Saudi Arabia Will Be Out of Money Within 5 Years — Says IMF

The dictatorship tried to smash its oil competition by pumping massive amounts of oil and keeping the price of oil at record lows. As a result, it's own finances are expected to be depleted by 2020.

Al Jubail, Saudi Arabia. (Photo by Jon Rawlinson)

By Abid Ali
Saudi Arabia could burn through its financial assets within five years, as the country grapples with slumping oil prices.

The Middle East’s biggest economy is expected to run budget deficits of 21.6 percent in 2015 and 19.4 percent in 2016, according the IMF’s latest regional outlook.

That means Riyadh needs to find money to meet its spending plans. Just like its oil exporting neighbours, it plans to make substantial cuts to its budgets.

"For the region’s oil exporters, the fall in prices has led to large export revenue losses, amounting to a staggering $360bn this year alone," Masood Ahmed, the IMF’s Middle East director, told reporters in Dubai.

There has been a trickle of evidence over the last few months that not all is well inside the kingdom. The Saudi Arabian Monetary Agency has withdrawn $70bn in funds managed by overseas financial institutions. Its foreign reserves have fallen by almost $73bn, since oil prices slumped, leaving it with $654.5bn.

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Waiting for Emancipation: The Prospects for Liberal Revolution in Africa

In the present decade, 7 out of the 10 fastest-growing economies (as conventionally measured) are African. In 1900 Africa was the world’s least densely populated and urbanized continent with 7.5% of world population. Today it is double that, with an urban share fast approaching the global average. According to UN projections, Africa will be home to 25% of all the people alive in 2050, 40% in 2100 (when Asia will contribute 42% and the rest 18%).—Keith Hart

80,000 South African Platinum Miners Strike For A Living Wage. (Screen capture
from YouTube video)

By Keith Hart
We live in a racist world. Despite the collapse of European empire and the formal adoption of a façade of international bureaucracy, the vast majority of black Africans are still waiting for meaningful emancipation from their perceived social inferiority.

Africans wait for emancipation in an unequal world

Now there is much talk of economic growth in Africa. In the present decade, 7 out of the 10 fastest-growing economies (as conventionally measured) are African. In 1900 Africa was the world’s least densely populated and urbanized continent with 7.5% of world population. Today it is double that, with an urban share fast approaching the global average. According to UN projections, Africa will be home to 25% of all the people alive in 2050, 40% in 2100 (when Asia will contribute 42% and the rest 18%). This is because Africa’s annual population growth rate is 2.5% while the rest of the world is ageing. The Asian manufacturing countries already recognize that Africa is the fastest-growing market in the world. This could provide an opportunity for Africans to play a stronger hand in international negotiations. If they succeed in standing up for themselves, it would be a world revolution, the end of the racist world order, no less.

The movement to abolish slavery was officially completed in the late nineteenth century. But emancipation is rarely as simple as that. In West Africa, abolition was a disaster. The internal drive to capture slaves continued apace and, despite a shift to their use in domestic production, supply soon exceeded demand. The price of slaves fell drastically, leading to their widespread abuse. Colonial empires were then justified by disorder in West Africa and by the drive to abolish the Arab slave trade in East Africa. Much later, when these regimes fell, Africans were offered emancipation once more, this time through national independence. Most African economies then regressed for a half-century. Apartheid was defeated in South Africa, but two decades later the country is more unequal and unemployment is rampant, while the government shoots its own people if they complain. Africans are still waiting for equal membership of world society. But they have never encountered more favourable conditions than now.

In the twentieth century, a population explosion was accompanied by a jump in Africa’s urban share from under 2% of the population to almost half. This urban revolution is not just a proliferation of cities, but also involves the installation of the whole package of pre-industrial class society: states, urban elites, intensification of agriculture and a political economy based on extraction of rural surpluses and the city bazaar.

The anti-colonial revolution unleashed hopes for the transformation of an unequal world. These have not yet been realized for most Africans. Africa’s new leaders thought they were building modern economies, but in reality they were erecting fragile states based on the same small-scale agriculture as before. Either machine production would be developed in some sectors of the economy or the state would devolve to a level compatible with its small-scale productive base. This structural weakness inevitably led them to exchange the democratic legitimacy of the independence struggle for dependence on foreign powers. Life support to Africa’s new ruling elites was switched off in the early 1980s. Many governments were made bankrupt and some countries collapsed into civil war.

The growth of cities should normally lead to rural-urban exchange, as farmers supply food to city-dwellers and in turn buy the latter’s manufactures and services. But this progressive division of labour requires a measure of protection from the world market and it was stifled at birth in post-colonial Africa by the dumping of subsidized food from the tax-rich West and later of cheap Asian manufactures. ‘Structural adjustment programmes’ imposed by the World Bank and IMF meant that Africa’s fledgling national economies had no protection. Tax collection in Africa was never as regular as in Eurasia; and governments still rely on whatever they can extract from mineral royalties and the import-export trade. Rents secured by political privilege are the chief source of wealth. This constitutes an Old Regime ripe for liberal revolution.

African development in the twenty-first century

‘Development’ refers first to humanity’s hectic dash from the countryside to the city since 1800. The engine driving this economic growth is assumed to be ‘capitalism’. Development then means trying to understand how capitalist growth is generated and how to make good the damage it causes in repeated cycles of creation and destruction. A third meaning refers to the developmental states of the mid-twentieth century, the idea that governments are best placed to engineer sustained economic growth with redistribution. The most common usage, however, refers to the commitment of rich countries to help poor countries become richer. This was at first real enough, even if the means chosen were often flawed. But after the 1970s, it has faded. If the rapid growth of the world economy encouraged a belief at first that poor countries could become rich, from the 1980s ‘development’ has meant freeing up global monetary flows and applying sticking plaster to the wounds inflicted. Development is the label for political relations between rich and poor countries after colonial empire.

There are two pressing features of our world: the unprecedented expansion of markets since the Second World War and massive economic inequality between (and within) nations. Becoming closer and more unequal at the same time is a recipe for disaster. Africa, with a seventh of the world’s population, had 2% of global purchasing power around the millennium. What could Africa’s new urban populations produce for the world economy? Apart from exporting raw materials, when they could, the world market for food and other agricultural products is skewed by western farm subsidies. Manufacturing as an alternative faces intense competition from Asia. African countries should argue collectively in the councils of world trade for some protection from international dumping, so that their farmers and infant industries might supply their own populations first.

Exchange between cities and their hinterlands has been frustrated for a post-colonial Africa whose international bargaining position is undermined by being fragmented into 54 states. The fastest-growing sector of world trade is the production of culture: entertainment, education, media, sports, software and information services. The terrain is less rigidly mapped out here than in agriculture and manufacture and Africans are well-placed to compete in this field because of the proven global preference for their music, films and plastic arts.

Classes for and against a liberal revolution

The classical liberal revolutions were sustained by three ideas: that freedom and economic progress require increased movement of people, goods and money in the market; that the political framework most compatible with this is democracy; and that social progress depends on science, the drive to know how things really work. The energies generated by Africa’s urban revolution are already manifested in economy, technology, religion and the arts; and they could be harnessed to radical change if freed from the Old Regime.

Miners on strike in Marikana, South Africa where 44 miners were ultimately massacre by police.
(Screen capture from YouTube video)

Rousseau’s condemnation of eighteenth century France rings as true for our world: “It is manifestly contrary to the law of nature, however defined… that a handful of people should gorge themselves with superfluities while the hungry multitude goes in want of necessities”. The institutions of agrarian civilization are alive and well, not just in post-colonial Africa. The greatest riches are no longer acquired through selling products cheaper than one’s competitors; rents secured by political privilege -- such as Big Pharma’s income from patents, monopoly revenues from DVDs and CDs or tax revenues, used to bail out the Wall Street banks – keep the superrich afloat today.

In The Wretched of the Earth, Frantz Fanon provided a blueprint for a class analysis of decadent societies ripe for revolution. Political parties and unions were weak and conservative in late colonial Africa because they represented only a tiny part of the population: the industrial workers, civil servants, intellectuals and shopkeepers of the town, classes unwilling to jeopardize their own privileges. They were hostile to and suspicious of the mass of country people.

The latter had customary chiefs supervised by the military and administrative officials of the occupying power. A nationalist middle class of professionals and traders confronted the superstition and feudalism of traditional authorities. Landless peasants joined the urban lumpenproletariat. Eventually colonial repression forced the nationalists to flee the towns and take refuge with the peasantry. Only then, with the rural-urban split temporarily healed by crisis, did a mass movement take off. Fanon’s method might help us identify the potential for another African revolution.

Clearly, trade and finance are not organized, in Africa or the world at large, with a view to liberating a popular movement. A liberal revolution would need allies with significant wealth and power. Africans will have to develop their own transnational associations to combat the huge coalitions that would deny them self-expression. One of the strongest political movements today is the formation of large regional trading blocs in response to neoliberal globalization. A national framework for development never made sense in Africa and it makes even less sense today. The coming revolution could leapfrog many of the obstacles in its path, but not if African societies still wear the national straitjacket they inherited from colonial rule.

Freedom and protection in the early modern revolutions

The American, French and Italian revolutions all combined mass insurgency with an extended period of warfare focused on removing fragmented sovereignty, unfair taxes and restrictions placed on movement and trade; German unification had a similar focus, but followed a different political trajectory. The success of the British in establishing a global free trade regime in the nineteenth century and the revival of that regime as economic orthodoxy today have obscured the complex dialectic of freedom and protection whose imperatives were laid out by Sir James Steuart in Principles of Political Economy (1767).

Impediments to trade caused by divided sovereignty within and between states had to be overcome. Development under these circumstances depended on removing these barriers to trade. At the same time, these incipient free trade areas needed a measure of protection, so that their own agriculture and manufactures could benefit from supplying newly consolidated home populations. The French revolution is a striking case in point.

In 1793, the Terror was unleashed and the Bretons raised a ‘Royal and Catholic Army’ against which the revolutionary Republic sent out an army of its own to fight in the War of Vendée. Nantes, France’s largest port, was heavily involved in slavery and trade with the Caribbean. It stood out for the Republic and was besieged by the Royalist army. The ensuing battle was decisive for the Revolution; the shippers financed the Republican army. Why did the Nantes bourgeoisie risk so much for the Revolution? France, although a central monarchy, was then a patchwork of local fief-holders, each of whom exacted what they could from people and goods moving through their territory. The Republic promised to end all that and establish a regulated home market. The Nantes shippers wanted to reduce the costs of moving their trade goods inland and so they allied themselves with the Republic.

In the United States, American and Dutch smugglers led resistance to the East India Company’s tea monopoly and to British taxes offsetting the crown’s military costs. The Italian Risorgimento too was backed financially by the industrialists of Milan and Turin who wanted a national home market freed of territorial fragments and unrestricted access to world trade. In all three cases, the power of merchant and manufacturing capital played a decisive part in the revolution.

Long before the European Common Market became the European Union, the Prussian Zollverein was launched in 1818 and culminated in the German Empire. In each case political unification was preceded by a customs union lasting half a century. The Zollverein was a piecemeal attempt to harmonise tariffs, measures and economic policy in scattered territories controlled by the Prussian ruling family. The Germans attributed their vulnerability to extreme political fragmentation (some 40 states in 1815). Prussia’s main aim was to expand a protected zone of internal free trade from which the Austrians were excluded. By the 1860s, most of what became Germany had joined the customs union. Their leading economist, Friedrich List, proposed a ‘national system’ of political economy. He emphasized the scope for innovation within an expanded free trade area protected from the world market. Similar proposals were espoused by Americans like Alexander Hamilton and Henry Clay.
Towards greater integration of African trade

President Mbeki’s idea of an ‘African renaissance’ expressed the belief that a black majority government in South Africa might be a catalyst for an African economic revival based on greater political coordination between what had before been easy pickings for the world’s great powers. His initiative was aimed exclusively at the very political class that has failed Africa so often since independence. He did not factor civil society movements into his plans.

Africa currently consists of a labyrinthine confusion of regional associations which do little to strengthen their members’ bargaining power in world markets. On the ground, however, African peoples maintain patterns of long-distance movement and exchange developed over centuries despite their rulers’ attempts to force economy and society into national cages.

This is one major reason why so much of the African economy is held to be ‘informal’: state regulations are routinely ignored, with the result that half the population and most economic activity are criminalized and an absurd public effort is wasted on trying to apply unenforceable rules. Classical liberalism offers an answer to this chaos -- the widest area possible of free trade and movement, with minimal regulation by the authorities. Neoliberal globalization has done much to discredit this recipe, since political initiatives, even in pursuit of free trade, are anathema. Yet the policy conclusion is inescapable: the boundaries of free commerce and of state intervention should be pushed beyond the limits of existing sovereignties.

China occupied a similar slot to Africa in western consciousness not so long ago. In the 1930s, people often spoke of the Chinese as they do of Africa today. China was then crippled by the violence of warlords, its peasants mired in the worst poverty imaginable. Today the country is an economic superpower. This profound shift in power from West to East does not guarantee that Africa will escape soon from the stigma of inferiority, but the structures of North Atlantic dominance that once seemed inevitable are perceptibly on the move; and that makes it easier to envisage change. Humanity is entering a new era of social possibility. Africans’ drive for emancipation from an unequal world society affects all of us. In that sense an African revolution would be a world revolution.

Reprinted with permission from openDemocracy.

Shock Doctrine in Ukraine: IMF $17.5 Billion Loan Linked to 'Reform' and the Impoverishment of the Ukrainian Population

Ukraine made a deal with the devil (the IMF). The post-coup government's billionaire president is swimming in money and thus has no need to worry, but the average Ukrainian might face starvation when all is said and done.

Deutsche Wirtschafts Nachrichten article. Translation and notes by Eric Zuesse,

Scroll down for Eric Zuesse’s analysis of the agreement

SUMMARY:

Ukraine will receive total loans of 40 billion dollars from international tax money. For this purpose, Ukraine will carry out “reforms” especially such demands as that the social system be dismantled and privatization [selloff of government assets in order to repay the loans] be performed. The Kiev government is very pleased with the ‘help’. A native of the US, Ukraine’s Finance Minister Natalie Jaresko wants to buy weapons with the money. European banks are relieved because Kiev, for the time being, is able to meet its debt service

DETAILS:

Angela Merkel and IMF chief Christine Lagarde rejoiced in Berlin on Wednesday, because, in their view, Ukraine is on the right track.

The International Monetary Fund (IMF) has fully approved its new loan package of 17.5 billion for Ukraine. This approval from the IMF Board of the four-year loan program was announced in Berlin on Wednesday by the IMF’s head Christine Lagarde. She said that the loan will help to stabilize the economic situation in Ukraine as quickly as possible. At the same time Ukraine will launch far-reaching reforms to restore robust growth and improve the living conditions of the population, she promises.

“Ukraine has fulfilled all conditions for this loan program, “Lagarde said in Berlin after a meeting with German Chancellor Angela Merkel (CDU) and the heads of other global financial and economic organizations. The newly approved plan will pay Ukraine ten billion dollars in the first year.

Overall, the international community is now fully committed to provide to Ukraine around $ 40 billion in loans. Specifically, the IMF has converted its previous short-term loans (Stand-By Arrangement) into a long-term loan program (Extended Fund Facility).

Ukraine is virtually bankrupt and can, according to the statement from Prime Minister Arseniy Yatsenyuk, survive only with the IMF loans. Yatsenyuk says that the amount of the first installment of the new loan program from the IMF will be five billion US dollars. ”We managed to show the IMF that we implement reforms,” he said on Wednesday night, according to local media in Kiev – and he pointedly held five fingers in the air.

The EU has recently approved 1.8 billion euros for Ukraine. Germany has bilaterally (with Ukraine) granted an additional credit line of 500 million euros for economic stabilization. In addition, Reuters reports that IMF insiders believe that the creditors of Ukraine will be asked to pay. They are expected to contribute 15.4 billion euros – which could run for example via a waiver [of part of what’s owed]. This could affect Russia as well as the investor George Soros, both of which hold Ukrainian government bonds.

Ukraine will get more funds, more time, more flexibility and better financing terms, Lagarde said. She pointed out that additional funding will be added. Furthermore, the Ukrainian government has initiated talks with lenders to reduce the national debt to a sustainable level in the medium term.

The IMF says that the impact of the reforms, particularly for the poorest part of the population, will be to cushion and enable to be strengthened the social network and enable its measures to be implemented in a more targeted way. But the opposite is actually true. The government has in particular brought in laws by which the situation of pensioners, the sick and children will significantly deteriorate.

“The program is ambitious and involves risks,” said Lagarde. This is particularly true in view of the conflict in the east. Encouragingly, the ceasefire agreed in Minsk seems to be holding, to a large extent.

In addition to the new IMF loans, the loan program to Ukraine also includes money from Western industrialized countries (G7), the EU and other institutions. Germany alone controls so far the additional credit line of 500 million euros for the reconstruction of the country. These are guarantees [insurance] to project funding.

The federal government had earlier stressed the “bailout” is linked to “reform”. ”This financial support from the IMF and the European Union can be provided only with the understanding that Ukraine will adopt and implement urgently needed reforms,” said government spokesman Steffen Seibert in Berlin.

US Secretary of State Victoria Nuland vowed on Wednesday in addressing the US Congress, that the reforms in Ukraine, will go beyond all the praise, by cutting pensions and the social system, and by privatizing Ukraine’s agriculture. International seed companies like Monsanto will benefit from the credits from taxpayers because these companies will be able to buy agricultural land from local farmers at low prices [without having to worry about the riskiness of Ukraine’s government debt]. [It should also be noted that until the U.S. took over Ukraine, there were no GMO seeds allowed anywhere in Europe.]

Only recently have oligarchs established an agency for the reconstruction of Ukraine.The agency is endorsed by ex-Commissioners and SPD politicians like Peer Steinbrück. Western politicians will likely help Ukraine’s oligarchs benefit from the tax money coming from Europe and America.

Taxpayers’ money will be controlled by the former employee of the US State Department, the investment banker [and now Ukraine’s Finance Minister] Natalie Jaresko. Jaresko has already announced that the new credit in addition to the debt service will help Ukraine to buy, especially, weapons.

The occupation of the key Ministry of Ukraine [Finance] by an American is describe by criticis critics as a provocation.

Banks in Europe are investing heavily in Ukraine, and therefore also will benefit from the newly approved loans. [Taxpayers take the risks, while those banks reap the benefits.]

Note by Eric Zeusse

The deal that seems to be shaping up is that while Obama’s secondary goal of enabling U.S. and EU corporations to plunder Ukraine will be fulfilled, Obama’s primary goal of Ukraine’s joining NATO will not. Russia has to approve these loans to Ukraine, because Russia is Ukraine’s most-senior debtholder. So, if this plan works out as described, and Russia accepts being treated instead as a junior debtholder, then Russia will have to be getting in return what it wants most, which is that the new, rabidly anti-Russian, Obama-imposed, Ukrainian regime, not be allowed into NATO, and not become a launch-site for NATO missiles. Implicit in this is also that the acceptance and permanency of the existing battle-demarcation-lines, in which Ukraine’s forces occupy Mariupol. This settlement suggests that Russia will somehow have to find a way to build a ten-mile bridge across the Kerch Strait connecting Crimea with the rest of Russia.

When Ukraine invaded Mariupol during 7-9 May 2014 and set afire the police headquarters and shot directly at the residents to terrify and subdue them, this started the bloodiest of the civil war’s battles that Ukraine ended up winning, and Mariupol is now virtually a ghost town except for Ukraine’s occupying troops. Ukraine’s very bloody conquest of Mariupol may be considered to be Ukraine’s revenge for having peacefully — because of Russian troops in Crimea — lost Crimea to Russia on 16 March 2014.

This news-story is basically a first-statement of the proposed and implicitly accepted settlement-terms of Ukraine’s civil war. Western taxpayers will be bearing much of the burden, though they had no role in approving these terms except for their having been fooled by propaganda into voting for politicians whose primarly loyalty is to the individuals who financed their campaigns and their careers — not to the public. The entire Ukrainian gambit of Obama ends up as little more than a pillaging operation. If he accepts it as being that, and if Putin accepts it as being nothing more than that, then the deal will stick, and the residents of Ukraine will become even more impoverished, and will massively migrate into Europe, as prostitutes and other desperate people competing against the existing refugees and other poor there. This will be a major victory for aristocrats, who will not need to pay as much for workers as formerly. However, everyone else will suffer. This is what the aristocracy calls ‘the free market,’ and ‘democracy.’ It’s a massive money-funnel to the super-rich.]

___________
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

Reprinted with permission from Center for Research in Globalization.

Ukraine, a Fascist Coup?: A Photo Essay

TOP: Fascism and religion hand in hand; BOTTOM: Arseniy Yatsenyuk – current
acting PM of Ukraine joins right-wingers during their attack on police. ((Photos by
ANDRE VLTCHEK)

See the rest of the Photos

By ANDRE VLTCHEK
Ukraine is burning, it is going to the dogs; it has been taken over by an illegitimate government engorged with fascists, neo-Nazis and simple pro-Western opportunists, as well as countless EU and US-sponsored members of various NGO’s.

The West has destabilized an entire nation, supporting right-wingers and fascists. Then it began spreading anti-Russian propaganda, even before Crimea had voted to join its historic homeland.

Everything was well planned, with Machiavellian precision. The EU was hoping to get its hands on the abundant natural resources, heavy industry and a well-educated and cheap labor force. In exchange, it was willing to give… nothing. No sane government would be willing to accept such a deal. Therefore, the only way to push through its agenda, the West began supporting violence and terror, as well as the fascist, neo-Nazi groups. A similar approach is being used by the US and EU in Venezuela, Syria and even Thailand.

Just a few days ago, I concluded my 2,000-kilometer drive, from Kiev to Odessa, and then to the border with Transnistria and Kharkov. I visited destroyed and abandoned villages – a result of the ‘collapse of the Soviet Union’ and Ukrainian flirtation with the market economy, its obedience to the IMF and World Bank.

All that I witnessed will be included in my in-depth report, which will be published, next week, in CounterPunch.

But right now, I would like to share some images with our readers.

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Shock Doctrine in Ukraine: The Looting Has Begun, Cut Pensions In Half — The West Offers Austerity and IMF 'Economic Medicine'

According to a report in Kommersant-Ukraine, the finance ministry of Washington’s stooges in Kiev who are pretending to be a government has prepared an economic austerity plan that will cut Ukrainian pensions from $160 to $80 so that Western bankers who lent money to Ukraine can be repaid at the expense of Ukraine’s poor. It is Greece all over again. 

By Dr. Paul Craig Roberts
Before anything approaching stability and legitimacy has been obtained for the puppet government put in power by the Washington orchestrated coup against the legitimate, elected Ukraine government, the Western looters are already at work. Naive protesters who believed the propaganda that EU membership offered a better life are due to lose half of their pension by April. But this is only the beginning.

The corrupt Western media describes loans as “aid.” However, the 11 billion euros that the EU is offering Kiev is not aid. It is a loan. Moreover, it comes with many strings, including Kiev’s acceptance of an IMF austerity plan.

Remember now, gullible Ukrainians participated in the protests that were used to overthrow their elected government, because they believed the lies told to them by Washington-financed NGOs that once they joined the EU they would have streets paved with gold. Instead they are getting cuts in their pensions and an IMF austerity plan.

The austerity plan will cut social services, funds for education, layoff government workers, devalue the currency, thus raising the prices of imports which include Russian gas, thus electricity, and open Ukrainian assets to takeover by Western corporations.

Ukraine’s agriculture lands will pass into the hands of American agribusiness.

One part of the Washington/EU plan for Ukraine, or that part of Ukraine that doesn’t defect to Russia, has succeeded. What remains of the country will be thoroughly looted by the West.

The other part hasn’t worked as well. Washington’s Ukrainian stooges lost control of the protests to organized and armed ultra-nationalists. These groups, whose roots go back to those who fought for Hitler during World War 2, engaged in words and deeds that sent southern and eastern Ukraine clamoring to be returned to Russia where they resided prior to the 1950s when the Soviet communist party stuck them into Ukraine.

At this time of writing it looks like Crimea has seceded from Ukraine. Washington and its NATO puppets can do nothing but bluster and threaten sanctions. The White House Fool has demonstrated the impotence of the “US sole superpower” by issuing sanctions against unknown persons, whoever they are, responsible for returning Crimea to Russia, where it existed for about 200 years before, according to Solzhenitsyn, a drunk Khrushchev of Ukrainian ethnicity moved southern and eastern Russian provinces into Ukraine. Having observed the events in western Ukraine, those Russian provinces want to go back home where they belong, just as South Ossetia wanted nothing to do with Georgia.

Washington’s stooges in Kiev can do nothing about Crimea except bluster. Under the Russian-Ukraine agreement, Russia is permitted 25,000 troops in Crimea. The US/EU media’s deploring of a “Russian invasion of 16,000 troops” is either total ignorance or complicity in Washington’s lies. Obviously, the US/EU media is corrupt. Only a fool would rely on their reports. Any media that would believe anything Washington says after George W. Bush and Dick Cheney sent Secretary of State Colin Powell to the UN to peddle the regime’s lies about “Iraqi weapons of mass destruction,” which the weapons inspectors had told the White House did not exist, is clearly a collection of bought-and-paid for whores.

In the former Russian provinces of eastern, Ukraine Putin’s low-key approach to the strategic threat that Washington has brought to Russia has given Washington a chance to hold on to a major industrial complex that serves the Russian economy and military. The people themselves in eastern Ukraine are in the streets demanding separation from the unelected government that Washington’s coup has imposed in Kiev. Washington, realizing that its incompetence has lost Crimea, had its Kiev stooges appoint Ukrainian oligarchs, against whom the Maiden protests were partly directed, to governing positions in eastern Ukraine cities. These oligarchs have their own private militias in addition to the police and any Ukrainian military units that are still functioning. The leaders of the protesting Russians are being arrested and disappeared. Washington and its EU puppets, who proclaim their support for self-determination, are only for self-determination when it can be orchestrated in their favor. Therefore, Washington is busy at work suppressing self-determination in eastern Ukraine.

This is a dilemma for Putin. His low-key approach has allowed Washington to seize the initiative in eastern Ukraine. The oligarchs Taruta and Kolomoyskiy have been put in power in Donetsk and Dnipropetrovsk, and are carrying out arrests of Russians and committing unspeakable crimes, but you will never hear of it from the US presstitutes. Washington’s strategy is to arrest and deep-six the leaders of the secessionists so that there no authorities to request Putin’s intervention.

If Putin has drones, he has the option of taking out Taruta and Kolomoyskiy. If Putin lets Washington retain the Russian provinces of eastern Ukraine, he will have demonstrated a weakness that Washington will exploit. Washington will exploit the weakness to the point that Washington forces Putin to war.

The war will be nuclear.

________________
Paul Craig Roberts, is former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal, has held numerous university appointments. He is a frequent contributor to Global Research.

Reprinted with permission from Center for Research in Globalization.

What Is The Fifth Estate?: The Role of Media in Affairs of State

Social Media Week Milano (Photo by Bruno Cordioli)

For the first time since 1848, a renewed Europe from the bottom up is possible: with the new social coalitions of the Fifth Estate.

By Giuseppe Allegri and Roberto Ciccarelli
‘A specter is haunting Europe’: the specter of the Fifth Estate, which follows Sieyès’s Third Estate and the Fourth Estate of peasant workers and the proletariat. The Fifth Estate can become ‘a new kind of proletariat’, but without any consciousness of class. It is made of stateless people, the outcast ‘precariat’ of Europe, to whom a new social figure is connected, ‘the included outcast’. This is the one who pays taxes, votes, expresses his/her opinion in real or virtual squares, but never comes out from the grey area between work and non-work.

This stateless person is the puzzle of contemporary citizenship. It is the product of the current European governance: a system formed by national governments and global economic institutions deferring to a technocratic elite and to a form of statism without a State. The outcast is left outside parliamentary representation, trade union or existing business. It floats in the empty space created by the disappeared balance between secular citizenship and the state, state sovereignty and the authorities that govern their lives at a super-national level (the European Central Bank, the International Monetary Fund, the World Bank: the ‘troika’ which monitors the crisis of European states and their populations).

Understanding the Fifth Estate

The Fifth Estate is an existential condition for millions of workers, whether self-employed, temporary or freelancer workers, skilled or mobile workers, ‘precarious’ workers or simply working poor. They are knowledge workers, chain workers, communication or health care workers, mini-job workers, or contract workers in the arts and culture sector.

The Fifth Estate, however, is also the condition for millions of non-working people in the age of unemployment in the European Great Recession (2008 onwards); a condition that affects the existence of young people Not in Education, Employment or Training (NEET) as well as that of those over-40s and -50s.

No rights or protection can be thought of for it. Its subjects are stateless people, as they are excluded from social citizenship, and always subjected to the chance of becoming poor. They are the ‘outcasts’ of traditional labor law in the crucial transition from the Welfare State to the Workfare of neo-liberal governance. The subjects of the Fifth ‘precarious’ Estate are stateless and outcasts in that they often live without class identity and political community. Although they are the natives of the particular country in which they live, today they are as foreign and barbaric as the migrants in our midst in those same countries. Both these natives and the migrants belong to the ‘community of those without community’. Their citizenship is without a State, because the State does not recognize their citizenship. This is especially true for Italy, with her 8 million ‘atypical workers’: precarious, self-employed or temporary workers, without a ‘typical’ work contract and deprived of social citizenship.

The Fifth Estate is the condition of common power

The Fifth Estate claims and practices equality, social justice, independence and solidarity. Equality is a product of social cooperation. When it loses its claims for abstract universal law, it acquires the profile of a disturbing power for formal democracy. The everyday practices of millions of people, who are crushed by ruling elites, produce innovative relations in the sharing of good practices, and the setting up of a new citizenship. The Fifth Estate is the condition of this common power, a collective democratic voice: a claim for a new society, against the politics of austerity. The Fifth Estate is the power of a collective redemption against the plunder of financial capitalism and its permanent ‘class struggle from above’. The Fifth Estate shall be all or it shall not be.
The Fifth Estate of self-organization and the new mutualism

In recent years the idea of the Fifth State has allowed for the formation of a widespread network of people who exchange their experience and experimentation, sharing their attempt to practice new independent forms of life and work. The Fifth Estate fights to achieve social justice, solidarity, cooperative mutualism, co-working and autonomy, and to affirm a new society against the austerity of the global recession.

In the USA, for instance, it is worth mentioning the Freelancers union, a ‘Federation of the Unaffiliated’, as their motto says. It consists of hundreds of thousands of ‘independents (workers) united to build a better future’. Their work and struggle for ‘the radical notion of fairness’, with political action and new mutualism, succeeded in obtaining a ‘Freelancer Union Medical Insurance’.

In Italy, ACTA (Associazione Consulenti del Terziario Avanzato - Association of the Consultants of Advanced Tertiary) promotes the self-organization of independent workers connected to new occupations with no professional qualification. Another case worth mentioning is the STradE (Sindacato Traduttori Editoriali - Union of Editorial Translators), which signed a supplementary health care agreement, Mutua Elisabetta Sandri, on behalf of its ordinary members and associates.
The agreement was signed in partnership with the mutual aid society Insieme Salute (Together Health), and was dedicated to Elisabetta Sandri, a ‘self-employed’ colleague who died prematurely after a long and courageous fight with her disease, and with an unfair health system that prevented her from enjoying the same rights as other categories of workers.

These are just a few examples of the self-organization of the Fifth Estate by which its self-protection is enacted and a new idea of social citizenship promoted. This reveals an unprecedented social coalition between movements, associations, and the people, struggling against neo-liberal dogma.
The social coalitions of the Fifth Estate: from the cities to a new social Europe

Social coalitions of the Fifth Estate first began to be formed in the cities. Echoing Guy Debord’s psychogeographic dérive, Henry Lefebvre’s droit à la ville, or David Harvey’s rebel cities, they all claim a new right to the city. As Harvey put it during an interview with Il Manifesto on the occasion of the Citizenship, Orientalism and the Commons seminar at Teatro Valle in September 2011, this stands as ‘a network for the many forms of proximity activism in the cities’.

These localized social coalitions create networks between freelancers’ associations, clubs, social organizations and movements, generating new forms of work and cultural and social enterprise. In this respect, they well reflect what Richard Sennet calls: ‘the essence of urbanity, which is that men can act together, without the compulsion to be the same’.

A remarkable symbol of a new institution of self-government of the commons is offered in this direction by Teatro Valle Occupato in Rome. The idea of the common good encompasses here theatre, cultural and knowledge works, politics and enterprise for people who desire to regain not only their lives, but also the social spaces where they can experiment with new forms of collective life, as they often put it in their interventions.

What we see here in a broad perspective is a unity in diversity that promotes self-organization and self-government in the city, creating a new idea of society that moves from a local to a post-national constellation as Jürgen Habermas anticipated already twenty years ago; that is to say, a European political space based on a federative pact of autonomous cities.

This is a movement for more social justice, equality, social cooperation and independence of life and work. It says with Étienne Balibar: ‘a new Europe can only come from the bottom up’. This new Europe must be a social Europe, allowing for the welfare of the Fifth Estate and the people crushed by neo-liberal plunder.

Real freedom for all (Philippe Van Parijs) begins with a universal basic income and has to promote a pan-European solidarity among all the people who have chosen to live in this continent. For the first time since 1848, a new Europe from the bottom up is possible: with the new social coalitions of the Fifth Estate.

References

Giuseppe Allegri. ‘New Social Movements and the Deconstruction of New Governance: Fragments of Post-Modern Theories in Europuzzle’, European Journal of Legal Studies, Vol. 1, No. 3, (2008).

Giuseppe Allegri and Roberto Ciccarelli, La furia dei cervelli, (Roma: manifestolibri, 2011).

Giuseppe Allegri and Roberto Ciccarelli, Il quinto stato. Perché il lavoro indipendente è il nostro futuro: Precari, autonomi free lance per una nuova società, (Milano: Ponte alle Grazie, 2013).

Étienne Balibar. ‘A new Europe can only came from the bottom up’, OpenDemocracy, 6 May 2013.

Basic Income Network Italia (eds.). Reddito per tutti. Un'utopia concreta per l'era globale, (Roma, Manifestolibri, 2009).

Michael Blecher et alii. Governance, società civile e movimenti sociali. Rivendicare il comune, (Roma, Ediesse, 2009).

Roberto Ciccarelli. ‘Il buon diritto alla Comune’, Il Manifesto, 1 October 2013.

Harvey David. Rebel Cities. From the Right to the City to the Urban Revolution, (London: Verso: 2012).

Richard Sennet. The Fall of Public Man, (New York: Knopf, 1977).

Guy Standing. ‘The Precariat: why it needs deliberative democracy’, OpenDemocracy, 27 January 2012.

Philippe Van Parijs. Real freedom for all. What (if anything) can justify capitalism?, (Oxford: Clarendon Press, 1995).

Reprinted with permission from openDemocracy.

CNN's Zakaria's Fantastic Economic Advice: His 'Free Market Faith' Doesn't Add Up For Latin American Nations

Fareed Zakaria speaking at the Blumenthal Pe. forming Arts Center,
Charlotte, NC in Oct of 2010. (Photo by James Willamor)

By Jim Naureckas
[CNN's Fareed] Zakaria presented what he called "another installment of 'How to Ruin Your Economy in Five Easy Steps'" on his GPS show on CNN (1/12/14): "Last time, Venezuela ticked off all the boxes, but we found another country that is following the same sad path."

That country was Argentina, which Zakaria criticized for following Venezuela's lead in "attacking big business," allowing "restrictions on global trade" and so forth–the basic neoliberal critique of developing economies. Zakaria ends with the moral:

Argentina's attempt to mirror a failed state like Venezuela tells a larger story. Look at this map of Latin America from a great article in the Wall Street Journal this week. On the left in green, you have the countries that are facing the Pacific. Mexico, Peru, Chile and Colombia are among the countries opening up their economies to great success. On the right, in red, you see the opposite. Countries that face the Atlantic, Brazil, Argentina, Venezuela, are closing their economies and resorting to populism. The countries in green are projected to grow nearly twice as fast in 2014 as the countries in red.

So the countries that are following Zakaria's advice are doing great, and the countries that aren't listening to him are doing worse–in the future. The great thing about the future, of course, is that it hasn't happened yet. What if we look, instead, at how those countries have actually done in the recent past? Here's the percentage change from 2003-13 in these nation's inflation-adjusted GDP, in their own currency, based on IMF data (with per capita GDP growth in parentheses):

Mexico: 28.8 (11.1)

Peru: 89.7 (61.8)

Chile: 59.2 (44.4)

Colombia: 58.3 (40.5)

Argentina: 89.0 (69.0)

Brazil: 44.1 (30.9)

Venezuela: 74.0 (48.0)

So the "great success" countries have grown by an average of 39.5 percent per capita over the past 10 years, while the "sad path" countries have grown by 49.3 percent per capita over the same time period. Maybe Argentina's efforts to "mirror a failed state" aren't so mysterious after all.

Of course, past performance is not a guarantee of future results.  But US corporate media's past performance in identifying economic policies that will lead to faster economic growth is pretty pathetic. Eight years ago, the New York Times ran a largish op-ed called "Globalizing Good Government" (4/10/06), in which Federal Reserve Bank officials Richard Fisher and W. Michael Cox attempted to sort the world into countires that "pursue policies that achieve faster economic growth" and those whose policies "lead to stagnation."

Really, it was sorting countries by how pro-corporate their economic policies were, and as I pointed out at the time (Extra!, 5/06), the "faster economic growth countries" were growing about half as fast as the "stagnation" countries. To a startling degree, when you see discussions about the economic policies of other countries in the US press, you're reading fantasy stories about imaginary lands where peoples are rewarded or punishment according to their adherence to the free market faith.

Thanks to Mark Weisbrot and Jake Johnston of CEPR for crunching the IMF numbers for me.
UPDATE: Years of growth covered in the calculations above corrected–they go to 2013, not 2012. I also meant to mention that the Argentina numbers are a little shaky–the country has been credibly accused of understating its inflation ratae–but its actual growth rate is probably still higher than all of Zakaria's favored nations except Peru.

Reprinted with permission from Fairness & Accuracy In Reporting.

Mandela’s Dream of Black Power Became a “Neoliberal Nightmare”

  

Nelson Mandela: During his younger, more revolutionary days.

Tributes to Nelson Mandela fill the media, with stories of his lengthy prison term and his “willingness to forgive” his oppressors.

Nowhere in sight is the real story of Nelson Mandela and the African National Congress that he headed, a story best told by Naomi Klein in her wonderful book, The Shock Doctrine. 

The ANC’s Freedom Charter, adopted in June 26, 1955, in Kliptown South Africa, begins with the promise,

“The People Shall Govern…”

It promises Land to the landless. Equality. Free and compulsory education. Freedom of movement, and more.

From prison, Mandela wrote a note to his supporters in January of 1990, a month before his release. Here’s what he wrote:

“The nationalisation of the mines, banks and monopoly industries is the policy of the ANC, and the change or modification of our views in this regard is inconceivable. Black economic empowerment is a goal we fully support and encourage, but in our situation state control of certain sectors of the economy is unavoidable.”

In the 1980s, young Black South Africans, weary from three decades of patience, took to the streets to fight for their beloved Freedom Charter.

When Mandela was released from prison after 27 years, on February 11, 1990, most spent on Robben Island off the coast of Cape Town, South Africa under the ANC appeared ripe to fulfill their dream: the Freedom Charter.

Great Expectations: yet, South Africa took the route characterized by Mandela as “inconceivable.” Political successes, but economic ruin. South Africa is now among the most unequal societies in the world.