aljazeera--2019-05-01--Irans economic crisis and ideological woes

Iran's economic crisis and ideological woes

Six months after the US sanctions came into effect, Iran's economy appears to be struggling. Efforts by the international community to salvage the nuclear deal and provide an economic lifeline to Iran to dampen the fallout of the sanctions have not borne fruit so far and recent devastating floods in the oil-producing southwest of the country have only exacerbated the situation.  Even before the recent decision by the United States government not to extend waivers provided to eight buyers of Iranian oil, the Islamic Republic was able to sell no more than 1.3 million barrels per day (bpd). Now its oil exports are expected to drop even further, which means the deficit gap in the state budget this year will be larger than expected.  At the same time, the measures the Iranian government is taking in order to minimise the effect of the sanctions are unsustainable and unlikely to work, as they do not address any of the major structural problems the economy suffers from.  The Islamic Republic continues to resort to inefficient stop-gap economic policies because giving up on its promise of social provision, which constitutes a major part of its post-1979 social contract, could endanger its survival.  When preparing the budget bill for this year, President Hassan Rouhani's administration planned for oil exports to be around 1.5 million bpd, sold at a price of $54 a barrel or above. Thus the budget submitted to parliament earlier this year was set at 4.8 quadrillion rial (around $47bn at the current unofficial exchange rate) and up to 33 percent of it was supposed to come from oil revenue.  Earlier this year, before the Trump administration took the decision to stop US sanction waivers was announced, the oil sector was estimated to shrink between 26 and 31 percent. With this announcement, the slump in the oil industry is expected to be even bigger.  Even if the US fails to bring Iranian oil exports to zero, sales will definitely collapse way below the government-projected 1.5 million bpd (and even below the 1.1 million bpd estimated by market experts), leaving Iran with a large financial gap.  This comes amid an already raging economic crisis which the Iranian authorities have struggled to contain. As inflation hit 40 percent earlier this year, consumer prices went up by 40 to 60 percent, putting additional strain on the already impoverished lower-class Iranian households.  Key industries - like the petrochemical, car and construction industries, which are highly dependent on imported equipment, spare parts and raw materials - are also suffering from the depreciation of the Iranian currency, which last year lost more than 100 percent of its value, significantly decreasing the purchasing power of Iranian companies on the international market.  Overall, Iran's economy in 2019 is expected to go even deeper into recession, with estimated negative growth of 5.5 percent or higher.  In the face of a looming economic disaster, the Iranian government is paradoxically adopting policies that do not address any of the major structural problems burdening the national economy.  The budget voted in March envisions an increase in current expenditures by 16 percent to maintain existing social programmes, boost state employee salaries to compensate for the negative effect of inflation and provide cheaper foreign currency to companies importing essential goods and raw materials. Some $14bn has been allocated to maintain the low prices on basic food products and medicines.  The government is also seeking to regulate domestic prices by directly demanding from some producers to accept lower profit margins. It also offers low prices for the produce of local farmers so it can provide foodstuffs at minimal cost to the general public.  It continues to subsidise fuel and electricity and is even considering the reintroduction of the coupon system it used to run during the 1980s Iran-Iraq war to allocate cheap basic goods to Iranian household.  But these policies are neither sustainable nor efficient. Iran's financial capacity has already been overstretched by the substantial social spending the government has undertaken in recent years. Currently, annual subsidies and social programmes cost the Iranian government up to half of the total budget.  The fact that oil exports will slump below what was planned for in the state budget means that the government will simply not have the money to implement some of these policies.  In fact, it is already struggling to fulfil some of the plans it has made to provide additional assistance to struggling sectors. As of mid-March, the Iranian authorities had already failed to provide 20 percent of the loans they promised to car makers and car spare part producers.  It also had to cancel a programme supplying bread producers with cheap wheat flour in order to reallocate the funds to cover the guaranteed purchases of grain from local farmers.  Tehran's attempts to control consumer prices are also not working. Providing importers with cheap foreign currency is unlikely to produce the desired results. The Majlis Research Center, a think-tank affiliated with the Iranian parliament, recently found that in 2018 a similar measure had little effect on consumer prices and inflation, as the recipients of cheap foreign exchange currency tended to either sell it on the black market or sell the goods they imported at inflated prices.  Price controls on local producers could also backfire. They could further discourage local businesses from expanding production given the rising cost of raw materials and shrinking profit margins and encourage the excessive export of goods out of the country, adding to the market deficit. Temporary export bans on selected items such as poultry, sugar, certain types of fruit, and more have only stimulated the smuggling business.  Meanwhile, the government is pulling funds out of long-term development and infrastructural projects. In this year's budget, the allocated funds to the National Development Fund which is supposed to help decrease the dependence of the Iranian economy on oil are inadequate. The fund has also lost part of its reserves which were reallocated to cover military and civilian expenditures.  The main reason behind the Iranian leadership's failure to improve the country's economic situation is its tendency to focus on dealing with the consequences of economic problems (such as high inflation rates, rising prices, illegal economic activities etc) rather than their sources. In order to find sustainable solutions to Iran's economic challenges, Tehran will need to make some structural reforms including cutting down or, at least, optimising the unjustifiably large social programmes and indirect subsidies.  However, the Iranian leadership is reluctant to take such steps because it goes against its self-declared social protection agenda.  In 1979, Ayatollah Khomeini and his followers declared the protection of the downtrodden, or mostazafin, as one of the main tasks of the newly created Islamic Republic. By doing so, they not only secured the support of the lower classes and guaranteed the durability of their regime, but also unwillingly chained their success to problematic and hard-to-sustain policies such as consumer subsidies.  As a result, the Iranian authorities created a mechanism to control the import, production and distribution of basic consumer goods. However, this system, which helped guarantee the survival of the regime for four decades, came at a heavy cost - it swallowed valuable financial resources that could have been used to develop the economy.  Today, the Iranian leadership knows that it cannot resolve the country's economic problems without stripping down this social protection system. However, it also knows that attempting to change this system would lead to an immediate rise in consumer prices, which could turn the lower classes against the regime.  Under these circumstances, Iran's economic prospects for 2019 remain gloomy. In order to cope with the country's deep-rooted economic problems, Tehran has to conduct substantial reforms - something the current leadership is reluctant to do. Consequently, the Iranian government is stuck with the unproductive policy of trying to deal with the consequences of problems rather than their origin for yet another year.  The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial stance.


aljazeera--2019-10-18--Lebanon protests over economic crisis, corruption continue

Beirut, Lebanon - Thousands of anti-government protesters rallied in downtown Beirut for a second day on Friday, calling on Lebanon's political elite to step down over a worsening economic crisis.  The protests, the country's biggest in years, are the most serious challenge to Prime Minister Saad Hariri's coalition government, which came to power less than a year ago.  In Beirut's Martyr Square, protesters waving the Lebanese flag called for the resignation of the country's top leaders, including Hariri, President Michel Aoun, Parliament Speaker Nabih Berri, and the head of the Free Patriotic Movement, Gebran Bassil.  Demonstrators - angry over government plans to impose new taxes amid rising costs of living - also accused the Lebanese leadership of corruption. They called for the country's strict banking secrecy laws to be lifted and for state funds stolen over the decades to be returned to the treasury.  "Thief, Thief, Michel Aoun is a thief," protesters chanted, some looking around nervously with grins on their faces. In Lebanon, insulting the president can land you in jail.  "Everyone is tired of this, the situation is horrible, people have no money, the people are falling apart, and all they give us is taxes, taxes, taxes," said Samir Shmaysri, a 39-year old hairdresser.  "There's no reform process to even hope for the situation to get better."  The protests began on Thursday after the cash-strapped government announced plans to impose new taxes, including on WhatsApp voice calls. Protesters blocked streets across the country by burning tyres, and in some areas set fire to buildings and vandalised shops.  Amid the unrest, banks, shops and schools closed operations on Friday.  The outpouring of anger prompted the Lebanese government to scrap plans for taxes on WhatsApp calls, and Hariri, who cancelled an emergency cabinet meeting on Friday, is expected to address the nation later in the day.  The measures, however, have done little to placate protesters.  "We want to change the situation in the country, that's it," said a protester blocking a road with a flaming rubbish bin near Beirut's Ras al-Nabaa area, just outside downtown.  "We've tried being peaceful, it hasn't worked."  The man had a wooden club with one charred end in his right hand. Next to him, another young man was busy re-blocking a road with smouldering rubbish bins and burning tyres, after a Lebanese Army vehicle briefly opened it to pass through.  Randa, who brought her young nephew to Friday's protest, said it was her first time on the streets  "It's not a matter of whether it's fitting or not for a child his age," the university teacher said, as the Lebanese national anthem rang out from speakers being her.  "Everyone needs to come down," she said. "I feel that there is no partisan inclination to the protests. The intentions are pure."


aljazeera--2019-11-25--US dollar shortage and Lebanon's economic crisis

There have been widespread concerns over Lebanon's economy. A shortage of US dollars has caused several businesses to close and many people have lost their jobs.  The crisis has triggered growing fears about the country's economic future.


aljazeera--2019-12-24--No Christmas miracle in Lebanon as economic crisis deepens

Beirut, Lebanon - Atta Issaoui cannot afford Christmas gifts for his children this year, let alone buy a tree.  "We want to take part in this celebration, but the situation in the country, the poverty and lack of work has made it difficult," the 55-year-old father of two said. • Roadblocks across Lebanon as anger rises over Diab pick as PM  Issaoui stood in line to receive presents donated by demonstrators at a protest encampment in Beirut's Martyrs' Square, the centre of an uprising against the ruling elite that began in mid-October.  "I thank God there are some who empathise with us, it really does raise our spirits," he told Al Jazeera.  On Monday night, a Christmas dinner was served to about 1,000 people in Martyrs' Square, with volunteers cooking under a Christmas tree adorned with symbols of the uprising.  Small initiatives like these have offered some hope to those struggling amid Lebanon's worst economic and financial crisis since the country's 15-year civil war. The currency has depreciated by 30 percent since September over its pegged rate to the dollar.  But for many in the country, this Christmas remains a bitter one. In the past few months, scores of businesses have shut their doors, while many others have laid off workers, reduced their operations or paid only half salaries.  A dollar shortage has led banks to introduce informal capital controls on both dollars and local currency, leaving many unable to withdraw their meagre earnings and shaking confidence in the country's banking system, long seen as a pillar of stability.  The country's economic collapse has been exacerbated by the country's continuing political crisis. Lebanon has been without a government since October 29, when former Prime Minister Saad Hariri resigned amid mass protests.  President Michel Aoun last week tasked former education minister Hassan Diab with forming a government, but Diab faces an uphill battle to reconcile the varying demands of parliamentary blocs and convince protesters, many of whom have already voiced opposition to the politician.  Meanwhile, the crisis has filtered down to those who struggled before the latest crisis hit.  Mohammad, 45, who works as a doorman, said his salary of 650,000 Lebanese Lira ($430 at the official rate of 1500 Lebanese lira to the dollar) had been slashed to just 350,000 Lebanese Lira ($230).  The father of four received a few bags of sweets, colouring pens and a drawing book from volunteers, which he said would be the only presents he could offer this year.  "I've never been worse off. My kids haven't eaten meat for three weeks, there is no Christmas cheer, there is nothing to be happy for," said Mohammad, who wished to only go by his first name. "I don't even have the money to get a bus to my home," he added, walking off towards Beirut's Hamra district.  It is unlikely the situation will improve any time soon, according to Dan Azzi, an expert on Lebanon's finances and former chairman and CEO of Standard Chartered Bank.  "Politicians need to stop messing around, else they preside over the biggest collapse in the history of Lebanon," Azzi told Al Jazeera.  He said that the best-case scenario depended on immediate, decisive measures being implemented as soon as possible. This includes formal, transparent policies to manage the flow of capital in and out of the country, and targeted tariffs, including on luxury cars.  He also advocates for so-called financial haircuts or the confiscation of a certain percentage of the highest depositor accounts. He said that some $90bn in Lebanon's banks was held by just 6,000 depositors  Much of that money is the result of high interest rates Lebanese banks put in place to attract dollars.  "It's fake money," Azzi said. "It's unearned interest that has been subsidised by the Lebanese public. So you need to go in and give them a big haircut and then you can move on to focusing on creating a real economy," he said.  If state policies remain unchanged, Azzi said Lebanon was heading towards the "Mad-Max scenario", a reference to the dystopian film of the same name, set after the collapse of civilised human life.  "If we keep procrastinating and wasting time, or get a government that doesn't have the know-how or the intestinal fortitude to execute the right decision, then we go to a Mad Max-type scenario," Azzi said.  There have already been signs of brewing chaos at banks in Lebanon, with a number of depositors refusing to leave until they are given their cash. In one video, a man says he would "burn the bank" if he was not given his money.  Back in Martyrs' Square, many clung to any hope they could find in the generosity of others.  Clasping four books bound in cheerful Christmas wrapping, Ahmad, 53, said that he hoped 2020 would be "a year of revenge," against corrupt politicians.  "Everything is getting worse, but we have hope in the revolution, that these corrupt ones are soon heading to their execution," Ahmad, who wished to only go by his first name, added. "We still have our dreams."


aljazeera--2019-12-27--Lebanon economic crisis hurting daily life

Lebanon has been without a government for two months.  Political deadlock is not rare, but it comes at a critical time.  The economy is near collapse and the Lebanese are relying on themselves to survive the crisis, which is being described as the worst in decades.


birminghammail--2019-01-22--Prince William grills Sir David Attenborough over planets environmental crisis at World Economic Fo

Prince William grills Sir David Attenborough over planet's environmental crisis at World Economic Forum

Sir David Attenborough has warned it is difficult to overstate the environmental crisis facing the planet, as he was interviewed live on stage by the Duke of Cambridge.  The veteran broadcaster urged leaders to care for the natural world as he spoke with William at the World Economic Forum in Davos, Switzerland.  The Blue Planet and Dynasties narrator stressed the "frightening" mechanisms humans have for destruction, and warned how a healthy natural world was "absolutely essential" to human life.  Sir David told the duke: "The future of the natural world is in our hands. We have never been more powerful.  "We can wreck it with ease. We can wreck it without even knowing we are doing it.  "And if we wreck the natural world, in the end, we wreck ourselves."  The broadcaster added: "It is difficult to overstate it. We are now so numerous, so powerful, so all-pervasive, the mechanisms that we have for destruction are so wholesale and so frightening, that we can actually exterminate whole ecosystems without even noticing it."  Sir David also discussed his new nature documentary Our Planet, saying streaming it on Netflix would allow it to be seen by millions of people around the world.  Describing the modern technology used in his documentary making, he said: "The facilities we now have are unbelievable. We can go everywhere. We can go to the bottom of the sea, we can go into space, we can use drones, we can use helicopters, we can speed things up and we can slow them down.  "So the natural world has never been exposed to this degree before."  He urged people "not to waste the riches of the natural world on which we depend" and to respect the planet by not throwing away food or power.  Sir David added: "Just care for the natural world, of which we are an essential part."  Second in line to the throne William described it as a "personal treat" to be interviewing Sir David.  The duke has spoken of his fondness for watching Sir David's programmes as a child and previously described him as having "the single most important impact in my conservation thinking".  He revealed in Davos: "It's a personal treat for me to be sitting here asking you questions.  "Normally I have to endure people asking me questions so it's quite nice to be turning the tables for once."  One of Sir David's favourite clips from Our Planet - dramatic footage of an Arctic glacier carving up and falling into the sea - was played during the Forum.  The naturalist said: "One of the most immediate dangers facing the planet today is rising temperatures... In the Arctic temperatures are rising very fast."  As Sir David discussed the difficulty in capturing the fast-moving glaciers on film, William joked that they were "a bit like children - unpredictable".  On Monday, Sir David was given a Crystal Award for his leadership in environmental stewardship at the WEF, and used his acceptance speech to call for a plan to tackle environmental problems.  William asked Sir David: "People of my generation now are beginning to step into positions of leadership around the world.  "The work to save the planet is probably, largely going to happen on our watch.  "What advice do you have for my generation?"  Sir David, who was given a standing ovation by delegates at the end of the interview, responded: "There has never been a time when more people have been out of touch with the natural world, than there is now.  "We have to recognise that every breath of air we take, every mouthful of food we take, comes from the natural world.  "And if we damage the natural world, we damage ourselves. We are one coherent ecosystem.  "It's not just a question of beauty, or interest, or wonder - it's the essential part of human life is a healthy planet."  The pair also discussed how Sir David will be seeking a global deal for nature in Beijing in 2020.  Tanya Steele, chief executive of WWF-UK (World Wildlife Fund) of which the naturalist is an ambassador, welcomed his call for action.  "We urgently need a new global deal for nature and people to kick-start a worldwide programme of recovery and, at the same time, bold action to restore nature at home in the UK," she said.  "We are the first generation to know that we are destroying the world and almost certainly the last that can do anything about it."


cnsnews--2019-06-19--Economist Who Predicted 2008 Economic Crisis Warns of 2020 Recession Risk

Economist Nouriel Roubini, who foresaw the 2008 world economic crisis, is now warning about the growing risk of a 2020 recession. In 2018, he had identified 10 potential downside risks with his colleague Brunello Rosa, risks that they believe could trigger a U.S. and global recession in 2020.  Roubini, co-founder of the economic forecasting team Rosa & Roubini Associates in London,  was a senior economist for International Affairs in the White House's Council of Economic Advisers during the Clinton administration. He currently is a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates.  On Sept. 7, 2006, Roubini warned about the potential economic crisis of 2008 while speaking to an audience of economists at the International Monetary Fund. His forecast proved correct, as the 2007-2008 financial crisis severely hurt the U.S. and world economy.  In 2018, Roubini and Rosa said there were 10 factors that could trigger a global recession in 2020. Many of the factors involve the United States.  In a recent commentary based on those factors, Roubini wrote, “Trade wars with China and other countries, along with restrictions on migration, foreign direct investment, and technology transfers, could have profound implications for global supply chains, raising the threat of stagflation (slowing growth alongside rising inflation).”  Prohibiting Chinese firms from using U.S. components could trigger a process of de-globalization, he said.  “With the current tension already denting business, consumer, and investor confidence and slowing global growth, further escalation would trip the world into a recession,” said Roubini.  China’s reaction to President Trump’s tariff restrictions could also hurt some multi-national companies in China, such as America’s Apple.  “Both Trump and Chinese President Xi Jinping know that it is in their countries’ interest to avoid a global crisis, so they have an incentive to find a compromise in the next few months,” said Roubini. “Yet both sides are still ratcheting up nationalist rhetoric and pursuing tit-for-tat measures.”  “Trump and Xi each seem to think that his country’s long-term economic and national security may depend on his not blinking in the face of a new cold war,” said the economist. “And if they each genuinely believe the other will blink first, the risk of a ruinous clash is high indeed.”  The other factors Roubini mentioned, in addition to the trade war, is China’s heavy debt and the U.S. Federal Reserve’s interest-rate policy.  In Europe and Japan, central banks are already in negative-rate territory, said Roubini, and it seems clear that they cannot go much further down without triggering economic problems.  In September 2018, Roubini wrote, “Trump was already attacking the Fed when the growth rate was recently 4%. Just think about how he will behave in the 2020 election year, when growth likely will have fallen below 1% and job losses emerge. The temptation for Trump to ‘wag the dog’ by manufacturing a foreign-policy crisis will be high, especially if the Democrats retake the House of Representatives this year,” which they did.  “Since Trump has already started a trade war with China and wouldn’t dare attack nuclear-armed North Korea, his last best target would be Iran,” wrote Roubini.  “By provoking a military confrontation with that country, he would trigger a stagflationary geopolitical shock not unlike the oil-price spikes of 1973, 1979, and 1990. Needless to say, that would make the oncoming global recession even more severe.”


conservativehome--2019-12-05--WATCH: Labour will create an economic crisis if they win the election, warns Javid

“It’s Labour that was responsible for the massive rise of homelessness.”  Chancellor @sajidjavid claims that the previous Labour government is to blame for the UK’s rise in homelessness.  Labour’s pledged to end rough sleeping in the #GE2019 campaign: https://t.co/xUdNCUIw2l pic.twitter.com/yQ5IPIoMPB


eveningstandard--2019-11-10--General election latest: Labour would plunge UK into economic crisis 'within months'

The Labour Party would plunge Britain into an economic crisis "within months", Sajid Javid has insisted.  The Chancellor said the opposition would spend an "eye-watering" extra £650 million a day if they win the General Election.  Shadow Chancellor John McDonnell hit back, condemning the Conservative Party analysis as an "incompetent mish-mash of debunked estimates and bad maths".  Mr Javid said the proposals, which include plans to renationalise rail, mail, water and energy, were "absolutely reckless" and equivalent to funding the entire NHS budget for nine years.  He told BBC One's The Andrew Marr Show: "This is the true cost of Corbyn's Labour: these are the numbers that John McDonnell did not want you to see, and they're out there today...  "These are eye-watering levels of spending - £1.2 trillion.  "It will be absolutely reckless and will leave this country with an economic crisis within months, not years."  But shadow chancellor John McDonnell said: "Labour will tax the rich to pay for things everyone needs and deserves, like decent housing, healthcare and support for our children.  "We will also use the power of the state to invest to grow our economy, create good jobs in every region and nation and tackle the climate emergency.  "The Conservatives will be able to read all about these plans - and how much they actually cost - when we publish our fully-costed manifesto."  The analysis, overseen by Mr Javid, and published in a 35-page dossier, is based on costings for Labour's last manifesto and its most recent pledges, spread across a five-year period.  It assumes the Opposition would immediately sign up to the 32-hour week, abolish private schools, and pilot a universal basic income.  However shadow defence secretary Nia Griffith said Labour would not implement every policy from its annual conference - as the party could "only do a certain amount at once".  Meanwhile, Business minister Kwasi Kwarteng was unable to put a price on his own party's pledges, and told Sky: "I'm not going to bandy around figures."  It came as Labour's shadow communities secretary Andrew Gwynne refused to say whether a Labour government's Brexit deal would end freedom of movement.  Mr Gwynne told the BBC that the £1.2 trillion claim was an "absolute work of fiction" by Tories, adding: "You can't trust a word that Johnson and his ministers say on this issue.  "We will have a fully-costed manifesto in due course when we launch that, and the challenge actually is for the Conservatives to fully cost their own manifesto, something they didn't do in 2017."  Asked what the correct figure for Labour's spending is, the shadow communities secretary said: "Well look, that's still being finalised."  As the battle for seats continues, Labour selected Ibrahim Dogus, a restaurateur, as its candidate for deputy leader Tom Watson's West Bromwich East constituency.  Meanwhile, the Conservative candidate for the Labour-held seat of Wakefield, Antony Calvert, quit the race amid a storm over comments he made on food banks and feminism.


foreignpolicy--2019-08-27--Is India Facing an Economic Crisis

Is India Facing an Economic Crisis?

Welcome to Foreign Policy’s weekly South Asia Brief. Sign up here to receive this weekly newsletter directly in your inbox.  The highlights this week: India tries to boost its economy, Kashmir remains under a broad lockdown, the Rohingya mark a sad anniversary, and Amazon opens its biggest office space in the world.  Last Friday, India’s government finally acknowledged that all was not well in the world’s seventh-largest economy. Finance Minister Nirmala Sitharaman rolled back a tax on foreign investors and promised to speed up tax refunds to small businesses, among other announcements. Investors seemed pleased: On Monday, the key Mumbai stock market gained more than 2 percent, after recording its worst July in nearly two decades. And the markets continued to rise on Tuesday.  Broader problems. While the stock market may have received a short-term boost, Sitharaman’s announcements alone won’t fix underlying economic problems. The biggest concern—and a likely factor behind slowing consumer demand—seems to be the country’s 6.1 percent unemployment rate, the highest in 45 years. An estimated 1 million Indians enter the workforce every month, and enough jobs simply aren’t being created for them. Perhaps unsurprisingly, car sales declined by 36 percent in July. Sitharaman announced on Friday a one-off government move to replace its fleet of cars with new ones, but that will hardly encourage the auto industry to ramp up production or hire more workers. (Automakers have laid off an estimated 350,000 workers since April.) Meanwhile GDP growth has slowed, with Nomura analysts predicting a tepid 5.7 percent growth rate for the April-June quarter, expected to be announced next week.  Criticism. Thomas Isaac, the finance minister of the state of Kerala, tweeted that Sitharaman’s announcements didn’t amount to enough. “What is required is a large fiscal spending package,” he wrote. And in a rare example of a top Indian businessman criticizing New Delhi, Adi Godrej, the chairman of the Godrej conglomerate, told Business Standard last week that “the speed of decision-making is very good for example in Kashmir, but the speed of decision-making on business matters is not good.”  One problem may be that even as India’s central bank continues to cut interest rates—which are already at their lowest level in nine years—outdated state banks often avoid passing on cheaper loans to consumers. And the private sector seems too spooked by a global slowdown to make large investments. Put together, these trends led a top government think tank leader to admit last week that India’s economic situation was “unprecedented” and that “nobody is trusting anybody else” in the government and private sector.  Depleting brain trust. Indian Prime Minister Narendra Modi has had to cope with the loss of some key lieutenants to ill health. On Saturday, Arun Jaitley, who was finance minister from 2014 to early 2019, died after years of kidney-related illnesses. Sushma Swaraj, who served as external affairs minister over the same period, also died this month after a heart attack. And Manohar Parrikar, who served as defense minister from 2014 to 2017, died from pancreatic cancer in March.  All talk. After 10 months, peace talks between the United States and the Taliban may soon be wrapping up. Under a draft agreement, the United States would pull some 5,000 troops out of Afghanistan in the next few months and 9,000 more by next year. The Taliban would cut ties to al Qaeda. Afghan President Ashraf Ghani, who is eager to move forward with a scheduled presidential election at the end of September, is putting pressure on the negotiations.  Refugee anniversary. On Sunday, at least 100,000 Rohingya refugees in camps in Bangladesh came together to mark what they called “Genocide Day.” It has been two years since the start of a wave of military violence—which the United Nations characterized as having “genocidal intent”—forced them to flee neighboring Myanmar. The camps in southern Bangladesh are home to more than 1 million people, making them the largest refugee settlement in the world.  Tarnished brass? In late August, the Sri Lankan government named Shavendra Silva, a veteran of the decades-long civil war against the Tamil Tigers, as commander of the country’s army. The move provoked immediate backlash from the United States, United Nations, and others because Silva is accused of overseeing torture and extrajudicial killings of unarmed rebels in the last weeks of that war. Colombo has since shot back, dismissing concerns that Silva’s appointment would undermine the reconciliation process and calling foreign efforts to influence the government’s decision-making “unwarranted and unacceptable.”  Let’s discuss. A few weeks into the lockdown in Kashmir, New Delhi claims that it is starting to lift some restrictions on movement there. Tensions remain as high as ever, though, with ongoing protests amid a media blackout. Meanwhile, in an interview with the New York Times last week, Pakistani Prime Minister Imran Khan took the opportunity to weigh in on negotiations with India, arguing that “there is no point in talking to them. I mean, I have done all the talking. … There is nothing more that we can do.” And at the G-7 summit in Biarritz, France, on Monday, U.S. President Donald Trump seemed to walk back earlier offers to mediate between India and Pakistan before adding that he’d still be there if they needed him. “I have a very good relationship with both gentlemen,” he said.  For more perspective from Kashmir, read this FP dispatch from Pulwama by the journalist Soumya Shankar.  According to the World Bank, 28 percent of Nepal’s workforce is based abroad. What percentage of Nepal’s GDP comes from remittances?  Scroll to the bottom for the answer.  India online. Amazon has opened its single largest office building in Hyderabad. Some 15,000 employees can work from the new facility’s 1.8 million square feet of office space. Amazon is battling Walmart for an e-commerce market that could be worth $200 billion in less than a decade, according to Morgan Stanley.  Unusual letter. According to Reuters, the U.S. ambassador to India, Kenneth Juster, wrote last month to top U.S. tech leaders encouraging them to take part in discussions on tech policy disputes with New Delhi. India recently imposed tough data localization laws that impact Facebook, Google, and Twitter, as well as more stringent rules for foreign investment. It’s unusual for businesses to receive such a letter from a sitting U.S. diplomat. Reuters, which viewed a copy of the letter, reports that Juster wrote, “My team at the Embassy stands by ready to help.”  Middle ground. As the United States and the Taliban eye a deal to end nearly two decades of war, Robert Pape, a professor of political science and director of the Chicago Project on Security and Threats, asks what the United States can do to keep itself safe from terrorism. Rejecting both leaving troops in the country on a large scale and a complete withdrawal, Pape argues for a middle course. “An ‘over-the-horizon’ counterterrorism strategy would rely on cooperation with local partners and selective interventions of air power, U.S. special operations forces, and intelligence, economic, and political support from regional bases outside Afghanistan,” he writes. It is ultimately the only plan, he argues, that is “realistic about what can be achieved in such a heavily challenged area as Afghanistan and remains true to America’s core security interests.”  That’s a rap. In Little Kid, Big Dreams, his debut album, the rapper Ahmer Javed takes on the struggles in Kashmir, his homeland. As one reviewer puts it, the music is challenging, but “his style is not directly confrontational—it is often a laying-bare of facts and stories, urging the listener to make up her mind, rather than guiding her urgently to a conclusion.” Listen on SoundCloud.  According to the Financial Times, although the inflow of remittances is rising, the value has fallen as a percentage of GDP from 31 percent in 2015 to 28 percent by 2018.  Read more of our South Asia-related stories on www.foreignpolicy.com. We welcome your feedback at newsletters@foreignpolicy.com. You can find older editions of South Asia Brief here. For more from FP, subscribe here or sign up for our other newsletters.


france24--2019-01-11--A decade on Spain still haunted by economic crisis

A decade on, Spain still haunted by economic crisis

Ten years ago, Spain was hit by a severe economic crisis. A million Spaniards moved abroad in search of a better life and the country’s traditional two-party system took a beating. Our correspondent takes a closer look at what has changed: Although economic indicators paint a rosier picture today, austerity has left its mark and job insecurity is on the rise.  Ten years ago, Spain was crippled by one of the worst economic crises in its history. When the housing bubble burst, several whole sections of the Spanish economy collapsed. Almost half of under-25s found themselves without a job. Unable to pay their mortgages, half a million families were evicted from their homes.  Deemed responsible for the crisis, the two mainstream political parties – the centre-left Socialist party and conservative People’s Party – lost ground. The emergence of new outfits like the far-left Podemos or centre-right Ciudadanos party dealt a blow to the two-party system, which had dominated Spanish politics for decades.  Today, after years of austerity, the Spanish economy is faring better. Spain is currently the fourth-largest economy in the eurozone and GDP growth exceeds 3 percent. The real estate market has also bounced back.  These positive indicators have prompted many young graduates, who had left during the crisis to find work abroad, to return home.  Looking behind the numbers  But although unemployment fell in Spain, it was at the expense of job security.  In 2012, under the Conservative government of Mariano Rajoy, a major labour reform was passed in a bid to make the job market more flexible. But it has led to a fall in wages and to job insecurity.  Last month, by decree, the Socialist government approved a 22 percent increase in the minimum wage from 2019. The move appears a first step in restoring trust between Spain’s political class and disillusioned citizens.


france24--2019-07-04--Even criminals are being hit by the economic crisis in Venezuela

The economic crisis in Venezuela is having a devastating impact on people across all levels of society. But there is one silver lining: the number of murders and kidnappings are dropping as the crisis is hitting the country's criminal gangs hard. FRANCE 24’s team in Caracas spoke to several felons about what has changed.  In other news, US government investigators are warning of dangerous levels of overcrowding at migrant centres on the southern border. Shocking photographs, which were published this week, depicted disturbingly packed cells of children with no access to food or showers. In reaction to the horrific images, protesters in New York rallied to voice their outrage.  In sports, the United States is through to FIFA’s World Cup final. But its star player has snubbed an invitation from the White House, sparking a war of words between US President Donald Trump and female football star Megan Rapinoe.


france24--2019-12-24--Argentina agrees on economic measures to end crisis

FILE PHOTO: A man shows Argentine pesos outside a bank in Buenos Aires' financial district, Argentina August 30, 2018. Picture taken August 30, 2018.  Argentina's center-left government approved on Monday a package of emergency measures aimed at lifting the South American country out of its worst economic crisis in years.  Argentina is in a recession caused by a currency collapse that struck 18 months ago.  Poverty levels in the country of 44 million still top 40 percent -- in a country that was among the world's wealthiest in the early 20th century.  The emergency economic package was announced by new President Alberto Fernandez, who took office two weeks ago with a vow to put Argentina back on its feet.  The emergency measures were announced just after 5:00 pm in the government's Official Bulletin -- several hours after it was expected due to some last-minute changes.  The government says the tax hikes will only affect the upper and middle classes.  The bill passed the lower house of Congress on Friday and the Senate on Saturday.  Fernandez has described this crisis as almost as bad as that of 2001 -- when Argentina defaulted on a $100 billion debt.  Its current foreign debt stands at around 90 percent of GDP.  "It is not the same as 2001. But it is similar. At that time, poverty was at 57 percent, today we have 41 percent poor people; then we had a debt default, today we are in virtual default," Fernandez said in an interview with TV program La Cornice on Sunday.  The new law will allow the executive extra powers over finance, tax, administration, pensions, tariffs, energy, health and social issues.  The government's aim is to "attend to the needs of the most vulnerable sectors and to ... spark growth," Social Security Administration chief Alejandro Vanoli said.  The government has vowed to "tackle hunger" and has announced a 10,000 ($160) peso bonus for pensioners and a six-month freeze on public utility prices.  "It's a difficult situation, it's a country that has had to restructure its debt, with a deep fiscal and financial deficit, in a situation of recession and inflation," said Vanoli.  "The state is putting all its efforts into those suffering the most from the social situation."  Market-friendly liberal ex-president Mauricio Macri had planned in September to negotiate a restructuring of debt repayments with the International Monetary Fund, with which he'd agreed a $57 billion bailout loan last year.  Argentina has already received $44 billion of that loan but Fernandez has said that he will refuse the remaining disbursements.  He told reporters on Monday an IMF delegation is due in Argentina "in the next few days."  Argentina's economy is expected to shrink by 3.1 percent in 2019, inflation is hovering around 55 percent and unemployment is rising to 10.5 percent.  "That's what we inherited. We can't face up to it and pay the obligations that we've been landed with," Fernandez said on Sunday, as he made comparisons with the 2001 crisis.  "We had massive unemployment, we also have that now. What we didn't have (then) is inflation (but) now we have it."  Economist Claudio Loser of the Washington-based Centennial Group says Fernandez wants to "make it clear to creditors that they're going to have to negotiate a restructuring with Argentina."  "He's referring to a virtual default to dramatize the situation and show that Macri left him a huge problem."  On Friday, Argentina unilaterally postponed a $9 billion maturities payment until August, a move that saw rating agencies Fitch and S&P downgrade its credit rating.  On Monday, though, Fitch restored Argentina's rating to "CC" from "restricted default" but warned of "a high probability of another default of some kind."  "We're in a huge freefall ... in two years, Argentina has massively increased its debt," said Fernandez.  Argentina owes $335 billion, just over 90 percent of its gross domestic product.  That figure was a little over 50 percent in 2016, soon after Macri came to power.  One of Argentina's main problems is its people prefer to hold dollars rather than pesos, meaning they try to sell their local currency and often keep their dollars in foreign bank accounts.  "Argentina has no more dollars. Macri lost $100 billion. Argentina needs dollars to come back in," said Fernandez, who has maintained the monthly $200 limit of buying foreign currency imposed by Macri last August.  "Dollars are scarce, as there aren't any, they have to be expensive" to buy, he said.


globalresearch--2019-01-31--Economic Warfare against Venezuela Illegal US Sanctions Causing Economic and Humanitarian Crisis

“Economic Warfare” against Venezuela. Illegal US Sanctions Causing Economic and Humanitarian Crisis according to Former UN Rapporteur

A former United Nations rapporteur has criticised the US for engaging in “economic warfare” against Venezuela which he claimed was the real reason for the economic and humanitarian crisis facing the country.  Alfred de Zayas, who last year became the first UN rapporteur to visit Venezuela for 21 years, also suggested in his recently published UN report, that US sanctions on the country are illegal and could amount to “crimes against humanity” under international law.  Mr De Zayas, an American lawyer, writer, historian and former secretary of the UN Human Rights Council (HRC), presented his Venezuela report to the HRC in September.  In the report, which can be read in full here, Mr De Zayas recommended, among other actions, that the International Criminal Court investigate economic sanctions against Venezuela as possible crimes against humanity under Article 7 of the Rome Statute.  In the report conclusions Mr De Zayas, who is an expert in the fields of human rights and international law, went on to say the solution to the Venezuelan crisis lay “in good faith negotiations between the Government and the opposition, an end to the economic war, and the lifting of sanctions.”  The US imposed sanctions against Venezuela began in 2015 under President Barack Obama and have intensified under Donald Trump.  US sanctions against Venezuela prohibit dealing in currencies and stop US-based companies or people from buying and selling new debt issued by the state-run oil body, PDVSA or the government.  The US Department of State’s sanctions and justifications can be read here  In his report Mr De Zayas said modern-day economic sanctions and blockades are comparable with medieval sieges of towns.  “Twenty-first century sanctions attempt to bring not just a town, but sovereign countries to their knees.”  Since 2015 around 1.9m people have fled the country and inflation has reached 60,324%.  Speaking to The Independent yesterday Mr de Zayas also suggested his research into the causes of the country’s economic crisis has so far largely been ignored.  Mr de Zayas went on to suggest that sanctions are part of a US effort to overthrow the Venezuelan government and instal a friendlier regime.  Venezuela has the largest oil reserves in the world and other abundant natural resources including gold, bauxite and coltan.  In his report, Mr de Zayas expressed concern that those calling the situation a “humanitarian crisis” are being “weaponised” to discredit the government and make violent overthrow more “palatable”.  Amnesty, for example, have said the Maduro government is responsible for “the worst human rights crisis in the country’s history,”  “There is nothing more undemocratic than a coup d’état and nothing more corrosive to the rule of law and to international stability when foreign governments meddle in the internal affairs of other states,” he told The Independent. “Only the Venezuelans have a right to decide, not the United States, not the United Kingdom … What is urgent is to help the Venezuelan people through international solidarity – genuine humanitarian aid and a lifting of the financial blockade so that Venezuela can buy and sell like any other country in the world – the problems can be solved with good faith and common sense.”  Mr De Zayas is one of 70 signatories of an open letter, along with with Noam Chomsky and over 70 other academics and experts, who have condemned what they described as a US-backed coup attempt against the Venezuelan government.  Note to readers: please click the share buttons above. Forward this article to your email lists. Crosspost on your blog site, internet forums. etc.


globalresearch--2019-02-01--Dishonesty Omissions and Lies in Reporting on the Venezuelan Economic Crisis

Dishonesty, Omissions and Lies in Reporting on the Venezuelan Economic Crisis

Since 2015 Venezuela has endured gruesome economic hardships. Inflation rates have spiraled out of control, and the public is facing a recession that is tearing the country apart. Now, Venezuelans not only face economic turmoil, but also direct military aggression. A sane response of anyone who wishes to help Venezuelans through these troubles is to try to understand why this is happening.  Unfortunately, not all opinion pieces and news articles are honest in their approach. In fact, most media outlets seem to regurgitate the same poor and factually erroneous narratives, leaving the public ill-informed. It is necessary to address some common falsehoods that have been circulating concerning the economic situation in Venezuela and to highlight important facts that have largely been omitted from the common narrative.  Venezuela’s economic problems did not start with the Bolivarian revolution  One example of dishonest narratives in the pages of the Western media is that Venezuela’s economic problems are caused by the policies Hugo Chavez and Nicolas Maduro. These men are depicted as despots who have ruined a formerly healthy economy and as the culprits of Venezuela’s current crises. Latent in such narratives is the sometimes-unuttered, sometimes yelled, assumption that the Venezuelan economy was in good shape prior to the public election of Chavez in 1998. This is certainly not true.  Venezuela economic crisis started more than 35 years ago.  From 1983 to 1998 real income fell by 14 percent, in a society that was already extremely corrupt and unequal (Corrales, 1999).According to data from the Inter-American Development Bank, 68 percent of Venezuelans lived below the poverty line in 1998. That same year the unemployment rate was 11.2 percent, and the inflation rate was 35.8 percent. This was a year before Chavez took office as president and before any economic sanctions and pressures from the West started.  After Chavez was elected president the economy strengthened considerably for three years, despite country being hit by massive flooding and landslides in December 1999. The inflation rate fell to 12.5% in 2001 and the poverty rate was successfully lowered to 39% (Weisbrot, 2008). The Bolivarian economic policies followed by the Chavez government were lifting Venezuelans out of poverty when Venezuela fortunately not being targeted for regime change.  What did cause the first downturn of Venezuela’s economy was not its progressive policies, nor Chavez’s alleged despotism, but a major attempt at a CIA assisted military coup d’état in 2002 and a subsequent violent shutdown of the country’s oil industry.  That coup left the country in turmoil despite being unsuccessful.Prior to 2003, the government did not exert control over the oil industry. The oil industry shut-down in 2002-2003 was orchestrated by the “Coordina Democrática”, an umbrella group of political parties, business federations and right-wing unions that pursued to overthrow the government by non-electoral means.We shall examine that coup attempt in more detail later, but we must note that this overt policy of the Venezuelan right-wing and its supporters in the US was conducted in a climate of increasingly positive standards of living, especially for the poor.  Unfortunately, the failure of that coup attempt was not the end, but only the beginning of attempts to force Venezuela to steer from its policies. From that point to the present, Venezuela’s progressive policies were targeted by ever more sinister means and attempts at un-democratic takeover.  A recession followed the coup in 2002 that lasted for two years. But the country bounced back and in 2005, the Venezuelan economy grew by 9,4%, the highest in Latin America. Inflation rates lowered to 15.3% (Wilpert, 2005). In 2012, Venezuela was the most equal society in Latin America in terms of wealth distribution (BBC, 2012). According the CNN, “In 2011, the Gini coefficient — which measures income inequality –was .39, down from nearly .50 in 1998, according to the CIA Factbook. That is, equality in Venezuela was better than in the US and only behind Canada in the Western Hemisphere”. (Voigt, 2013). Thus, despite real and aggressive attempts at sabotage, the Chavéz government managed to put into place policies that aided the poor and, at the same time, strengthened the economy.  A common theme in current news stories regarding Venezuela’s crisis is that its cause can be found solely in the “economic mismanagement, corruption and political oppression” of Chavéz and Maduro (Laya, 2019). Such claims are supported with examples of the “Dutch syndrome”, where a country becomes to reliant on one commodity (Venezuela is very reliant on oil), on overspending on social programs, heavy lending and corruption. These claims might be open for reasonable debate if Venezuela had in any real sense been allowed to operate in peace. But nothing could be further from the truth.  A factor too seldom included in the common narrative on Venezuela’s economic crash is the apparently intentional meddling of oil prices by Saudi Arabia and its allies that apparently aimed at hurting Iran (Cooper, 2014) as well as other oil dependent countries such as Venezuela and Russia. Starting in 2014, Saudi Arabia started to flood the market with cheap oil. Despite this hurting even Saudi Arabia itself, this overproduction of oil had drastic effects. The price of oil went down from $110 per barrel to $28 in two years (Puko, 2016). This plummeting of oil prices had immediate negative effects on the Venezuelan state budget, as well as on other oil dependent countries, leaving Venezuela cash-starved. It is true that the country was indeed over dependent on one resource, and it has a serious corruption problem. But it is hard to see how the government of Venezuela could have managed to deal with such a huge blow to its economy amidst serious sanctions and economic sabotage that already plagued the country. A right-wing government would not have fared better in these circumstances. Instead of showing understanding to its problems, this crisis was used to denounce the Maduro government and to promote propaganda that increased the possibility of violent foreign and internal aggression.  Economic sanctions directed by the most powerful military- and economic powers can cripple any economy. Even relatively mild sanctions can have serious consequences for the target economy. It has been found that the imposition of economic sanctions decreases the target state’s real per capita GDP growth rate by 25 to 30 percentage points on average with effects lasting for at least 10 years. More serious sanctions produce more serious effects (Neuenkirch, 2015).Furthermore, economic sanctions have been found to seriously worsen economic inequality and widen the poverty gap in target countries, in effect hitting the poorest people in the target countries hardest (Afersorgbor & Mahadevan, 2016; Mulder, 2018).  For example, in 1993, Serbia was singled out for economic sanctions that lasted until 2001. The sanctions had devastating effects on the public, making more than half the population of the country poor, unemployed, or displaced as refugees (Garfield, R. 2003). In Iraq, the economic sanctions imposed on the country in August 1990 and extended following the 1991 Persian Gulf War, lead to a decrease in GDP from $38 billion in 1989 to $10.8 billion in 1996. Per capita GDP declined over 75%, leading to devastating effects for the public. According to a report by Bossuyt (2000), the transportation, power and communication infrastructure were not rebuilt during the period, the industrial sector was in shambles, and agricultural production suffered greatly due to the sanctions. The “purchasing power of an Iraqi salary by the mid-1990s was about 5 per cent of its value prior to 1990 …” and, as the United Nations Development Program field office recognized, “the country has experienced a shift from relative affluence to massive poverty …The previous advances in education and literacy have been completely reversed over the past 10 years” (ibid).  As should be obvious, economic sanctions have horrible effects on the economy of the targeted nations and their inhabitants. How strange it is that opinion pieces, editorials and news segments tend to completely ignore that the overbearing barrage of economic sanctions directed against Venezuela might be a factor in the current crisis in its economy. Journalists that fail to address this cannot and should not be taken seriously.  The crash in Venezuela is directly linked to economic sanctions  In 2006, the first economic sanctions against Venezuela were put in place by Venezuela’s most important trading partner and,apparently, its worst enemy, the U.S. At first, these were directed against single individuals, but gradually these have evolved into hard and serious sanctions on all Venezuela.  The US House of Representatives passed the Venezuelan Human Rights and Democracy Protection Act (H.R. 4587; 113th Congress) on May 28, 2014. It applied economic sanctions against Venezuelan officials who were alleged to be involved in the mistreatment of protestors during the 2014 Venezuelan protests.  In December that year, the U.S. Congress passed S. 2142 (Venezuela Defense of Human Rights and Civil Society Act of 2014). The bill directed the President to impose sanctions against “any person, including any current or former official for the government of Venezuela or person acting on behalf of that government” who the US Congress would deem as responsible for human rights abuses or “knowingly materially assisted, sponsored or provided significant financial, material or technological support for, or goods or services in support of, the commission of such acts” (Poling et al., 2014). When the US Congress passed the bill, U.S. businesses raised concerns that the legislation could provide an incremental step towards broader sanctions against the Venezuelan economy, including the country’s oil industry despite being introduced as targeting individuals (ibid).  On March 9, 2015, the Obama Administration signed and issued a Presidential order. In it, Venezuela was declared a threat to US national security and sanctions were ordered against Venezuelan officials. How Venezuela was a threat to the United States was not explained. The order was strongly denounced by the Community of Latin American and Caribbean Sates for its “unilateral coercive measures against International Law” (Tejas, 2015). Ernesto Samper, the Secretary-General of the Union of South American Nations, deemed the order as an attempt to disrupt the democratic process in Venezuela.  The Trump Administration greatly escalated the economic pressures started by the Obama Administration. These included financial sanctions against the Venezuelan government and aggressive measures against the oil industry. The additional sanctions on Venezuela that were imposed with Executive Order 13808 on August 24, 2017 were nothing less than an act of aggression against the Venezuelan economy and its people. It specifically bars revenues from Venezuela’s state oil company to paid from the US, bars the Venezuelan government from selling bonds, and even bars the state from receiving loans. These sanctions were designed to prevent Venezuela’s own money from entering Venezuela.Note that all the Venezuelan governments’ outstanding foreign currency bonds are governed under New York State law,and one of Venezuela’s major government assets, the state oil company, is based in Texas. So barring all profit flow from that company is crippling for Venezuela (Ellner, 2019).  The US economic sanctions have indeed had devastating effects on the Venezuelan economy. Francisco Rodriguez, Venezuelan economist and a long-time critic of the Venezuelan government, presented clear evidence that since 2015, and especially after the sanctions imposed by the Trump administration in 2017, Venezuela’s oil production dropped much faster than had been predicted. According to Rodriguez, after the sanctions made it illegal for the Venezuelan government to obtain financing from the US, Venezuelan production fell by 37%, much more than the 6-13% decline that had been predicted. Rodriguez calculated that the difference in total revenue between the “sanctions” and “no sanctions” case over one year was about $6 billion. That sum is 133 times larger than what the UNHCR has appealed for in aid for Venezuelan migrants. Rodríguez summed up the main cause of Venezuela’s economic implosion as follows: “The fall in oil production began when oil prices plummeted in early 2016 but intensified when the industry lost access to credit markets in 2017” (Rodríguez, 2018).  The US issued yet another economic sanction on Venezuela on January 28 this year. This time specifically focusing on “persons operating in Venezuela’s oil sector”, especially on Petroleos de Venezuela (PDVSA). The press release announcing these new economic sanctions even specify that the US will “continue to take concrete and forceful actions against those who oppose the peaceful restoration of democracy in Venezuela” adding that the US “stands with interim President Juan Guaido”, an un-elected man (US dep. of State, 2019). This means that not only is the US arbitrarily sanctioning another country’s state assets and intentionally hurting its economy, it is directly involving itself in the internal affairs on another country, which is illegal under international law.  The severe attacks on Venezuela´s economy have been followed by US allies. Recently, the Bank of England refused to return $1.2 billion in gold reserves after lobbying from National Security Adviser John Bolton and Secretary of State Michael Pompeo (Laya, Bronner and Ross, 2019).  Indeed, these sanctions have been described “illegal and could amount to ‘crimes against humanity’ under international law” by Alfred de Zayas, former special rapporteur to the UN. According to de Zayas, the US is engaging in “economic warfare” against Venezuela that results in hurting the economy and killing Venezuelans (Selby-Green, 2019). As the sanctions seem to be means to starve the population of Venezuela and deliberately cripple the economy in order to achieve political aims, these acts can rightly be described as terrorism.  It is very doubtful that any economy would survive such violent sanctions. Unfortunately, the sanctions are only one part of the extensive sabotage that have been done towards the Venezuelan economy and society. An even bigger threat to Venezuela’s economy than US lead sanctions has been the conspicuous acts of the internal enemies of Venezuela’s government and its progressive Bolivarian policies.  Ever since 1999, the Venezuelan government has been under constant attacks from the very rich and powerful elite of business oligarchs who hate Bolivarian politics with a passion. These oligarchs have been supported by the US, as well as far right groups in the hemisphere, not least in Colombia.  The first serious coup attempt took place in April 2002. It started with a general strike called by unions for the state oil company, PDVSA, which was followed by protest marches through Caracas. As protests neared the Miraflores palace, a massacre took place where 16 people were killed, 7 policemen and 9 civilians. Within hours, the military high command had arrested Chavéz and put in his place Pedro Carmona, the head of Venezuela’s largest business association. This presidency lasted 48 hours. In that short period Carmona, dissolved Congress and cancelled the newly approved constitution of Venezuela. Scores of people were imprisoned, and a military state was put in place. However, thousands of demonstrators and military personnel opposed to Carmona’s rule managed to reverse the coup. According to Bellos (2002),the Bush administration “was left with some eggs on its face. Unlike Latin American countries, which voiced concern that the coup had forsaken democratic principles, the US showed no remorse at Mr. Chavez’s removal”.  The narrative of exactly what happened is still very partisan, but the coup attempt had been organized for at least 9 months by a group of businessmen, military officers and various opposition figures in Venezuela. Keeping in mind how long this coup attempt was planned, it is hard to take seriously claims that the demonstrations and the massacre that occurred in the early hours of April 11, followed by the arrest of Chavez and other political figures by elements of the Venezuelan military were unrelated to these plans. Private media outlets reported with dishonesty about what happened that day (see Wilpert, G. 2009) and were therefore complicit in the coup attempt.  Although the extent to which institutions in the US were involved in the coup attempt, US officials knew it was going to take place. In 2004, declassified intelligence documents showed that the Central Intelligence Agency was aware that dissident military officers and opposition figures in Venezuela were planning a coup against President Hugo Chávez in 2002, well in advance. Parts of the document reads as followed: “disgruntled senior officers and a group of radical junior officers are stepping up efforts to organize a coup against President Chávez, possibly as early as this month…” It stated that Chávez and 10 senior officers were targeted for arrest and the plotters would try to “exploit unrest stemming from opposition demonstrations slated for later this month” (Forero, 2004).  In November 2013, a document titled “Plan Estratégico Venezolano” or “Stratetic Venezuelan Plan” that was written in June that same year, surfaced after suits from attorney Eva Golinger (2013). The document highlighted a plan by representatives of the United States, Colombia and the oligarchs in Venezuela to undermine the economy of Venezuela as part of removing Maduro. The document was prepared by the “Democratic Internationalism Foundations” which is headed by ex-Colombian president Alvaro Uribe, and also the “First Colombia Think Tank” and the US Consulting firm, FTI Consulting.  The document is a very sinister read. It outlines a strategic plan to destabilize Venezuela by various means. For example, it details a strategy to sabotage the electrical system in Venezuela, “maintain and increase the sabotages that affect public services” and “increase problems with supply of basic consumer products”. For propaganda, the authors propose “perfecting the confrontational discourse of [opposition candidate] Henrique Capriles” and generate “emotion with short messages that reach the largest quantity of people and emphasize social problems, provoking social discontent”. More seriously, the authors propose to create “situations of crisis in the streets that will facilitate US intervention, as well as NATO forces, with the help of the Colombian government” adding “whenever possible, the violence should result in deaths or injury”. The document recommends “a military insurrection” against Venezuela with “contacting active military groups and those in retirement to amplify the campaign to discredit the government inside the Armed forces… It’s vital to prepare military forces so that during a scenario of crisis and social conflict, they lead an insurrection against the government, or at least support a foreign intervention or civil uprising” (Golinger, 2013).  The plan was developed during a meeting between the three organizations as well as leaders of the Venezuelan opposition, including Maria Corina Machado, Julio Borges and Ramon Guillermo Avelado, expert in psychological operations J.J. Rendon and the Director of the US Agency for International Development (USAID) for Latin America, Mark Feierstein.  One must ask, how many such plans have been put in place since, but not exposed? The actions and dialogue of these oligarch show just how low they are ready to sink in order to oust a democratically elected government.  The opposition in Venezuela has been very violent and showed complete disregard for democratic principles. For example, in 2014 Venezuela was hit by a big wave of demonstrations following the outcome of the 2013 presidential elections, where Nicolas Maduro won by a small margin, 50.6%. During this time of unrest opposition political figures such as Leopoldo Lopéz, who had also been involved in the 2002 coup attempt, and María Corina Machado, launched a campaign to remove Maduro from office. The plan was named “La Salida” (the exit) and had the intent of having Maduro resign through protests. Machado stated publicly that “we must create chaos in the streets” (Carasik, 2014). At least 36 people died in the unrest following this statement. The opposition predictably blamed the government for these deaths. But considering that the deaths included several security forces and pro-government civilians and others were apparently non-affiliated, that statement must be contested (see Hart, 2014).  Recently, an organization called “Democratic Unity Roundtable” seems to have been coordinating acts of violence against those who are identified as pro-Chavista (Joubert-Ceci, 2017).This group was formed in 2008 to unify opposition Chavéz and can be viewed as the successor of the CoordinadoraDemocrática. The violent protests centered around a call by Maduro to a vote on a Constituent Assembly to rewrite the constitution. Despite having called for the Assembly themselves, the opposition refused to enter dialogue, demanding the presence of the Vatican. But even Pope Francis announced that the dialogue had failed because the opposition would not participate (Nelson, 2017). Instead, the opposition rallied anti-Maduro demonstrators to start a spree of violence that left at least 100 dead (ibid). According to the Canadian Peace Congress of 2017, “if an attempt at internal counter-revolution fails, plans are being put in place for direct military intervention by the United States, possibly under the cover of the Organization of American States (OAS)” (ibid). It is at least clear that the opposition is thoroughly un-democratic in their planning’s and actions but are still supported by Western powers.  To report that the economy of Venezuela is in turmoil solely because of Maduros “socialistic” policies, while ignoring the very serious consequences of economic sanctions, oil price manipulations, and internal sabotage is deliberate denial of facts, is propagandistic journalism, is absurd. Informed discussions about the effects and costs of progressive social programsmay be interesting and useful theoretical exercises.But as distortions and denials of historic facts, emotional attacks on Venezuela’s government should be seen as the propaganda, designed to manipulate American, Canadian and European populations into supporting another violent regime change in another oil-producing nation.  Note to readers: please click the share buttons above. Forward this article to your email lists. Crosspost on your blog site, internet forums. etc.  Jón Karl Stefánsson is an administrator for services directed to mentally disabled individuals from Reykjavík, Iceland. He studied computer science and psychology in the University of Iceland and received his MA in psychology in the University of Tromso, Norway with focus on biased language in news discourse. Since 2003 he has written several articles independently in mostly Icelandic newspapers and independent news outlets and has focused his writing on biased language, propaganda and its effects on society.  Afersorgbor, S. K. & Mahadevan, R. 2016. The impact of economic sanctions on income inequality of target states. World Development, 83, p. 1-11.  BBC. (August 22., 2012). UN study says wealth gap in Latin America increases. Available at https://www.bbc.co.uk/news/world-latin-america-19339636.  Bellos, A. (April 15., 2002). Chavez rises from very peculiar coup. The Guardian. Available at https://www.theguardian.com/world/2002/apr/15/venezuela.alexbellos  Bossuyt, M. (June 21, 2000). The adverse consequences of economic sanctions. Global Policy Forum; Economic and Social Council. Available at https://www.globalpolicy.org/global-taxes/42501-the-adverse-consequences-of-economic-sanctions.html#case-a  Carasik, L. Obama continues Bush’s policies in Venezuela. Al Jazeera. 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globalresearch--2019-05-31--Washingtons Silent Weapon for Not-so-quiet Wars A World Full of Dollars A 2019 Global Economic

Washington’s Silent Weapon for Not-so-quiet Wars. “A World Full of Dollars”, A 2019 Global Economic Crisis

Today by far the deadliest weapon of mass destruction in Washington’s arsenal lies not with the Pentagon or its traditional killing machines. It’s de facto a silent weapon: the ability of Washington to control the global supply of money, of dollars, through actions of the privately-owned Federal Reserve in coordination with the US Treasury and select Wall Street financial groups. Developed over a period of decades since the decoupling of the dollar from gold by Nixon in August, 1971, today control of the dollar is a financial weapon that few if any rival nations are prepared to withstand, at least not yet.  Ten years ago, in September, 2008, US Treasury Secretary, former Wall Street banker Henry Paulson, deliberately pulled the plug on the global dollar system by allowing the mid-sized Wall Street investment bank, Lehman Bros go under. At that point, with aid of the infinite money-creating resources of the Fed known as Quantitative Easing, the half-dozen top banks of Wall Street, including Paulson’s own Goldman Sachs, were rescued from a debacle their exotic securitized finance created. The Fed also acted to give unprecedented hundreds of billions of US dollar credit lines to EU central banks to avert a dollar shortage that would clearly have brought the entire global financial architecture crashing down. At the time six Eurozone banks had dollar liabilities in excess of 100% of their country GDP.  Since that time a decade ago, the supply of cheap dollars to the global financial system has risen to unprecedented levels. The Institute for International Finance in Washington estimates the debt of households, governments, corporations and the financial sector in the 30 largest emerging markets rose to 211% of gross domestic product at the start of this year. It was 143% at the end of 2008.  Further data from the Washington IIF indicate the scale of a debt trap that is only in early stages of detonating across the less-advanced economies from Latin America to Turkey to Asia. Excluding China, emerging market total debt, in all currencies including domestic, has nearly doubled from 15 trillion dollars in 2007 to 27 trillion dollars at end of 2017. China debt in the same time went from 6 trillion dollars to 36 trillion dollars according to IIF. For the group of Emerging Market countries, their debts denominated in US dollars has grown to some 6.4 trillion dollars from 2.8 trillion dollars in 2007. Turkish companies now owe almost 300 billion dollars in foreign-denominated debt, over half its GDP, most in dollars. Emerging markets preferred the dollar for many reasons.  As long as those emerging economies were growing, earning export dollars at a rising rate, the debt was manageable. Now all that’s beginning to change. The agent of that change is the world’s most political central bank, the US Federal Reserve, whose new chairman, Jerome Powell, is a former partner of the spooky Carlyle Group. Arguing that the domestic US economy is strong enough that they can return US dollar interest rates to “normal,” the Fed has begun a titanic shift in dollar liquidity to the world economy. Powell and the Fed know very well what they are doing. They are ratcheting up the dollar screws to precipitate a major new economic crisis across the emerging world, most especially from key Eurasian economies such as Iran, Turkey, Russia and China.  Despite all efforts of Russia, China, Iran and other countries to shift away from US dollar dependence for international trade and finance, the dollar remains still unchallenged as world central bank reserve currency, some 63% of all BIS central bank reserves. Moreover almost 88% of daily foreign currency trades are in US dollars. Most all oil trade, gold and commodity trades are denominated in dollars. Since the Greek crisis in 2011 the Euro has not been a serious rival for reserve currency hegemony. Its share in reserves are about 20% today.  Since the 2008 financial crisis the dollar and the importance of the Fed have expanded to unprecedented levels. This is only now beginning to be appreciated as the world begins to feel for the first time since 2008 real dollar shortages, meaning a much higher cost to borrow more dollars to refinance old dollar debt. The peak for total emerging market dollar debt falling due comes in 2019, with more than 1.3 trillion dollars maturing.  Here comes the trap. The Fed is not only hinting it will raise US Fed funds rates more aggressively later this year into next. It is also reducing the amount of US Treasury debt it bought after the 2008 crisis, so-called QT or Quantitative Tightening.  After 2008 the Fed began what was called Quantitative Easing. The Fedbought a staggering sum of bonds from the banks up to a peak of 4.5 trillion dollars from only 900 billion dollars at the start of the crisis. Now the Fed announces it plans to reduce that by at least one third in coming months.  The result of QE was that the major banks behind the 2008 financial crisis were flooded with liquidity from the Fed and interest rates plunged to zero. That bank liquidity was in turn invested in any part of the world offering higher returns as US bonds paid near zero interest. It went into junk bonds in the shale oil sector, into a new US housing mini boom. Most markedly the liquid dollars went into higher-risk emerging markets like Turkey, Brazil, Argentina, Indonesia, India. Dollars flooded into China where the economy was booming. And the dollars poured into Russia before US sanctions earlier this year began to put a chill on foreign investors.  Now the Fed has begun QT – Quantitative Tightening – the reverse of QE. Late 2017 the Fed slowly began to shrink its bond holdings which reduces dollar liquidity in the banking system. In late 2014 the Fed already stopped buying new bonds from the market. The reduction of the bond holdings of the Fed in turn pushed interest rates higher. Until this summer, it was all “gently, gently.” Then the US President launched a global targeted trade war offensive, creating huge uncertainty in China, Latin America, Turkey and beyond, and new economic sanctions on Russia and Iran.  Today the Fed is allowing 40 billion dollars of its Treasury and corporate bonds mature without replacing them, rising to 50 billion dollars monthly later this year. That takes those dollars out of the banking system. In addition, to aggravate what is quickly becoming a full-blown dollar shortage, the Trump tax cut law is adding hundreds of billions to the deficit that the US Treasury will have to finance by issuing new bond debt. As the supply of US Treasury debt rises, the Treasury will be forced to pay higher interest to sell those bonds. Higher US interest rates already are acting as a magnet to suck dollars back into the US from around the world.  Adding to the global tightening, under pressure from the dominance of the Fed and the dollar, the Bank of Japan and the European Central Bank have been forced to announce they would no longer buy bonds in their respective QE actions. Since March, the world has de facto been in the new era of QT.  From here it looks to get dramatic unless the Federal Reserve does an about face and resumes with a new QE liquidity operation to avoid a global systemic crisis. At this juncture that looks unlikely. Today the world central banks more than even before 2008, dance to the tune played by the Federal Reserve. As Henry Kissinger allegedly stated in the 1970’s “If you control the money, you control the world.”  While so far the impact of dollar contraction has been gradual, it’s about to get dramatic. The combined G-3 central banks’ balance sheet increased by a mere 76 billion dollars in the first half of 2018, compared with a 703 billion dollars rise in the prior six months – almost half a trillion of dollars gone from the global lending pool. Bloomberg estimates that net asset purchases by the three main central banks will fall to zero by the end of this year, from close to 100 billion dollars a month at the end of 2017. Annually that translates into an equivalent 1.2 trillion dollars less of dollar liquidity in 2019 in the world.  The Turkish Lira has dropped by half since early this year in relation to the US dollar. That means Turkish large construction companies and others who were able to borrow “cheap” dollars, now must find double the sum of US dollars to service those debts.The debt is not state Turkish debt for the most part but private corporate borrowing. Turkish companies owe an estimated 300 billion dollars in foreign currency debt, most dollars, almost half the entire GDP of the country. That dollar liquidity has kept the Turkish economy growing since the 2008 US financial crisis. Not only the Turkish economy…Asian countries from Pakistan to South Korea, minus China, have borrowed an estimated 2.1 trillion dollars.  As long as the dollar depreciated against those currencies and the Fed kept interest rates low – as from 2008 – 2015, there was little problem. Now that’s all changing and dramatically so. The dollar is rising strongly against all other currencies, 7% this year. Combined with this, Washington is deliberately initiating trade wars, political provocations, unilateral breaking of the Iran treaty, new sanctions on Russia, Iran, North Korea, Venezuela, and unprecedented provocations against China.  Trump’s trade wars, ironically, have led to a “flight to safety” out of emerging countries like Turkey or China to the US markets, most notably the stock market.  The Fed is weaponizing the US dollar and the preconditions are in many ways similar to that during the 1997 Asia crisis. Then all it needed was a concerted US hedge fund attack on the weakest Asian Tier economy, the Thai Baht to trigger collapse across most of South Asia to South Korea and even Hong Kong. Today the trigger is Trump and his bellicose tweets against Erdogan.  The US Trump trade wars, political sanctions and new tax laws, in the context of the clear Fed strategy of dollar tightening, provide the backdrop to wage a dollar war against key political opponents globally without ever having to declare war.  All it took was a series of trade provocations against the huge China economy, political provocations against the Turkish government, new groundless sanctions against Russia, and banks from Paris to Milan to Frankfurt to New York and anyone else with dollar loans to higher risk emerging markets began the rush for the exit. The Lira collapses as a result of near panic selling, or the Irancurrency crisis, the fall of the Russian ruble. All reflects the beginning, as likely does the decline in the China Renminbi, of a global dollar shortage.  If Washington succeeds on November 4 in cutting all Iran oil exports, world (dollar) oil prices could soar above 100 dollars, adding dramatically to the developing world dollar shortage. This is war by other means. The Fed dollar strategy is acting now as a “silent weapon” for not so quiet wars. If it continues it could deal a serious setback to the growing independence of Eurasian countries around the China New Silk Road and the Russia-China-Iran alternative to the dollar system. The role of the dollar as lead global reserve currency and the ability of the Federal Reserve to control it, is a weapon of massive destruction and a strategic pillar of American superpower control. Are the nations of Eurasia or even the ECB ready to deal effectively?  F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook” where this article was originally published. He is a frequent contributor to Global Research.    Featured image is from the author.  The Great Depression of the XXI Century  Each of the authors in this timely collection digs beneath the gilded surface to reveal a complex web of deceit and media distortion which serves to conceal the workings of the global economic system and its devastating impacts on people’s lives.  In all major regions of the world, the economic recession is deep-seated, resulting in mass unemployment, the collapse of state social programs and the impoverishment of millions of people. The meltdown of financial markets was the result of  institutionalized fraud and financial manipulation.  The economic crisis is accompanied by a worldwide process of militarization, a “war without borders” led by the U.S. and its NATO allies.    This book takes the reader through the corridors of the Federal Reserve, into the plush corporate boardrooms on Wall Street where far-reaching financial transactions are routinely undertaken.  “This important collection offers the reader a most comprehensive analysis of the various facets – especially the financial, social and military ramific ations – from an outstanding list of world-class social thinkers.”    -Mario Seccareccia, Professor of Economics, University of Ottawa  “In-depth investigations of the inner workings of the plutocracy in crisis, presented by some of our best politico-economic analysts. This book should help put to rest the hallucinations of ‘free market’ ideology.”   -Michael Parenti, author of God and His Demons and Contrary Notions  “Provides a very readable exposé of a global economic system, manipulated by a handful of extremely powerful economic actors for their own benefit, to enrich a few at the expense of an ever-growing majority.”   -David Ray Griffin, author of The New Pearl Harbor Revisited