The Eurasian Big Bang: How China and Russia Are Running Rings Around Washington

The Eurasian Big Bang:  How China and Russia Are Running Rings Around Washington

By Pepe Escobar
July 23, 2015

Let’s start with the geopolitical Big Bang you know nothing about, the one that occurred just two weeks ago. Here are its results: from now on, any possible future attack on Iran threatened by the Pentagon (in conjunction with NATO) would essentially be an assault on the planning of an interlocking set of organizations — the BRICS nations (Brazil, Russia, India, China, and South Africa), the SCO (Shanghai Cooperation Organization), the EEU (Eurasian Economic Union), the AIIB (the new Chinese-founded Asian Infrastructure Investment Bank), and the NDB (the BRICS’ New Development Bank) — whose acronyms you’re unlikely to recognize either.  Still, they represent an emerging new order in Eurasia.

Tehran, Beijing, Moscow, Islamabad, and New Delhi have been actively establishing interlocking security guarantees. They have been simultaneously calling the Atlanticist bluff when it comes to the endless drumbeat of attention given to the flimsy meme of Iran’s “nuclear weapons program.”  And a few days before the Vienna nuclear negotiations finally culminated in an agreement, all of this came together at a twin BRICS/SCO summit in Ufa, Russia — a place you’ve undoubtedly never heard of and a meeting that got next to no attention in the U.S.  And yet sooner or later, these developments will ensure that the War Party in Washington and assorted neocons (as well as neoliberalcons) already breathing hard over the Iran deal will sweat bullets as their narratives about how the world works crumble.

The Eurasian Silk Road

With the Vienna deal, whose interminable build-up I had the dubious pleasure of following closely, Iranian Foreign Minister Javad Zarif and his diplomatic team have pulled the near-impossible out of an extremely crumpled magician’s hat: an agreement that might actually end sanctions against their country from an asymmetric, largely manufactured conflict.

Think of that meeting in Ufa, the capital of Russia’s Bashkortostan, as a preamble to the long-delayed agreement in Vienna. It caught the new dynamics of the Eurasian continent and signaled the future geopolitical Big Bangness of it all. At Ufa, from July 8th to 10th, the 7th BRICS summit and the 15th Shanghai Cooperation Organization summit overlapped just as a possible Vienna deal was devouring one deadline after another.

Consider it a diplomatic masterstroke of Vladmir Putin’s Russia to have merged those two summits with an informal meeting of the Eurasian Economic Union (EEU). Call it a soft power declaration of war against Washington’s imperial logic, one that would highlight the breadth and depth of an evolving Sino-Russian strategic partnership. Putting all those heads of state attending each of the meetings under one roof, Moscow offered a vision of an emerging, coordinated geopolitical structure anchored in Eurasian integration. Thus, the importance of Iran: no matter what happens post-Vienna, Iran will be a vital hub/node/crossroads in Eurasia for this new structure.

If you read the declaration that came out of the BRICS summit, one detail should strike you: the austerity-ridden European Union (EU) is barely mentioned. And that’s not an oversight. From the point of view of the leaders of key BRICS nations, they are offering a new approach to Eurasia, the very opposite of the language of sanctions.

Here are just a few examples of the dizzying activity that took place at Ufa, all of it ignored by the American mainstream media. In their meetings, President Putin, China’s President Xi Jinping, and Indian Prime Minister Narendra Modi worked in a practical way to advance what is essentially a Chinese vision of a future Eurasia knit together by a series of interlocking “new Silk Roads.” Modi approved more Chinese investment in his country, while Xi and Modi together pledged to work to solve the joint border issues that have dogged their countries and, in at least one case, led to war.

The NDB, the BRICS’ response to the World Bank, was officially launched with $50 billion in start-up capital. Focused on funding major infrastructure projects in the BRICS nations, it is capable of accumulating as much as $400 billion in capital, according to its president, Kundapur Vaman Kamath. Later, it plans to focus on funding such ventures in other developing nations across the Global South — all in their own currencies, which means bypassing the U.S. dollar.  Given its membership, the NDB’s money will clearly be closely linked to the new Silk Roads. As Brazilian Development Bank President Luciano Coutinho stressed, in the near future it may also assist European non-EU member states like Serbia and Macedonia. Think of this as the NDB’s attempt to break a Brussels monopoly on Greater Europe. Kamath even advanced the possibility of someday aiding in the reconstruction of Syria.

You won’t be surprised to learn that both the new Asian Infrastructure Investment Bank and the NDB are headquartered in China and will work to complement each other’s efforts. At the same time, Russia’s foreign investment arm, the Direct Investment Fund (RDIF), signed a memorandum of understanding with funds from other BRICS countries and so launched an informal investment consortium in which China’s Silk Road Fund and India’s Infrastructure Development Finance Company will be key partners.

Full Spectrum Transportation Dominance

On the ground level, this should be thought of as part of the New Great Game in Eurasia. Its flip side is the Trans-Pacific Partnership in the Pacific and the Atlantic version of the same, the Transatlantic Trade and Investment Partnership, both of which Washington is trying to advance to maintain U.S. global economic dominance. The question these conflicting plans raise is how to integrate trade and commerce across that vast region. From the Chinese and Russian perspectives, Eurasia is to be integrated via a complex network of superhighways, high-speed rail lines, ports, airports, pipelines, and fiber optic cables. By land, sea, and air, the resulting New Silk Roads are meant to create an economic version of the Pentagon’s doctrine of “Full Spectrum Dominance” — a vision that already has Chinese corporate executives crisscrossing Eurasia sealing infrastructure deals.

For Beijing — back to a 7% growth rate in the second quarter of 2015 despite a recent near-panic on the country’s stock markets — it makes perfect economic sense: as labor costs rise, production will be relocated from the country’s Eastern seaboard to its cheaper Western reaches, while the natural outlets for the production of just about everything will be those parallel and interlocking “belts” of the new Silk Roads.

Meanwhile, Russia is pushing to modernize and diversify its energy-exploitation-dependent economy. Among other things, its leaders hope that the mix of those developing Silk Roads and the tying together of the Eurasian Economic Union — Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan — will translate into myriad transportation and construction projects for which the country’s industrial and engineering know-how will prove crucial.

As the EEU has begun establishing free trade zones with India, Iran, Vietnam, Egypt, and Latin America’s Mercosur bloc (Argentina, Brazil, Paraguay, Uruguay, and Venezuela), the initial stages of this integration process already reach beyond Eurasia. Meanwhile, the SCO, which began as little more than a security forum, is expanding and moving into the field of economic cooperation.  Its countries, especially four Central Asian “stans” (Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan) will rely ever more on the Chinese-driven Asia Infrastructure Investment Bank (AIIB) and the NDB. At Ufa, India and Pakistan finalized an upgrading process in which they have moved from observers to members of the SCO. This makes it an alternative G8.

In the meantime, when it comes to embattled Afghanistan, the BRICS nations and the SCO have now called upon “the armed opposition to disarm, accept the Constitution of Afghanistan, and cut ties with Al-Qaeda, ISIS, and other terrorist organizations.” Translation: within the framework of Afghan national unity, the organization would accept the Taliban as part of a future government. Their hopes, with the integration of the region in mind, would be for a future stable Afghanistan able to absorb more Chinese, Russian, Indian, and Iranian investment, and the construction — finally! — of a long-planned, $10 billion, 1,420-kilometer-long Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline that would benefit those energy-hungry new SCO members, Pakistan and India. (They would each receive 42% of the gas, the remaining 16% going to Afghanistan.)

Central Asia is, at the moment, geographic ground zero for the convergence of the economic urges of China, Russia, and India. It was no happenstance that, on his way to Ufa, Prime Minister Modi stopped off in Central Asia.  Like the Chinese leadership in Beijing, Moscow looks forward (as a recent document puts it) to the “interpenetration and integration of the EEU and the Silk Road Economic Belt” into a “Greater Eurasia” and a “steady, developing, safe common neighborhood” for both Russia and China.

And don’t forget Iran. In early 2016, once economic sanctions are fully lifted, it is expected to join the SCO, turning it into a G9. As its foreign minister, Javad Zarif, made clear recently to Russia’s Channel 1 television, Tehran considers the two countries strategic partners. “Russia,” he said, “has been the most important participant in Iran’s nuclear program and it will continue under the current agreement to be Iran’s major nuclear partner.” The same will, he added, be true when it comes to “oil and gas cooperation,” given the shared interest of those two energy-rich nations in “maintaining stability in global market prices.”

Got Corridor, Will Travel

Across Eurasia, BRICS nations are moving on integration projects. A developing Bangladesh-China-India-Myanmar economic corridor is a typical example. It is now being reconfigured as a multilane highway between India and China. Meanwhile, Iran and Russia are developing a transportation corridor from the Persian Gulf and the Gulf of Oman to the Caspian Sea and the Volga River. Azerbaijan will be connected to the Caspian part of this corridor, while India is planning to use Iran’s southern ports to improve its access to Russia and Central Asia. Now, add in a maritime corridor that will stretch from the Indian city of Mumbai to the Iranian port of Bandar Abbas and then on to the southern Russian city of Astrakhan. And this just scratches the surface of the planning underway.

Years ago, Vladimir Putin suggested that there could be a “Greater Europe” stretching from Lisbon, Portugal, on the Atlantic to the Russian city of Vladivostok on the Pacific. The EU, under Washington’s thumb, ignored him. Then the Chinese started dreaming about and planning new Silk Roads that would, in reverse Marco Polo fashion, extend from Shanghai to Venice (and then on to Berlin).

Thanks to a set of cross-pollinating political institutions, investment funds, development banks, financial systems, and infrastructure projects that, to date, remain largely under Washington’s radar, a free-trade Eurasian heartland is being born. It will someday link China and Russia to Europe, Southwest Asia, and even Africa. It promises to be an astounding development. Keep your eyes, if you can, on the accumulating facts on the ground, even if they are rarely covered in the American media. They represent the New Great — emphasis on that word — Game in Eurasia.

Location, Location, Location

Tehran is now deeply invested in strengthening its connections to this new Eurasia and the man to watch on this score is Ali Akbar Velayati. He is the head of Iran’s Center for Strategic Research and senior foreign policy adviser to Supreme Leader Ayatollah Khamenei. Velayati stresses that security in Asia, the Middle East, North Africa, Central Asia, and the Caucasus hinges on the further enhancement of a Beijing-Moscow-Tehran triple entente.

As he knows, geo-strategically Iran is all about location, location, location. That country offers the best access to open seas in the region apart from Russia and is the only obvious east-west/north-south crossroads for trade from the Central Asian “stans.” Little wonder then that Iran will soon be an SCO member, even as its “partnership” with Russia is certain to evolve. Its energy resources are already crucial to and considered a matter of national security for China and, in the thinking of that country’s leadership, Iran also fulfills a key role as a hub in those Silk Roads they are planning.

That growing web of literal roads, rail lines, and energy pipelines, as TomDispatch has previously reported, represents Beijing’s response to the Obama administration’s announced “pivot to Asia” and the U.S. Navy’s urge to meddle in the South China Sea. Beijing is choosing to project power via a vast set of infrastructure projects, especially high-speed rail lines that will reach from its eastern seaboard deep into Eurasia. In this fashion, the Chinese-built railway from Urumqi in Xinjiang Province to Almaty in Kazakhstan will undoubtedly someday be extended to Iran and traverse that country on its way to the Persian Gulf.

A New World for Pentagon Planners

At the St. Petersburg International Economic Forum last month, Vladimir Putin told PBS’s Charlie Rose that Moscow and Beijing had always wanted a genuine partnership with the United States, but were spurned by Washington. Hats off, then, to the “leadership” of the Obama administration. Somehow, it has managed to bring together two former geopolitical rivals, while solidifying their pan-Eurasian grand strategy.

Even the recent deal with Iran in Vienna is unlikely — especially given the war hawks in Congress — to truly end Washington’s 36-year-long Great Wall of Mistrust with Iran. Instead, the odds are that Iran, freed from sanctions, will indeed be absorbed into the Sino-Russian project to integrate Eurasia, which leads us to the spectacle of Washington’s warriors, unable to act effectively, yet screaming like banshees.

NATO’s supreme commander Dr. Strangelove, sorry, American General Philip Breedlove, insists that the West must create a rapid-reaction force — online — to counteract Russia’s “false narratives.” Secretary of Defense Ashton Carter claims to be seriously considering unilaterally redeploying nuclear-capable missiles in Europe. The nominee to head the Joint Chiefs of Staff, Marine Commandant Joseph Dunford, recently directly labeled Russia America’s true “existential threat”; Air Force General Paul Selva, nominated to be the new vice chairman of the Joint Chiefs, seconded that assessment, using the same phrase and putting Russia, China and Iran, in that order, as more threatening than the Islamic State (ISIS). In the meantime, Republican presidential candidates and a bevy of congressional war hawks simply shout and fume when it comes to both the Iranian deal and the Russians.

In response to the Ukrainian situation and the “threat” of a resurgent Russia (behind which stands a resurgent China), a Washington-centric militarization of Europe is proceeding apace. NATO is now reportedly obsessed with what’s being called “strategy rethink” — as in drawing up detailed futuristic war scenarios on European soil. As economist Michael Hudson has pointed out, even financial politics are becoming militarized and linked to NATO’s new Cold War 2.0.

In its latest National Military Strategy, the Pentagon suggests that the risk of an American war with another nation (as opposed to terror outfits), while low, is “growing” and identifies four nations as “threats”: North Korea, a case apart, and predictably the three nations that form the new Eurasian core: Russia, China, and Iran. They are depicted in the document as “revisionist states,” openly defying what the Pentagon identifies as “international security and stability”; that is, the distinctly un-level playing field created by globalized, exclusionary, turbo-charged casino capitalism and Washington’s brand of militarism.

The Pentagon, of course, does not do diplomacy. Seemingly unaware of the Vienna negotiations, it continued to accuse Iran of pursuing nuclear weapons. And that “military option” against Iran is never off the table.

So consider it the Mother of All Blockbusters to watch how the Pentagon and the war hawks in Congress will react to the post-Vienna and — though it was barely noticed in Washington — the post-Ufa environment, especially under a new White House tenant in 2017.

It will be a spectacle.  Count on it.  Will the next version of Washington try to make it up to “lost” Russia or send in the troops? Will it contain China or the “caliphate” of ISIS? Will it work with Iran to fight ISIS or spurn it? Will it truly pivot to Asia for good and ditch the Middle East or vice-versa? Or might it try to contain Russia, China, and Iran simultaneously or find some way to play them against each other?

In the end, whatever Washington may do, it will certainly reflect a fear of the increasing strategic depth Russia and China are developing economically, a reality now becoming visible across Eurasia. At Ufa, Putin told Xi on the record: “Combining efforts, no doubt we [Russia and China] will overcome all the problems before us.”

Read “efforts” as new Silk Roads, that Eurasian Economic Union, the growing BRICS block, the expanding Shanghai Cooperation Organization, those China-based banks, and all the rest of what adds up to the beginning of a new integration of significant parts of the Eurasian land mass. As for Washington, fly like an eagle? Try instead: scream like a banshee.

Pepe Escobar is the roving correspondent for Asia Times, an analyst for RT and Sputnik, and a TomDispatch regular. His latest book is Empire of Chaos. Follow him on Facebook by clicking here.

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The Imperial Designs on Iran

The Imperial Designs on Iran

By Pepe Escobar
Sputnik International
July 23, 2015

So what is the Obama administration really up to in Iran? What sort of strategic calculations have led to what for the moment looks like a tactical geopolitical shift?

President Obama certainly concluded that the 36-year-long Wall of Mistrust against Iran was bound to fail. The real Masters of the Universe in Washington – those who control the deep state – always knew that the “nuclear weapons” hysteria was bogus. That was part of a strategic decision to keep the Islamic Republic isolated from the West as long as possible, and ultimately force regime change.

The “policy” failed – miserably. So Obama’s Plan B was a nuclear deal.

And after striking a deal, why not seduce Tehran into some sort of collaborative effort in policing the Middle East – as in reigning in or, better yet, soundly defeating ISIS/ISIL/Daesh?

That would provide a neat historical echo to the Shah years – the former “gendarme of the Gulf” who, when driven out of power by the Islamic revolution, plunged Exceptionalistan into fits of decades-long despair.

Moreover, the Obama administration and some Beltway factions seemed to believe that factional leadership silos in Tehran – and Qom — might be manipulated to serve US strategic interests.

Even before the Lausanne agreement, and in the lead-up towards the Vienna deal, this possibility was practically discussed by US Secretary of State John Kerry, Iranian Foreign Minister Javad Zarif, and Russian Foreign Minister Sergey Lavrov. In diplomatic talk, these were “discussions of regional issues”.

In the bigger picture, and evidently oblivious to a slew of technical problems, the real Masters of the Universe shadowed by the Obama administration also entertained a simple equation; Iranian gas should eventually replace Russian gas to supply the EU. Russia must – and will — suffer.

Forget that Gazprom is a commercial juggernaut on two fronts, Europe and Asia. And forget that Gazprom is coordinating crucial energy moves with Tehran.

Yet the energy wars never stop. NATO’s perennial expansion marches in tandem with Washington – successfully — sabotaging South Stream; now Washington will do whatever it takes to sabotage Turk Stream and prevent austerity-devastated Greece from linking to the pipeline. Astonishing as it may seem, Iran is now back in Washington’s favor as the only possible, future Pipelineistan star.

Listen to the leader 

Iranian Foreign Minister Javad Zarif has been extra busy “selling” the deal with the P5+1 in Vienna to internal public opinion. He never tires to stress that once foreign businesses enter Iran, they will act as a barrier against the reinstatement of sanctions – which is now the Holy Grail of US neocons and neoliberalcons. Iranian planners are busy drafting the pathways for the reconstruction of the country’s core economic sectors. Iranian oil and natural gas projects – many with input from foreign energy majors – may be worth $185 billion by 2020.

On July 20, the UN Security Council unanimously (15-0) endorsed the Vienna deal — and the termination of seven UN resolutions imposing sanctions on Iran since 2006. That provoked shrieks of desperation in that nest of corporate paperboys – the US Congress. Someone should have explained to that lot this is an international deal.

The EU, meanwhile, approved the deal on July 21 – as key EU members, itching to restore trade relations, are now on caravan mode, hitting the Persian trail.

There is a 90-day grace period before sanctions can be lifted, following the UNSC vote. Realistically, most UN and EU sanctions, as well as some US third party sanctions, will be lifted only by early 2016.

The bottom line is that sooner rather than later – whatever the campaign by US neocons and the Israeli and Saudi lobbies — the whole architecture of sanctions, especially financial and banking, is bound to collapse. Iran will soon be open for business for all Eurasia.

On July 18, even before the UN unanimous vote, Iran’s Supreme Leader Ayatollah Khamenei re-entered the scene with a bang, clarifying where Iran is heading next, geopolitically. He emphasized the nuclear deal would not change Tehran’s policy toward the “arrogant” US government. John Kerry was mortified; as if he didn’t know, based on his extensive conversations with Zarif.

So there we have it. Washington carrots will buy nothing – as the stick also didn’t. What Iran post-sanctions is aiming at is what’s brewing in the New Great Game in Eurasia; the interlocking integration promoted by the Chinese-led New Silk Roads and the Russia-led Eurasia Economic Union (EEU); the infrastructure financing of the BRICS New Development Bank (NDB) and the China-led Asian Infrastructure Investment Bank (AIIB); the prospect of soon joining the Shanghai Cooperation Organization (SCO); the Eurasia-wide offensive to bypass the US dollar; and of course the normalization of trade and commerce with Europe.

The Three (Eurasian) Amigos

The Pentagon’s new military strategy made it very clear that the number one issue for the Masters of the Universe – irrespective of who’s in the White House — is a concerted push to strategically isolate both Russia and China, and destroy their strategic partnership. As unrealistic as this policy may be, it may even lead to a hot war; the Pentagon does leave the option on the table.

The Masters of the Universe, setting policy way above their paperboys in the Obama administration and already thinking post-2016, are actively engaged in a three-pronged military strategy. The intelligence establishment in Russia, China and Iran – the Top Three Eurasian integration powers – totally knows what is going on.

Failed state Ukraine is just a pretext for NATO’s perpetual expansion. Threatening a huge area from Russia’s southern underbelly to the west of Iran, ISIS/ISIL/Daesh is being instrumentalized, Divide and Rule-style, to actually end up with Sykes-Picot and pave the way for yet another Pentagon intervention, in Syria, in Iraq, or in “Syraq”.

And in Asia-Pacific, the “pivot to Asia”, as much as it’s just a chimera for the moment, remains in play, centered on interfering with China in the South China Sea.

From Syria to Ukraine all the way to the South China Sea, the trend points to Exceptionalistan creating havoc for the Top Three Eurasian powers. This is a frontal shock of two models – what I have previously described as Eurasia integration against the Empire of Chaos.

The Masters of the Universe seem to believe that the “pivot to Asia” won’t work if Iran is not part, as a vassal state, of the imperial design for Southwest Asia. Well, listen to Khamenei; that won’t happen.

The road ahead, for Iran, is a mix of Eurasia integration spearheaded by the China-Russia partnership, and mutually beneficial, extensive trade relations with Europe. It’s a neat echo of the initial motto of the Islamic revolution: “Neither east nor west.”

The empire won’t buy — or bribe — a new vassal. So expect an inevitable, nasty renewal of the Wall of Mistrust even before the architecture of sanctions eventually vanishes.

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The Fire Next Time

The Fire Next Time

Before Homes Are Even Rebuilt in the Ruins of the Gaza Strip, Another War Looms

By Max Blumenthal
July 16, 2015

“A fourth operation in the Gaza Strip is inevitable, just as a third Lebanon war is inevitable,” declared Israeli Foreign Minister Avigdor Lieberman in February. His ominous comments came just days after an anti-tank missile fired by the Lebanon-based guerrilla group Hezbollah killed two soldiers in an Israeli army convoy. It, in turn, was a response to an Israeli air strike that resulted in the assassination of several high-ranking Hezbollah figures.

Lieberman offered his prediction only four months after his government concluded Operation Protective Edge, the third war between Israel and the armed factions of the Gaza Strip, which had managed to reduce about 20% of besieged Gaza to an apocalyptic moonscape. Even before the assault was launched, Gaza was a warehouse for surplus humanity — a 360-square-kilometer ghetto of Palestinian refugees expelled by and excluded from the self-proclaimed Jewish state. For this population, whose members are mostly under the age of 18, the violence has become a life ritual that repeats every year or two. As the first anniversary of Protective Edge passes, Lieberman’s unsettling prophecy appears increasingly likely to come true. Indeed, odds are that the months of relative “quiet” that followed his statement will prove nothing more than an interregnum between Israel’s ever more devastating military escalations.

Three years ago, the United Nations issued a report predicting that the Gaza Strip would be uninhabitable by 2020. Thanks to Israel’s recent attack, this warning appears to have arrived sooner than expected. Few of the 18,000 homes the Israeli military destroyed in Gaza have been rebuilt. Few of the more than 400 businesses and shops damaged or leveled during that war have been repaired. Thousands of government employees have not received a salary for more than a year and are working for free. Electricity remains desperately limited, sometimes to only four hours a day. The coastal enclave’s borders are consistently closed. Its population is trapped, traumatized, and descending ever deeper into despair, with suicide rates skyrocketing.

One of the few areas where Gaza’s youth can find structure is within the “Liberation Camps” established by Hamas, the Islamist political organization that controls Gaza. There, they undergo military training, ideological indoctrination, and are ultimately inducted into the Palestinian armed struggle. As I found while covering last summer’s war, there is no shortage of young orphans determined to take up arms after watching their parents and siblings be torn limb from limb by 2,000-pound Israeli fragmentation missiles, artillery shells, and other modes of destruction. Fifteen-year-old Waseem Shamaly, for instance, told me his life’s ambition was to join the Al-Qassam Brigades, the military wing of Hamas. He had just finished recounting through tears what it was like to watch a YouTube clip of his brother, Salem, being executed by an Israeli sniper while he searched for the rest of his family in the rubble of their neighborhood last July.

Anger with Hamas’s political wing for accepting a ceasefire agreement with Israel in late August 2014 that offered nothing but a return to the slow death of siege and imprisonment is now palpable among Gaza’s civilian population. This is particularly true in border areas devastated by the Israelis last summer. However, support for the Al-Qassam Brigades, the military wing of Hamas that carries the banner of the Palestinian armed struggle, remains almost unanimous.

Palestinians in Gaza need only look 80 kilometers east to the gilded Bantustans of the Palestinian Authority (PA) to see what they would get if they agreed to disarm. After years of fruitless negotiations, Israel has rewarded Palestinians living under the rule of PA President Mahmoud Abbas with the record growth of Jewish settlements, major new land annexations, nightly house raids, and the constant humiliation and dangers of daily interactions with Israeli soldiers and fanatical Jewish settlers. Rather than resist the occupation, Abbas’s Western-trained security forces coordinate directly with the occupying Israeli army, assisting Israel in the arrest and even torture of fellow Palestinians, including the leadership of rival political factions.

As punishing as life in Gaza might be, the West Bank model does not offer a terribly attractive alternative. Yet this is exactly the kind of “solution” the Israeli government seeks to impose on Gaza. As former Interior Minister Yuval Steinitz declared last year, “We want more than a ceasefire, we want the demilitarization of Gaza… Gaza will be exactly like [the West Bank city of] Ramallah.”

Keeping Gaza in Ruins

Behind the quasi-apocalyptic destruction exacted on Gaza by the Israeli military during Operation Protective Edge lies a sadistic strategy whose aim is to punish residents of the besieged coastal enclave into submission. The “Dahiya Doctrine,” named after a southern Beirut neighborhood the Israeli air force decimated in 2006, is focused on punishing the civilian populations of Gaza and southern Lebanon for supporting armed resistance movements like Hamas and Hezbollah. In “Disproportionate Force,” a 2008 paper published by the Institute for National Security Studies, a think tank closely linked to the Israeli military, Colonel Gabi Siboni spelled out its punitive, civilian-oriented logic clearly: “With an outbreak of hostilities, the [Israeli army] will need to act immediately, decisively, and with force that is disproportionate to the enemy’s actions and the threat it poses. Such a response aims at inflicting damage and meting out punishment to an extent that will demand long and expensive reconstruction processes.”

In the aftermath of Protective Edge’s massive destruction of civilian infrastructure in Gaza, the Israeli government set out to obstruct any reconstruction process and extend the suffering of Gaza’s civilian population. When diplomats including American Secretary of State John Kerry gathered in Cairo last October to discuss repairing and rebuilding some of the $7 billion in damage caused by Protective Edge, then-Israeli Transportation Minister Yisrael Katz assured them that their efforts were ultimately futile. “The Gazans must decide what they want to be: Singapore or Darfur,” Katz said, ominously invoking the threat of Sudanese-style genocide. “If one missile will be fired, everything will go down the drain.” The nature of his warning was not lost on the diplomats in Cairo, where one complained of “considerable donor fatigue.”

“No one can expect us to go back to our taxpayers for a third time; to ask for contributions for reconstruction and then we simply go back to where we were before all this began,” a diplomat complained to a reporter. Another conceded: “There isn’t a terrible amount of political commitment or hope.”

In the end, only a minuscule fraction of the $5 billion pledged at the conference has actually made its way to Gaza’s devastated masses. Instead, much of it has been diverted into the coffers of the Palestinian Authority on the West Bank, whose mission requires it to spend around 30% of its budget on “security,” or policing fellow Palestinians, on behalf of their occupier.

Earlier this year, as funds for reconstruction dried up entirely, the United Nations Special Coordinator for the Middle East Peace Process Robert Serry attempted to compel Palestinians in Gaza to accept a rebuilding plan he concocted in cooperation with the Israeli military, the Egyptian military junta of Abdel Fattah el-Sisi, and the PA. Described by Israeli military correspondent Ron Ben-Yishai as a model of “the conflict management approach,” the plan amounts to the internationalization of the siege of Gaza and the perpetual imprisonment of Palestinians there. Needless to say, it proved a non-starter among those whose lives it would have controlled.

Though Hamas has stringently maintained the ceasefire it inked when hostilities ended last August, Israel has repeatedly attacked Gaza’s fishermen as well as farmers working in areas near the Israeli border wall. As despair spreads, the previously minute ranks of Salafist extremists are expanding and pledging allegiance to the Islamic State (IS), the brutal theocratic crew that has established a “caliphate” in parts of Syria and Iraq and whose followers in Gaza have declared war on Hamas.

Gaza’s IS-allied factions have adopted a simple formula for undermining Hamas that begins with the launching of a crude rocket or mortar usually into an unpopulated area of southern Israel. That these do little or no damage hardly matters, since IS followers know that Israel will respond with airstrikes targeting Hamas-controlled facilities. Through these provocations, IS in Gaza has established an alliance of convenience with the Israeli military, with each relying on the other to tighten the vise on Hamas. Though IS has no chance now of toppling Hamas, its presence — and Israel’s apparent eagerness to play its game — has injected a volatile new element into an already unstable post-war landscape.

Field Testing the Brand

Hamas and allied militant groups like Palestinian Islamic Jihad entered last summer’s war with a set of conditions that were entirely humanitarian in nature. They called for the right to construct a seaport in Gaza, rebuild the airport Israel destroyed, and freely import and export goods, as well as for Gaza’s stateless residents to obtain travel permits. In exchange, Hamas offered Israel a 10-year truce. Rather than accept any of these conditions, which would have promoted a dramatic reduction in tensions, Israel and its allies in Cairo and Washington opted for 51 days of brutal warfare, knowing that Gaza’s civilians would pay the steepest price — and that an elite sector of Israeli society would reap handsome rewards. 

Unlike the rulers of Gaza, Israel’s upper classes thrive off war. The assaults on Gaza since 2005 have invigorated one of the country’s leading industries and been a boon to the 150,000 Israeli families who earn their livelihoods from it. Thanks in large part to the wars in Gaza and the ongoing occupation of Palestine, Israel’s weapons industry has tripled its profits to more than $7 billion a year over the past decade, making a country about the size of New Jersey into the fourth largest weapons exporter in the world.

“A salesman for the IAI [Israel Aerospace Industries] told me that assassinations and operations in Gaza bring about an increase of tens of percentage points in company sales,” said Yotam Feldman, the Israeli journalist whose documentary film, The Lab, provides a disturbing look at the country’s weapons industry and how it has transformed Israeli society. According to Feldman, “the war in Gaza has become inherent to the Israeli political system, possibly a part of our system of government.”

Members of the Israeli elite have benefitted directly from the Gaza wars by orchestrating the assaults as generals and politicians and then taking jobs as lobbyists, marketing to foreign militaries the newest weaponry and battlefield tactics tested on Gaza’s civilian population. Ehud Barak, for instance, was the defense minister who directed Israel’s disproportionate attacks on Gaza in 2008-2009 and again in 2012. He was also one of the closest associates of Michael Federman, a former member of his Sayeret Matkal commando unit and a political advisor who also happened to be the owner of Israel’s largest weapons manufacturer, Elbit Systems. It was perhaps unsurprising then that, after leading the Defense Ministry during so many wars deploying and promoting Elbit’s latest weaponry, Barak’s name suddenly wound up on the Forbes list of Israel’s wealthiest politicians in 2012.

A quick browse through Israel Defense News, the leading English-language trade publication of Israel’s weapons industry, offers perhaps the best look at how new tactics and weaponry are marketed. In its latest issue, dedicated to the “new age warfare” practiced in Gaza, readers are assured that “2015 will be good for Israeli Defense Industries.” Uri Vered, general manager of Elbit Systems, promises that “land field systems” — the tanks and armored combat vehicles deployed in the recent conflict — will experience record growth.

Among the high tech weaponry being touted by the magazine is a drone “capable of loitering over the target and attacking it.” This is a reference to Israeli Aerospace Industries’ Harop, a “suicide drone” first tested in southern Lebanon that hovers over its target before diving into it with 10 kilograms of explosives packed into its nose. With militaries around the world snapping up the Harop by the hundreds, Israel’s weapons sector is eager to roll out a next generation vehicle that includes its own launch pad. In order to brand the newfangled drone with the magical marketing label of “field tested,” IAI simply needs another war.

The Point of No Return

To be sure, there are figures within Israel’s military-intelligence apparatus keen on averting another war with Gaza’s armed factions, at least in the near term. They recognize that Hamas has become a stabilizing force in Gaza capable of maintaining ceasefires in good faith. As it did with the Fatah-controlled Palestine Liberation Organization during the 1970s and 1980s, the Israeli military establishment has attempted to domesticate Hamas by assassinating “irreconcilables” like former Al-Qassam commander Ahmed Jaabari, while allowing more conciliatory and politically ambitious figures like Gazan Prime Minister Ismail Haniyeh to rise. Its strategy is aimed at cultivating within Hamas the kind of docile leadership that now makes up the Palestinian Authority in the West Bank, thereby transforming another self-proclaimed Palestinian resistance organization into an occupation subcontractor.

Yet as Israel (relying on international mediators) engages in negotiations with Hamas over a range of issues including the release of a captured Israeli citizen, there is no sense that its domestication strategy is working. And whatever accommodations the gatekeepers of Israel’s military-intelligence sector had in mind, the chaos unleashed by Operation Protective Edge has probably pushed Jewish Israeli society beyond the point of no return. Indeed, the wartime atmosphere proved a godsend for far-right mobilization, electrifying religious nationalist elements in the government and fascist goons in the streets of Tel Aviv. This January, the 45% of Jewish Israelis who complained that their military had not used enough force against Gaza went on to elect the most right-wing government in Israeli history.

Among the leaders of Israel’s increasingly dominant religious nationalist movement is Naftali Bennett, the 43-year-old head of the pro-settler Jewish Home Party. Bennett spent much of last summer’s war railing against Prime Minister Benjamin Netanyahu for refusing to order a full reoccupation of Gaza and the violent removal of Hamas — a potentially catastrophic move that Netanyahu and the Israeli military brass vehemently opposed. While Bennett accused Palestinians of committing “self-genocide,” his youthful deputy, Ayelet Shaked, declared that Palestinian civilians “are all enemy combatants, and their blood shall be on all their heads.” According to Shaked, the “mothers of the martyrs” should be exterminated, “as should the physical homes in which they raised the snakes. Otherwise, more little snakes will be raised there.”

In the current Israeli governing coalition, Bennett serves as Minister of Education, overseeing the schooling of millions of Jewish Israeli youth. And Shaked has been promoted to Minister of Justice, giving her direct influence over the country’s court system. Once one of the young Turks of the right-wing Likud Party, Netanyahu now finds himself at the hollow center of Israeli politics, mediating between factions of hardline ethno-nationalists and outright fascists.

Where Gaza is concerned, Israel’s loyal opposition differs little from the country’s far-right rulers. In the days before the January national elections, Tzipi Livni, a leader of the left-of-center Zionist Union, proclaimed, “Hamas is a terrorist organization and there is no hope for peace with it… the only way to act against it is with force — we must use military force against terror… and this is instead of [Prime Minister Benjamin] Netanyahu’s policy to come to an agreement with Hamas.” Livni’s ally, Labor Party leader Isaac Herzog, reinforced her militaristic position by declaring, “There is no compromising with terror.”

Months after the cessation of hostilities, even as foreign correspondents marvel at the “quiet” that has prevailed along Gaza’s borders, the Israeli leadership is ramping up its bloody imprecations. At a conference this May sponsored by Shurat HaDin, a legal organization dedicated to defending Israel from war crimes charges, Defense Minister Moshe Yaalon warned that another crushing assault was inevitable, either in Gaza, southern Lebanon, or both. After threatening to drop a nuclear bomb on Iran, Yaalon pledged that “we are going to hurt Lebanese civilians to include kids of the family. We went through a very long deep discussion… we did it then, we did it in [the] Gaza Strip, we are going to do it in any round of hostilities in the future.”

Yaalon went on to boast to his audience about how one year before Operation Protective Edge, he furnished his commanders with maps of “certain neighborhoods in Gaza” to hit. They included Shujaiya, an area east of Gaza City where over 120 civilians were killed in a matter of hours, and which now lies in utter ruin. Gaza still reels from last summer’s assault, yet there is no reason to doubt that the Israeli military will fulfill Yaalon’s terrifying vow — perhaps sooner than anyone expects.

For Israel, war is no longer an option. It is a way of life.

Max Blumenthal, a TomDispatch regular, is the author of the bestselling Republican Gomorrah and of Goliath, the winner of the Lannan Foundational Cultural Freedom Notable Book Award. He is a senior writer for Alternet. His new book is The 51 Day War: Ruin and Resistance in Gaza (Nation Books).  Follow him on Twitter @maxblumenthal.

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Revealed: USAID Funded Group Supporting Haitian President in 2011

Revealed:  USAID Funded Group Supporting Haitian President in 2011

by Jake Johnston
Al Jazeera
July 15, 2015

The U.S. Agency for International Development gave nearly $100,000 to a Haitian political movement with close ties to President Michel Martelly in the country’s 2010 elections, documents obtained by Al Jazeera show. The money was allocated shortly after Washington helped overturn the election results to thrust Martelly into power.

On the afternoon of Haiti’s Nov. 28, 2010, elections, 12 of 18 presidential candidates took the stage at the glamorous Karibe Hotel, high up in the mountains that surround the capital. The elections were a fraudulent mess, they told the gathered press, and the only way out was to cancel the poll and start over. Chaos soon engulfed Port-au-Prince and other cities, as thousands of young Haitians, many clad in the pink synonymous with Michel “Sweet Micky” Martelly, took to the streets to simultaneously denounce electoral fraud and herald the victory of their candidate, many days before any official results would be announced.

In the midst of the mayhem, key international actors mobilized. At an emergency meeting at the home of the head of the U.N. peacekeeping mission, Edmond Mulet, leading diplomats pushed then-President René Préval to accept their offer of a plane to take him out of the country and avoid further confrontation. Mulet also approached the front-runners, including Martelly, telling them they had secured a spot in the second round and to cease calls for the election’s cancellation. Days later, when the electoral council announced preliminary results that did not have Martelly advancing to the runoff, the streets were once again taken over by largely pro-Martelly protesters. The U.S. Embassy released a statement questioning the announced results, fueling the demonstrations in Port-au-Prince.

The pressure of these pro-Martelly demonstrators — on the day of the elections and during the following weeks — was a key factor in convincing the U.S. and other international actors to intervene in Haiti’s elections and force the electoral authority to change the results of the first round, so as to ensure that Martelly remained on the ballot.

According to numerous firsthand accounts, Mouvement Tét Kale (MTK), a political organization with close ties to Martelly, was active in these street mobilizations. Now documents through Freedom of Information Act requests reveal that the U.S. government later provided nearly $100,000 in support to MTK, through the U.S. Agency for International Development (USAID).

The arm of USAID that funded MTK can provide support to political groups, as long as that support is provided to all political parties equally and does not influence election outcomes.

The second round of that election, held in March 2011, was the last election held in Haiti. Mayors across the entire country saw their terms expire in 2012 and were replaced by political appointees who are in power today. Also in 2012, a third of the Senate reached the end of their terms; without new elections, this severely hampered the Senate’s ability to reach a quorum and legislate.

On Jan. 12, 2015, on the fifth anniversary of the earthquake, the terms of the entire Chamber of Deputies and another third of the Senate came to an end, leaving Martelly to govern by decree.

Throughout it all, the U.S. government has stood by the president. On Jan. 11, as leaders scrambled to cobble together a last-minute deal to prevent parliament from dissolving, the U.S. Embassy released a statement dumping cold water on any hopes for an agreement. Even if no deal is reached, it wrote, “the U.S. will continue to work with President Martelly and whatever legitimate Haitian government institutions remain.”

Aid funds to political groups

It was through the Office of Transition Initiatives (OTI) arm of USAID, specifically through the for-profit contractor Chemonics, that the support for MTK was provided. Chemonics’ contract with USAID explains that its primary focus is “to support U.S. foreign policy objectives.” Further, while noting that the “OTI cannot create a transition or impose democracy,” the office may “identify and support key individuals and groups … In short, OTI acts as a catalyst for change where there is sufficient indigenous political will.”

In the lead-up to Haiti’s election, the OTI funded campaigns to increase voter turnout that targeted Haiti’s youth, funded Haiti’s first televised debates and created a website to track election news and analysis. It also provided funding to political organizations on opposing sides, according to a former technical adviser who worked for the OTI program for Chemonics and who spoke on condition of anonymity because of a nondisclosure agreement with the contractor. USAID funding for political parties is not in and of itself a breach of policy, though it is restricted. The documents indicating $100,000 in support to MTK redact information on any funding to other groups.

USAID’s political party assistance policy, crafted in 2003 under George W. Bush’s administration, encourages support (PDF) to political parties as a way to foster “friends and allies” and develop relations with incoming governments. The policy also covers NGOs that “operate as de facto political parties.” However, support is allowed only under certain terms, including that all democratic parties receive “equitable levels of assistance” and that the funding not affect election results. Waivers must be obtained from the USAID administrator for any financing outside the scope of the policy. USAID press officer Lisa Hibbert-Simpson confirmed in an email that no waivers have been requested in Haiti since the earthquake.

“It was very difficult to be nonpartisan,” the former technical adviser said. At the time, USAID’s program was being run by both Chemonics and Development Alternatives Inc. (DAI). “If one [Mirlande] Manigat supporter goes to DAI and requests support … then OTI would ask Chemonics how to help the other party.” A 2009 Congressional Research Service (PDF) report on the OTI’s activities called the USAID branch “overtly political” and said that while it is subject to the party assistance policy, “its work often lends itself to political entanglements that may have diplomatic implications.”

Assad Volcy, a spokesman for the opposition political platform Pitit Dessalines, was unsurprised when shown evidence of U.S. support for MTK. “They give money to control the power,” he said.

‘An electoral movement’

In May 2011, with Martelly’s inauguration just days away, USAID provided $98,928 in support to MTK. According to Chemonics’ internal activity database, the support was for cleaning up the capital “in advance of the presidential inauguration.” Chemonics and USAID declined to be interviewed for this story. In an emailed statement, USAID said that hand tools were provided to clean the streets as part of a “civic engagement” program.

Both Chemonics and USAID, in separate emails, used the exact same language to describe MTK, calling the group a “network of community-based organizations” — and not a political organization. However, one person who was an MTK member from 2010 to 2014 and who requested anonymity for fear of reprisals, explained that from the very beginning, MTK “was a political movement.”

The former MTK member explained that before the election, many Haitians bought pink membership cards declaring themselves the Base of Michel Joseph Martelly (BMJM). The pink cards were supposed to get people jobs with the new government as well as discounts at local businesses. It was also a tremendously successful way to obtain personal information on thousands of potential voters. At the time, analysts noted the similarity to the infamous Tontons Macoutes, the brutal secret police active under François “Papa Doc” Duvalier’s dictatorship, which had a similar system of membership cards that yielded patronage and privileges for holders.

The first round of the election was fatally flawed from the beginning. With over a million people still displaced by the earthquake and a cholera epidemic sweeping the country, there was predictably massive disenfranchisement, with most would-be voters simply staying home. Initial results released by the electoral authority put Manigat and Préval’s preferred successor, Jude Célestin, in the runoff election.

For days, throngs of Martelly supporters took to the streets of the capital seeking to push their candidate into the second round. They were clad in their signature pink and loudly declared their support for MTK. Many also carried their pink membership cards. Manigat, his eventual rival in the second round, dubbed the street supporters Martelly’s “pink militia” and warned of the threat to political tolerance that they represented.

“It was an electoral movement,” a current member of MTK, who held various positions in the organization and spoke on the condition of anonymity to avoid reprisals, said during a recent interview in Port-au-Prince. “After the first round, it was us in the streets protesting … This is the movement that put Martelly into power.”

The former MTK member said that at first members were given BMJM cards but that after the election they were given new cards, with MTK emblazoned on them. He showed both his now expired cards.

Street pressure and U.S.-led diplomatic pressure succeeded in overturning the first round results, in what Organization of American States (OAS) whistleblower Ricardo Seitenfus later described as a “silent coup.” A mission nominally from the OAS but in reality funded in large part and controlled by the United States government, according to analysts, went to Haiti to analyze the results. What the OAS recommended was unprecedented. Without any statistical basis, the mission said Martelly came in second, ousting Célestin from the runoff. In a private meeting in 2011, the head of the OAS statistical team, Fritz Scheuren, acknowledged that in all his years, he had never otherwise seen an example of an election outcome being reversed without a recount.

In a January 2015 interview in his home in the historic Pacot neighborhood of Port-au-Prince, the prime minister at the time, Jean-Max Bellerive, said that when he first received the OAS’ report on the elections, it was clear that the conclusions it reached were not supported by the evidence in the report. According to Bellerive, Mulet would not accept a result that put Célestin in the runoff. Hillary Clinton, the U.S. secretary of state at the time, traveled to Haiti in late January 2011 to push for overturning the first round election. “We tried to resist and did, until the visit of Hillary Clinton. That was when Préval understood he had no way out and accepted” the OAS report, Bellerive said.

Consolidation of power

Sitting in an air-conditioned office behind the gates of Auction City in Haiti’s wealthy Pétionville neighborhood, Georges Racine, the president of MTK, defended the group’s social mission and discussed the relationship between the movement and the party.

“We started the organization based on the needs in Haiti, and so we began to train first responders,” he said, adding that the initial goal was to have MTK first responders in every locality in Haiti. And group members have appeared alongside Haitian first lady and current Senate candidate Sophia Martelly at big events, such as Carnival. Members have been invited to the National Palace to receive certificates for their first-aid training. “At first there was more support,” he said, but now “sponsors are afraid to back the organization because they see it as political.”

But he insisted that MTK is “totally separate” from Martelly’s political party, Parti Haitiene Tét Kale (PHTK). He wasn’t as sure in 2012 after the formation of PHTK, however, when Haiti’s leading daily, Le Nouvelliste, asked about MTK’s relationship with the party. “I can’t tell you if it’s a movement, if it’s a party. Contact me on Monday, and I’ll be able to give you more information,” he told the paper.

Michel Martelly, a famous kompa musician who frequently performed for members of Haiti’s brutal military under Jean-Claude “Baby Doc” Duvalier, eventually emerged triumphant from the rubble of Haiti’s flawed elections. But he did so without a true political base. Having campaigned on the ticket of a small party, Repons Peyizan, he arrived in office without any congressional allies and with less than 5 percent of the electorate having voted for him.

USAID was quick to point out that “Mouvement Tet Kale is not the same thing as the Tet Kale Party, which came into being in 2012 — a year after the inauguration and the grant.” But Bellerive explained that in Haiti, politicians ride electoral movements to office then consolidate their party afterward. It was no different with Martelly, he said.

In PHTK headquarters, behind a palatial gate and surrounded by lush trees, party representative Roudy Chute explained the role of MTK over the loud hum of an air conditioner. “MTK was a campaign movement, but we needed a political party, and the president agreed,” he said. “So we took from MTK and formed PHTK.”

“After we formed PHTK, some wanted to stay outside the party so they wouldn’t be limited in what activities they could participate in,” he said. “We get help from outside … MTK exists because we need them.”

Racine, who is active in PHTK, acknowledged that during the election he and other supporters formed MTK in order to “help Martelly.” Asked about his role as head of MTK and his political activism, Racine responded that he “wears two hats.” A Martelly campaign poster from 2010 stared back from the doorway. Racine became secretary of state for the interior, the powerful ministry in charge of internal security, in 2011, though he later quietly resigned after questions arose about his Haitian citizenship.

While waiting to speak with Racine, Al Jazeera witnessed an SUV with tinted windows and government plates drive into the parking lot. Georges Racine’s wife, Magalie Racine, stepped out. Her mother, a powerful Tonton Macoute, ran a notorious torture camp during François Duvalier’ dictatorship, and the family’s ties to figures from that era run deep. In early 2013 she became minister of youth, sports and culture, which has been at the center of corruption allegations involving the first family for years.

Ongoing support?

In MTK’s storage yard, boxes of old clothing stood at least 15 feet high amid cluttered rows of old appliances and furniture. A young man who milled about as trucks came and went, dropping off goods and leaving with fresh cargo, explained that much of the equipment came from Haitian customs, which provides seized goods to Auction City, a large auction yard and also the headquarters of MTK, to be sold. Georges Racine confirmed this. That relationship predates the election of Martelly.

Racine initially said the group received no funds from the U.S. government, but after being presented with evidence of the funding, he acknowledged that USAID provided some support right after the election in 2011. “They stopped after, I think because of apprehension. They never said it, but I suspected it was because they saw us as political,” he said. When he first approached the U.S. government for funding during the campaign, officials offered to build the movement’s first center, but they later backed off, he said.

USAID confirmed by email that “this is the only such grant provided by USAID/OTI, through Chemonics, to MTK.” But whether deliberately or not, the U.S. government continues to provide support for the movement. Racine said that he has had trouble raising funds for MTK and that the main support for the movement at this point comes from Auction City.

Since at least 2003, the U.S. Embassy has sold its old equipment, including cars, through Auction City, providing ongoing indirect support to Racine and his political groups. A former USAID official, who was not authorized to comment on the relationship and asked not to be identified, confirmed that Racine “has big auctions, often of equipment from the international community, specifically USAID … They know him very well.”

Upcoming elections

With no functioning parliament since January, Martelly has scheduled elections by decree, with first round legislative elections scheduled for Aug. 9. Still, a majority of Haitians in a recent poll said they don’t believe elections will be held. If they are, Martelly’s political party will be in a position of strength.

Jean Andre Victor, the coordinator of the opposition platform MOPOD, said in his small office, piled high with old folders and paperwork, that the government consolidates power in order to weaken opposition parties. “Elections for elections’ sake are nothing,” he said. “The international community sees elections as Election Day, but it’s the process that matters to us.”

Having spent three years consolidating its network, without having to compete in any elections, PHTK was able to register more candidates than any other political party. Victor and others allege that nearly half the 128 registered political parties are closely aligned with the president’s party, with their presence on the ballots serving only to obfuscate and divide the vote.

But if PHTK is successful, it won’t be because of the base of support that pushed Martelly into the presidency. Disillusionment with his government set in quickly. A recent poll showed his approval rating nearly 20 points lower than the national average in the all-important West department, home to the many poorer neighborhoods from which his supporters emerged to take over the streets in 2010.

The former MTK member sat back in his plastic lawn chair, his frustration with the movement clearly evident. “Before the election, they’re your friends, but after, they’re gone. Those that seek change will be disappointed … There is no change with MTK,” he said, shaking his head.

Jake Johnston is a Research Associate at the Center for Economic and Policy Research (CEPR) in Washington D.C. He is the lead author for CEPR’s Haiti: Relief and Reconstruction Watch blog and has authored papers on Haiti concerning the ongoing cholera epidemic, aid accountability and transparency and the U.S. foreign aid system. His articles have been published in outlets such as The Hill, AlterNet, Truthout, and the Caribbean Journal.

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Why the European authorities refuse to let Greece recover

Why the European authorities refuse to let Greece recover

by Mark Weisbrot
Al Jazeera
July 17, 2015

The battle over the future of Europe – currently centered in Greece – is far from over. But, with the tentative deal that has been struck between the Syriza government and European authorities, it has certainly entered a new phase.

Prior to the July 5 referendum, European officials had been carrying out a strategy of “regime change.” Deadlines came and went, and threats of a forced Grexit were mainly bluff, despite the fact that the most powerful leader of the eurogroup of finance ministers, Germany’s Wolfgang Schäuble, seemed to favor it. The strategy of regime change looked relatively easy: the European Central Bank (ECB), by restricting credit, together with the standoff and rumors of Grexit, had already pushed the Greek economy back into recession. It seemed only a matter of time before the economic failure, combined with anti-Syriza media coverage, would undermine support for the Greek government enough to usher in a new one.

In his first interview since his July 6 resignation from the post of Greek finance minister, Yanis Varoufakis describes “The complete lack of any democratic scruples, on behalf of the supposed defenders of Europe’s democracy,” i.e., his eurozone negotiating partners. They continuously “delayed and then came up with the kind of proposal you present to another side when you don’t want an agreement.”

On June 26, Greek Prime Minister Alexis Tsipras called their bluff by announcing the referendum, which on July 5 produced a landslide “no” vote against further austerity and regressive “reforms.” This made regime change a somewhat more cumbersome strategy: If you are going to get rid of a government by wrecking the economy, the people have to blame the government rather than the officials who are wrecking the economy. But the vote showed that Greeks saw who was responsible for their misery, especially after the ECB, in an effort to intimidate voters, forced a closure of the banking system – something it had not done in the past six years of crisis and depression.

This strengthened the position within the European camp of Schäuble and his allies who favored an “out now” solution. Tsipras was faced with a choice, it appears: to accept the European authorities’ terms, or be forced out of the euro as the ECB continued to destroy the Greek banks and financial system. It was a hostage situation. He chose to surrender, defending his decision on the grounds that although the voters had clearly rejected austerity, they also did not want to leave the euro.

But the current deal, if it holds, almost certainly will not allow for the Greek economy to recover. The primary budget surplus targets of 2, 3, and 3.5 percent of GDP for the three years of the deal, 2016 through 2018, will make sure of that, given that the country is running a primary budget deficit right now. Of course, the government is unlikely to be able to meet these targets as the economy and therefore government revenues shrink. The Financial Times estimates that primary surpluses will contribute just 4.5 billion euros over the three years. Even if this estimate turns out to be low, this is a small part of a package currently estimated at 86 billion euros.

The fact that European officials are willing to keep the Greek economy indefinitely stuck in a depression for such a small fraction of the money that they are putting up – really pocket change relative to their resources – should be an eye-opener for anyone who is following the drama. It means that the European authorities are really not interested in an economic recovery in Greece in the near future. It also indicates that this fight is not mostly about the debt itself, but part of a much larger political struggle over what kind of society Greeks (and tens of millions of other Europeans) will live in.

The European authorities have now made it clear that – so long as they are in control of Greece’s economic policy – the country’s depression and mass unemployment will continue indefinitely.

Even further debt relief, which is not yet part of the deal, will not improve the situation over the next three years, since it is very unlikely to reduce interest payments during this period.

So what can be done? In his post-exit interview, Varoufakis describes three steps that he advocated in response to the ECB forcing the closure of Greek banks:

We should issue our own IOUs, or even at least announce that we’re going to issue our own euro-denominated liquidity; we should haircut the Greek 2012 bonds that the ECB held, or announce we were going to do it; and we should take control of the Bank of Greece [the Greek central bank].

These were steps in the direction of leaving the euro, but not irreversible ones. They were moves that would help prepare the government to keep the economy functioning in the absence of an agreement with the creditors. They would also show that Greece was not completely at the creditors’ mercy.

But Varoufakis was outvoted, he said. He also noted that although there was a small team that had worked on the details of an exit from the euro, “To prepare the country an executive decision had to be taken, and that decision was never taken.”

Such preparation would now appear to be prudent, since the masks have come off and the whole world can see how mean and ruthless the current leadership of the eurozone is willing to be in order to impose their own brand of economic order on the common currency area. If Greece left the euro, things would likely get worse before they got better, but the economy would recover.

As is well known, Argentina suffered a very severe financial crisis after it defaulted on its debt at the end of 2001 and de-linked its currency from the dollar in January of 2002. However, the economy was growing three months later, and went on to grow 63 percent over the ensuing six years – one of the fastest rates of growth [PDF] in the world during this period. Contrary to popular belief, growth was not driven by a “commodities boom” nor by exports. Although Greece has more exports as a percent of GDP than Argentina did, and would benefit from a devaluation, the main boost to recovery – as in Argentina – would come from being able to escape from the destructive economic policies imposed by foreigners. (Argentina had just one-third of the troika to deal with – the IMF – but it was a pretty deadly constraint.)

Some economists have correctly noted that a default and devaluation that involves creating a new currency presents additional challenges, as compared with Argentina’s abandoning the peso/dollar peg. But this does not change the basic story. A developed economy does not transform itself overnight into a failed state, simply because it exits from a currency union. We can look at the worst financial crises over the past 25 years, and none of them resulted in the kind of economic damage that Greece has already suffered. It is not clear why anyone would argue that Greece would be worse off leaving the euro than it would be three years from now if it were to follow the economic program that it is currently finalizing with the European authorities.

Meanwhile, despite the unconditional surrender of the Syriza government and the parliament’s approval of the hated austerity measures that the European authorities demanded, the ECB did not increase its Emergency Liquidity Assistance to Greek banks so that they could open. The banks remain closed today (Thursday). The ECB appears to be in no hurry to let up on the accelerated economic damage that it has been deliberately inflicting on the Greek economy over the past few weeks in order to force this agreement.

Mark Weisbrot is co-director of the Center for Economic and Policy Research in Washington, D.C. and president of Just Foreign Policy. He is also the author of the forthcoming book “Failed: What the ‘Experts’ Got Wrong about the Global Economy.

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Another ‘Too Big to Fail’ System in G.M.O.s

Another ‘Too Big to Fail’ System in G.M.O.s

The New York Times
July 13, 2015

Before the crisis that started in 2007, both of us believed that the financial system was fragile and unsustainable, contrary to the near ubiquitous analyses at the time.

Now, there is something vastly riskier facing us, with risks that entail the survival of the global ecosystem — not the financial system. This time, the fight is against the current promotion of genetically modified organisms, or G.M.O.s.

Our critics held that the financial system was improved thanks to the unwavering progress of science and technology, which had blessed finance with more sophisticated economic insight. But the “tail risks,” or the effect from rare but monstrously consequential events, we held, had been increasing, owing to increasing complexity and globalization. Given that almost nobody was paying attention to the risks, we set ourselves and our clients to be protected from an eventual collapse of the banking system, which subsequently happened to the benefit of those who were prepared.

The fallacies used in the arguments against us at the time were as follows:

First, we were said to be “against science.” Our adversaries invoked consensus among economists in favor of these methods, a serious fallacy. Had science operated solely by consensus, we would still be stuck in the Middle Ages. According to scientific practice, scientific consensus is used in telling us what theory is wrong; it cannot determine what is right. Nor can it apply to risk management, which requires much greater scrutiny.

Second, we faced the argument that “more technology is invariably better,” a corruption of the notion of progress. In fact, only a small minority of technologies end up sticking; most fail because of some flaw identified over time.

Third, we were told that had ideas such as ours prevailed in the past, they would have hindered risk-taking. Yet, the first rule of risk-taking is to not cross the street blindfolded.

Fourth, toxic financial exposures were deemed to be “safe,” according to primitive risk models. But Fannie Mae went bust exactly because of overconfidence in its bad models (and, incidentally, after its bailout, appears to use the same risk models).

Fifth, the system kept relying on “predictions,” not noticing that the past track record of predictions by central bankers and economists can be used to make astrologists look good. Yet the entire economic system rested on these flimsy predictions — while we were advocating a system that had isolated parts to withstand prediction errors.

We were repeatedly told that there was evidence that the system was stable, that we were in “the Great Moderation,” a common practice that mistakes absence of evidence for evidence of absence. For the financial system to be viable, the solution is for it to resemble the restaurant business: decentralized, with mistakes that stay local and that cannot bring down the entire apparatus.

As we said, the financial system nearly collapsed, but it was only money. We now find ourselves facing nearly the same five fallacies for our caution against the growth in popularity of G.M.O.s.

Interestingly, there are similarities between arguments that are pro-G.M.O. and snake oil, the latter having relied on a cosmetic definition of science. The charge of “therapeutic nihilism” was leveled at people who contested snake oil medicine at the turn of the 20th century. (At that time, anything with the appearance of sophistication was considered “progress.”)

Second, we are told that a modified tomato is not different from a naturally occurring tomato. That is wrong: The statistical mechanism by which a tomato was built by nature is bottom-up, by tinkering in small steps (as with the restaurant business, distinct from contagion-prone banks). In nature, errors stay confined and, critically, isolated.

Third, the technological salvation argument we faced in finance is also present with G.M.O.s, which are intended to “save children by providing them with vitamin-enriched rice.” The argument’s flaw is obvious: In a complex system, we do not know the causal chain, and it is better to solve a problem by the simplest method, and one that is unlikely to cause a bigger problem.

Fourth, by leading to monoculture — which is the same in finance, where all risks became systemic — G.M.O.s threaten more than they can potentially help. Ireland’s population was decimated by the effect of monoculture during the potato famine. Just consider that the same can happen at a planetary scale.

Fifth, and what is most worrisome, is that the risk of G.M.O.s are more severe than those of finance. They can lead to complex chains of unpredictable changes in the ecosystem, while the methods of risk management with G.M.O.s — unlike finance, where some effort was made — are not even primitive.

The G.M.O. experiment, carried out in real time and with our entire food and ecological system as its laboratory, is perhaps the greatest case of human hubris ever. It creates yet another systemic, “too big too fail” enterprise — but one for which no bailouts will be possible when it fails.

Mark Spitznagel is the founder and chief investment officer of Universa Investments and author of “The Dao of Capital: Austrian Investing in a Distorted World.” Nassim Nicholas Taleb is distinguished scientific adviser at Universa Investments, author of “The Black Swan” and distinguished professor of risk engineering at New York University School of Engineering.

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Huge International Coalition Calls for a Big Change to WTO Agenda

Huge International Coalition Calls for a Big Change to WTO Agenda
Negotiations in the WTO are heating up – and they are going badly.

By Deborah James
July 10, 2015

Remember the “Doha Round” of the WTO? Yeah, I wish I didn’t either.

Negotiations in the WTO are heating up – and they are going badly. In November last year, WTO members agreed to come up with a “Work Program” for resurrecting the Doha Round by July 31. As you may remember, it had been stalled for years, but since the new Director-General, Roberto Azevêdo of Brazil, took over in September of 2013, he has been shaking things up. The first WTO expansion agreement, on “Trade Facilitation,” was concluded in December 2013, along with a promise to negotiate to reduce WTO constraints WTO on developing countries’ ability to feed their poor.

It must be remembered that developing countries only agreed to launch a new round of negotiations in order to address problems with the previous round that resulted in the founding of the WTO in 1995. Since then, they have been advocating for a series of fixes to the existing agreements. Many of their proposals dovetail with calls from global civil society for a turnaround in the global trade agenda.

However, after nearly 14 of negotiations, the United States has decided that India, China, Brazil, and other developing countries – in which the vast majority of the world’s impoverished people live – can no longer be considered as developing countries. Even worse, they want to clear the deck of the development demands and get on with introducing even more radical liberalization agenda. Thus the U.S. – sometimes in conjunction with the European Union, Japan, Australia, New Zealand, and Canada, but sometimes unilaterally – is insisting on jettisoning the previous agreements, “re-calibrating” the talks, and reducing the ambition of the deal. Unfortunately, what they are pushing to keep is the wrong agenda, and the agreements they are insisting on abandoning are all of the desperately needed improvements.

That’s why today, 341 civil society organizations from more than 100 countries sent a letter to WTO members demanding that governments stop negotiating on the wrong agenda of WTO expansion, and instead take up an agenda focused on food security and urgent development needs of countries for global trade rules that facilitate rather than hinder development.

With the Work Program deadline just weeks away, in advance of the 10th Ministerial meeting of the WTO in Nairobi fast approaching this December 15-18, 2015, the time is short for governments to change course.

Wrong Agenda: Further Liberalization of Services and Goods and New Corporate Wish Lists

There is a lot about the Doha Round that should be jettisoned. The letter notes that “[n]egotiations to further liberalize ‘trade in services’ through the expansion of the General Agreement on Trade in Services (GATS) must be immediately halted. Strong public oversight over both public and private services is crucial for democracy, the public interest and development, as well as for the orderly functioning of the services market. The deregulation of the financial sector which was encouraged in part through 1990s–era rules of GATS led to the recent global financial crisis and the ensuing worldwide wave of recessions.”

That, along with our belief in quality, accessible public services, is one of the many reasons why civil society also opposes services liberalization through the proposed Trade in Services Agreement (TISA). You may not have heard of the TISA, because negotiations – ongoing for more than two years now – are being held in secret. Fortunately Wikileaks released the largest trove of secret trade documents last month on the TISA, and just last week released updated versions with analysis – including the core text.

“For similar reasons we oppose the continuation of negotiations to further liberalize trade in goods through the Non-Agricultural Market Access (NAMA) pillar,” continues the letter. “The structural transformation that is required for many African countries and LDCs to create jobs and alleviate poverty – key aspects of the proposed Sustainable Development Goals – requires the protection of infant industries, the promotion of added-value exports, technology transfer, and other tools that were used by every developed country on their path to development. In addition, the global jobs crisis in which tens of millions of people remain unemployed cannot be resolved with more liberalization of trade in goods.

That’s why the letter notes that “[a]ny future negotiations on trade in goods – including those in the NAMA negotiations but also in the proposed pluri-laterals including the expansion of the Information Technology Agreement (ITA-II) and the negotiations on Environmental Goods – must focus on job creation and the Decent Work agenda developed by the International Labor Organization working in conjunction with the global labor movement, rather than on the narrow agenda of reducing corporate taxes.”

Throwing Development Overboard

But it gets worse. The main goal of the U.S. and friends is to clear a path in the WTO to introduce a dangerous set of new issues that correspond to their agenda in the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP). These include the so-called ‘Singapore Issues’ like investment, government procurement, and competition policy, which were rejected by developing countries in 2003 in the WTO and cannot be introduced while the Doha Round is still in play, along with other issues including disciplines on state owned enterprises and electronic commerce.

They intend to do this by getting rid of the Doha Round: either by concluding a smaller version (with just the bad bits) or by permanently suspending it. A main strategy is to split developing countries, by pitting the Least Developed Countries (LDCs) against the BRICS (Brazil, Russia, India, China, and South Africa) and other so-called “emerging-market” countries to ensure that India, China et al also “make concessions” as if they were developed countries – when they have the largest populations of poor people of any countries! And the shenanigans involved in the negotiations have gotten out of hand: secret “Green Room” meetings where zero African countries and zero LDCs are invited. As the former leader of the alliance of all developing countries in the WTO when he was Brazil’s Ambassador, Director General Azevêdo should be ashamed.

The Right Agenda: Food Security and Development Flexibilities

If that weren’t enough, the United States is unilaterally blocking discussion of the needed changes to WTO, focused on food security. Last November, members agreed to have a permanent solution on food security by December 31, 2015. This is to address one of the worst hypocrises in WTO rules: while most developed countries are allowed to give subsidies to large agribusiness exporters, even what those subsidies damage other countries’ markets, poor countries are not allowed to subsidize poor farmers to buy food for hungry citizens. Although this seems like an obvious candidate for immediate change, talks have been stalled as the U.S. refuses to even discuss it at the WTO.

At the same time, it is refusing to talk about previously agreed flexibilities to allow developing countries to deal with devastating agricultural import surges (called the Special Safeguard Mechanism) and insisting thatall flexibilities for developing countries must be dropped.

If that wasn’t enough, the U.S. is refusing to talk about cutting its trade-distorting domestic support and its export subsidies – and remember, that’s the reason developing countries agreed to the round to begin with! This issue is core to countries like Brazil, and Azevêdo, who led the charge of developing countries for many years. Now he is clearly taking the side of the developed countries, as he made a new proposal for everyone to cut their subsidies – even China and India, when they need to be able to increase them, but for the poor and hungry instead of agribusiness exporters.

And that’s just in agriculture. The developing country agenda of changing rules across the WTO, and helping LDCs benefit more from trade is not even being discussed.

Azevêdo is apparently upset that his secret Green Room tactics are being criticized, and was finally forced to report to the membership about the secret talks.

Much like when he was able to get a deal on Trade Facilitation during the last Ministerial meeting in December 2013 – without anyone having the time to read the final text – many experts in Geneva think it is actually possible to conclude a deal by this December.

In Our World Is Not for Sale network, we have been clear: after 20 years of failed policies of the WTO, it is time for a Turnaround! There needs to be an immediate cessation of all talks for further liberalization, and instead governments around the world need to start working in a completely different direction for global trade talks that put jobs, food, and sustainable development issues first.

Civil society needs to send a clear message to turn around the direction of global trade talks. Building on the global letter, work on the national level to ensure that elected officials reflect our goals and values is essential.

What happens if we don’t act now?

If we fail to get an agreement on food security this year, countries like India, but also Botswana, Cameroon,Egypt, Ghana, Kenya, Morocco, Nepal, Senegal, Tunisia, Zimbabwe, and even LDCs including Bangladesh, Malawi, Tanzania, and Zambia, who have public stockholding programs, will be constrained from implementing this best practices to reduce hunger on a massive scale. This means, flat out, that more poor people will go hungry.

After 20 years it is clear that there are a lot of problems with the existing WTO. If we allow the status quo to continue, the terrible rules will continue to have negative impacts on people, including not letting countries achieve the proposed Sustainable Development Goals being negotiated in the United Nations.

On the other hand, if we allow the WTO to expand liberalization, it would mean even more race-to-the-bottom policies would be bound by international law. Think of it as austerity but mandated legally, and just about impossible to get out of.

If they are able to officially close the Doha Round, either by getting a bad deal or by “suspending” it, it leaves the terrain open for them to bring investment, competition policy, government procurement, and other policies back into the WTO.

Instead, civil society must hold governments accountable to turnaround the agenda and remove WTO obstacles to food security, and respond to developing countries’ needs for more flexibilities in the rules.

The letter from civil society concludes: for the Nairobi Ministerial to be a “success,” it must deliver on development and turn around the WTO.

That would be a first step towards a much larger transformation of the current global trade rules from a system that focuses on expanding trade, to focusing on enabling states and communities to achieve food, jobs, and sustainable development – and that will be a world without the WTO.

Deborah James is the Director of International Programs at the Center for Economic and Policy Research in Washington, DC ( She facilitates the WTO campaign of OWINFS (Our World Is Not for Sale) global civil society network.

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