidden or overt, know the purpose of their newly professed turn of international policy.

Its intention is to cut the political cohesion created by globalization, to divide again for the empire to conquer. Yes. The intention is not to promote local economies, per se, but rather to get countries ready for unguarded bilateral negotiations and agreements between Washington and the developing world, under which the latter have no protection, and with their mostly corrupt leaders, they buckle under facing the harsh conditions of the empire. So, the purpose is not to help, say, the Latin American US backyard to become sovereign again, to the contrary, with imposed bilateral deals – see Brazil, Argentina, Chile, Ecuador, Peru, Colombia – they are slated to become increasingly vulnerable to and dependent on the US and US-dollar hegemony.

The point is for self-conscious and alert governments with the desire to return to their sovereign national politics, this is a crucial moment of truth to take advantage of. The ship is turning. It is the moment to jump off the globalized bandwagon, the globalized trade, the open borders for indiscriminate foreign investments; it is time to sit down and reflect and return to autonomous local policies: local economies, for local markets, with local money and local public banking for the benefit of the local economy. Trade, of course, is part of a local economy; but trade should best be kept within the realm of friendly neighbors and nations that have similar interests and similar political convictions. Trade under de-globalized circumstances should and will return equal benefits for partners, a win-win situation for all trading partners – as it should be according to the original interpretation of trade. By contrast, modern trade as we know it has almost consistently benefited the rich countries to the detriment of the poorer ones.

A good example for fair and equal trade may be ALBA (Alianza Bolivariana para los Pueblos de Nuestra América) – an association of 11 Latin American and Caribbean countries (Antigua and Barbuda Bolivia, Cuba, Dominica, Grenada, Nicaragua, Saint Kitts and Nevis, Saint Lucia, Saint Vincent, Surinam, the Grenadines and Venezuela), initiated and created by Venezuela and Cuba. ALBA may be an excellent illustration on how trade should work between countries or groups of countries. Most people have never heard of ALBA, for the simple reason the international media are typically silent about it, because the neoliberal elite doesn’t want a case of equality to become an example for others to follow. There exist currently other similar, even lesser known cases of fair and equal trade throughout the world, that are equally silenced by the media.

Promoting fair and equal trade is not an agenda item of WTO, nor of the IMF or the World Bank. Their role is just the contrary, being facilitators for the west to further exploit the people of the South and to further deplete the workers’ accumulated funds of their social safety-net that are still available in many western industrialized countries, especially in the western EU. It’s the bedrock of social safety that can be privatized and sucked empty by the international corporate banking system, along with privatization of social infrastructure, such as water supply and sanitation, electricity, hospitals, airports, railways – and much more. All what has the air of profitability can and must be privatized under neoliberal economic doctrines.

Countries, nations and societies, beware from listening and adhering to and working with these nefarious globalizing organizations – IMF, WTO and WB. They are mere servants of western corporatism and debt enslaving financial systems driven by the US Federal Reserves (FED), as well as Wall Street and their European banking partners.

This is an appeal to all countries that are proud of regaining their political sovereignty and economic autonomy, to ignore scaremongering and fear imposing threats by the IMF, the World Bank and WTO. They are not representing the truth, but their nasty role is to belie reality in favor of manipulative invented statistics that are expected to being believed because they stem from these so-called well-reputed institutions. Again, the best example of the IMF’s nonsensical statements is their repeated denigration of Venezuela, accusing the country of fostering an economy that creates a one million percent inflation in 2018 and even higher, they say, in 2019. Can you imagine? That says it all. Be aware – their words, whether spoken in Bali, Washington or Geneva, are nothing more than fear- and threat mongering hot air.

A Global People’s Bailout for the Coming Crash

When the global financial crisis resurfaces, we the people will have to fill the vacuum in political leadership. It will call for a monumental mobilisation of citizens from below, focused on a single and unifying demand for a people’s bailout across the world.

*****

A full decade since the great crash of 2008, many progressive thinkers have recently reflected on the consequences of that fateful day when the investment bank Lehman Brothers collapsed, foreshadowing the worst international financial crisis of the post-war period. What seems obvious to everyone is that lessons have not been learnt, the financial sector is now larger and more dominant than ever, and an even greater crisis is set to happen anytime soon. But the real question is when it strikes, what are the chances of achieving a bailout for ordinary people and the planet this time?

In the aftermath of the last global financial meltdown, there was a constant stream of analysis about its proximate causes. This centred on the bursting of the US housing bubble, fuelled in large part by reckless sub-prime lending and an under-regulated shadow banking system. Media commentaries fixated on the implosion of collateralised debt obligations, credit default swaps and other financial innovations—all evidence of the speculative greed and lax government oversight which led to the housing and credit booms.

The term ‘financialisation’ has become a buzzword to explain the factors which precipitated these events, referring to the vastly expanded role of financial markets in the operation of domestic and global economies. It is not only about the growth of big banks and hedge funds, but the radical transformation of our entire society that has taken place as a result of the increasing dominance of the financial sector with its short-termist, profitmaking logic.

The origins of the problem are rooted in the early 1970s, when the US government decided to end the fixed convertibility of dollars into gold, formally ending the Bretton Woods monetary system. It marked the beginning of a new regime of floating exchange rates, free trade in goods and the free movement of capital across borders. The sweeping reforms brought in under the Thatcher and Reagan governments accelerated a wave of deregulation and privatisation, with minimum protective barriers against the ‘self-regulating market’.

The agenda was pushed aggressively by most national governments in the Global North, while being imposed on many Southern countries through the International Monetary Fund and World Bank’s infamous ‘structural adjustment programmes’. A legion of books have examined the disastrous consequences of this market-led approach to monetary and fiscal policy, derisorily labelled the neoliberal Washington Consensus. As governments increasingly focused on maintaining low inflation and removing regulations on capital and corporations, the world of finance boomed—and the foundations were laid for a dramatic dénouement in 2008.

Missed opportunities

What’s extraordinary to recall about the immediate aftermath of the great crash is the temporary reversal of those policies that had dominated the previous two decades. At the G20 summit in April 2009 hosted by British Prime Minister Gordon Brown, heads of state envisaged a return to Keynesian macroeconomic prescriptions, including a large-scale fiscal stimulus in both developed and developing countries. It appeared that the Washington Consensus had suddenly lost all legitimacy. The liberalised global financial system had clearly failed to provide for a net transfer of resources to the developing world, or prevent instability and recurrent crisis without effective state regulation and democratic public oversight.

Many civil society organisations saw the moment to call for fundamental reform of the Bretton Woods institutions, as well as a complete rethink of the role of the state in the economy. There was even talk of negotiating a new Bretton Woods agreement that re-regulates international capital flows, and supports policy diversity and multilateralism as a core principle (in direct contrast to the IMF’s discredited approach).

The United Nations played a staunch role in upholding such demands, particularly through a commission set up by the then-President of the UN General Assembly, Miguel d’Escoto Brockmann. Led by Nobel laureate Joseph Stiglitz, the ‘UN Conference on the World Financial and Economic Crisis and its Impact on Development’ proposed a number of sensible measures to protect the least privileged citizens from the effects of the crisis, while giving developing countries greater influence in reforming the global economy.

Around the same time, the UN Secretary-General endorsed a Global Green New Deal that could stimulate an economic recovery, combat poverty and avert dangerous climate change simultaneously. It envisioned a massive programme of direct public investments and other internationally-coordinated interventions, arguing that the time had come to transform the global economy for the greater benefit of people everywhere, including the millions living in poverty in developing and emerging industrial economies.

This wasn’t the first time that nations were called upon to enact a full-scale reordering of global priorities in response to financial turmoil. At the onset of the ‘third world’ debt crisis in 1980, an Independent Commission on International Development Issues convened by the former West German Chancellor, Willy Brandt, also proposed far-reaching emergency measures to reform the global economic system and effectively bail out the world’s poor.

Yet the Brandt Commission proposals were widely ignored by Western governments at the time, which marked the rise of the neoliberal counterrevolution in macroeconomic policy—and all the conditions that led to financial breakdown three decades later. Then once again, governments responded in precisely the opposite direction for bringing about a sustainable economic recovery based on principles of equity, justice, sharing and human rights.

A world falling apart

We are all familiar with the course of action taken from 2008-9: colossal bank bailouts enacted (without public consultation) that favoured creditors, not debtors, despite using taxpayer money. Quantitative easing (QE) programmes that have pumped trillions of dollars into the global financial system, unleashing a fresh wave of speculative investment and further widening income and wealth gaps. And the perceived blame for the crisis deflected towards excessive public spending, leading to fiscal austerity measures being rolled out across most countries—a ‘decade of adjustment’ that is projected to affect nearly 80 percent of the global population by 2020.

To be sure, the ensuing policy responses across Europe were often compared to structural adjustment programmes imposed on developing countries in the 1980s and 1990s, when repayments to creditors of commercial banks similarly took precedence over measures to ensure social and economic recovery. The same pattern has repeated in every crisis-hit region, where the poorest in society pay the price through extreme austerity and the privatisation of public assets and services, despite being the least to blame for causing the crisis in the first place.

After ten years of these policies a new billionaire is created every second day, banks are still paying out billions of dollars in bonuses each year, and the top 1% of the world population are far wealthier than before the crisis happened. At the same time, global income inequality has returned to 1820 levels, and indicators suggest progress is now reversing on the prevention of extreme poverty and multiple forms of malnutrition.

Indeed the United Nations continues to face the worst humanitarian situation since the second world war, in large part due to conflict-driven crises that are rooted in the economic fallout of the 2008 crash—most dramatically in Syria, Libya, and Yemen. Countries of both the Global North and South remain in the grip of a record upsurge of forced human displacement, to which governments are predictably failing to respond to in the direction of cooperative burden sharing through agreements and institutions at the international level.

Not to mention the rise of fascism and divisive populism that is escalating in almost every society, often as a misguided response to pervasive inequality and a widespread sense of unfairness among ordinary workers. It is surely reasonable to suggest that all these trends would not be deteriorating if the community of nations had seized the opportunity a decade ago, and acted in accordance with calls for a just transition to a more equitable world order.

The worst is yet to come

We now live in a strange era of political limbo. Neoclassical economics may have failed to predict the great crash or provide answers for a sustained recovery, yet it still retains its hold on conventional academic thought. Neoliberalism may also be discredited as the dominant political and economic paradigm, yet mainstream institutions like the IMF and OECD still embrace the fundamentals of free market orthodoxy and countenance no meaningful alternative. Consequently, the new regulatory initiatives agreed at the global level are largely voluntary and inadequate, and governments have done little to counter the power of oligopolistic banks or prevent reckless speculative behaviour.

Banks may be relatively safer and possess a bigger crisis toolkit, but the risk has moved to the largely unregulated shadow banking system which has massively increased in size, growing from $28 trillion in 2010 to $45 trillion in 2018. Even major banks like JP Morgan are forewarning an imminent crisis, which may be caused by a digital ‘flash crash’ in which high frequency investments (measuring trades in millionths of a second) lead to a sudden downfall of global stock markets.

Another probable cause is the precipitous rise in global debt, which has soared from $142 to $250 trillion since 2008, three times the combined income of every nation. Global markets are running on easy money and credit, leading to a debt build-up which economists from across the political spectrum agree cannot last indefinitely without catastrophic results. The problem is most acute in emerging and developing economies, where short-term capital flowed in response to low interest rates and QE policies in the West. As the US and other rich countries begin to steadily raise interest rates again, there is a risk of a mass exodus of capital from emerging markets that could trigger a renewed debt crisis in the world’s poorest countries.

Of most concern is China, however, whose credit-fuelled expansion in the post-crash years has led to massive over-investment and national debt. With an overheating real-estate sector, volatile stock market and uncontrolled shadow banking system, it is a prime candidate to be the site for the next financial implosion.

However it originates, all the evidence suggests that an economic collapse could be far worse this time around. The ‘too-big-to-fail’ problem remains critical, with the biggest US banks owning more deposits, assets and cash than ever before. And with interest rates at historic lows for many G-10 central banks while the QE taps are still turned on, both developed and developing countries have less policy and fiscal space to respond to another shock.

Above all, China and the US are not in a position to take the same decisive central bank action that helped avert a world depression in 2008. And then there are all the contemporary political factors that mitigate against a coordinated international response—the retreat from multilateralism, the disintegration of established geopolitical structures and relationships, the fragmentation and polarisation of political systems throughout the world.

After two years of a US presidency that recklessly scraps global agreements and instigates trade wars, it is hard to imagine a repeat of the G20 gathering in 2009 when assembled leaders pledged never to go down the road of protectionist tariff policies again, fearing a return to the dire economic conditions that led to a world war in the 1930s. The domestic policies of the Trump administration are also especially perturbing, considering its current push for greater deregulation of the financial sector—rolling back the Dodd-Frank and consumer protection acts, increasing the speed of the revolving door between Wall Street and Washington, D.C., and more.

Mobilising from below

None of this is a reason to despair or lose hope. The great crash has opened up a new awareness and energy for a better society that brings finance under popular control, as a servant to the public and no longer its master. Many different movements and campaigns have sprung up in the post-crash years that focus on addressing the problems wrought by financialisation, which more and more people realise is the underlying source of most of the world’s interlinking crises. All of these developments are hugely important, although the true test of this rising political consciousness will come when the next crash happens.

After the worldwide bank bailouts of 2008-9—estimated in excess of $29 trillion by the US Federal Reserve alone—it is no longer possible to argue that governments cannot afford to provide for the basic necessities of everyone. Just a fraction of that sum would be enough to end income poverty for the 10% of the global population who live on less than $1.90 a day. Not to mention the trillions of dollars, euros, pounds and yen that have been directly pumped into financial markets by central banks of the major developed economies, constituting a regressive form of distribution in favour of the already wealthy that could have been converted into some form of ‘quantitative easing for the people’.

A reversal of government priorities on this scale is clearly not going to be led by the political class. They have already missed the opportunity, and are largely beholden to vested interests that are unduly concerned with short-term profit maximisation, not the rebuilding of the public realm or the universal provision of essential goods and services. The great crash and its aftermath was a global phenomenon that called for a cooperative global response, yet the necessary vision from within the ranks of our governments was woefully lacking. If the financial crisis resurfaces in a different and severer manifestation, we the people will have to fill the vacuum in political leadership. It will call for a monumental mobilisation of citizens from below, focused on a single and unifying demand for a people’s bailout across the world.

Much inspiration can be drawn from the popular uprisings throughout 2011 and 2012, although the Arab Spring and Occupy movements were unable to sustain the momentum for change without a clear agenda that is truly international in scope, and attentive to the needs of the world’s majority poor. That is why we should coalesce our voices around Article 25 of the Universal Declaration of Human Rights, which proclaims the right of everyone to the minimal requirements for a dignified life—adequate food, housing, medical care, access to social services and financial security.

Through ceaseless demonstrations in all countries that continue day and night, a united call for implementing Article 25 worldwide may finally impel governments to cooperate at the highest level, and rewrite the rules of the international economic system on the basis of shared mutual interests. In the wake of a breakdown of the entire international financial and economic order, such a grassroots mobilisation of numberless people may be the last chance we have of resurrecting long-forgotten proposals in the UN archives, as notably embodied in the aforementioned Brandt Report or Stiglitz Commission.

The case of Iceland is widely remembered as an example of how a people’s bailout can be achieved, following the ‘Pots and Pans Revolution’ that swept the country in 2009—the largest protests in the country’s history to date. As a result of the public’s demands, a new coalition government was able to buck all trends by avoiding austerity measures, actively intervening in capital markets and strengthening social programs for the less privileged. The results were remarkable for Iceland’s economic recovery, which was achieved without forcing society as a whole to pay for the blunders of corrupt banks. But it still wasn’t enough to prevent the old establishment political parties from eventually returning to power, and resuming their support for the same neoliberal policies that generated the crisis.

So what must happen if another systemic banking collapse occurs of even greater magnitude, not only in Iceland but in every country of the world? That is the moment when we’ll need a global Pots and Pans Revolution that is replicated by citizens of all nationalities and political persuasions, on and on until the entire planet is engulfed in a wave of peaceful demonstrations with a common cause. It will require a huge resurgence of the goodwill and staying power that once animated Occupy encampments, although this time focused on a more inclusive and universal demand for implementing Article 25 and sharing the world’s resources.

It may seem far-fetched to presume such an unprecedented awakening of a disillusioned populace, as if we can expect a visionary leader of Christ-like stature to point out the path towards resurrecting the UN’s founding ideals of “better standards of life for everyone in the world”. Unfortunately, nothing less may suffice in this age of economic chaos and confusion, so let us all be prepared for the climactic events about to take place.

“Living above our means”: Macri, the IMF, and Other Victims of Austerity

Argentinian president Mauricio Macri speaking on September 3rd, 2018 (Youtube screenshot).

After a hectic weekend with speculation aplenty, Argentina woke up on September 3rd waiting for the announcements of president Mauricio Macri. After accomplishing the feat of being late in delivering a recorded video, the message of more than 20 minutes was finally broadcast, with Macri announcing new austerity measures to try and get an earlier disbursement of the funds contemplated in the agreement with the IMF that was signed in May.

*****

Argentina’s current context is one of economic contraction, inflation, an increase in interest rates and a strong devaluation of the currency, which has lost 50% of its value with respect to the US dollar so far in 2018. For all these woes the Argentinian president found the solution in resorting to the IMF. But he did manage to find a multitude of parties responsible for the current situation: the rise of oil prices, drought, the commercial “war” between the United States and China, troubles in Turkey and Brazil, and above all the corruption and bad policies of previous governments.

But while the Argentinian president did his best to assign blame to his enemies, near and far, the explanation for the crisis – the failure of neoliberalism – was right in the middle of the screen, since nobody embodies noeliberalism better than Mauricio Macri himself.

Finance minister Nicolás Dujovne later presented more details of the measures that the government wishes to implement, before departing to meet the IMF in order to secure an early release of funds. These measures include a tax on exports and a promise to reduce the 2019 deficit to 0. In the agreement with the IMF the goal was 1.3%, so this reduction will hinge on bigger cuts to public spending and hikes in energy and transportation prices.

It should be stressed that these measures do not represent a shift, but rather a doubling-down on the policies that have been implemented since the Cambiemos coalition took power. The past two years have seen brutal increases in electricity and gas prices, a pension reform, massive layoffs in the public sector, major cuts in areas such as science, education or healthcare, attacks against labour rights, etc., with disastrous consequences for the population.

The Argentinian government, who was represented by Dujovne in the US, hopes that this latest round of sacrifices to the almighty markets will slow down the currency devaluation and secure the blessing of the high priests of the IMF and Wall Street. Nevertheless, prophecies about market uncertainties do have a tendency to self-fulfil. Not only that, the Argentinian executive, now slashed in less than half, is a team of businessmen that will know which interests to protect when push comes to shove.1

Macri and Dujovne meeting with IMF Managing Director Christine Lagarde on March 16, 2018 (Photo: Casa Rosada)

Discursive platitudes

Macri’s speech was littered with elements that would have sounded extremely familiar to anyone who followed the austerity programmes that were implemented since 2010 in countries like Portugal or Greece. When the Argentinian president said that “we have been living above our means”, any Portuguese person could have recalled listening to their own president in 2011 – Cavaco Silva – say exactly the same thing.

Along the same lines, this was also the verdict reached by the Greek prime minister – Georgios Papandreou – who signed the first bailout agreement, and the all-powerful German finance minister – Wolfgang Schäuble – has always harped on this string to justify the austerity imposed on Greece. In truth the sanctimonious discourse of “living within our means” is no modern invention, but rather something that has always closely followed the neoliberal doctrine, even going back to Thatcher.

Another common element was the admission, with dishonest concern, that these measures will result in increased poverty. In 2011, the Portuguese prime minister went even further, saying that only by getting poorer would the crisis be overcome. In exchange, there is always a pledge that “the most vulnerable will be looked after”, and that those with more resources will be called upon to make bigger sacrifices, when it is well known that, almost by definition, the purpose is quite the opposite.

The cases of Greece and Portugal

Keeping in mind the distances between the examples we discuss, the similarities in the official discourse demand that we at least examine what took place in Greece and Portugal. In these cases the IMF was not the only creditor institution: it was joined by the European Central Bank and the European Union to form the fearsome “troika”. These were perhaps the most extreme cases of the austerity that was imposed throughout the continent in response to the crisis that broke out in 2008.

Greek GDP contracted by more than 40% since 2008. After the implementation of the memoranda of agreement with the troika, unemployment has consistently topped 20%, and youth unemployment has been around 40%. More than that, 4 out of 10 children are at risk of poverty. These are but a few indicators, among many others, that showcase the devastation that was unleashed upon the Greek people, while billions of euros of bailout money ended up directly in the hands of foreign banks.

As for the stated goal of the austerity packages, Greek public debt grew from 146% of GDP at the time of the first “structural reform” programme (2010) to 180% of GDP in 2018. Although officially Greece has exited the bailout programmes, the debt remains absolutely unpayable, and the idea that Greece can go on for decades balancing budgets under this weight is an illusion.

The Portuguese case is slightly less tragic. The 2015 elections resulted in a defeat for the right-wing coalition – which had implemented the deal signed with the troika in 2011 – and the emergence of a new government solution, which from afar might seem like it is on the left. The new government put an end to austerity and managed to revert the economic tendency and register economic growth once more.

The mere action of putting an end to austerity, while slowly reverting salaries and pensions to their 2011 levels, was a demonstration that the path of harsh budget cuts and tax increases was not the only choice. However, Portuguese public debt remains unpayable and an obstacle, among others, which will have to be confronted sooner or later.

Carlos Latuff depicts austerity in Greece

Where austerity leads to

This small transatlantic detour is useful to illustrate that, despite some declaring them as successful, the bailout plans did not manage to bring debt under control in Europe’s peripheral countries. But that goal, as well as the sacred budgetary targets, are simply argumentative artefacts.

Austerity packages, which are often more eloquently branded as “structural reforms”, are nothing but mechanisms to transfer wealth from labour to capital, with an underlying logic that profits are private and losses are socialised. When salaries and pensions are cut, when healthcare and education budgets are shrunk, when public services are dismantled, when thousands of workers are laid off, in order to pay back creditors, the people are being sacrificed to safeguard the interests of a handful of shareholders, be they national or foreign.

This transfer of wealth also occurs under the form of privatisations. These can be blatant or hidden under the pretext of the inefficiency of public management, but bailouts and structural adjustment plans have always been tremendous opportunities for capitalists. In the Greek case, important state assets, such as airports or the port of Piraeus, one of the biggest in the Mediterranean, ended up in private hands.

In truth, the Macri government has already made its position quite clear on the issue of privatizations; for example, in the energy sector, where the state is looking to sell its stake in several projects. In addition, the Argentinian company that produced satellites, ARSAT, was sold to an American company. The agreement with the IMF, and especially the version on steroids that will allow for an early release of funds, is sure to bring a new wave of privatisations, much to the delight of investors, and reviving ghosts of a not-so-distant past in Argentina.2

But it is not just through privatisation that room is opened up for private companies, especially multinational corporations, to flourish. The mere reduction of the reach of the state and public services leaves an open space to be filled by the whims of the market. In this context, the suppression of the health ministry, now reduced to a secretariat in the new ministry for health and social development, is quite symbolic. That this happened at a time when the implementation of the Universal Healthcare Coverage (CUS), a programme with a mercantile view of healthcare, is being discussed, is not a good omen for public healthcare in Argentina.

At this point we should go back to the issue of “living within our means”. The evolution of capitalism, even in times of crisis, has seen an ever growing concentration of wealth. It is estimated that 8 men own about as much wealth as the poorest half of the planet’s population. Therefore there are people living above what should be their means. But these are not pensioners, or public workers, or trade unionists, etc., as some would have us believe.

Resistance and repression

The Cambiemos government offensive, which will be intensified in the coming months, has been met with resistance from the Argentinian people in the streets. For example, a faculty strike in the university system, in protest against cutbacks in higher education and reforms in the pension system, was joined in August by a strong student mobilization in support, with several universities throughout the country temporarily occupied.

Trade unions, contradictions notwithstanding, also look to resist, and have called a general strike which is taking place on September 24-25. And perhaps there has been nothing more surprising and inspiring than the mobilisation of several hundred thousand people to defend the legalisation of abortion. Despite the goal not having been achieved for now, the awakening of consciences and the scale of the street mobilisations are building blocks for the upcoming struggles. The challenge is to turn all these struggles into attractor poles of a single, unified battle front.

Demonstration in Buenos Aires during a National Day of Protest, September 12 (Photo: Resumen Latinoamericano)

While it is fair to say that the rapid development of the crisis has caught the Argentinian government by surprise, the fact is that preparations to contain and repress any resistance to austerity had long been on the march. The decree which allows the armed forces to intervene in internal security matters, something which had not happened since end of the dictatorship, is particularly significant, not to mention the installation of US military bases in Argentinian territory.

The government and its talking heads have put forward a fallacious argument; namely, that with a tremendous sense of duty, those in charge are doing what needs to be done with no concern for upcoming elections. In reality what they are doing is ensuring that the interests of capitalists are shielded for decades, way beyond next year’s elections. It is the purest defence of class interests. Because at the end of the day power is not confined to the presidential palace or to legislative chambers.

An important difference with respect to cases such as Portugal or Greece is that in Argentina, thanks to the hegemony of media conglomerates such as the Clarín group, a scapegoat to which attention can be diverted has been put in place. This is the (alleged) corruption of Cristina Fernández de Kirchner and members of her government, which is presented as the root of all evils that befall Argentina. Similarly to what has happened in cases such as Lula’s in Brazil, the goal is to have the trial in the media for short-term political gain.3

The cases of Portugal and Greece, alongside many other recent examples of “rescue plans”, give an idea of what is to come. Under the excuse of “having lived above our means”, different mechanisms to transfer wealth to capital, brazen or hidden, will be implemented. And faced with the difficulty of meeting unrealistic budgetary targets that are imposed from the outside there will be no solution other than imposing more and more sacrifices on the majority of the people.

After its failure and exhaustion as a political project, neoliberalism resurfaced in Latin America essentially leaning on the media and on the (politicisation of the) judicial system. It now looks to contain any alternative, in the case of Argentina, by mortgaging the country’s future and reactivating repression mechanisms. All of this places Argentina in the front line of a battle that is not just about next year’s presidential elections. The task ahead is to resist, every day and in every way, against this renewed offensive, and at the same time to construct a true, and radical, alternative.

• Thanks to Luciana Daffra for her comments and corrections.

• First published in Investig’Action

  1. On September 17 Dujovne presented the 2019 budget before the Argentinian Congress. It is, in his words, an “austere budget”, with a 7% cut on public spending, a prediction of economic contraction of 2.4%, and a zero deficit goal.
  2. It is worth recalling that this is no pure ideological matter for Macri, since the Macri Group is one of the largest business conglomerates in Argentina, with activities over a range of sectors, and having directly benefited from privatisation of state assets in the past.
  3. Our goal is not to vouch for anyone’s innocence, rather to point out the clear manipulation of justice for political ends and the double standards (or lack of standards) of the media. In Argentina, for example, a large circus has been set up surrounding the famous “notebooks” which detail the corruption of a former official during the Kirchner governments. The notebooks came from a remorseful driver, but up until now only photocopies of the smoking gun have been presented. In exchange, Macri featuring in the Panama Papers did not seem to merit the same level of scrutiny from the media, and the same can be said about the “fake contributions” and money laundering in the campaign of Maria Eugenia Vidal, governor of the province of Buenos Aires and one of the main figures of Cambiemos.

Our Broken System has no “Moderate” Devotees

Western politics is tearing itself apart, polarising into two camps – or at least, it is in the official narrative we are being fed by our corporate media. The warring camps are presented as “moderate centrists”, on one side, and the “extreme right”, on the other. The question is framed as a choice about where one stands in relation to this fundamental political divide. But what if none of this is true? What if this isn’t a feud between two opposed ideological camps but rather two differing – and irrational – reactions to the breakdown of late-stage capitalism as an economic model, a system that can no longer offer plausible solutions to the problems of our age?

Neighbouring news headlines this week offered a neat illustration of the media’s framing of the current situation. Representing the “moderates”, German chancellor Angela Merkel made a “passionate address” in which she denounced the outbreak of far-right protests in east Germany and reports of the “hunting down” of “foreigners” – asylum seekers and immigrants.

She observed:

There is no excuse or explanation for rabble-rousing, in some cases the use of violence, Nazi slogans, hostility towards people who look different, to the owner of a Jewish restaurant, attacking police.

Ostensibly pitted against Merkel is Viktor Orban, Hungary’s “extreme right” prime minister. Hungary risks being stripped of its voting rights in the European Union because of Orban’s “rabble-rousing” policies and his anti-migrant agenda.

Shortly before the European parliament voted against Hungary, accusing its government of posing a “systematic threat” to democracy and the rule of law, Orban argued that his country was being targeted for preferring not to be “a country of migrants”.

He is far from an outlier. Several other EU states, from Italy to Poland, are close behind Orban in pursuing populist, anti-immigrant agendas.

Family feud

But does this civil war in Europe really reflect a divide between good and bad politics, between moderates and extremists? Are we not witnessing something else: the internal contradictions brought to the fore by a turbo-charged neoliberalism that is now so ideologically entrenched that no one dares question its suitability, let alone its morality?

In truth, the row between Merkel and Orban is a family feud, between sister and brother wedded to the same self-destructive ideology but in profound disagreement about which placebo should be administered to make them feel better.

What do I mean?

Merkel and the mainstream neoliberal elite are committed to an ever-more deregulated world because that is imperative for a globalised economic elite searching to accrue ever more wealth and power. That elite needs open borders and a lack of significant regulation so that it can plunder unrestricted the Earth’s resources – human and material – while dumping the toxic waste byproducts wherever is most profitable and convenient.

In practice, that means creating maximum damage in places and against life-forms that have the least capacity to defend themselves: the poorest countries, the animal kingdom, the forests and oceans, the weather system – and, of course, against future generations that have no voice. There is a reason why the deepest seabeds are now awash with our plastic debris, poisoning and killing marine life for decades, maybe centuries, to come.

Interestingly, this global elite makes a few exceptions to its policy of entirely open borders and sweeping deregulation. Through its pawns in the world’s leading capitals – the people we mistakenly think of as our political representatives – it has created small islands of opacity in which it can stash away its wealth. These “offshore tax havens” are highly regulated so we cannot see what goes on inside them. While the elite wants borders erased and the free movement of workers to set one against the other, the borders of these offshore “safe deposit boxes” are stringently preserved to protect the elite’s wealth.

International order

Meanwhile, the global elite has created international or trans-national structures and institutions precisely to remove the power of nation-states to regulate and dominate the business environment. The political class in the United States, France, Britain, Germany, Mexico or Brazil do not control the corporations. These corporations control even the biggest states. The banks are too big to fail, the arms manufacturers too committed to permanent war to rein in, the largely uniform narratives of the corporate media too powerful to dissent from.

Instead, global or trans-national institutions, such as the World Bank, the International Monetary, the European Union, NATO, BRICS and many others, remake our world to promote the globalised profits of the corporations.

The United Nations – a rival international project – is more problematic. It was created immediately after the Second World War with the aim of imposing a law-based international order, premised on respect for human rights, to prevent future large-scale wars and genocide. In practice, however, it chiefly serves the interests of the dominant western states through their capture of the Security Council, effectively the UN’s executive.

A few UN institutions – those in charge of human rights and prosecuting war crimes – that have the potential to restrain the power of the global elite find themselves ever more marginalised and undermined. Both the UN Human Rights Council and the International Criminal Court have been under sustained assault from US officials, both before and after Donald Trump became president.

Towards the abyss

The internal contradictions of this globalised system – between the unfettered enrichment of the elite and the endless resource depletion of the Earth and its weakest inhabitants – are becoming ever more apparent. Historically, the toxic waste from this system was inflicted on the poorest regions first, like puddles forming in depressions in the ground during a rainstorm.

As the planet has warmed, crops have failed, the poor have gone hungry, wars have broken out. All of this has been an entirely predictable outcome of the current economics of endless, carbon-based growth, coupled with resource theft. But unlike puddles, the human collateral damage of this economic system can get up and move elsewhere. We have seen massive population displacements caused by famines and wars, especially in the Middle East and North Africa. These migrations are not about to stop. They are going to intensify as neoliberalism hurtles us towards the economic and climate abyss.

The political class in the west are now experiencing profound cognitive dissonance. Merkel and the “moderates” want endless growth and a world without borders that is bringing gradual ruination on their economies and their privileges. They have no answers for the “extremists” on the right, who acknowledge this ruination and say something needs to be done urgently about it.

Orban and the far-right want to fiercely resurrect the borders that globalisation erased, to build barriers that will stop the puddles merging and inundating their higher ground. This is why the right is resurgent. They, far more than the moderates, can describe our current predicament – even if they offer solutions that are positively harmful. They want solid walls, national sovereignty, blocks on immigrants, as well as racism and violence against the “foreigners” already inside their borders.

The system is broken

We have to stop thinking of these political debates as between the good “moderates” and the nasty “extreme right”. This is a fundamental misconception.

The deluded “moderates” want to continue with a highly unsustainable form of capitalism premised on an impossible endless growth. It should be obvious that a planet with finite resources cannot sustain infinite growth, and that the toxic waste of our ever-greater consumption will poison the well we all depend on.

The west’s deluded far-right, on the other hand, believe that they can stand guard and protect their small pile of privilege against the rising tide of migrants and warming oceans caused by western policies of resource theft, labour exploitation and climate destruction. The far-right’s views are no more grounded in reality than King Canute’s.

Both sides are failing to grasp the central problem: that the western-imposed global economic system is broken. It is gradually being destroyed from within by its own contradictions. The “moderates” are doubly blind: they refuse to acknowledge either the symptoms or the cause of the disease. The “extremists” are as oblivious to the causes of the illness besetting their societies as the “moderates”, but they do at least recognise the symptoms as a sign of malaise, even if their solutions are entirely self-serving.

Squaring the circle

This can be seen in stark fashion in the deep divide over Britain’s decision to leave the European Union, so-called Brexit, which has cut across the usual left-right agendas.

The Remain crowd, who want to stay in Europe, believe Britain’s future lies in upholding the failed status quo: of a turbo-charged neoliberalism, of diminishing borders and the free movement of labour, of distant, faceless technocrats making decisions in their name.

Like a child pulling up the blanket to her chin in the hope it will protect her from the monsters lurking in the darkness of the bedroom, the “moderates” assume European bureaucrats will protect them from economic collapse and climate breakdown. The reality, however, is that the EU is one of the trans-national institutions whose chief rationale is accelerating our rush to the abyss.

Meanwhile, the Brexit crowd think that, once out of the EU, a small island adrift in a globalised world will be able to reclaim its sovereignty and greatness. They too are going to find reality a terrifying disappointment. Alone, Britain will not be stronger. It will simply be easier prey for the US-headquartered global elite. Britain will be jumping out of the EU frying pan into the flames of the Atlanticists’ stove.

What is needed is not the “moderates” or the “extreme right”, not Brexit or Remain, but an entirely new kind of politics, which is prepared to shift the paradigm.

The new paradigm must accept that we live in a world that requires global solutions and regulations to prevent climate breakdown. But it must also understand that people are rightly distrustful of distant, unaccountable institutions that are easily captured by the most powerful and the most pitiless. People want to feel part of communities they know, to have a degree of control over their lives and decisions, to find common bonds and to work collaboratively from the bottom-up.

The challenge ahead is to discard our current self-destructive illusions and urgently find a way to solve this conundrum – to square the circle.

Ethiopia: A Case Study in Take-Over by Western Interests

Ethiopia is a landlocked country, bordering on Somalia which is dominating the Horn of Africa. Due to several border conflicts during the past decades with Somalia, many of them supportive of Ethiopia by the US military, the border between the two countries has become porous and ill-defined. Ethiopia is also bordering on Djibouti, where the United States has a Naval Base, Camp Lemonnier, next to Djibouti’s international airport. The base is under AFRICOM, the Pentagon’s African Command. AFRICOM has its boots in Ethiopia, as it does in many other African countries.

Ethiopia’s new Prime Minister, Abiy Ahmed, has already demonstrated that he is poised to hand over his country to western interests, vultures, such as the World Bank, IMF and eventually the globalized Wall Street banking clan. In fact, it looks like these institutions were instrumental in manipulating parliamentary maneuvers, with arm-twisting of the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) to make Mr. Abyi the new Prime Minister, succeeding Mr. Hailemariam Desalegn, who rather suddenly was forced to resign in February 2018, amidst endless foreign induced protests and violent street demonstrations. With EPRDF Ethiopia is a de facto one-party state. EPRDF is a coalition of different regional representations.

Read also Ethiopia – Breaking the Dam for Western Debt Slavery

Proud Ethiopia has never been colonized by western powers, per se, except for a brief Italian military occupation (1935 – 1939) by Mussolini. And now, in the space of a few months, since Mr. Abiy’s ascent to power, the country is being enslaved by the new western colonial instruments, the so-called international development institutions, the World Bank, IMF – and others will follow.

Mr. Abiy is an Oromo leader; Oromia being a disputed area between Ethiopia and Somalia. The latter is effectively controlling the Horn of Africa, overseeing the Gulf of Aden (Yemen) and the entire Iran-controlled Persian Gulf area. Control over the Horn of Africa is on Washington’s strategic wish list and may have become an attainable target, with the Oromo leader and new PM, Abiy Ahmed.

Think about it. Yemen, another ultra-strategic location, being bombed to ashes by the Saudis on behalf of the western powers, primarily the US and the UK, being subdued for domination by the west wanting to control the Gulf area, foremost Iran and her riches. On the other hand, Ethiopia, a prime location as an assault basis for drones, war planes and ships.

Curiously, Prime Minister Meles Zenawi, a former rebel leader, elected in 1991 and in power for 21 years, died suddenly at age 57 in August 2012, while actually recovering from an undisclosed illness in a hospital abroad, allegedly from an infection – according to official Ethiopian state television. He was succeeded by Mr. Hailemariam, who last February had to resign.

In the same vein of strange events – events to reflect on – PM Zenawi, about 18 months before he died, signed on 31 March 2011 a no-bid contract for US$ 4.8 billion with ‘Salini Costruttori’, alias Salini Impregilo. The Italian company, well established in Ethiopia since 1957, is responsible for the construction of the controversial “Grand Ethiopian Renaissance Dam”, formerly the Millennium Dam on the Nile. When finished, it will be African’s largest artificial water reservoir with a capacity of 74 billion m3.

Under construction since 2011, this gravity dam on the Blue Nile River in Ethiopia’s Benishangul-Gumuz Region, about 15 km from the Sudanese border, is expected to produce 6.45 gigawatts which will make it the largest hydroelectric power plant in Africa and the 7th largest in the world. The works are about two thirds completed, and the dam will take from 5 to 15 years to fill up.

The project was fiercely contested by Egypt which claimed that the dam would reduce the agreed amount of Nile water flowing into Egypt. However, Prime Minister Zenawi argued that the dam would not reduce the downstream flow, and – in addition to generating hydropower and making Ethiopia Africa’s largest electricity exporter, would help regulate irrigation, thus, helping to avert Ethiopia’s notorious droughts and famines that kill regularly tens of thousands of people. Indications are that this dam project could become an economic “power house” for Ethiopia, a country otherwise known as impoverished and destitute.

This water flow conflict between Ethiopia and Egypt was discussed in numerous meetings and conferences of the World Bank sponsored Nile Basin Initiative (NBI), encompassing ten riparian countries (Burundi, D.R. Congo, Egypt, Eritrea, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, Uganda); and about 350 – 400 million people. It is not clear whether the dispute was ever satisfactorily settled.

Mr. Zenawi’s successor, PM Hailemariam Desalegn, continued with the project unchallenged and unchanged until his sudden resignation earlier this year. At the end of August 2018, in a surprise move, the new PM, Abiy Ahmed, ousted the dam project’s subcontractor, METEC, under the pretext of numerous work delays. METEC is a state enterprise run by the Ethiopian military. According to several insider accounts, there were never any complaints about project delays caused by METEC. The new sub-contract was to be awarded to a foreign private company.

Simultaneously, in another alarming occurrence, on 26 August 2018, Mr. Simegnew Bekele, the chief engineer and project manager of the controversial dam, was found murdered, shot to death, in his Landcruiser in an Addis Ababa parking lot.

The series of events, starting from the signing of the dam project in 2011, to the sudden death of then PM Zenawi a year later, the resignation of his successor, Mr. Hailemariam, earlier this year, the hasty appointment of the neoliberal PM Abiy Ahmed in February 2018, the assassination of the dam’s project manager in August 2018 – all this looks like well-orchestrated, with a few hiccups in between that were rapidly ironed out – to pave the way for a neoliberal, corporate and maybe foreign military take-over of this once proudly independent country, an African nation with a potentially prosperous future.

This leads to the other side of the same coin, the west is interested in.

With a population of about 104 million (2018 est.), Ethiopia is the second most populous country in Sub-Saharan Africa and one of the most densely populated ones, with an annual population growth rate of about 2.5%. Ethiopia is known for endemic poverty and her periodic droughts. Ethiopia is also the world’s second fastest growing non-oil economy (after Bhutan), having increased her GDP more than ten-fold since 2000, from US$ 8 billion to US$ 80.6 billion in 2017, however, with a nominal GDP of only US$850, or US$2,100 PPP (Purchasing Power Parity).

Agriculture contributes about 36% to GDP, indicating a considerable growth potential with regulated irrigation expected to emanate from the Renaissance Dam project. Economic expansion amounted to more than 10% in 2017 and is projected at close to 9% per year through 2019.

This economic profile, plus the potential increase in output from the Grand Renaissance Dam, offer more than fertile grounds for corporate exploitation through debt enslavement and privatization of public, civil and social services. This has already started. Ethiopia’s current debt is a modest 33.5% of GDP but is predicted to grow to at least 70% by 2022. Why?

In November 2017 the World Bank has committed US$ 4.7 billion over the coming 5 years, roughly a billion per year  which may be called blank checks. These funds are destined for structural adjustment type activities, for loosely defined and little controlled budget support measures, much of which, as worldwide experience shows, is likely to ‘disappear’ unproductively, leaving behind public debt, and what’s much worse, a plethora of austerity conditions, from cutting public employment, to privatization of water, electricity and other public services, as well as ‘land-grabbing’ type agricultural concessions to foreign agricultural enterprises.

The latter will be especially attractive, thanks to the new regulated irrigation potential, making Ethiopia’s desert fertile – but leaving hardly any additional food at affordable prices for the impoverished population in the country. Frequently such land concessions come with long-term GMO contracts attached. Bayer-Monsanto may already be a player in Ethiopia’s future agricultural sector. If so, the country may not only be enslaved by debt, but also by endless, oppressive, land-destructive GMO contracts that bear high risks for human health.

Such a WB commitment will usually be followed by an IMF intervention, both of which will serve as leverage for further debt from private banking and corporate investors. The modest 2017 debt ratio of about one third to GDP may explode and skyrocket in the near future, making Ethiopia the Greece of Africa, shamelessly exploited and “milked” to the bones by western corporate and financial interests.

Fortunately, there are other economic interests alive in Africa and especially in Ethiopia. There is, for example, China, for whom Ethiopia is a key partner and a linchpin for President Xi’s Belt and Road Initiative (BRI), a massive China-initiated infrastructure development plan, spanning the globe from east to west, via different routes, one of them via Africa. Although China has become cautious over the past years with direct investments in Ethiopia, mainly due to the lasting unrest, said to be over ‘territorial issues’, Ethiopia remains an important partner, because of its strategic location next to the tiny port of Djibouti, where China has a naval base. Ethiopia is also attractive for manufacturing with low-cost labor and because of her transport links to other African countries and a potentially large consumer market.

Chinese, Russian and other eastern investments are usually based on mutual benefits, in contrast to the western one-sided exploitation method. Hopefully, Chinese, Russian and other eastern investments may continue as a strong counter-balance to the west, and help bringing a more equitable development model not only to Ethiopia, but to the African Continent in general. In fact, recent statements by the leaders of South Africa, Ghana and Rwanda have praised Chinese investments over the western abusive ‘carrot and stick approach’. With the help of China, Russia and other eastern investors, Ethiopia might prevent western vultures from devouring the poverty struck nation and from falling into the trap of neoliberal, everything-goes “free market ideology” to the detriment of the Ethiopian population.

•  First published in New Eastern Outlook (NEO)

India: The State of Independence

India celebrates its independence from Britain on 15 August. However, the system of British colonial dominance has been replaced by a new hegemony based on the systemic rule of transnational capital, enforced by global institutions like the World Bank and WTO. At the same time, global agribusiness corporations are stepping into the boots of the former East India Company.

The long-term goal of US capitalism has been to restructure indigenous agriculture across the world and tie it to an international system of trade underpinned by export-oriented mono-cropping, commodity production for the global market and debtThe result has been food surplus and food deficit areas, of which the latter have become dependent on agricultural imports and strings-attached aid.

Whether through IMF-World Bank structural adjustment programmes, as occurred in Africa, trade agreements like NAFTA and its impact on Mexico or, more generally, deregulated global trade rules, the outcome has been similar: the displacement of traditional, indigenous agriculture by a corporatized model centred on transnational agribusiness and the undermining of both regional and world food security. The global food regime is in effect increasingly beholden to unregulated global markets, financial speculators and global monopolies.

India, of course, has not been immune to this. It is on course to be subjugated by US state-corporate interests  and is heading towards environmental catastrophe much faster than many might think. As I outlined in this previous piece, the IMF and World Bank wants India to shift hundreds of millions out of agriculture and has been directed to dismantle its state-owned seed supply system, reduce subsidies and run down public agriculture institutions.

The plan for India involves the mass displacement of people to restructure agriculture for the benefit of western agricapital. This involves shifting at least 400 million from the countryside into cities. A 2016 UN report said that by 2030, Delhi’s population will be 37 million.

One of the report’s principal authors, Felix Creutzig, says:

The emerging mega-cities will rely increasingly on industrial-scale agricultural and supermarket chains, crowding out local food chains.

The drive is to entrench industrial agriculture, commercialise the countryside and to replace small-scale farming, the backbone of food production in India. It could mean hundreds of millions of former rural dwellers without any work (India is heading for ‘jobless growth’). Given the trajectory the country seems to be on, it does not take much to imagine a countryside with vast swathes of chemically-drenched monocrop fields containing genetically modified plants or soils rapidly degrading to become a mere repository for a chemical cocktail of proprietary biocides.

The plan is to displace the existing system of livelihood-sustaining smallholder agriculture with one dominated from seed to plate by transnational agribusiness and retail concerns. To facilitate this, independent cultivators are being bankrupted, land is to be amalgamated to facilitate large-scale industrial cultivation and those farmers that are left will be absorbed into corporate supply chains and squeezed as they work on contracts, the terms of which will be dictated by large agribusiness and chain retailers.

Some like to call this adopting a market-based approach: a system in the ‘market-driven’ US that receives a taxpayer farm bill subsidy of around $100 million annually.

The WTO and the US-India Knowledge Initiative on Agriculture are facilitating the process. To push the plan along, there is a strategy to make agriculture financially non-viable for India’s small farms. The result is that hundreds of thousands of farmers in India have taken their lives since 1997 and many more are experiencing economic distress or have left farming as a result of debt, a shift to cash crops and economic liberalisation.

The number of cultivators in India declined from 166 million to 146 million between 2004 and 2011. Some 6,700 left farming each day. Between 2015 and 2022 the number of cultivators is likely to decrease to around 127 million.

For all the discussion in India about loan waivers for farmers and raising their income levels, this does not address the core of the problem affecting agriculture: the running down of the sector for decades, spiralling input costs, lack of government assistance and the impacts of cheap, subsidised imports which depress farmers’ incomes.

Take the cultivation of pulses, for instance. According to a report in the Indian Express (September 2017), pulses production increased by 40% during the previous 12 months (a year of record production). At the same time, however, imports also rose resulting in black gram selling at 4,000 rupees per quintal (much less than during the previous 12 months). This has effectively driven down prices thereby reducing farmers’ already meagre incomes. We have already witnessed a running down of the indigenous edible oils sector thanks to Indonesian palm oil imports on the back of World Bank pressure to reduce tariffs (India was virtually self-sufficient in edible oils in the 1990s but now faces increasing import costs).

On the one hand, there is talk of India becoming food secure and self-sufficient; on the other, there is pressure from the richer nations for the Indian government to further reduce support given to farmers and open up to imports and ‘free’ trade. But this is based on hypocrisy.

Writing on the ‘Down to Earth’ website in late 2017, Sachin Kumar Jain states some 3.2 million people were engaged in agriculture in the US in 2015. The US govt provided them each with a subsidy of $7,860 on average. Japan provides a subsidy of $14,136 and New Zealand $2,623 to its farmers. In 2015, a British farmer earned $2,800 and $37,000 was added through subsidies. The Indian government provides on average a subsidy of $873 to farmers. However, between 2012 and 2014, India reduced the subsidy on agriculture by $3 billion.

According to policy analyst Devinder Sharma, subsidies provided to US wheat and rice farmers are more than the market worth of these two crops. He also notes that, per day, each cow in Europe receives subsidy worth more than an Indian farmer’s daily income.

How can the Indian farmer compete with an influx of artificially cheap imports? The simple answer is that s/he cannot and is not meant to.

In the book The Invention of Capitalism, Michael Perelmen lays bare the iron fist which whipped the English peasantry into a workforce willing to accept factory wage labour. A series of laws and measures served to force peasants off the land and deprive them of their productive means. In India, we are currently witnessing a headlong rush to facilitate (foreign) capital and turn farmers into a reserve army of cheap industrial/service sector labour. By moving people into cities, it seems India wants to emulate China: a US colonial outpost for manufacturing that has boosted corporate profits at the expense of US jobs. In India, migrants – stripped of their livelihoods in the countryside – are to become the new ‘serfs’ of the informal services and construction sectors or to be trained for low-level industrial jobs.

Even here, however, India might have missed the boat as it is not creating anything like the number of jobs required and the effects of automation and artificial intelligence are eradicating the need for human labour across many sectors.

India’s high GDP growth has been fuelled on the back of debt, environmental degradation, cheap food and the subsequent impoverishment of farmers. The gap between their income and the rest of the population, including public sector workers, has widened enormously to the point where rural India consumes less calories per head than it did 40 years ago.

Amartya Sen and former World Bank Chief Economist Kaushik Basu have argued that the bulk of India’s aggregate growth occurred through a disproportionate rise in the incomes at the upper end of the income ladder. Furthermore, Global Finance Integrity has shown that the outflow of illicit funds into foreign bank accounts has accelerated since opening up the economy to neoliberalism in the early nineties. ‘High net worth individuals’ (i.e. the very rich) are the biggest culprits here.

While corporations receive massive handouts and interest-free loans, they have failed to spur job creation; yet any proposed financial injections (or loan waivers) for agriculture (which would pale into insignificance compared to corporate subsidies/written off loans) are depicted as a drain on the economy.

Making India ‘business friendly’

PM Modi is on record as saying that India is now one of the most business-friendly countries in the world. The code for being ‘business friendly’ translates into a willingness by the government to facilitate much of the above, while reducing taxes and tariffs and allowing the acquisition of public assets via privatisation as well as instituting policy frameworks that work to the advantage of foreign corporations.

When the World Bank rates countries on their level of ‘ease of doing business’, it means national states facilitating policies that force working people to take part in a race to the bottom based on free market fundamentalism. The more ‘compliant’ national governments make their populations and regulations, the more ‘business friendly’ a country is.

The World Bank’s ‘Enabling the Business of Agriculture’ entails opening up markets to Western agribusiness and their fertilisers, pesticides, weedicides and patented seeds with farmers working to supply transnational corporations’ global supply chains. Rather than working towards food security based on food sovereignty and eradicating corruption, building storage facilities and dealing with inept bureaucracies and deficiencies in food logistics, the mantra is to let ‘the market’ intervene: a euphemism for letting powerful corporations take control; the very transnational corporations that receive massive taxpayer subsidies, manipulate markets, write trade agreements and institute a regime of intellectual property rights thereby indicating that the ‘free’ market only exists in the warped delusions of those who churn out clichés about letting the market decide.

Foreign direct investment is said to be good for jobs and good for business. But just how many get created is another matter – as is the amount of jobs destroyed in the first place to pave the way for the entry of foreign corporations. For example, Cargill sets up a food or seed processing plant that employs a few hundred people; but what about the agricultural jobs that were deliberately eradicated in the first place to import seeds or the village-level processors who were cynically put out of business via bogus health and safety measures so that Cargill could gain a financially lucrative foothold?

The process resembles what Michel Chossudovsky notes in his 1997 book about the ‘structural adjustment’ of African countries. In The Globalization of Poverty, he says that economies are:

opened up through the concurrent displacement of a pre-existing productive system. Small and medium-sized enterprises are pushed into bankruptcy or obliged to produce for a global distributor, state enterprises are privatised or closed down, independent agricultural producers are impoverished. (p.16)

The opening up of India to foreign capital is supported by rhetoric about increasing agricultural productivity, creating jobs and boosting GDP growth. But India is already self-sufficient in key staples and even where productivity is among the best in the world (as in Punjab) farmers still face massive financial distress. Clearly, productivity is not the problem: even with bumper harvests, the agrarian crisis persists.

India is looking to US corporations to ‘develop’ its food, retail and agriculture sectors. What could this mean for India? We only have to look at the business model that keeps these companies in profit in the US: an industrialised system that relies on massive taxpayer subsidies and has destroyed many small-scale farmers’ livelihoods.

The fact that US agriculture now employs a tiny fraction of the population serves as a stark reminder for what is in store for Indian farmers. Agribusiness companies’ taxpayer-subsidised business models are based on overproduction and dumping on the world market to depress prices and rob farmers elsewhere of the ability to cover the costs of production. They rake in huge returns, while depressed farmer incomes and massive profits for food retailers is the norm.

The long-term plan is for an overwhelmingly urbanised India with a fraction of the population left in farming working on contracts for large suppliers and Walmart-type supermarkets that offer a largely monoculture diet of highly processed, denutrified, genetically altered food based on crops soaked with chemicals and grown in increasingly degraded soils according to an unsustainable model of agriculture that is less climate/drought resistant, less diverse and unable to achieve food security.

Various high-level reports have concluded that policies need to support more resilient, diverse, sustainable (smallholder) agroecological methods of farming and develop decentralised, locally-based food economies. There is also a need to protect indigenous agriculture from rigged global trade and trade deals. However, the trend continues to move in the opposite direction towards industrial-scale agriculture and centralised chains for the benefit of Monsanto, Cargill, Bayer and other transnational players.

Devinder Sharma has highlighted where Indian policy makers’ priorities lie when he says that agriculture has been systematically killed over the last few decades. Some 60% of the population live in rural areas and are involved in agriculture but less than 2% of the annual budget goes to agriculture. Sharma says that when you are not investing in agriculture, you are not wanting it to perform.

It is worth considering that the loans provided to just five large corporations in India are equal to the entire farm debt. Where have those loans gone? Have they increased ‘value’ in the economy. No, loans to corporate houses left the banks without liquidity.

‘Demonetisation’ was in part a bail-out for the banks and the corporates, which farmers and other ordinary folk paid the price for. It was a symptom of a country whose GDP growth was based on a debt-inflated economy. While farmers commit suicide and are heavily indebted, a handful of billionaires get access to cheap money with no pressure to pay it back and with little ‘added value’ for society as a whole.

Corporate-industrial India has failed to deliver in terms of boosting exports or creating jobs, despite the hand outs and tax exemptions given to it. The number of jobs created in India between 2005 and 2010 was 2.7 million (the years of high GDP growth). According to International Business Times, 15 million enter the workforce every year. And data released by the Labour Bureau shows that in 2015, jobless ‘growth’ had finally arrived in India.

So where are the jobs going to come from to cater for hundreds of millions of agricultural workers who are to be displaced from the land or those whose livelihoods will be destroyed as transnational corporations move in and seek to capitalise small-scale village-level industries that currently employ tens of millions?

Development used to be about breaking with colonial exploitation and radically redefining power structures. Now we have dogma masquerading as economic theory that compels developing countries to adopt neoliberal policies. The notion of ‘development’ has become hijacked by rich corporations and the concept of poverty depoliticised and separated from structurally embedded power relations, not least US-driven globalisation policies resulting in the deregulation of international capital that ensures giant transnational conglomerates are able to ride roughshod over national sovereignty.

Across the world we are seeing treaties and agreements over breeders’ rights and intellectual property being enacted to prevent peasant farmers from freely improving, sharing or replanting their traditional seeds. Large corporations with their proprietary seeds and synthetic chemical inputs are trying to eradicate traditional systems of seed exchange. They have effectively hijacked seeds, pirated germ plasm that farmers developed over millennia and have ‘rented’ the seeds back to farmers

Corporate-dominated agriculture is not only an attack on the integrity of ‘the commons’ (soil, water, land, food, forests, diets and health) but is also an attack on the integrity of international institutions, governments and officials which have too often been corrupted by powerful transnational entities.

Whereas some want to bring about a fairer, more equitable system of production and distribution to improve people’s quality of lives (particularly pertinent in India with its unimaginable inequalities, which have spiralled since India adopted neoliberal policies), US capitalism regards ‘development’ as a geopolitical tool.

As economics professor Michael Hudson said during a 2014 interview (published on prosper.org under the title ‘Think Tank Times’):

American foreign policy has almost always been based on agricultural exports, not on industrial exports as people might think. It’s by agriculture and control of the food supply that American diplomacy has been able to control most of the Third World. The World Bank’s geopolitical lending strategy has been to turn countries into food deficit areas by convincing them to grow cash crops – plantation export crops – not to feed themselves with their own food crops.

The Regional Comprehensive Economic Partnership (RCEP) could further accelerate the corporatisation of Indian agriculture. A trade deal now being negotiated by 16 countries across Asia-Pacific, the RCEP would cover half the world’s population, including 420 million small family farms that produce 80% of the region’s food.

RCEP is expected to create powerful rights and lucrative business opportunities for food and agriculture corporations under the guise of boosting trade and investment. It could allow foreign corporations to buy up land, thereby driving up land prices, fuelling speculation and pushing small farmers out. If RCEP is adopted, it could intensify the great land grab that has been taking place in India. It could also lead to further corporate control over seeds.

Capitalism and environmental catastrophe joined at the hip

In India, an industrialised chemical-intensive model of agriculture is being facilitated. This model brings with it the numerous now well-documented externalised social, environmental and health costs. We need look no further than the current situation in South India and the drying up of the Cauvery river in places to see the impact that this model has contributed to: an ecological crisis fuelled by environmental devastation due to mining, deforestation and unsustainable agriculture based on big dams, water-intensive crops and Green Revolution ideology imported from the West.

But we have known for a long time now that India faces major environmental problems, many of which are rooted in agriculture. For example, in an open letter written to officials in 2006, the late campaigner and farmer Bhaskar Save noted that India, next to South America, receives the highest rainfall in the world. Where thick vegetation covers the ground, and the soil is alive and porous, at least half of this rain is soaked and stored in the soil and sub-soil strata. A good amount then percolates deeper to recharge aquifers, or ‘groundwater tables’. Save argued that the living soil and its underlying aquifers thus serve as gigantic, ready-made reservoirs gifted free by nature.

Half a century ago, most parts of India had enough fresh water all year round, long after the rains had stopped and gone. But clear the forests, and the capacity of the earth to soak the rain, drops drastically. Streams and wells run dry.

Save went on to note that while the recharge of groundwater has greatly reduced, its extraction has been mounting. India is presently mining over 20 times more groundwater each day than it did in 1950. Much of this is mindless wastage by a minority. But most of India’s people – living on hand-drawn or hand-pumped water in villages and practising only rain-fed farming – continue to use the same amount of ground water per person, as they did generations ago.

According to Save, more than 80% of India’s water consumption is for irrigation, with the largest share hogged by chemically cultivated cash crops. Maharashtra, for example, has the maximum number of big and medium dams in the country. But sugarcane alone, grown on barely 3-4% of its cultivable land, guzzles about 70% of its irrigation waters.

One acre of chemically grown sugarcane requires as much water as would suffice 25 acres of jowar, bajra or maize. The sugar factories too consume huge quantities. From cultivation to processing, each kilo of refined sugar needs two to three tonnes of water. This could be used to grow, by the traditional, organic way, about 150 to 200 kg of nutritious jowar or bajra (native millets).

While rice is suitable for rain-fed farming, its extensive multiple cropping with irrigation in winter and summer as well is similarly hogging water resources and depleting aquifers. As with sugarcane, it is also irreversibly ruining the land through salinization.

Save argued that soil salinization is the greatest scourge of irrigation-intensive agriculture, as a progressively thicker crust of salts is formed on the land. Many million hectares of cropland have been ruined by it. The most serious problems are caused where water-guzzling crops like sugarcane or basmati rice are grown round the year, abandoning the traditional mixed-cropping and rotation systems of the past, which required minimal or no watering.

Unfortunately, policy makers continue to look towards the likes of Monsanto-Bayer for ‘solutions’. Such companies merely seek to break farmers’ environmental learning ‘pathways’ based on centuries of indigenous knowledge, learning and practices with the aim of getting farmers hooked on chemical treadmills for corporate profit (see Glenn Stone and Andrew Flach’s paper on path-breaking and technology treadmills in Indian cotton agriculture).

Wrong-headed policies in agriculture have already resulted in drought, expensive dam-building projects, population displacement and degraded soils. The rivers are drying, farmers are dying and the cities are creaking as a result of the unbridled push towards urbanisation.

In terms of maintaining and creating jobs, managing water resources, regenerating soils and cultivating climate resilient crops, agroecology as a solution is there for all to see. Andhra Pradesh and Karnataka are now making a concerted effort to roll out and scale up zero budget agroecological agriculture.

Solutions to India’s agrarian crisis (and indeed the world’s) are available, not least the scaling up of agroecological approaches which could be the lynchpin of rural development. However, successive administrations have bowed to and continue to acquiesce to the grip of global capitalism and have demonstrated their allegiance to corporate power. The danger is that without changing the capitalist relations of production, agroecology would simply be co-opted by corporations and incorporated into their global production and distribution chains.

In the meantime, India faces huge problems in terms of securing access to water. As Bhaskar Save noted, the shift to Green Revolution thinking and practices has placed enormous strain on water resources. From glacial melt in the Himalayas that will contribute to the drying up of important rivers to the effects of temperature rises across the Indo Gangetic plain, which will adversely impact wheat productivity, India has more than its fair share of problems. But despite this, high-level policy makers are pushing for a certain model of ‘development’ that will only exacerbate the problems.

This model is being driven by some of the world’s largest corporate players: a model that by its very nature leads to environment catastrophe:

… our economic system demands ever-increasing levels of extraction, production and consumption. Our politicians tell us that we need to keep the global economy growing at more than 3% each year – the minimum necessary for large firms to make aggregate profits. That means every 20 years we need to double the size of the global economy – double the cars, double the fishing, double the mining, double the McFlurries and double the iPads. And then double them again over the next 20 years from their already doubled state.

— Jason Hickel

While politicians and bureaucrats in Delhi might be facilitating this economic model and all it entails for agriculture, it is ultimately stamped with the logo ‘made in Washington’. Surrendering the nation’s food sovereignty and the incorporation of India into US financial and geopolitical structures is the current state of independence.

Final thoughts

Neoliberalism and the drive for urbanisation in India have been underpinned by unconstitutional land takeovers and the trampling of democratic rights. For supporters of cronyism and manipulated markets, which to all extents and purposes is what economic ‘neoliberalism’ across the world has entailed (see thisthis and this), there have been untold opportunities for well-placed individuals to make an under-the-table fast buck from various infrastructure projects and privatisation sell-offs.

According to the Organisation for Co-operation and Economic Development, the doubling of income inequality has made India one of the worst performers in the category of emerging economies.

Unsurprisingly, therefore, struggles (violent and non-violent) are taking place in India. The Naxalites/Maoists are referred to by the dominant class as left-wing extremists who are exploiting the situation of the poor. But how easy it is to ignore the true nature of the poor’s exploitation and too often lump all protesters together and create an ‘enemy within’. How easy it is to ignore the state-corporate extremism across the world that results in the central state abdicating its redistributive responsibilities by submitting to the tenets of Wall Street-backed ‘structural adjustment’ pro-privatisation policies, free capital flows and largely unaccountable corporations.

Powerful (mining) corporations are shaping the ‘development’ agenda in India and have signed secretive Memorandums of Understanding with the government. The full backing of the state is on hand to forcibly evict peoples from their land in order to hand it over to mineral-hungry industries to fuel a wholly unsustainable model of development. Around the world, this oil-dependent, urban-centric, high-energy model of endless consumption is stripping the environment bare and negatively impacting the climate and ecology.

In addition to displacing people to facilitate the needs of resource extraction industries, unconstitutional land grabs for Special Economic Zones, nuclear plants and other projects have additionally forced many others from the land.

Farmers (and others) represent a ‘problem’: a problem while on the land and a problem to be somehow dealt with once displaced. But food producers, the genuine wealth creators of a nation, only became a problem when western agribusiness was given the green light to take power away from farmers and uproot traditional agriculture in India and recast it in its own corporate-controlled image.

This is a country where the majority sanctifies certain animals, places, rivers and mountains. It’s also a country run by Wall Street sanctioned politicians who convince people to accept or be oblivious to the destruction of the same.

Many are working strenuously to challenge the selling of the heart and soul of India. Yet how easy will it be for them to be swept aside by officialdom which seeks to cast them as ‘subversive’. How easy it will be for the corrosive impacts of a rapacious capitalism to take hold and for hugely powerful corporations to colonise almost every area of social, cultural and economic life and encourage greed, selfishness, apathy, irretrievable materialism and acquisitive individualism.

The corporations behind it all achieve hegemony by altering mindsets via advertising, clever PR or by sponsoring (hijacking) major events, by funding research in public institutes and thus slanting findings and the knowledge paradigm in their favour or by securing key positions in international trade negotiations in an attempt to structurally readjust retail, food production and agriculture. They do it by many methods and means.

Before you realise it, culture, politics and the economy have become colonised by powerful private interests and the world is cast in their image. The prevailing economic system soon becomes cloaked with an aura of matter of factuality, an air of naturalness, which is never to be viewed for the controlling hegemonic culture or power play that it really is.

Seeds, mountains, water, forests and biodiversity are being sold off. The farmers and tribals are being sold out. And the more that gets sold off, the more who get sold out, the greater the amount of cash that changes hands and the easier it is for the misinformed to swallow the lie of Wall Street’s bogus notion of ‘growth’ – GDP.

If anyone perceives the type of ‘development’ being sold to the masses is actually possible in the first instance, they should note that ‘developing’ nations account for more than 80% of world population but consume only about a third of the world’s energy. US citizens constitute 5% of the world’s population but consume 24% of the world’s energy. On average, one American consumes as much energy as two Japanese, six Mexicans, 13 Chinese, 31 Indians, 128 Bangladeshis, 307 Tanzanians and 370 Ethiopians.

Consider that the Earth is 4.6 billion years old and if you scale this to 46 years then humans have been here for just four hours. The Industrial Revolution began just one minute ago, and in that time, 50% of the Earth’s forests have been destroyed.

We are using up oil, water and other resources much faster than they can ever be regenerated. We have also poisoned the rivers, destroyed natural habitats, driven species to extinction and altered the chemical composition of the atmosphere – among many other things.

Levels of consumption were unsustainable long before India and other countries began striving to emulate a bogus notion of ‘development’. The West continues to live way beyond its (environmental) limits.

This wasteful, high-energy model is tied to what ultimately constitutes the plundering of peoples and the planet by powerful transnational corporations. And, as we see all around us, from Libya and Syria to Afghanistan and Iraq, the outcome is endless conflicts over fewer and fewer resources.

The type of ‘progress and development’ and consumerism being sold makes beneficiaries of it blind to the misery and plight of the hundreds of millions who are deprived of their lands and livelihoods. In Congo, rich corporations profit from war and conflict. And in India, tens of thousands of militias (including in 2005, Salwa Judum) were put into tribal areas to forcibly displace 300,000 people and place 50,000 in camps. In the process, rapes and human rights abuses have been common.

If what is set out above tells us anything, it is that India and other regions of the world are suffering from internal haemorrhaging. They are being bled dry from both within and without:

There are sectors of the global population trying to impede the global catastrophe. There are other sectors trying to accelerate it. Take a look at whom they are. Those who are trying to impede it are the ones we call backward, indigenous populations – the First Nations in Canada, the aboriginals in Australia, the tribal people in India. Who is accelerating it? The most privileged, so-called advanced, educated populations of the world.

— Noam Chomsky.

Underpinning the arrogance of such a mindset is what Vandana Shiva calls a view of the world which encourages humans to regard man as conqueror and owner of the Earth. This has led to the technological hubris of geo-engineering, genetic engineering and nuclear energy. Shiva argues that it has led to the ethical outrage of owning life forms through patents, water through privatization, the air through carbon trading. It is leading to appropriation of the biodiversity that serves the poor.

And therein lies the true enemy of genuine development: a system that facilitates such plunder, which is presided over by well-funded and influential foreign foundations and powerful financial-corporate entities and their handmaidens in the IMF, World Bank and WTO.

If we look at the various western powers, to whom many of India’s top politicians look to for inspiration, their paths to economic prosperity occurred on the back of colonialism and imperialist intent. Do India’s politicians think this mindset has disappeared? The same mentality now lurks behind the neoliberal globalisation agenda hidden behind terms and policies like ‘foreign direct investment’, ‘ease of doing business’, making India ‘business friendly’ or ‘enabling the business of agriculture’.

Is India willing to see Monsanto-Bayer, Cargill and other transnational corporations deciding on what is to be eaten and how it is to be produced and processed. A corporate takeover spearheaded by companies whose character is clear for all to see:

The Indo-US Knowledge Initiative in Agriculture with agribusinesses like Monsanto, WalMart, Archer Daniels Midland, Cargill and ITC in its Board made efforts to turn the direction of agricultural research and policy in such a manner as to cater their demands for profit maximisation. Companies like Monsanto during the Vietnam War produced tonnes and tonnes of ‘Agent Orange’ unmindful of its consequences for Vietnamese people as it raked in super profits and that character remains.

— Communist Party of India (Marxist)

Behind the World Bank/corporate-inspired rhetoric that is driving the overhaul of Indian agriculture is a brand of corporate imperialism which is turning out to be no less brutal for Indian farmers than early industrial capitalism was in England for its peasantry. The East India company might have gone, but today the bidding of elite interests (private capital) is being carried out by compliant politicians, the World Bank, the WTO and lop-sided, egregious back-room trade deals.