Saturday, February 13, 2010

A Greek tragedy

A few observations about the toppling of Greece's sovereign funds. One, it has exposed a systemic weakness of the European Union [EU]. Its constitution has no mechanism to treat a member's default, thereby putting in peril the single EU currency the Euro.
Two, the role of the US banking house Goldman Sachs in advising in an Enron manoeuvre, hidding the growing Greek debt as long as 5 years at least.
Three, the scrambling of Germany and France to strong arm the newly elected Socialist government in Athens, to accept draconian measures, before bailing out Greece.
Four, the crisis has already drawn the social forces more tightly to a point they might explode, by sharpening extremes on the right and strengthening the small, but effective Greek Communist party. Already an odour of civil war prevades Greece. The open attack on foreigners and illegal immigrants encouraged the not so latent fascistic right, by playing the anti foreign card, and accusing the immigrants of taking Greek jobs from Greeks. The implication is that 'they' are feeding off the fat our Hellenic land whilst we the Greeks are starving. Eyewash. The waves of emigration fill those meanial jobs which the Greeks themselves won't do.
On the left, the strong arming of the Germans and the French whose banks have the lion share of at least US$100 bn in debt, will impoverish Greece. Greece's debt makes up close to 13 per cent of its GDP, the big sticks of the EU are demanding that it be brought down to at least 3 per cent in 3 to 4 years, to meet EU rules.
Translation: a break to any economic activity in Greece. A slash in salaries from the bottom to the top, yes, including CEO's; an attack on education and a comprehensive health systems; impoverishment of the average Greek citizen; a tightening of the tax laws in a country which is notorious for tax evasion, and where yacht owners outnumber those who declare falsely their wealth.
Greece has become a tinderbox which can ignite a 'prairie fire' in the world's hugest economy, the EU, and lead to dire consequences politically, economically, and socially.
Greece is the EU's weakest link!

Tuesday, February 9, 2010

After hurricane Goldstone, Israel is planning to go on the charm offense

Israel pooh poohed the UN commissioned Goldstone Report on its preemptive war in Gaza, pompously called 'Operation Cast Lead'. It had the gaggle of trained lapdogs in the US Congress and even in the White House, to denounce it as 'biased', and unworthy of consideration. Jerusalem turned down the opportunity to cooperate with the eminent South African and Jewish jurist, Richard Goldstone, as he patiently gathered evidence for his report to the United Nations.
In fact, ruling circles in Israel dismissed Goldstone as a 'self hating Jew', even though the judge is a supporter of Israel.
Israel misjudged the breath and depth of the global effect which the Goldstone Report would have. In brief, it was a time bomb ready to explode, and it did in Israel's face. It seriously damaged the 60 years old crafted and manicured image of the 'Jewish' state, with 20 per cent Arab citizenry, and a state which had two national languages--Hebrew and Arabic.
'Operation Cast Lead' badly tarnished Israel's international glow, wot, with the price civilian Gazans payed with loss of life and limb and the high numbered of injured; they saw the Strip's infrastructure--schools, hospitals, roads, factories, farm land, destroyed before their very eyes. Furthermore, after 22 days of fighting, the continued Israeli blockade lets enough food in...something like 15 per cent of daily nutritional intake, to enter the ringed Gaza Strip, something which David Pelham documented in the 'London Review of Books'. Vindictive hardly describes the animus that Israel has towards a Hamas governed Gaza Strip.
And then Israel's use of white phosphorous and collective punishment against a civilian population against the puny rocket attacks against southern Israeli settlements, pales in comparison to the Bantustan Israel has forced Gaza to become.
Speaking of Bantustan more broadly, the ongoing illegal Israeli settlements in the Palestinian west bank, under 43 years of Israeli colonial occupation, have so eaten away Palestinian territory that what's left is unconnected 'islands' of Palestinians, and hardly land which one can say would make a viable Palestine which more likely than not--short of a miracle or US pressure--will never perhaps see the day. In all, Israel has embaced apartheid as a way of ruling the Palestian population. And this belief that Israel has inherited the mantle of the racist South African government, and all the baggage that goes with that, suddenly has awakened Israel to the crisis of their own making, which the Goldstone report was the straw that broke Jerusalem's camel's back.
To wash its reputation with rose water, Israel is plotting a huge charm offensive, to tart itself up as a sainted, but wrong virgin. A media blitz which it is hoped will significantly tilt world opinion in Israel's favour. The road map remains to be more finely drawn, before being put into execution. This makes one pause to ask, how could the Israeli propaganda machine which has more or less well oiled, yea these 60 years break down? What happened to the 'Shalom' campaign to beef up sagging tourism, wot, with smiling Israelis welcoming one and all, Jew and non Jew, to the land of 'milk and honey'? Potemkin like images masking the brutual suppression of Palestinians, the theft of their land, and the double standards of the 'uebermenchen' Israelis lording it over the 'untermenschen' the Palestinians.
That, too, failed. So it's back to the drawing board to rewrite history or the scenes of the misery and humiliation and the brutality of more than 40 years occupation on the tv screen, the computer, or the cell phone.
No matter how Israel tries, it will fail. The UN Goldstone report has torn the veil of the 'holy of holies', exposing Jerusalem's warts and festering sores. No matter, too, how diligently Israel strives, it will never fully dominate. It has to finally own up to a two state solution, making amends to the Palestinians for 42 years now of harsh colonial rule.
The Israeli government, right wing or centrist or even 'socialist', strive to fulfill the dream of the earliest settlers: a state from the sea to the Jourdan river. Were that to happen, it would spell the death of Zionism, in the same way South Africa's apartheid crash under the weight of its own ideology.

Sunday, February 7, 2010

Pyongyang misses a beat

The DPRK's [Democratic People's Republic of Korea aka North Korea] is backstepping from its demonetarization of the won. The move has proven ill advised but not without warning. An article in a North Korean economic review, under the signature of Kim Jong il's sister, in September, gave warning that monetary reform was coming on close heels.
The Korean Workers' Party and possibly high ranking military had an 'early warning' that change was imminent, to the extent that Pyongyang wanted to swiftly regain control of its money supply, including foreign currency, and with a sharp blow, knock the wind out of loosening of control on the market.
It did not count on limited scenes of riots in the market place, an unreported backlash among the 'core' group that forms the backbone of support of the DPRK, which the reevaluation of the currency hit hard.
As immediately proclaimed, Kim Jong il's government modified the decree, weakening it to what extent outsiders might ever know. And a scape goat was found in the person of Pak Nam gi chief of the finance and planning department of the Workers' party. He was blamed for the sharp increase of food prices in a country which is still suffering from years of bad harvests, and of course, instances of social unrest in a society which boasts of law and orderliness.
We know very little of the inner workings in the DPRK, but one thing, we do know is that decisions are never made by a single authority, collectivism reigns although the 'Dear Leader' can and does modify or overrule them, depending on the occasion.
Rumour has it that after Mr. Pak's disgrace, in the higher echelons of the nomenklatura, some, albeit unnamed, found themselves out of a job, downgraded, or shifted to the provinces, and others, also unnamed, came into favour to stem the fallout of the monetary reform.
GuamDiary has already reported on the Petersen Institute's senior economist Marcus Norland's talk at the New York Korea Society. Dr. Norland hit the right notes on the reform's immediate consequences, on the hardships encurred, and took too task Pyongyang's unwillingness to embrace 'free market reforms' which China and Vietnam had done.
The DPRK is not China, nor is it Vietnam. Furthermore, one thing is crystal clear, the DPRK is got trashing the mechanisms of a planned economy. Still, as even Mr. Norland observed in the provinces of North Korea, thanks to a relaxation of Pyongyang's central control, experimentation in 'liberalising the market' has taken place. More on the order of a cooperative nature than as critics of North Korea would like to describe it, for they almost to a man, see hope only in laissez faire, free market capitalism.
Pyongyang's rude awakening and swift rush to remedy the situation, does indicate that willy nilly, like it or not, market reform continues taking place in the DPRK, no matter what.
It goes without saying that the central government in pursuit of its own interests wants to appropriate it, However, here's the rub, to the outside world, no one really knows of internal debates, the clash of ideas for or against reform, etc. etc.
Nonetheless, this has not stopped economists formed in the old Peoples' Democracies of eastern Europe, who pursued graduate studies in Pyongyang, from writing, as they follow North Korea's political economy, from discerning, even 15 years ago, a slow, gradual evolution in the mechanics of the market in the DPRK.
Western critics take vicarious pleasure in stereotyping North Korean economists or political economy. And yet, Pyongyang is not unaware of 'bourgeois' economics. Remember they have a Swiss funded School of Business in the North Korean capital, which does teach capitalist economics, so on and on.
It is foolhardy to assume, yea presume, that somehow the DPRK is a fossil of another age, and klewless.
The Workers' party is binding its wounds, girding its loins for tomorrow's battle, to direct and lead the economy of the DPRK, in the direction that it sees the best for the country.
For outsiders, the difficulty lies in the opaqueness of the process which lends itself to wishful thinking, wild eyed speculation, and not necessarily to the patient work of reading material from the DPRK itself, and then trying to make good sense of it.

Saturday, February 6, 2010

Butcher Hu Jintao issues orders

Buther Hu Jintao, once Beijing proconsul in Tibet, ordered US president Barack Obama [BHO] not to meet China's nemesis the Dalai Lama.
In late 2009, the silly goose who is president of the US, civilised as he is to the point of correctness, refused to receive the Dalai Lama, in another foreign policy misstep, because BHO was going to meet Butcher Hu on Chinese soil.
BHO had much to talk to the Chinese president about, he didn't want to make unnecessary waves. BHO's talks didn't produce much. The Chinese Communist leaders read him as a fool, thereby hidding behind polite formulae of gossamer weightiness, but yielding nothing of substance on currency reform, Iran, North Korea, so on and on.
Butcher Hu in issuing his tsarist like ukase warning that receiving the Dalai Lama at the White House would damage Sino US relations, shows a side of an arrogant China flexing the growing strength of its economic clout. Capitalist China has become a caricature of its 'socialist' persona, and is exhibiting the monstrous ego that the once dominant British, French, or Dutch paraded when they had the world at their 'command'.
Monster China, now the economic engine hauling the dead weight of the west's economy and cracking the whip to the west's finance capitalists, cannot escape the burdens of capitalism. It is turning imperialist as the beads of sand flow effortlessly in the hourglass of history.
BHO rebuffed Hu. He showed a slight stiffening of his backbone, which gained stronger posture by selling more sophisticated arms to Taiwan, albeit of a more strictly defensive nature. A move calculated to nettle Butcher Hu & co. To add more injury to an inflated China's pride, it upped the import tax on China's good, which sent Beijing crying foul.
Of course Butcher Hu & co. think what's good for its goose is not good for others' ganders. Wrong. Strong as Butcher Hu may think of China, it always has a blind side which it cannot see; an Achilles heel waiting for a spear to poison it.
Butcher Hu & co. view BHO and the US as China's foremost adversary. They will do business with it as long as it profits Beijing. In other words, there is no peace and friendship. Peace there is as long as it benefits China, no more, no less.
Butcher Hu may think the world's China's oyster but he is 'con comme ses pieds', as the French would say. And ain't that the truth!