Zed Books

Greening America

2012-02-20T17:54:00.000Z

The articul was originaly posted on The Peter McManners Sustainability Blog.

‘Environmental policies must be carefully structured and predictable if they are to enhance rather than undermine competitiveness.’

So begins an article in the current edition of Harvard Business Review, ‘Green Rules to Drive Innovation’ by Daniel Esty and Steve Charnovitz. To paraphrase the article, they write about energy and climate policy from a viewpoint that this has to be done so let’s do it right. Looking across the pond from Europe, companies in Europe should be concerned. Europe is well advanced in putting a cost against carbon dioxide emissions, considerable investment is flowing into the low-carbon economy and there is growing confidence that making the early moves in green technology will pay off handsomely. But what if America, the slumbering giant so far resisting calls for action on climate change, wakes up to the opportunities? The ability of America to reinvent itself and steal a march on Europe is a very real threat to European companies.

In the article it is argued that without a coherent framework for pricing greenhouse gas emissions, American companies have been unable to make rational decisions about investments. Spending on factories, equipment, and product design where there are significant energy implications becomes fraught with difficulty. ‘This uncertainty has cast a pall over the entire U.S. economy... dampened innovation and put U.S. companies at a serious disadvantage.’ The authors argue that U.S. business is put at a disadvantage compared with businesses in countries where clear policies have sharpened the corporate focus on waste and inefficiency and spurred innovation.

If America enters the international competition for green and renewable technologies, it would be a game changer. The nation that put a man on the moon could turbo-charge green innovation. For example in aviation, U.S. companies have the technology to launch the next Golden Age of aviation, but there is little sign that the U.S. government will allow it. The necessary action includes putting a price on carbon and tax on aviation fuel, but such proposals are greeted with deep suspicion in America. With a presidential election looming, politicians will not be campaigning for increasing the cost of carbon dioxide emissions.

At the time of writing, the HBR article on green innovation does not appear to have grabbed the attention of U.S. business leaders, not appearing on the list of the most popular articles on HBR.com. Perhaps European business can rest easy that competition from the United States will not be mobilized anytime soon. That would be wrong; the United States has the capability to catch up, over take and forge ahead.

For the sake of the planet I would like to see a race for who can lead in green technology. However it is not a two-horse race; both the United States and Europe should be concerned that China could take the lead. For those who think green innovation is a waste of money; think again, the new economy will depend on it.

Peter McManners works as an author, consultant and Visiting Fellow of Henley Business School, Reading University. He is a member of the Institute for Green Economics and has published extensively on business and environment.

His latest book

Fly and Be Damned

What now for aviation and climate change?

will be out this Thursday!!

Would Mubarak’s ouster have happened without Internet?

2012-02-20T17:17:00.000Z

Egyptian communications expert says Mubarak’s downfall was inevitable anyway, but boosted by social media.

Egypt's "Facebook Revolution" that toppled Hosni Mubarak last February may have been boosted by Internet social networking, but his downfall was inevitable anyway, a communications expert said on Sunday.

"It was a people's revolution, accelerated, facilitated by the Internet," said Rasha Abdulla, associate professor of journalism and mass communication at the American University in Cairo (AUC).

Without social networks such as Twitter and YouTube, "it would have happened but much later," she said, adding: "Practically it helped people to organise."

Abdulla was speaking at a conference entitled "Tweeting the revolution: how social media helped bring down a dictator."

"This revolution didn't start in 2011, but it accelerated with the introduction of blogs" around 2003 in Egypt, before social media really began making their mark, she said.

She singled out the posting online after 2005 of videos showing sexual harassment or police violence, and the formation of the "Kefaya" ("Enough" in Arabic) movement aimed at the Mubarak regime the same year.

Online appeals also played a great part in mobilising strikes in early April 2008, leading to the creation of the "April 6 Group," a driving force behind last year's revolution.

"The new thing in 2011 is instead of having demos of 20 to 200 people, all of a sudden they had masses of people," Abdulla said.

Gradually social networks created "horizontal communication" between Internet users talking to each other one-on-one, she said, and "gave them that sense of 'I have a voice, I'm entitled to speak and I will speak, this is my country.'"

She also said the Facebook page "We are all Khaled Said" -- dedicated to a young man beaten to death by police in Alexandria -- played a huge role in sparking the revolution.

"The page that had the biggest effect. This page was instrumental, the first page in Egypt to have such a big number" of members, Abdulla said.

"It was a political page by nature. All the conversations on the page were political. When the call for the 25th of January came, almost half a million clicked on the 'I'm attending' button. That encouraged the people."

"There was momentum in the air," she said of Tunisia's uprising against president Zine el-Abidine Ben Ali. Conditions were ripe for a mass mobilisation in Egypt.

© Middle East Online

You can learn more from

The Arab Spring,

the lastest book by Hamid Dabashi

(out in May 2012!)

The Burning House Theory: Realism, Liberalism and Constructivism

2012-02-20T16:49:00.000Z

Liberia: The Burning House Theory - Security and Survival in International Politics

© All Africa by Musue N. Haddad

Have you ever seen a house burning? Have you ever survived a burning house? Now as you begin thinking about a burning house, your mind may become preoccupied with other disasters. Then you may start asking yourself, "What kind of life is considered a good life for human beings? What kind of life is appropriate for a person to live among people and how does a person's relationship with others influence society and their own survival? Well, as you read on, you will notice that this article is not pushing you to think about being in a burning house. Rather, this article is using a burning house scenario to demonstrate three political theories: Realism, Liberalism and Constructivism. These political terminologies, are theories that have been at work for many years, and have influenced political ideas around the world.

The questions asked at the beginning of this article are similar to ones that have been the focus of various political theories for several centuries. Deliberation on these political principles resulted in Arnold Wolfers' work: Discord and Collaboration: Essays on International Politics, published in 1963 which uses the example of the burning house to demonstrate some principles of political theories.

The burning house metaphor provides the concepts and applications of Realism, Liberalism and Constructivism. The circumstance in the Burning House metaphor, scenario #1, the heat from the fire is extremely intense, smoke has filled the room and it is difficult for the occupants to breathe and almost impossible for them to see falls within the Realism theories where occupants will see their survival as zero-sum - one occupant's survival is balanced by the losses of another occupant. With this in mind, self- interest and survival becomes the primary goal of each occupant with no interest in cooperation and building alliance. Acting on the Realism principles, the occupants also considers themselves as a sovereign state who are the principal actors in the international system and therefore do not anticipate help from the fire department.

The next circumstance, scenario # 2, the fire is in a distant part of the house and does not pose an immediate threat to the occupants reflects Realism view. Occupants are self-centered. They do not see the fire as posing any direct threat to their survival and security, therefore do not feel obliged to put to use resources they have amassed to extinguish the fire. The reason is that, states are in competition with one another and views self-interest as a primary goal to maintain and ensure their own security which translates into sovereignty and survival with security as its primary goal. Realism holds that in the pursuit of security, states will attempt to amass resources and that relations between states are determined by their level of power. That level of power is in turn determined by the states military might and economic capabilities. Kenneth N. Waltz in his contribution to the study of Realism said the main goal of a state actor is to secure power and security in the form of military power or political persuasion. The goal of each state's interest in its own security and survival is prevalent today in international politics.

One example of Realism is the United States under the leadership of President George Bush. Bush exhibited some characteristics of being a realist. The U.S war on Iraq was obviously because President Bush feared the security of the United States was threatened. The act of going to war followed one of the theories of realism - states ensure security and survival of its own state even if it has to go to war to protect its security and survival. President Bush was aggressive in his pursuit of security and survival which is a guarantee of power. President Bush's attempts to make sure of the security of the United States and its ability to influence or control other states which in turn ensures the survival of the U.S. The level of power a state possesses determines its survival. Another underlying outcome of the war on Iraq could be the preservation of the United States culture.

An additional example to show how realism is still dominant in the world today is by looking at Indian and Pakistan. At one time, Pakistan and India were one state, but today they are split and have almost similar amount of power between them. However, both states wish to be more powerful than the other one, which is why so much conflict is occurring today. This concept of balance of power is another fundamental assumption of realism.

One more example of Realism approach in the pursuit of wealth and security through amassing resources was demonstrated by ex-warlord and ex-president Charles Taylor of Liberia. While leading a rebel group, Charles Taylor began displaying some of the qualities of Realism by establishing and supporting insurgency groups to destabilize governments in other countries within the region. Even after becoming President of Liberia, Taylor continued to pursue resources from other countries as a way of accumulating more resources in pursuit of security, survival and power. In addition to accumulating resources as President, Charles Taylor in his relation with other states within the region exemplified basic theories of Realism with regards to the pursuit of political power by threatening the political stability of governments which he considered opposing forces. Realism believes that states want to be more dominant than their neighbors and that power is control, so whoever has the power has the control. The character of Taylor was a unique example of the Realism principles of how relations between states are determined by their power and that that level of power is determined by military and economic potentials. Charles Taylor's approach to power is what realism views as natural to human beings; that is to be self-centered and eager for power. To what extend this view extends to all human beings is arguable but there were reports that Taylor regularly consulted Machiavelli work, "The Prince." Machiavelli in the Prince argues human being is set in his ways of being corrupt when it comes to power.

Niccolò Machiavelli discussed the methods of gaining and maintaining political power in his work The Prince, published in 1532. Michiavelli supported other political scholars definition of power as the ability to impose one's will on others, or to pursue one's goals at the expense of others' interests. Power can be exercised through violence or through coercion, through threat of force, or through treaties and diplomacy.

Throughout its history, realism has faced many challenges and criticisms from different approaches; most notably liberalism. Liberalism argues that power politics itself is the product of ideas, and crucially ideas can change. From a liberalism view, cooperation is more persuasive that action forced. Realism holds the assumptions that international system is anarchical and that sovereign states rather than International Governmental Organizations, (IGOs), Non Governmental Organizations, (NGOs), or Multinational National Corporations, (MNCs), are primary actors in international affairs, Liberalism and Constructivism hold other views on international system. Liberalism criticizes the notion of state as unitary actors, each with a single set of coherent interests. Constructivism rejects standard realist and liberal views on international relations and argues that state interests stem from identities and international norms, rather than from the effects of international anarchy.

In the metaphor of the burning house, scenario # 3, the occupants have a well-rehearsed evacuation plan demonstrates the importance of collective action and the significance of cooperation in achieving a common goal. The differences between liberalism and Realism and other political beliefs is that Liberalism believes that an organized society creates the possibility for preplanning and cooperation and coordination. Scenario # 4, the exits are clearly visible and unobstructed, describes some of the advantages of cooperation over competition. While the Realism principles of competition drives people to reach their highest performance, it supports separation which leads to individuality, cooperation promotes unity. People are stronger together than when they are separated.

Scenario # 4 also demonstrates how people adapt (new) behavior. Although the Liberalism and Constructivism theories discuss institutions and people's reactions to these issues, Constructivism delves more into the behavior of people to society and norms. The Constructivism principles explores how people's behavior change even though they initially had different set if ideas, people adapt to behavior to avoid being reprimanded. Although the authoritative influence is lacking in Liberalism and Realism, Constructivism principles approach to behavior is through legitimacy and getting people to do what they would not have done. This approach of authority and legitimacy resulted into keeping the exits clearly visible and unobstructed. Had this circumstances being under the Realism theory of self-interest, the exits would have been obstructed by individuals who for example needed space to store excesses of their personal belongings with total disregard for the security and well-being of others.

As for the situation cited in scenario # 5, the occupants are unsure which exits, if any, are usable, it exhibits variables of both Liberalism and Constructivism theories. Liberalism believes conflict is often a result of miscommunication or that information may have being misrepresented or unfavorable. This miscommunication may have resulted to lack of knowledge of if any, the availability and location of a usable exit. A high level of threat is perceived in this scenario according to the Constructivism theory. However, in the midst of this threat, Constructivism makes available the presence of an intermediary and also allows for help to enable the understanding of problems faced by others. In this scenario, although occupants are unsure of the existence and positions of usable exits, intermediary and activism under Constructivism could intervene through advocacy or providing insight to occupants on the problems they are faced with. Assistance could also be provided to help occupants.

In Arnold Wolfers' metaphor of the burning house, Scenario # 6, one occupant takes the lead and shouts out orders for others to follow, describes the Realism theory where one strong state must takes the lead in anarchy in order to maintain order. The principle is that the only source of stability so far relies on the balance of power; the powerful leads and others follow.

Unlike the Realism principle, states are independent under the Liberalism theory, but they work cooperatively through other organizations where generally there is not one leader. This is what is exhibited in scenario # 7, where no one takes the lead. Although in such a disastrous situation, when there is no sign of rescue, there is paranoid which might result into anarchy and it's survival of the fittest, this is not to say that order and cooperative groups do not arise in anarchy. Order and cooperative groups do arise in times of disaster; it is just that mostly they re not planned.

The focus of Realism in nationalism as opposed to sub-national groupings is why the issue of capability is important to the survival and security of the state. In scenario # 8, the tallest occupant can escape through the window, being tall is considered a capability in this circumstance for Realism, and therefore an advantage for the tall occupant in the burning house.

Constructivism legitimizes support for intervention which comes through cooperation and alliance with international organizations, sub-state and other actors. Legitimacy and intervention could be based on treaties, moral and how practices exist in society and this is what is expected of the volunteer firefighter is scenario # 9, one occupant is a volunteer firefighter and some are small children. Constructivism recognizes the volunteer firefighter as a learner who is building his knowledge through experience. Constructivism is a learning process in which the learner is engaged in constantly building that knowledge and is always analyzing their learning experience. Constructivism promotes the notions of diversity and adaptability and believes that learners who can adapt quickly by learning are more likely to adapt to changing conditions which in turn promotes survival in the event of disaster.

Scenario # 10, the house was ignited by a forest fire that continues to burn uncontrollably, describes a situation of providing help for the helpless when there is anarchy. This scenario portrays Liberalism and is almost similar to that of scenario # 7, where no one takes the lead. The differences between the two circumstances are that unlike #7 where order and cooperation seems to have arisen in the anarchy among occupants of the burning house, for scenario #10, efforts are galvanized by other stronger states to provide help for the vulnerable which results into future opportunity to negotiate.

The importance of institutions in the Liberalism and Constructivism principles though at different levels in illustrated in scenario # 11, the fire department is located just two blocks away and is renowned for its excellent response time. The occupants can seek outside help because the principles of Constructivism and Liberalism do not view sovereign state as the only body in the political realm as argued by Realism. Liberalism principle maintains that there are outside organizations to help facilitate problems. Liberalism views cooperation as more persuasive while Constructivism on the other hand says that state interests stem from identities and international norms, rather than from the effects of international anarchy, a view opposed by Realism.

The scenario # 12, one occupant had intentionally set the fire, describes both Realism and Liberalism theories. The deliberate setting of the fire is a characteristic of greed and self-interest common to Realism zero-sum theory of power. Realism holds the view that states are naturally aggresive, and that expanding one's territory is hindered by opposing power. The greed to acquire more territory which can be term resources and expanding control resulted in the deliberate setting of the fire to get rid of opposing forces reflects the Realism principle of pursuing power. Realism discusses the pursuit of one's goal at the expense of others' interests. In pursuing his goal which can be defined in this scenario as the desire for power and security, the occupant used violence and the threat of force to achieve his goal. However, the affected occupants acted in cooperative ways because of the uncertainty they faced as a way of ensuring their safety. This cooperative approach falls within the Liberalism principle. Occupants realized that they are stronger together than being separated.

The last scenario, you are in the house and a laptop containing a draft of your PSC 240 thought paper is in a bedroom upstairs, shows some principles of Liberalism and Constructivism. Although constructivism started on the principle of learning, it has expanded its authority, becoming a basis of teaching, education, and the basis for the origin of ideas, and also personal knowledge. That means it is worth risking one's life because society is served if the paper survives. Many constructivists believe that "all knowledge is a human construction." Sherman, L. W. (1995), said constructivism hold the view that knowledge is not 'about' the world, but rather 'constitutive' the world.

Constructivism regards all learning as vital to the learner and important to society, whether original or not. Liberalism provides individuals the freedom to pursue their own goals, in their own ways, provided they do not infringe on the rights of others. As a result of the freedom provided by the Liberalism theory and the lack of competition, people become interested in the well-being of others. Realizing the importance of the PSC paper to society, occupants will cooperate and assist in retrieving the PSC paper from the bedroom upstairs.

BRW.: Keen to be heard

2012-02-20T12:45:00.000Z

Steve Keen, associate professor of economics at the University of Western Sydney, is becoming something of a superstar. He has been acknowledged as one of a handful of economists to have predicted the global financial crisis and now is a regular speaker at high-profile conventions around the world.

He is a consultant for the United Nations’ Economic and Social Commission for the Asia Pacific and in April he is speaking alongside George Soros and Nobel Prize-winning economists Joseph Stiglitz and Paul Krugman at the Institute for New Economic Thinking where he has been asked to give a speech on “taming financial market instability”.

The same organisation has given Keen almost $250,000 to develop software capable of predicting an economic crisis before it happens.

Last November he was interviewed on the BBC’s Hardtalk program, which attracts a worldwide audience of almost 300 million, in which he “went public” about his idea for a “debt jubilee”, where private debts are written off “en masse” to avoid “two decades” of economic stagnation.

Yet in his home country, this renegade economist is regarded as something of a quack. His outspoken views about Australia’s housing market, which he maintains will fall by 40 per cent over the next 10-15 years, have caused many to dismiss him as an attention-seeking alarmist.

Ironically, it’s a label that Keen does not mind wearing. “Somebody has to tell people the bad news,” he says. “When I saw the signs of the financial crisis back in 2005, I didn’t want to see what I was seeing.

“It was an accident, stumbling across the data while preparing to appear as an expert witness in a court case. It showed an exponential rise in private debt in Australia, and in the US, that was clearly unsustainable and was going to lead to a collapse in asset prices.

“When you see something like that, you have a responsibility to ring the alarm bell.”

While Keen was right about the crash in much of the northern hemisphere, the Rudd government’s stimulus prevented a similar crash here (although Keen says this is temporary). Consequently, within these shores, Keen is still known as the man who got it wrong.

Overseas, he is often given obsequious receptions by hedge fund managers and fellow economists who flock to meet one of the few that they think has a credible record at predicting what is going to happen next.

Yet it is not as if Keen has invented an entirely new science to predict economic behaviour. It is simply that he has taken a commonsense view of economics and quantified it into a modern theory, one that acknowledges the importance of debt in determining demand in an economy.

“Traditional economists do not take any account of debt in their modelling,” he says. “In their world, debt simply doesn’t matter.”

Keen quotes Nobel Prize winning economist Paul Krugman to illustrate the point. In his 2010 paper entitled Debt, Deleveraging and the Liquidity Trap, Krugman said: “. . . looking at the world as a whole, the overall level of debt makes no difference to aggregate net worth – one person’s liability is another person’s asset.”

Yet Keen argues that, while this is empirically true, it is also irrelevant.

“That view is fine if you have money being lent from one person to another, because the lender has less money and the borrower has more and everything ends up equal,” he says. “But this completely ignores the role of banks.

“If somebody goes to a bank and wants to borrow money, the bank effectively creates that money out of nothing. It doesn’t have to take cash out of somebody’s savings to get it. And by doing so it injects extra cash and potential demand into the economy without subtracting spending power from anywhere else. In that way, overall demand is boosted and things can get out of kilter.”

Keen says things are made worse when that money is invested in speculative assets such as property or shares because it raises both the level of debt and the level of asset prices without adding anything to the economy or boosting economic growth: it just results in higher asset prices and higher debt, which inevitably ends up reducing demand.

“This is how bubbles grow and burst and ignoring debt in this way is one of the great fallacies of modern economics,” says Keen.

It is worth understanding this argument in more detail because this measure of demand – the changing levels of debt as a ratio of GDP – appears to explain the depths of the crisis far more clearly than simple measures of economic growth.

In 2008, private debt in the US grew $4.1 trillion but in 2010 shrunk $2.85 trillion as banks decreased their lending as a result of the housing crash.

When subtracted from GDP, this fall in debt equated to a 38 per cent reduction in aggregate demand, leading directly to the “great recession” and unemployment hitting its highest level in almost 30 years.

“This is what people find so confusing,” says Keen. “When you look at GDP numbers in the US, they’re not bad. At the beginning of 2008, US GDP was $14.25 trillion and today it has GDP of $14.75 trillion. That’s stagnant growth but doesn’t explain the enormous depths of the US downturn. It only begins to makes sense when you look at the fall in aggregate demand.”

In Australia, our aggregate demand has not yet even turned negative. Over the same period as the US, Australia’s private borrowing fell from $260 billion in 2008 to $37 billion in March 2010 but because GDP has been rising, thanks to the resources boom, aggregate demand has fallen by only 6.5 per cent, peak to trough.

“However, credit growth is low and getting lower, running at just 3 per cent a year, which is a level associated with the depths of recessions, not boom times.”

He says cutting interest rates will hardly help.

“A couple of years ago people were borrowing to invest in rising asset prices but that isn’t happening now,” Keen says. “Even the healthy borrowing by the resources sector may turn down and that means aggregate demand in Australia will turn negative.

“As that happens, we will fall into recession – a recession we should have had two or three years ago – and house prices will continue to fall for years to come.”

Check out more of Steven Keen's theories and predictions in Debunking Economics, available from Zed Books

Guardian: Order has returned to Nigeria after the fuel protests, but deep anger remains

2012-02-20T10:48:00.000Z

After the January unrest caused by fuel subsidy cuts and rising petrol prices, Nigerians are demanding fundamental change

One month after Nigerians ended their protests against a 120% rise in the price of petrol, a measure of calm has returned. But interviews with ordinary people in the commercial capital, Lagos, suggest there is now enormous pressure on President Goodluck Jonathan's administration to deliver measurable progress on development and good governance.

The protests were sparked when Nigeria – a member of the Organisation of Petroleum-Exporting Countries (Opec) and Africa's largest exporter of oil – heeded advice from the International Monetary Fund to end fuel subsidies. The sudden move, on 1 January, raised petrol pump prices from 65 naira to 141 (40 cents to 90) a litre. The government said scrapping the subsidy would save $8bn a year, much of which was falling into the hands of corrupt middlemen.

Trade unions said the sudden hike was too much for Nigerians to bear and declared a national strike. After an overwhelming show of popular anger, the government backed down, offering a compromise price of 97 naira a litre.

The fuel subsidy crisis came as Nigeria's government battled an intensifying campaign of bombings in the north, spearheaded by Boko Haram, a sect that wants sharia law implemented across Nigeria. The two factors have combined to make Jonathan appear weak in the face of danger and clumsy in policy implementation.

Victoria Adekoya, 38, nurse

Nigeria is a major oil producer and the petrol subsidy is the only benefit we get for being Nigerians.

We, the masses, do not have trust in our politicians any more. When they said they were removing the petrol subsidy, it did not feel like that to us. It just felt like they were doubling the fuel price. As soon as petrol went up, the price of beans doubled. Rice, yams and meat have all become more expensive.

When the government announced we would pay 141 naira, we felt we would be subsidising more corruption by our politicians. Corruption is all they are good at. The 97 naira compromise just feels like we will be subsidising corruption slightly less.

The strike ended because we needed to get back to work, to eat. It did not end because we were happy with the 97 naira price.

Saheed Bayo, 38, unemployed community volunteer, Ajegunle slum

In my slum, no one has a vehicle. There is not even a road. But we felt the impact of the price increase immediately. The price of sachets of water doubled from 5 to 10 naira overnight.

Nigeria is like Tunisia and Egypt. Our politicians do not have a sense of serving the population. They want to make money. They hang on to power by doing favours for people who will support them, even if the benefits granted to some are harmful to others. This divides us. In this sense, the Nigerian people are not like the Tunisians or the Egyptians. It is too easy to break our spirit because there will always be someone who is receiving favours and who will tell us to stop complaining.

Moses Ohiomokhare, 50, curator, Quintessence art gallery

The fuel price increase opened the eyes of people in the east of the country. They were paying 80 naira a litre already. When they were asked to go on strike for a lower price, they could not see why they should sacrifice their earnings so that people in Lagos and Abuja could pay less than they were spending already. This is Nigeria all over: every issue very quickly boils down to regionalism and calls for a break-up of the country, and frightening memories of the [1967-70] civil war.

We need state finances to be spent on development, but our first request is not even for that. If the government sent a signal of rigour – fewer ministries, fewer advisers and secretaries, a leaner and more efficient police – Nigerians would respond with enthusiasm. Instead, we are fed drop-in-the-ocean pledges, like the promise to spend 25% less on state banquets. We also hear our politicians calling for higher salaries and comparing their pay packets with those of US senators. How dare they?

Ayo Obebe, 27, unemployed political sciences graduate

I voted for Goodluck Jonathan, but I am fed up. Given the amount of money going into the Treasury from oil, I don't see his administration delivering. He is not moving fast enough. Just lately he has shown himself to be more decisive … it was good that he sacked the police chief to send the message that the bombings in the north of the country have to stop. But his administration needs to deliver on infrastructure development and employment so that people's lives start improving.

Until people see the government delivering, they will question the government's sincerity. The protests stopped because people needed to get back to work. During the strike, the black market price of fuel rose to 250 naira. Prices were going crazy.

Prince Oluwasola Olajubu, 45, self-employed printer, Ikorodu

The government says the fuel price will come down again when we have our own working refineries. As it is, we just have one refinery that is limping along. It is shameful that a country like Nigeria does not have enough refineries to cover its needs.

If, indeed, the government delivers on its promise – to use the money it saves on fuel subsidies to build infrastructure – then I believe scrapping them was a good idea. But the policy was not properly explained. A couple of years ago they removed the subsidy on diesel and kerosene and we never saw that money being spent on infrastructure. Why would it be different this time?

Poor people spend a high proportion of their income on food and transport, and that share has just increased. So people are impatient for their lives to improve, and the government needs to demonstrate that it has heard the message that was sent during the strike.

Ngozi Ekwerike-Okoro, 42, child protection officer

If it is true, as the government says, that fuel subsidies have been falling into the wrong hands, then it is right that they should be abolished. But that does not explain why the price of petrol at the pumps had to increase.

The government outlined the measure poorly. Last year, in April, I went to a town hall meeting at which the plan was explained. But most people had no idea or no understanding of the measure when it was implemented. The government should have given notice. The director-general of national orientation [Idi Farouk] was sacked because he did not explain the subsidy removal to the people. That was the right move. We need the government to be much closer to the people so that if painful policies are needed, we all understand.

To learn more about situations similars to this one, read Oil and Insurgency in the Niger Delta, available from Zed Books

Guardian: Robert Mugabe supporters plan lavish celebrations for 88th birthday

2012-02-20T10:30:00.001Z

Food is running out, schools are short of books and typhoid is on the loose – but still Robert Mugabe looks set for a near million-dollar birthday party when he turns 88 next week.

There were accusations of a "let them eat cake" attitude when details of the bash emerged on Friday, but it is the Zimbabwean president himself who will be treated to a giant birthday cake.

Each year Africa's oldest leader is treated to a lavish celebration organised by a youth group in his Zanu-PF party known as the 21 February Movement.

Three-course meals, a music gala featuring top Zimbabwean artists, a "Miss 21st Movement" beauty pageant and a football tournament dubbed the "Bob 88 Super Cup" are on this year's agenda, South Africa's Mail & Guardian newspaper reported.

For two months supporters across the country have been raising funds for the birthday party in Mutare, the paper said. It is rumoured that it will cost close to $1m (£630,000) – as much as Zanu-PF's three-day party conference last December.

Like the national treasury, Zanu-PF is often said to be cash-strapped, but there are widespread claims that it is siphoning off profits from Zimbabwe's diamond fields in readiness for upcoming elections.
Despite his age and speculation over his health – word is that he falls asleep during cabinet meetings – Mugabe has declared himself eager for the polls. To relinquish power now, after more than three decades in power, would be "an act of cowardice", he said recently.

Not everyone will be celebrating the president's birthday. The largesse was condemned by the Movement for Democratic Change (MDC), whose power-sharing agreement with Zanu-PF is perpetually under strain.

"This is a total waste of taxpayers' money and typical of the attitude of Zanu-PF," said Douglas Mwonzora, an MDC spokesman. "Right now we are faced with a situation of food shortages in some parts of the country. This needs to be addressed and Zanu-PF isn't doing that. Instead they are spending a million dollars on the birthday of an 88-year-old president.

"The money could be spent on food and books. Mugabe is totally out of touch with reality. He has a bloated ego and he thinks Zimbabweans like what he is doing."

Mugabe's example compares unfavourably with that of other countries, Mwonzora said. "I think he is the only president in the world who spends so much money on his birthday. I don't think President Obama or Prime Minister Cameron do it. Mugabe is the president of a poor African country and should be condemned."

Civil society groups joined the criticism. Dewa Mavhinga, regional information and advocacy co-ordinator of the Crisis in Zimbabwe Coalition, said: "It is the wrong way of deifying an individual: the belief that Mugabe is a supreme being while the country is suffering.

"We have an outbreak of typhoid in the capital. Zanu-PF does not have its priorities right. Mugabe is completely out of touch with what's going on. He should step aside and allow for fresh ideas. He is turning 88 and we are already seeing the law of diminishing returns. There is an urgent need for leadership renewal in Zanu-PF and the country."

© 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved.

To learn more about the ongoing humanitarian crisis in Zimbabwe, check out Richard Bourne's Catasrophe, available from Zed Books.

'Congo is on the move, but where is it going?'

2012-02-17T15:12:00.002Z

all Africa: Congo-Kinshasa: Nation Is On the Move, but Where Is It Going? Reflections On Elections

by William Townsend

Congo is on the move, but where is it going?' asked Dr Theodore Trefon (author of the African Arguments book Congo Masquerade) at an international conference, hosted by the Royal African Society in London earlier this week.

It was hoped that the historic presidential poll conducted in the Democratic Republic of Congo (DRC) last November, only the second since six years civil conflict came to an end in 2003, would consolidate plurality and herald a new era of political accountability. Instead, Kris Berwouts (until recently, the Director of the Belgium-based European Network for Central Africa) described the unfolding political picture as one of growing uncertainty and pervasive insecurity, limiting opportunities for the Congo's vibrant civil society to take root and flourish.

The November 28th poll was the first back-to-back multiparty contest the Congo had ever experienced. Following what was deemed a successful first election in 2006, it was widely agreed that this time the international community had taken their eye off of the ball in the run up to, and during, this crucial second test. Trefon went on to describe the resulting political stalemate and absence of a master-plan as a consequence of reform failure - indeed, there have been many changes in the Congo since the time of Marshal Mobutu, but few improvements.

The international community's apparent assume that the consolidation of democracy would not require the level of diplomatic and financial solicitude previously made available, was a mistake. This mistake has left Sub-Saharan Africa's largest state more divided and its future relationship with representative government unclear. This sentiment was echoed by former Foreign Office Analyst, Marco Jowell, who stressed that the international community had not acted early enough to raise concerns, despite clear moves by the incumbent to circumvent the spirit of the democratic process by altering the constitution (removing the second round of voting) to favour his chances of re-election. Failure on this multilateral front was matched only by the inadequacy of bi-lateral engagement in the run-up to the elections. Citing departments that were losing country experts, desk officers and senior staff, the UK's research capacity and pool of knowledge from which to inform key decision makers was severely muted, leaving the government with only a "watch and wait" policy available.

This was compounded by a perfect storm of other 'distractions' around polling day, causing the UK's focus on the DRC to wane. Egypt was entering a new phase of the Arab Spring as it too was scheduled to go to the polls; the economic recession remained foremost in the minds of the UK public; other issues across Africa, for example in Nigeria and Somalia, were giving rise to concern in the FCO, whilst Afghanistan remained top of the defence and development agenda; and, finally, it was approaching Christmas, when the intensity of monitoring drastically slows.

This concern was reinforced by the observations of Eric Joyce, MP, who has been among the most vocal British political figures in holding the Congolese government to account. From the start, Joyce who also chairs the Great Lakes All Party Parliamentary Group, was frank: "being diplomatic and tip-toeing around doesn't get you very far with the Congo." His concern was that politics in the Congo hinges too much on the personalities of the contenders at the expense of sound policy prescriptions and long-term ambition. For this reason, he contended, the inflammatory gestures and call to arms that emanated from the leading opposition candidate, Etienne Tshisekedi, explain the lack of international appetite to help precipitate change. Unlike the recent ballots in Cote d'Ivoire and Zimbabwe, the international community did not collectively call on the incumbent to step aside, even after proven widespread fraud, irregularities and the deaths of civilians. The growing wariness of Congolese affairs can be traced beyond the political sphere, to the extent that even international mining companies are hesitant about setting up shop in the Congo.

Overwhelmingly however, one message surfaced from the conference on which all panelists agreed - in order to move forward, it is necessary to reassess how we think about and engage with the Congo. Harry Verhoeven encapsulated this point by suggesting that, for decades, politics in the Congo has revolved around elites keeping the state weak and avoiding entry into a social contract with the Congolese people. In the wake of the November elections, acquiescing to a business as usual approach will benefit nobody, but the international community must be realistic about its ambitions and opportunities to elicit solid development outcomes. As the security sector reform project reveals, it is naïve to think that international partners have significant leverage over events in the Congo. However, hope was raised at the prospect of renewed engagement with local-level politicians with whom it might be possible to effect lasting change.

The scale and complexity of the challenges ahead cannot be overstated and despite its painful history and strategic importance to the rest of Africa and the World, the DRC still receives too little attention in global discourse. Whilst it is true that the Congo hosts the world's largest UN mission and has received billions-of-dollars in international aid, it is worth recalling that, during the secession of Yugoslav states, nearly ten-times as much money was pumped into Southeastern Europe over a corresponding period. Looking ahead, it is essential that Congolese people, NGOs, foreign diplomats and donor governments press for and support the completion of the electoral cycle; the local and provincial elections scheduled for the months ahead will be vital to the development process and empowerment of local people.

To learn more about the Democratic Republic of Congo read

Congo Masquerade

by Theodore Trefon

The book launch of Getting Somalia Wrong? by Mary Harper

2012-02-17T11:41:00.000Z

This title is now available from Zed Books

Remarks of Mary Harper, BBC World Service- Somali National Press Day

2012-02-17T11:36:00.002Z

Check out Mary Harper's new book, Getting Somalia Wrong?, available now from Zed Books

All Africa: Congo-Kinshasa: Security Forces Fire Teargas at Peaceful Demonstrators

2012-02-17T11:09:00.003Z

Security forces in the Democratic Republic of Congo on Thursday fired teargas to break up a "March of Christians" organized by the local Roman Catholic Church to protest alleged fraud in the recent presidential and legislative elections, news reports said.

Police in the capital, Kinshasa, used armored vehicles and water cannon to patrol the neighborhoods where the protesters were to demonstrate. They were prevented from marching and gathered in churches, Radio France Internationale reported.

There were no immediate reports of deaths, although Agence France-Presse reported that thugs entered a church and beat women inside. There were also reports that three priests, two nuns and two protesters were detained.

The demonstration was also called to mark a protest by Christian groups that was held 20 years ago today in Kinshasa called the "March of Hope". More than 30 protesters were killed as they called for the government of then-President Mobutu Sese Seko to reopen a national conference on democracy that was supposed to lead the country out of dictatorial rule.

But two decades later the country's leading opposition figure, Etienne Tshisekedi, remains the capital's main force behind calls for genuine democratic reform, and there has been little change in the lives of ordinary people. Official election results put Tshisekedi second, behind President Joseph Kabila. International observers and civil society groups have said the elections were flawed.

In a statement, the U.S.-based Carter Center deplored the suppression of Thursday's march. "Peaceful political expression is a fundamental human right that is protected by the DRC's constitution and international treaties of which the government of the DRC is a signatory," the private, non-profit group said.

"The arrest of priests, nuns and a human rights activist in Kinshasa, along with the closure of three radio stations, are dangerous developments, and The Carter Center urges the government to reverse these actions immediately. Radio stations should be reopened and the government should release from custody immediately those who have been arrested for their peaceful political activities."

Observers from the Carter Center witnessed last November's elections and said they "lacked credibility".

To learn more about the 2011 Congolese elections and the struggle there, check out Theodore Trefon's book, Congo Masquerade, available from Zed Books

TheRealNews: Why Demand Nuclear Transparency from Iran and Not Israel?

2012-02-16T17:52:00.002Z

Interview with Zed Author Hamid Dabashi who's forthcoming book 'The Arab Spring' will be released this May

Pacific Free Press: US, Saudis and Russia Vie for Influence in Post-Assad Syria

2012-02-16T17:39:00.001Z

In Syria, the situation intensifies. The foreign minister of Russia isthere for talks. The Gulf Cooperation Council countries have not onlywithdrawn their own ambassadors, but have kicked out Syrian ambassadorsfrom their countries. Other, European countries have withdrawn theirrepresentation. Now joining us from New York City to talk about all ofthis is Hamid Dabashi. Hamid teaches at Columbia University. Thanks forjoining us, Hamid.

Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Washington.

HAMID DABASHI, PROF. IRANIAN STUDIES AND COMPARATIVELIT., COLUMBIA UNIV.: Thanks, Paul. Anytime.JAY: So, first of all,what's your sense of what's happening there?

DABASHI: My sense is that the continued carnage is going apace. Who exactly iskilling whom is a subject of debate. Obviously, governmental forces areseverely crashing [sic], both in Hama and in Homs. But obviously thereis armed resistance, which indicates there must be one of two things or a combination of both: defection in the army, and arming of theopposition by people interested in this sort of further violence of theconfrontation.But the diplomatic scene, I think, is moreindicative of what is happening. As you know, Saudi Arabia and the GulfCooperation Council initiated a machination through the Arab League inorder to force Bashar al-Assad out. It didn't work, and they took thething to the United Nations, and as you know, the Russians vetoed it.Now, we have had lots of hot air between United States and Russia, UnitedStates accusing Russia of giving Syrians a license to kill, or they have blood on their hands, or that they are disgusted with Russia—thiscoming from the country that has vetoed anything against Israel forgenerations. If we reverse the vocabulary, obviously, one might read itas United States having given Israel license to kill.Butit is important to read the Russian reaction in their veto in the United Nations in the context of the more general frame of Arab Spring. TheRussians were left out of the post-Gaddafi deal in Libya, and this timearound they have no intention of post-Assad scenario. So both IslamicRepublic of Iran and Russia have their own vested interest in keepingAssad in power, or, if Assad is to go, for the Russians—Russians have no problem letting go of Assad, so far as they have a say, they have abenefit, something to come their way in the aftermath of Assad.That's where we stand now. That is, the geopolitics of the region is UnitedStates, Israel, Saudi Arabia, Gulf Cooperation Council, and the ArabLeague is on one side; Syria and Iran and Hezbollah is on the otherside.

JAY: Now, if you look at the substance of the Russian veto, it's not being discussed in what I think is enough detail in most of the Western media, because it seems to me the Russian position wasnot so unreasonable. They said that, one, if you're going to ask Syriantroops to withdraw from the neighborhoods and towns and go back to their barracks, you have to ask the defecting troops to do the same thing,and all the arms groups need to get out of the confrontation zones. Andno one talked that that's what Russia was saying. And the other piece of the Russian veto was saying it's not up to the United Nations to tellSyria they need to move towards any specific political system. Theresolution specifically called for moving towards a multiparty democracy and all of this sort of thing. So it seems to me the Russian positionwas actually fairly measured, but it's being portrayed in the Westernmedia as if support for this vicious dictatorship.

DABASHI: Yeah, and I read what you're reading of how Russian position is beingkind of taken out of proportion. But it doesn't mean that the Russianshave the best interests of the Syrian people in heart. The Russians want to have a piece of post-Assad scenario. And, yes, United States puts adifferent spin on it, but so do the Russians.Remember,Paul, we have to keep our eyes on the ball. What is the ball? The ballis the peaceful democratic uprisings of Syrians for their democraticrights, for a post-Assad scenario. And it is the Assad regime itselfthat initially began turning this violent and severely cracking down.And as a result, after eight months of severe crackdown and civiliancasualties, obviously, the resistance has gone militant and picked uparms and started fighting. That's the basic scenario.Now,then comes the geopolitics of the region and the interest of the U.S.,Israel, Saudi Arabia, etc., that wants to take advantage of thissituation. In this particular regard, Paul, in my judgment, the Russianinterests and American interests are identical. They won't mind ascenario in which you have a figurehead like Bashar al-Assad is choppedoff, just like in Egypt or in Tunisia and Libya, so far as the body ofthe junta, the state apparatus, remains the same, that they have acontrol over it. What is—they don't want the cat out of the bag thatthere is really a freefall of democratic possibilities, which is bothchaotic and more promising. They want to control it. And if in thiscontrol it means the chopping off the head of Bashar al-Assad, neitherU.S. nor Russia will mind.

JAY: Now, in terms of the levelof the conflict, there seems to be—first of all, Turkey seems to besupporting this thing called the Free Syrian Army. Other sections of the army have defected, probably with arms. But there also—as you justsuggested, there's outside forces are certainly playing here andinstigating various forms of armed struggle there or supporting it. What do you make of this kind of mix of this kind of legitimate resistanceagainst the dictatorship mixed up with what now, according to The Guardian, are fighting factions coming from the military, where they're kind disputing who's going to lead the armed struggle?

DABASHI: Again, first and foremost I blame Bashar al-Assad. It is very important to remember, as we did with Libya, that when Syrians begandemonstrating, it was a peaceful demonstration. It was Bashar al-Assadwho made it violent. Now that it has been made violent, I haveabsolutely no doubt Americans, Europeans, Israelis, and Saudis arearming, are directly involved in the opposition, trying to tilt [it] totheir benefit. So, again, we have to keep in mind that this used to be a peaceful uprising. The more it becomes violent, the more U.S. and itsregional allies become involved and the more they will try to control it and the more they will try to abuse the humanitarian crisis that hasbeen generated to their advantage.It is very important for your viewers, Paul, to know that this same president who seems veryconcerned about the humanitarian crisis in Syria, has imposed cripplingsanctions on Islamic Republic (which means—even New York Timestoday reported—directly creating a humanitarian crisis among 75 millionhuman beings in Iran who are directly being—suffering the consequencesof these crippling sanctions), is not in a moral position to say, oh,they care about the humanitarian crisis in Syria. They are trying totake advantage of this humanitarian crisis for their own advantage. But, again, we must hold Bashar al-Assad chiefly responsible for turningthese peaceful demonstration into a violent confrontation.JAY: Now, Lavrov, the foreign minister of Russia, is in Syria as we speak.He's trying, he says, to push some kind of strategy that would causesome kind of cease-fire negotiations rather than simply isolating theAssad regime. I take what you say about Russia having its own agendahere, especially given how Syria has been sort of a long-termtraditional ally of sorts of Russia. But what do you make—seems—Lavrov's position here?

DABASHI: Paul, I think Lavrov, SergeiLavrov, will probably have a better-case scenario of some sort of theresolution to this than the gung ho diplomacy of U.S. and its regionalallies to create some [snip] Bashar al-Assad's neck will be saved, but a more peaceful transition to democracy will happen. But the fact of thematter is, I think, whatever Bashar al-Assad promises Lavrov is abit—too little too late. That is, the level of tension and violence that he has been instrumental in generating, of this violence that is beinggenerated on the scene, and for which [inaud.] are chiefly responsible,in my judgment, in my reading of the situation, is too far along forLavrov to be able to negotiate a peaceful transition or negotiation,which was possible maybe, you know, five, six months ago when you hadsome leading Syrian intellectuals gathering in a hotel in Damascus andnegotiating. But Bashar al-Assad didn't listen, didn't deliver, anddemonstrations continued and violent crackdown continued.So I think that the best that Russia will get out of this is their ownshare in the aftermath of Assad. And the dynamic of the tension withinSyrian society at this point, after so many sacrifices, is such thatsymbolically they want to see Bashar al-Assad go. But would that mean apeaceful transition to democracy for Syrian people? Absolutely not,given the machinations of the [U.S.] and its regional allies and Russiaand its regional allies. They will try to have the apparition of arevolution—the head of the state has gone, but the structure of thestate remaining intact, on the model of Egypt—so they can continue tohave their manipulation.Again, quick cuts to Egypt. Lookat Egypt. The Saudi financed Salafis and Muslim Brotherhood is incontrol of the Parliament, and the U.S.-controlled army is stillperfectly intact, and as a result, the collusion of interests of U.S.and Saudis have—are controlling the consequences of the EgyptianRevolution. Something like that scenario (this time with the involvement of the Russians) they want to have for the post-Assad Syria, which they may succeed actually in doing. But would that mean an actual collapseof the regime, as their slogan demands? Absolutely not. So the struggle, the open-ended revolution will continue.

JAY: Thanks for joining us,Hamid.

DABASHI: Thanks, Paul. Anytime.

JAY: And thank you for joining uson The Real News Network.

Source: Pacific Free Press

CNBC: ‘Greece Should Default Instantly,’ Economics Professor Says

2012-02-16T16:08:00.002Z

The euro is rallying on fresh hopes that Greek politicians can agree to austerity measures that could secure them a much-needed second bailout from their euro zone peers.

PNC | Brand X Pictures | Getty Images

On Wednesday, political parties in Greece were again going to try to agree on tough reforms needed to obtain a second bailout which would help the country avoid a messy default.

But according to one Greek economics professor, the country should simply default as soon as possible to provide some kind of relief to the region’s debt crisis.

“This bailout is certainly not the answer for anyone, for Greece, for the euro zone, for the world,” Yanis Varoufakis, Professor of Economics at University of Athens, told CNBC. “Greece should default instantly, immediately, without any talk of leaving the euro [EUR=X 1.3051 -0.0015 (-0.11%) ].”

“Here we have a typical bankruptcy problem which we’ve had for two years now,” Varoufakis said.

According to him, Greece’s first bailout back in May 2010 was not the illiquidity problem leaders perceived and they should stop “throwing good money after bad,” ballooning Greece’s deficit and “destroying the economy” thereby leaving it incapable creating income to repay its debt.

“Why can’t we (Greece) default within the euro zone?” Varoufakis said, noting that the country has already been frozen out of the money markets.

“The only reason for taking on more loans is if we think that by doing that then we can repay them. We can’t and everybody knows that. The European Central Bank knows that. The International Monetary Fund knows that,” he said.

The ECB and members of the euro zone must decide to “end the political lunacy” and be willing to accept the inevitable Greek bankruptcy and not “push it under the carpet like children trying to avoid a spanking,” Varoufakis said, adding that this won’t happen and another bailout is inevitable.

“Greece is going to go further into the coma in which it finds itself and the euro zone crisis is going to escalate and reach an even more advanced stage of disintegration,” he said.

Varoufakis likened the situation to the 1929 Wall Street crash where the “common currency of the era”—the gold standard—“simply disintegrates and then very soon after that you have a Hobbesian war of all against all.”

To find out more about this topic, read Zed author Yanis Varoufakis' Book, The Global Minotaur

The New York Times: The Way Greeks Live Now

2012-02-15T18:04:00.002Z

Zed author Yanis Varoufakis interviewed for larger NYT article

One of the grandest piles of ancient stones in a country full of glorious ruins lies on the island of Crete. It is called Knossos, and it was to Greece what Greece is to Europe: the cradle of its civilization. At the core of its prehistory is the legend of King Minos, who ruled over the Greek islands. Minos maintained his hegemony over Greece by requiring that Athens, the second power in the Aegean world, send him tribute in the form of young men and women, whom Minos fed to the beast he kept in his labyrinth: the Minotaur.

Improbably enough, a Greek economist named Yanis Varoufakis has been drawing attention in many of the hot spots of global finance lately, offering the Minotaur myth as a metaphor for understanding recent macroeconomic events. As Varoufakis writes in his recent book, “The Global Minotaur,” the world in which we have been living until recently functioned thanks to the voracious consumption of a different kind of beast. After World War II, the U.S. built up the infrastructure of its European allies as well as its former enemies, all of whom became trading partners. The U.S., with its great industrial and financial might, became the world’s surplus nation: its profits flowed out to its allies in the form of aid and investments. By the early 1970s, however, other countries had robust economies, and the U.S. was a debtor nation. “At that moment, certain very bright men within the American financial hierarchy made a stunning realization,” Varoufakis told me. The realization was that it didn’t matter if the U.S. was the biggest surplus or biggest debtor nation. What mattered was controlling the world’s primary currency, which would allow the United States to continue to recycle the global economic surplus. The idea was not unlike the thinking behind a casino — whichever gamblers are winning or losing, the house, which sets the terms and takes its cut, always wins.

So a new system came into being, in which a huge part of the world’s capital flows went to service debt originating in the United States. American debt, and the need to feed it, would be the modern Minotaur. The Wall Street financial houses became the handmaidens of the Minotaur. “The massive flow of capital into Wall Street gave it the impetus for financialization,” Varoufakis said, referring to the creation of derivatives and other risky financial vehicles. “And so Wall Street created a great deal of private money, with which it flooded the world and created huge bubbles, in the U.S. housing market and elsewhere.”

When that system came crashing down in 2008, Varoufakis says, “it was then only a matter of time that the euro would come into crisis.” Europe’s powerhouse economies — essentially, the northern countries — no longer had a place to sell their goods.

And where, in this grand picture, does Greece fit? Part of the logic of the eurozone involved the strong economies’ providing loans to the weaker ones, in order to build up their infrastructure so they could then buy products from the stronger countries — a kind of replay of what the U.S. did vis-à-vis Europe with the Marshall Plan. But while Greece took the loans, it didn’t invest wisely, and its own debt kept mounting.

As the weakest link in the eurozone, Greece gives us the clearest picture of what the larger economic downturn portends. And for all the hopefulness of some of the Greeks I met in my travels, others take a dimmer view of their future. Near Thessaloniki — Greece’s second-largest city — I visited a family home. Husband, wife and son were present. The woman is one of the top bankers in Greece. She spoke on condition that I not use her name or the name of her bank. When I asked for her views on the future, she said: “Last week, in the town of Larissa, I was sitting at an outdoor cafe, and a clean, well-dressed Greek man of about 60 passed by and politely asked if he could have the biscuit that came with my coffee. What you say about successful companies is good to hear. But the reality is that man who asked for my biscuit. You can’t see the crisis results fully yet because people have been living off their savings. Soon the savings will end. I believe that by the end of 2012, you will see a different Greece, a different country, with real poverty.”

According to Yanis Varoufakis, the future — for Greece and for much of the rest of the Western world, never mind recent upticks in the U.S. economy — is one of even more upheaval. “The Minotaur died, and that is what held everything together,” he said. “Until a new system is invented, we are in for turmoil.” As anecdotal evidence of the situation in Greece, he told me that all of his top Ph.D. students at the University of Athens were seeking jobs abroad. Then he added that he, too, would soon be leaving, possibly for a position in the United States.

To read the full article, click here

For more information on the current conditions in Greece and the rest of the world created by the economic crisis, read Yanis Varoufakis' book, The Global Minotaur

Forbes: How Economists Contributed to the Financial Crisis

2012-02-15T17:48:00.000Z

Zed author Steve Keen mentioned in Forbes article-

A lot of blame has been spread around regarding the financial collapse and the onset of the Great Recession. Greedy speculators, big banks, Wall Street executives, and Fannie Mae and Freddie Mac have all taken turns as whipping boys. But one group has largely avoided their fair share of attention: economists. They were the ones who provided the intellectual justification for the transformation of our economy over the past thirty years. They stood idly by as jobs went overseas, demand was sapped by increasingly uneven distributions of income, competition was destroyed by lax attitudes towards antitrust laws, and safeguards were discarded in the financial sector. More than that, many actually praised these events. This is not insignificant. Much of the financialization of the U.S. economy (the shift from producing goods and services to managing financial wealth that played such a central role in our collapse) could not have occurred without economists offering their tacit and open approval. Opposition would have slowed, if not stopped, these trends.

There was actually a poll among economists to determine which of their brethren they thought most responsible for our current debacle. The “winners” were as follows:

Alan Greenspan (5,061 votes): As Chairman of the Federal Reserve System from 1987 to 2006, Alan Greenspan both led the over expansion of money and credit that created the bubble that burst and aggressively promoted the view that financial markets are naturally efficient and in no need of regulation.

Milton Friedman (3,349 votes): Friedman propagated the delusion, through his misunderstanding of the scientific method, that an economy can be accurately modeled using counterfactual propositions about its nature. This, together with his simplistic model of money, encouraged the development of fantasy-based theories of economics and finance that facilitated the Global Financial Collapse.

Larry Summers (3,023 votes): As US Secretary of the Treasury (formerly an economist at Harvard and the World Bank), Summers worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also helped Greenspan and Wall Street torpedo efforts to regulate derivatives.

One might wonder how there could be such a disconnect between the theories employed by these economists and the real world. But, to those of us in the profession, it comes as no surprise. Some of us have been worried to death about it for years.

The short answer is, the incentive structure in mainstream (or Neoclassical) economics is skewed towards rewarding people for building complex mathematical models, not for explaining how the actual economy works. You might assume those two things are connected in some tangible way, but that’s not necessarily the case. I think the non-economist would be absolutely shocked by some of the things we learn in graduate school. For example, I wonder how many people know the formal Monetarist (Milton Friedman’s school of thought) explanation of how the Great Depression occurred? Their analysis depends on the existence of something called money illusion on the part of workers. The idea is that laborers are never quite certain what the current cost of living is since they do not keep a careful accounting of their expenditures. Meanwhile, firms are pretty darn sure what prices are because it is so important to their livelihood to pay close attention. Now imagine the following. Let’s say there is a massive collapse in the supply of money, leading to a fall in prices (which is, as I have pointed out elsewhere (albeit, in terms of the opposite direction), based on a very poor understanding of the modern financial system; but, in the interest of keeping things simple, I’ll concede the point here). The fall in prices, because it means they are earning lower profits, leads firms offer lower wages to their employees. But–and here’s what they say happened in the Great Depression–workers, not realizing because of money illusion that the cost of living has declined (and that firms’ offer is therefore not unreasonable), quit their jobs. And that, apparently, is how unemployment rose to 25% in the 1930s: the money supply fell, lowering prices, leading firms to offer lower wages, and causing workers to VOLUNTARILY QUIT THEIR JOBS! I don’t know about you, but that’s one of the most ridiculous explanations I have ever heard in my entire life. It also puts into perspective the above quote criticizing Friedman’s approach.

This is not completely atypical. It is a function of the fact that economists spend too much time developing complex thought experiments and clever stories and not working to understand the complexities of the real-world economy. A famous book published in 1990 showed evidence of this in the top graduate programs in our discipline (The Making of an Economist by Arjo Klamer and David Colander, Westview Press). When asked what was most important to success as an economist, students ranked these skills in this order (page 18):

1. Being smart in the sense of being good at problem solving.
2. Excellence in mathematics.
3. Being very knowledgeable about one particular field.
4. Ability to make connections with prominent professors.
5. Being interested in, and being good at, empirical research.
6. Having a broad knowledge of the economics literature.
7. Having a thorough knowledge of the economy.

No, I did not accidentally type the list backwards! And, if anything, the relegation of “knowledge of the economy” to dead last has become worse. Courses that would have provided context and empirical grounding to theory have been slowly replaced over the past thirty years by those teaching more mathematical methods. Today, students learn more about set theory than they do about the merger movements of the late 19th and early 20th centuries–if they hear about the latter at all, which is increasingly unlikely. Moreover, winning the publishing game means writing articles that are more general, theoretical, and mathematical. The author of a piece on the evolution of the specific institutional structure of the financial sector in the United States from 1980 to 1990, for example, even if well-written and firmly grounded in theory, would find it difficult to publish in any of the “top” journals. This would hurt the career advancement of a middle- to senior-level economics professor and could be a death sentence for the junior one, needing, as they do, to earn tenure in order to keep their job.

Not that I have anything against mathematics. My first college major was physics and I have always enjoyed the subject. I was one of those strange kids who loved word problems and derived great joy from figuring out the underlying logic of mathematical relationships (no, I didn’t date very much!). But for economists, math should be no more than a tool, not the end in itself. I’m afraid that’s not the case, so much so that today a common pattern is for a student to earn a math degree as an undergraduate and then pursue an economics PhD. Are they really interested in understanding unemployment, inflation, poverty, pricing, consumer choice, etc., or have they found a place where doing what they do best is rewarded?

This doesn’t mean that nothing useful gets done, but there are built-in incentives against it. Nor do I mean to implicate all of economists. Many DID raise the alarm and tried very hard to get the attention of the powers that be. But, they were in the minority and members of schools of thought largely dismissed by mainstream economics (e.g., Institutionalism, Post Keynesianism, and Modern Monetary Theory). Their graduate programs DO force students to learn about the structure of the actual economy (although still with plenty of math, but this time as the means rather than the end) and their journals DO reward authors who tackle the extremely complex and much messier task of figuring out what caused real-world economic disasters and successes. This is the sort of work that needs to be encouraged.

There was, incidentally, a second poll asking who most accurately forecast the financial crisis. The winner was, by a wide margin, Professor Steve Keen of the University of Western Sydney. The page announcing the award says this about Professor Keen’s work:

In December 2005, drawing heavily on his 1995 theoretical paper and convinced that a financial crisis was fast approaching, Keen went high-profile public with his analysis and predictions. He registered the webpage www.debtdeflation.com dedicated to analyzing the “global debt bubble”, which soon attracted a large international audience. At the same time he began appearing on Australian radio and television with his message of approaching financial collapse and how to avoid it. In November 2006 he began publishing his monthly DebtWatch Reports (33 in total). These were substantial papers (upwards of 20 pages on average) that applied his previously developed analytical framework to large amounts of empirical data. Initially these papers analyzed the Global Financial Collapse that he was predicting and then its realization.

In the 1995 article referenced above, Keen takes pains to model explicitly the features of a modern financial system (see Steve Keen, “Finance and Economic Breakdown: Modeling Minsky’s ‘Financial Instability Hypothesis,’” Journal of Post Keynesian Economics, vol.17, no.4, Summer 1995, pp.607-635). For him, there are no helicopters increasing the money supply by dropping cash, no households with perfect working models of the economy in the backs of their heads, no depressions caused by the fact that workers suddenly and voluntarily quit their jobs en masse, no speculators who know the future (all of these are actually features of popular mainstream economic approaches). His paper contains a great deal of math, but as a tool rather than an end. Among his key conclusions are:

• “…capitalist expectations of profit during booms can lead them to incur more debt than the system is capable of financing” (p.633).

• a breakdown results when there is a debt-induced recession, leading some capitalists to go bankrupt and lenders to “write off bad debts and suffer capital losses” (p.633).

• “…a rise in income inequality (between workers and capitalists) leads to a period of instability and then collapse” (p.633).

• “…a long period of apparent stability is in fact illusory, and the crisis, when it hits, is sudden–occurring too quickly to be reversible by changes to discretionary policy at the time” (p.633).

• the weight of the collapse may be so great that monetary (he specifically mentions lowering interest rates) and fiscal policy are powerless to reverse the trend.

All this was written in the midst of the longest peacetime expansion in US economic history, a period when some mainstream economists were declaring it a “New Economy” where recession had been banished forever. His predictions–and this is just a small subset of his work–were eerily accurate and based on work well outside of what is recognized as worthwhile in mainstream economics. He has continued to constantly update his work in his blog: http://www.debtdeflation.com/blogs/.

If you have never heard of him, that’s not surprising. You probably don’t read too many academic journals. The real problem is, most economists have never heard of him either. If we are to truly recover and put ourselves back on the track to prosperity, that has to change. It is vital that our profession revise its incentive structure such that models that more closely reflect the complex institutional structures and behaviors in the real world are valued above those that look pretty, but tell us nothing.

2012 Forbes.com LLC™ All Rights Reserved

To learn more about Steve Keen and his economic theories, check out Debunking Economics, available from Zed Books

Think Africa Press: Review: Getting Somalia Wrong?

2012-02-15T17:41:00.000Z

Somalia is a considered a failed state by many international bodies and governments. And it has been over 20 years since the fall of its former dictator Siad Barre in 1991. When Somalia is mentioned, it is most likely as a threat whether to itself, its neighbours or the wider world. In recent years, it has become notorious for the rise of Islamic extremism and for the piracy attacks off its coast. It is even considered by some specialists of international relations as a new “southern front” in the global war on terror.

The difficulty of covering events in Somalia has left the country surrounded by many misunderstandings and misconceptions. Mary Harper’s work Getting Somalia Wrong?, published this month by Zed Books, in their the African Arguments series, seeks to shift a narrow vision of the country and broaden understandings Somalia’s situation.

As a BBC journalist and currently Africa Editor at the BBC World Service, Mary Harper has been reporting from Somalia since the outbreak of civil war in 1991 as well as from other war zones across Africa, including Sudan, Liberia and the Democratic Republic of Congo. Her interest in Somalia, however, also has a personal dimension. Her mother worked in Somalia as a nurse in the early 1990s and introduced the country to her daughter in a sensitive and detailed way, above and beyond the descriptions offered by short news bulletins. After years of reporting in the Horn of Africa, Harper has developed a rare proximity to the Somali people.

Pride and prejudice

Harper is well aware of the prejudices surrounding Somalia. She writes in her introduction that she realises the country “ticks all the boxes for an African disaster zone”. “It has war, it has hunger. It provides perfect images for the media: gun-wielding, drug-crazed teenagers race around in sawn-off Land Cruisers, while skeletal women clutch starving children, flies buzzing around their faces.” Such images that have recently dominated world television networks during the famine of the past year.

But the whole point of the essay is to show how those images and clichés are barriers to other ways of fathoming a country in crisis but also in constant evolution. Indeed, despite two decades of conflicts, Somalia has still managed to develop its economy via improvements in technology and money transfer. It has also grown through drastically-changing political phases.

Harper even argues that the rest of the world has a few things to learn from Somalis’ resilience and capacity to reinvent themselves. Alternative systems of business, justice, education and local politics have survived and evolved in the country.

Misunderstanding the situation

It is difficult to talk about a political system when dealing with contemporary Somalia, but even in this area, the country has found its own pattern, insists Harper. Somalia has no central government and is made up of a combination of regions which have more or less achieved semi-autonomy, like Somaliland and Puntland. The boundaries between these territories and the rest of Somalia – “south central” as it is often referred to – are blurred, disputed and shifting. But in many ways, this partition has benefited the population, since there is no conflict in the northern regions of country, while south central Somalia is still undergoing civil war.

What the book demonstrates best is how foreign powers involved in trying to resolve the conflict have often exacerbated the situation. When the Union of Islamic Courts (UIC) took control of most parts of Somalia in 2006, ''The USA and its allies misinterpreted these events”, comments Harper. “They mistakenly equated a home-grown form of political Islam with the international al-Qaeda franchise and, by doing so, inadvertently advertised the country as a promising new battle front for jihadists from across the world''.

In reality, what happened in Somalia at that time was that Sharia courts were providing stability, some safety and a form of justice to the people after years of absolute chaos. And the US misinterpretation of the movement encouraged the UIC's fall in 2007 and the rise of al-Shabaab militias, who are violent and represent an actual threat for the country and the whole region.

According to Harper, Somalia has been ''squeezed into the dominant Western post-9/11 narrative'', but it happened without realising that the country would not let itself turn into a field of experimentation for the Western world's war on terror.

Harper admits that Somalia has always been difficult to comprehend for outsiders. But the foreign powers involved in the Horn of Africa nevertheless must now have a better look at its history if they want to understand it.

Looking back

The second chapter of the book gives the readers a short history of Somalia. Plunging into Somalia's clan-like structure and complex history of invasions and cultural exchanges with its neighbours through the first and second chapters, Harper describes a very complex, mostly nomadic and oral society, as developing its own political models and religious patterns.

The third chapter, dedicated to Islam in Somalia, is particularly striking. Harper reports some of her hard-won interviews with current and former al-Shabaab leaders in order to better understand the interactions between politics and Islamism in today's Somalia. This includes the Islamic leader Sheikh Hassan Dahir Aweys and former leader Al Ahzari, as well as child soldiers living in Mogadishu or hidden as runaways in Nairobi.

Failed state, failed society?

Harper also describes how much Somalia has evolved into developing its own political and social systems, which are, despite the West's criticisms, somehow functional. Broken into more or less autonomous sub-regional and local entities, Somalia is not actually a state as modern political theories define it, but a collection of different clan and regional organisations. The example of the region of Somaliland shows, according to Harper, a form of possible stability for Somalis.

Also focusing on the issues of piracy in the Horn of Africa and the relations between Somalia and the outside world, the book describes how the country may be considered as a failed state, but is far from being a failed society. Harper concludes that to view Somalia through the prism of al-Qaeda is only a source of further destabilisation of the country and the entire Horn of Africa.

With a provocative analysis, Getting Somalia Wrong? argues that the international community needs to start getting Somalia right, or the consequences might end up being devastating, and not just for Somalia, but for major parts of the world. It is also wonderfully written, appealing and engaging, with numerous references to Somali traditions and poetry, rare virtues for such a serious topic.

By Melissa Chemam

Check out this book, Getting Somalia Wrong? available now from Zed Books

Al Jazeera- Dam it: Brazil's Belo Monte stirs controversy

2012-02-15T13:24:00.002Z

Altamira, Brazil - Drive about 90 minutes outside this sultry Brazilian Amazon town, and into the thicket of the jungle, and a surreal, other-worldly scene appears.

It's a place where dozens of steel arms with giant claws from land excavators cut into the red earth, carving out deep holes.

There are earth movers, growling bulldozers and dump trucks crossing switch back roads that lead into colossal man-made craters, while clusters of hard hat-wearing engineers, glare down inspecting it all.

This is the scene at the opening phase of the building of the largest and most expensive project in Brazil, and one of the most controversial projects in Latin America: The Belo Monte Dam, along the Xingu River.

Officially the ground breaking quietly happened in June of last year, but the heavy construction ramped up during the turn of the year, and is moving full speed ahead at a blistering pace.

Five thousand men are working in two shifts, from 7 am until 5 pm and from 5 pm until 2:30 am, six days a week.

The construction area is gigantic, comprising three separate work sites sites that will eventually merge together to form two reservoirs 500 square kilometres in size linked by a channel comprising the Belo Monte Dam complex.

Twice a day, dynamite is used to blow up hard rock under the earth to make way for the dam.

A 'small city' is being built inside the work area to accommodate some of the 20,000 labourers and engineers who will be working here by November 2013.

When completed, Belo Monte will be the world's third largest hydroelectric dam and the latest cost estimate is $14bn.

The construction scene is all the more remarkable given that until a few months ago, Belo Monte's future still seemed in doubt, as the project faced a wave of judicial injunctions, and opposition from indigenous groups and environmental organisations both in Brazil and abroad.

The judicial injunctions were primarily imposed by the federal prosecutors office in the state of Para where Belo Monte is located and they questioned the builders processes of environmental licensing, contracting bids and the rights of effected indigenous populations.

Renewable energy worth social cost?

Those regional injunctions were either thrown out by higher courts or appealed, which has allowed builders to proceed forward and project and air of confidence.

"In this moment Belo Monte has the perspective to fulfill absolutely all its timetables," Joao Pimentel, the director of institutional relations for Norte Energia, told Al Jazeera. "We haven't had any delays by any judicial action or for any other reason, and we never had any lost days of work. That's why Belo Monte is going to continue within the timeframe."

While Belo Monte is being built by Norte Energia - a consortium of more than 10 mining, engineering and construction companies - the project is heavily backed by the federal government and Brazil's President Dilma Rousseff, who have long said the dam is an essential component of Brazil's energy security.

Pimentel argues Belo Monte represents clean, renewable energy, and he points to the fact 86 per cent of Brazil's energy generation is from renewables, far higher than the world average.

"Brazil needs Belo Monte," Pimentel said.

Most environmentalists disagree, arguing that the ecological and social impacts of Belo Monte far outweigh any benefits.

"Belo Monte's social and environmental impacts are far greater than the Norte Energia propagandists would lead us to believe," Christian Poirier, Brazil programme coordinator for Amazon Watch told Al Jazeera. "They are in fact an unacceptable price to pay for a hugely inefficient mega-project carved into an extremely sensitive and precarious region."

Poirier says the Brazilian government has put too much emphasis on hydroelectric dams and not on wind and solar energy, which are generally considered to have less social and environmental impacts.

There is also the issue of displacement. According to Pimentel, about 6,000 families, or roughly 24,000 people, are being paid-off to leave their homes to make way for the dam.

Elio Alves da Silva, 56, a fishermen in the community of Santo Antonio - which sits at the base of one the main work sites - is being pushed off the land where he has lived for more than 30 years.

Only 60 families live in the community, but more than half have taken the payout and moved.

Their homes are then quickly demolished by Norte Energia, and no trespassing signs put up. The church will be destroyed, and the tiny cemetery with about 20 gravesites has also been closed.

Payouts not enough

"Our community was one of the most talked about in the area," Alves da Silva told Al Jazeera. "Belo Monte is finishing our community. We had no option. For me, the saddest part of this story is to know that everything I helped create here I'm now seeing it all be destroyed. For me, this is the most difficult part."

There are a handful of people who don't want to leave, but last month the Brazilian government declared the entire Belo Monte construction area as well as surrounding 'areas of impact' part of the 'public interest,' meaning that residents have little legal recourse.

Mr Alves da Silva was offered about $11,000 for his home, but when he rejected that amount, Norte Energia offered a few hundred more dollars that he accepted, fearing there was no other option.

The money, he says, isn't enough to buy a proper piece of land, so he's moving 70km away to the only area he can afford, but will loose his livelihood of fishing.

"I consider myself as one of those who has been defeated," Alves da Silva said.

When thinking about his home being bulldozed, tears started to roll down his cheeks.

"It's difficult, very difficult," he said.

Pimentel argues that Belo Monte's social impacts will be marginal.

"The design of Belo Monte was changed in the last year precisely to reduce the social impacts," Pimentel said. "The population that has been or will be removed during the process of the building of Belo Monte will only be in those areas that are necessary for the reservoir. And that is a small population... Yes, there are social impacts of a big project like Belo Monte, but we are mitigating those."

Questions such as how much land will be flooded and how many indigenous people will be effected have been batted around for years; debates about effects of building a dam of such magnitude on the Xingu River date back to the late 1970s during the time of Brazil's military dictatorship.

But today Belo Monte is fast becoming a reality, not just a concept to discuss.

Unanticipated social consequences

Just this week the Arara indigenous community claimed that land runoff from the construction was dirtying the Xingu river water they use to fish and drink. The public prosecutor's office has asked environmental authorities to urgently look into the matter.

And the city of Altamira has suffered a transformation as thousands of migrants merge on the city for jobs on the dam. The prices at the few hotels in town have more than doubled, and there has been skyrocketing land prices and home rentals. New business are opening to meet demand of well-funded engineers migrating to the city from other parts of Brazil.

And there is also crime.

ISTOE, a respected national news magazine, recently reported that criminality in Altamira has skyrocketed - the number of weapons confiscated jumped 379 per cent from 2010 to 2011 - as thousands of migrants flooded the city looking for work on the dam project.

"The trafficking of drugs and the bank robberies have intensified in the Xingu region because of a higher number of people and the movement of resources generated by the work of the large construction project," Paulo Kisner, the local Federal Police boss in Altamira, told the magazine. "Investments in the cities of the Xingu area are not being made, and the consequence is the increase in cost of living for a majority of population that is poor."

Belo Monte officials strongly deny crimes rates in Altamira are related to the construction project.

A new study released by a respected Brazilian environmental research organisation claims that deforestation will spike in the coming years in the region around the dam with an estimated 800 square kilometres destroyed in a "best case scenario", or as much as 5,316 square kilometres in a "worst case scenario" depending on migrations patterns.

Perhaps shocked by the speed of construction, Xingu Vivo Para Sempre, the main local NGO fighting against the dam, stormed a part of the construction site in January and spray painted work vehicles with anti-dam slogans, temporarily halting work for about one hour.

'Battle for public opinion'

Last year, more than one million Brazilians signed a petition against the dam in less than a week and in 2010 American filmmaker James Cameron came to Brazil to take up the cause of fighting against the dam.

Meanwhile, Norte Energia is pushing ahead both on construction and the battle for public opinion.

The first turbine is expected to be operational by 2015, and the entire project complete by early 2019.

They say all plans are on schedule.

The company has started a television station in Altamira, TV Belo Monte, and also hired Luiz Carlos Barreto, a famous Brazilian cinema filmmaker, to produce promotional videos extolling the benefits of the dam.

But decades after this project first was considered, and with cement being laid and earth movers carving new paths for construction, some opponents of the dam say there is still a long battle ahead.

"The government and builders of Belo Monte appear to think that rushing this disaster's completion will make it a fait accompli," said Poirier, from Amazon Watch. "But I'm afraid what they are doing is provoking further conflict with affected people and the potential for a prolonged standoff."

For his part, Pimentel is convinced the benefits outweight the costs. If there is no dam, he said, "there will be a need for nuclear or coal power and that is worse".

Estimated Cost: $14bn USD

Workers: 5,000 now, 20,000 by November 2013

Schedule: First turbine to start generating electricity in February 2015, final completion of project by
January 2019.

Size: Will be the world's third largest dam, behind China's Three Gorges and Brazil-Paraguay Itaipu. It's
currently the largest construction project in Brazil, and one of the largest in all of Latin America.

Who: Norte Energia, a consortium of over 10 of the largest construction, engineering, and mining firms in the world, mostly Brazilian. Norte Energia is a private ('special use') company set up especially for the Belo Monte Dam.

Location: Belo Monte is located on the Amazon's Xingu River. The nearest town is the city of Altamira (pop 98,750), roughly 50 kilometres from the construction site. It's in the Brazilian state of Para (pop 7.6 million). There are 11 cities in the area of influence of Belo Monte.

About the Xingu River: The Xingu River flows from the tropical savanna of central Mato Grosso state,
Brazil northward to the Amazon for 1,979 km (1,230 miles). According to NGO International Rivers, some 25,000 indigenous people from 18 distinct ethnic groups live along the Xingu. Norte Energia says only 2,200 indigenous people are in the Belo Monte area of influence.

History of Belo Monte project: The idea of building a dam on the Xingu River was first proposed in the 1970s, during the time of the military dictatorship in Brazil. The idea was for several Dams on the Xingu, but it never went forward and the plans were just put on hold.

In 1989, an international mobilisation (called the Encontro do Xingu) led by the Kayapo Indians stopped state-owned electric company Eletronorte's plans to construct a six-dam complex on the Xingu.
During the 1990s there was more of a focus put on energy and plans for Belo Monte were again renewed. Former President Lula da Silva agreed to the Belo Monte Dam project.

With the project coming closer to reality, yet still working it's way through the legal and environmental and government bodies, in May of 2008 there was a second Encontro do Xingu gathering and it was the largest indigenous gathering ever in the Brazilian Amazon.

Thousands of indigenous people protested against Belo Monte. But at the same time there were a series of high profile energy blackouts in major Brazilian cities, that talk of needing more energy was again renewed.

In April 2010 the Consortium Norte Energia was formed, made up of 11 companies, and won the rights to build the dam. Ibama, the environmental regulatory agency, signed off on the project. July 23, 2011 construction officially began, but ramped up in January 2012.

Al-Jazeera: Fresh doubts over Greek bailout plan

2012-02-15T13:09:00.002Z

European finance ministers have cancelled a meeting to discuss Greece's second bailout, creating further uncertainty over Greece's commitment to austerity reforms demanded by its creditors.

Jean-Claude Juncker, the prime minister of Luxembourg who heads the Eurogroup of eurozone finance ministers, said Wednesday's meeting had been replaced by a conference call because Greece had failed to meet all the conditions needed in order to receive its next rescue loan.

Juncker said the group had not yet received assurances from Greek political leaders over their commitment to cuts, despite the measures being passed by the country's parliament. He said Greece had also still to detail how it planned to cover a budget gap of $428m.

Jan Kees de Jager, the Dutch finance minister, said: "We should have everything clear on paper. We don't give an inch. We want everything, a complete package."

Greece needs access to the 130bn-euro loan ($170bn) in order to avoid defaulting on its debts next month, when it is due to pay out 14.5bn euros ($19bn) in redeemed government bonds.

Antonio Samaras, Greece's conservative leader, who is expected to be the country's next prime minister after elections in April, plans to send a letter of commitment to the terms of EU/IMF bailout within the day, a spokesman told Reuters.

But Greek political leaders have continued to rail against the stern measures demanded in return for the bailout.

Christos Papoutisis, the country's public order minister, said: "Greece has made all the efforts that it needed to do, and the people cannot take any more. The government is making superhuman efforts and we have reached the limits of the social and economic system."

Lack of trust

Al Jazeera’s Barnaby Philips, reporting from Athens, said: "There is no doubt that the EU is holding the Greek feet to the fire, if you like."

"It's a lack of trust from the European leaders, perhaps particularly Germany and Netherlands," he said.

"The record of the past two years, unfortunately, has suggested that Greek leaders cannot always deliver. On this side there will be exasperation, despair - a feeling that enormous sacrifices have been made and now European partners need to show solidarity and need to help Greek people."

Al Jazeera's John Psaropoulos, also reporting from the Greek capital, said the cancellation of Wednesday's meeting was the latest in a line of procedural hiccups.

He said Greek officials had gone to Brussels "unprepared" with respect to precisely where the 325m euro [$428m] that was still outstanding from a proposed 3.9bn euros in cuts would come from.

"What I am hearing from the Greek government is that about [$132m] of that sum remains to be clarified."

Our correspondent said $262m would be culled from military expenditure and local government spending, with several hundred jobs in local government set to be eliminated by June 2012.

Election date set

Greece's parliament voted in favour of the latest austerity measures on Sunday, but the debate brought the government to the brink of collapse, with the far-right LAOS party quitting the ruling coalition and both of the country's main parties suffering resignations and rebellion within their ranks.

Lucas Papademos, Greece's unelected prime minister appointed in November to steer the country through its debt crisis, says that the consequences of a Greek default, including probable exclusion from the eurozone, would be worse than the effects of the austerity measures, pitching the country into social and economic chaos.

The country also announced parliamentary elections for April, prompting European officials to seek assurances that any agreement over the austerity measures would be honoured by the next government.

The country has also been rocked by days of strikes, protests and street clashes amid anger over the extent of the cuts.

At least 45 buildings were burned during riots on Sunday, including one of Athens' oldest cinemas. Dozens of stores and cafes were also smashed and looted.

Authorities said 106 police needed medical care after being injured by petrol bombs, stones and other objects hurled at them. At least 70 protesters were also admitted to hospital.

Police arrested at least 74 people and detained a further 92.

Greece has already endured several rounds of austerity cuts amid efforts to put its economy in order, prompting a fall in GDP of seven per cent in the fourth quarter of 2011, according to figures released on Tuesday.

Source:

Al Jazeera and agencies

Bloomberg: EU Is `Pretending' Greek Package Will Work

2012-02-15T12:49:00.000Z

Feb. 13 (Bloomberg) -- Yanis Varoufakis, a professor at the University of Athens, and Miranda Xafa, president of EF Consulting, talk about the outlook for Greece after lawmakers approved the austerity package demanded to secure a financial lifeline. They speak with Owen Thomas on Bloomberg Television's "Countdown." (Source: Bloomberg)

To watch the interview, click here

For more information on the current eurozone debt crisis, check out Zed Author Yanis Varoufakis' book, The Global Minotaur

Al Jazeera: Starving for freedom: The hunger strike of Khader Adnan

2012-02-14T17:02:00.000Z

Amman, Jordan - By the time you read these words, Khader Adnan could be dead. After 58 full days on hunger strike, his body is already well past the stage where his vital organs may cease to function at any moment. But Khader Adnan is dying to live.

The 33-year-old Palestinian baker, husband, father, and graduate student has refused food since December 18, a day after he was arrested in a nighttime raid on his family home by Israeli occupation forces in the West Bank. He has lost over 40 kgs and his wife Randa and young daughters have described his appearance as "shocking".

Adnan, whom Israel says is a member of Islamic Jihad, was given a four month "administrative detention" order by the Israeli military - meaning that he is held without being charged for any crime or trial, a practice continued by Israel that dates back to British colonial days.

Yesterday an Israeli military court rejected Adnan's appeal against the arbitrary detention. Having vowed to maintain his hunger strike until he is released or charged, the judge - an Israeli military officer - might as well have sentenced Khader Adnan to death, unless there is urgent international intervention.

Though the life in his body hangs on by a thread, his spirit is unbroken.

"The Israeli occupation has gone to extremes against our people, especially prisoners," Adnan wrote in a letter published through his lawyer, "I have been humiliated, beaten, and harassed by interrogators for no reason, and thus I swore to God I would fight the policy of administrative detention to which I and hundreds of my fellow prisoners fell prey."

According to Amnesty International, which has issued two urgent appeals on Adnan's behalf, as of December 31 last year, 307 Palestinians were in Israeli administrative detention, including 21 members of the Palestinian Legislative Council that was elected in January 2006.

"I hereby assert that I am confronting the occupiers not for my own sake as an individual, but for the sake of thousands of prisoners who are being deprived of their simplest human rights while the world and international community look on," Adnan wrote in his letter.

In addition to Amnesty, Human Rights Watch too has heard Adnan's message, calling on Israel to release or charge him.

Adnan's insistence on his dignity and autonomy and his unwillingness to be broken by an overwhelmingly powerful oppressor contrasts starkly with the increasingly directionless and unprincipled actions of Palestinian leaders who continue to make dubious "reconciliation" deals that go nowhere, and pursue "negotiations" with Israel that have no chance of liberating Khader Adnan, his young daughters and millions of their countrywomen and men from Israel's occupation, colonisation and apartheid.

Adnan's fast has drawn support from people all over the world. Hundreds staged peaceful protests outside Israel's Ofer Prison - where they were met with violence and arrests by Israeli police - and other protests were held as far as Washington DC, New York and Chicago. Many others have fasted in solidarity with Adnan.

Khader Adnan's struggle reminds us that nonviolence is not the easy choice. It is often the harder one.

Yet the world is still failing to act. The Palestinian prisoner's group Addameer undoubtedly spoke for many when it declared that it "holds the international community responsible for not taking action to save Khader’s life". It demanded "that the European Union, the United Nations and the International Committee of the Red Cross intervene with Israel immediately before it is too late".

And there has been silence too from prominent voices such Nick Kristof, the New York TimesWaiting for Gandhi", Kristof scolded Palestinians for not adopting nonviolent tactics. columnist famous for using individual stories to draw attention to human rights abuses around the world. In a 2010 column titled "

Of course Kristof was ignoring or simply ignorant of the rich history and present of such popular resistance in Palestine ably documented by Mazin Qumsiyeh in his recent book, Popular Resistance in Palestine: a History of Hope and Empowerment- which includes hunger strikes. Last Autumn hundreds of Palestinian prisoners spent weeks on hunger strike against punitive Israreli prison conditions, and many are on hunger strike now in solidarity with Adnan.

But if Kristof and others claim to be "waiting for Gandhi" why haven't they spoken up for Adnan? After all it was Mahatma Gandhi himself who when repeatedly imprisoned by the British famously used hunger strikes to draw international attention to his people's cause.

In more recent memory are the Irish hunger strikes by IRA and Republican prisoners in Belfast's Maze Prison in 1980-81. Ten of the men - most famously Bobby Sands, just 27 years-old, who endured 66 days - fasted to death. During his strike Sands was even elected a member of the British Parliament - a fact murals on the walls of Belfast still commemorate by affixing the letters "MP" after his name.

The government of Margaret Thatcher refused to yield to the demands of the hunger strikers to be treated as political prisoners. Yet their sacrifice galvanised global support and greatly embarrassed the British, pressure that arguably contributed to eventual peace.

Last week Tommy McKearney, who spent 53 days on hunger strike in 1980, sent a video message of solidarity with Khader Adnan. McKearney, himself a former member of the IRA, lived to contribute to peace in his country, just as his comrades did with their deaths.

But Bobby Sands and his comrades need not have died had wiser, more humane policies prevailed at the time. And Khader Adnan need not die today or tomorrow. But it will take the world to speak out now to save him.

The determination, unflinching courage and self-sacrifice of Adnan's hunger strike has captured the imagination and support of people everywhere. He deserves our respect, but more importantly right now, he needs us to raise our voices.

For more information about the Palestine-Israeli Conflict, check out the The Palestine Nakba, available from Zed Books

Investor Home: The Evolving State of Economics and Steve Keen's Debunking Economics

2012-02-14T15:55:00.000Z

Book Review-

Gary Karz, CFA
Host of InvestorHome

In the wakeof the Global Financial Crisis (GFC), economistsworldwide have been reassessing their opinions and theories about how theeconomy works, what caused the crisis, andhow to fix it. In fact, many have blamed the professionof economics (and specific economists) for contributing to the crisis.

A chiefcritic of mainstream economics that has been drawing increasing attention inrecent years is Australian Professor Steve Keen. While there are (I believe)more than 50 prominent individuals that warned in advance of the crisis, thousands ofeconomists at Real-World Economics Reviewoverwhelmingly voted Keen the winner of the Revere Award (thecriteria being those that "first and most clearly anticipated and gavepublic warning of the Global Financial Collapse and whose work is most likelyto prevent another GFC in the future"). The result is particularlyimpressive given that Keen outpolled the other prominent nomineesincluding Nouriel Roubini (who placed second and is widely acknowledged by thepress for predicting the crisis), Robert Shiller, George Soros, as well asNobel laureates Joseph Stiglitz and Paul Krugman.

Keen originallypublished the first edition of his book Debunking Economics in2001 and he expanded and updated the 2nd Edition, which wasreleased near the end of 2011. Keen argues that virtually every aspect ofconventional neo-classical economics' thinking is intellectually unsound andthat "neoclassical economics is not bad because it is mathematical per se,but because it is bad mathematics." Keen discusses many of the modernworld's most well-known economists and economic theories and critiques theprinciple concepts, theories, and methodologies of economics in the book. He isparticularly critical of many of the commonly used economics textbooks and Keenstates "the critiques in this book are not based on politics, but onlogic. No political position - left, right or middle - should be based onfoundations which can easily be shown to be illogical. Yet much of economictheory is illogical."

As the GFCevolved there were many that gravitated toward the work of the late economistHyman Minsky. Keen's PhD thesis was on modeling Minsky's financial instabilityhypothesis and Keen argues that some of those that have jumped on the Minskybandwagon misinterpret or display ignorance of Minsky's work. For instance,Keen writes that some prominent economists seem "incapable of conceivingthat aggregate debt can have a macroeconomic impact . . . While Krugman reachedsome policy conclusions with which I concur - such as arguing againstgovernment austerity programs during a debt-deflation crisis - his analysis isproof for the prosecution that even cutting edge' neoclassical economics, bycontinuing to ignore the role of aggregate debt in macroeconomic dynamics, ispart of the problem of the Great Recession, not part of the solution." I'msure there is more to the story, but I did see this Krugman blog post(11/29/2011) "looking at the long-term debt history of the UnitedStates" showing nonfinancial private-sector debt as percentage of GDP. Heconcluded "for now, I think the data are really interesting."

Oneinteresting detail Keen notes in the book is that Minsky himself identified1966 as the time at which America made the transition from a productive to aPonzi economy. I always try to look at (and link to) the various sides of anargument/theory and there are others that have not joined the Minsky bandwagon,one prominent one being Richard Roll. See the The Possible Misdiagnosis of aCrisis (March/April 2011) and his response to a comment referencingMinsky in the May/June 2011 issue of the Financial Analysts Journal.

While thenews regularly cites unemployment numbers (the definition of which was changedin 1994), Keen argues the correct comparison to the Great Depression is an"alternative measure for the US measure that includes long-termdiscouraged workers." (See Shadowstats). Keenpoints out that "one in six Americans are out of work today, versus a peakrate of one in four during the Great Depression. The current crisis, though itis called the Great Recession, is therefore really a depression too." Asample chapter that Keen has made available is Misunderstanding the GreatDepression and the Great Recession. In the book, Keen makes"the empirical case that a collapse in debt-financed demand was thecause of both the Great Depression and the Great Recession. Bernanke'sneoclassical goggles rendered him incapable of comprehending the bestexplanations of the Great Depression and let him to ignore the one data setthat overwhelmingly explained the fall in aggregate demand and the collapse inemployment." See also Down and Out: Measuring Long-TermHardship in the Labor Market (January 2012) and Unemployment Is Down BecausePeople Have Given Up Looking for Work (24 January 2012) from TheCenter for Economic and Policy Research.

Keen writesfurther that "The Great Depression remains the greatest economic crisisthat capitalism has ever experienced, but on every debt metric, the forces thatcaused the Great Recession are bigger. Private debt rose 50% of the 1920s, from$106 Billion (yes, billion) in 1920 to $161 billion by 1930; it rose from $17trillion between 1999 and 2009 - a 140 percent increase. The debt-to-GDP ratiowas 175 percent when the Great Depression began; it is over 100 percent highertoday and hit 298 percent before it began to reverse in 2009." Diagramssupporting the book are also available from his web site here (46 pages), with graphic 96 accompanying thepreceding text. The book is over 429 pages without the diagrams. Incidentally, Krugman has also said we are in adepression (and still believes that to this day).

Keen'sprescription for fixing our debt problems has been finding more supportrecently. "There is a simple, but confrontational, way to stop thisprocess: a unilateral write-off of debt." See also Keen's response to my GFC Survey. While it would befascinating to see Keen debate some of the prominent economists he comments on,he doesn't expect many would change their minds, because "there is nopoint trying to debate fundamental beliefs with a zealot."

My first exposure to Keen's writing was when I found his FCIC Report critique Sound and fury, signifying nothingin which he commented that he "wasted a perfectly good day reading thereport." While it's generally difficult to make economics booksinteresting, I find Keen to be consistently interesting and quotable. Forinstance, Keen summarized that "Economics is not the emperor of the socialsciences, but the Humpty Dumpty." Frank Fabozzi andSergio Focardi comment in What Can We Really Know aboutEconomics? where they summarize "The science of economics is inan uncomfortable position, somewhere between the physical sciences and thehuman sciences . . . One can say: In physics, we have lots of informationcorrupted by a little noise; in economics, we have lots of noise corrupted by alittle information."

In economics and investing, noise is a major issue, causingmisdiagnosis, too much trading, and way too much overconfidence on the part of both economists andinvestors. After reading Debunking Economics, one thing I can say is I'm sureglad that I didn't major in economics.

Despite it's issues, economics clearly plays a role in the investmentbusiness, which is one of the reasons I link to many prominent economists' websites and blogs. As I noted above, I like to hear both sides of an argument, soit's somewhat intentional that I link to the blogs of Paul Krugman and GregMankiw next to each other on the InvestorHome home page,as well as to Robert Reich alongside Karl Rove (alphabetically organized). I'veadded Steve Keen's blog to those links, and I think hehas earned the right to be heard on major economic issues. As the debates abouthow to improve the world's economy continue, I think many will be well servedto consult the advice of Keen and others, rather than solely relying on thosewith similar opinions to their own and/or only those in traditional positionsof influence. Keen is seeking sponsors forhis continued efforts to develop "a realistic theory of economics, andpublic knowledge of both the flaws in neoclassical analysis and the existenceof alternatives."

Debunking Economics also has interesting discussions on many othertopics including monopolies and unions, as well as the efficient market hypothesis. The final chapter isone of the most interesting and in it Keen discusses alternative economicapproaches and their strengths, weaknesses, and track records. My collection ofother interesting quotes from Debunking Economics include the following (it wasdifficult to cull the list down to these).

· Rather than being a 'Black Swan', the GreatRecession was a 'White Swan' made invisible by neoclassical economists becausetheir theory makes them ignore the key factors that caused it: debt,disequilibrium, and time.

· An economic theory that ignores the role of moneyand debt in a market economy cannot possibly make sense of the complex,monetary credit-card based economy in which we live.

· Confronted by a competitive disconnect between whatthey believed and what was happening, economists reacted in a very human way:they panicked. Suddenly, they threw their neoclassical policy rules out thewindow, and began to behave like 'Keynesian' economists on steroids.

· Neoclassical efforts to get out of such a crisis -once they've gotten over the shock of one actually happening, and revert toform after behaving like 'born-again Keynesians' when the crisis begins -invariably argue that wages have to fall to end the crisis, because highemployment clearly indicates the wages are too high.

· To neoclassicals like Friedman and Bernanke, it wasbetter to blame one of the nurses for incompetence, than to admit thatcapitalism is a manic-depressive social system that periodically attempts totake it's own life.

· the key to preventing depressions is to prevent anexplosion in the ratio of private debt to GDP, so that debt-financed demandcannot reach a level from which its collapse will trigger a depression.

· As this book details, neoclassical economics isawash with examples of its internal contradictions being ignored by itsbelievers, so in one sense their practice of pretending that the MoneyMultiplier determines the amount of money in the economy is just anotherexample of neoclassical economists believing in something that does no exist.

· The global economy won't return to sustained growthuntil debt levels are substantially reduced. With debt at its current level,the general tendency of the private sector will be to delever, so that thechange in credit will deduct from economic growth rather than contributing toit. Any short-term boost to demand from the Credit Impulse - such as occurringin early 2011 - will ultimately dissipate, since if it were sustained thenultimately debt levels would have to rise again. Since the household sector inparticular is debt-saturated credit growth will hit a debt ceiling and give wayto deleveraging again. The US economy in particular is likely to be trapped ina never-ending sequence of 'double dips,' just as Japan has been for the lasttwo decades.

· Though deregulation of the financial sector was farfrom the sole cause of the financial crisis that began in 2007, removing thefetters from the financial sector resulted in a crisis that was more extremethan it would have been had the previous regulations been kept in place. TheUSA's 'shadow banking' sector could not have invented and sold so many 'weaponsof financial mass destruction' as it did - to use Warren Buffett's evocativephrase - had Glass-Steagall not been abolished during Bill Clinton's term, forexample.

For an entertaining diversion while debating economics, invest a fewminutes to watch 10 Principles of Economicsby Stand-Up Economist Yoram Bauman. Additionalexamples of changing perceptions of economics (called the dismal science by some) in the wake of theGFC include the following.

· 10/28/2008 - The Behavioral Revolutionby David Brooks in the NYT

My sense isthat this financial crisis isgoing to amount to a coming-out party for behavioral economists and others whoare bringing sophisticated psychology to the realmof public policy. At least these folks have plausible explanations for why somany people could have been so gigantically wrong about the risks they weretaking.

· February 2009 - The Financial Crisis and theSystemic Failure of Academic Economics by Thomas Lux, DavidColander, Michael Goldberg

We trace thedeeper roots of this failure to the profession’s insistence on constructingmodels that, by design, disregard the key elements driving outcomes inreal-world markets. The economics profession has failed in communicating thelimitations, weaknesses, and even dangers of its preferred models to thepublic.

· 4/16/2009 - What Good are Economists Anyway?by Peter Coy in Businessweek

"thisgroup say government needs to break downward spirals with the kinds ofaggressive policies the U.S. is following now—cutting interest rates andraising government spending. The group includes Paul R. Krugman, the PrincetonUniversity economist and Nobel laureate; NYU's Nouriel Roubini, who was earlyin predicting a severe recession; and Yale University's Robert J. Shiller, whopredicted the housing bust and the tech-stock bust. Other economists have moreconfidence that the economy is self-equilibrating. They believe low interestrates and heavy deficit spending will be ineffective while leaving the U.S.with a mountain of debt. Count Harvard's Robert Barro in this camp, along withChicago's Robert E. Lucas Jr., Arizona State University's Edward C. Prescott,and the University of Minnesota's Patrick J. Kehoe and V. V. Chari. Nosurprise, the equilibrium school mainly leans Republican, and theinterventionist school seems to be crawling with Democrats. On the right, JohnH. Cochrane of the University of Chicago dismisses those who advocate Keynesianstimulus, saying: "Professional economists, the guys I hang out with, arenot reverting to ancient Keynesianism any more than physicists are going back toAristotle when they can't understand how fast the universe is expanding."There are some middle-of-the-roaders, such as Columbia University's MichaelWoodford, who argue that macroeconomists are converging on a methodology forasking questions. But even Woodford agrees that "recent debates don'tparticularly make the field look unified."

· 5/13/2009 - Why Economists Failed to Predictthe Financial Crisis (Knowledge@Wharton)

· 7/18/2009 - What Went Wrong with Economics? in the Economist

OF ALL theeconomic bubbles that have been pricked, few have burst more spectacularly thanthe reputation of economics itself. . . In the wake of the biggest economiccalamity in 80 years that reputation has taken a beating. In the public mind anarrogant profession has been humbled . . . The profession itself is sufferingfrom guilt and rancour. In a recent lecture, Paul Krugman, winner of the Nobelprize in economics in 2008, argued that much of the past 30 years ofmacroeconomics was “spectacularly useless at best, and positively harmful atworst.” Barry Eichengreen, a prominent American economic historian, says thecrisis has “cast into doubt much of what we thought we knew about economics.”

· 9/2/2009 - How Did Economists Get It SoWrong? by Paul Krugman

There wasnothing in the prevailing models suggesting the possibility of the kind ofcollapse that happened last year.

· 1/10/2011 - IMF Performance in the Run-Up tothe Financial and Economic Crisis: IMF Surveillance in 2004–07

The IMF’sability to correctly identify the mounting risks was hindered by a high degreeof groupthink, intellectual capture, a general mindset that a major financialcrisis in large advanced economies was unlikely, and inadequate analyticalapproaches.

· 5/20/2011 - Neo-Voodoo Economics byJim Tankersley and Chicago Economics on Trialin the WSJ

· 11/20/2011 - Robin Wells: We Are Greg Mankiw…or Not?

· 12/16/2011 - It's time for economic theory toevolve by Kevin Kaiser in Fortune

Last month,seventy freshmen at Harvard walked out of Gregory Mankiw's introductoryEconomics 10 lecture; they wrote to the well-known economist that his course"espouses a specific – and limited – view of economics that we believeperpetuates problematic and inefficient systems of economic inequality in oursociety today."

German physicist Max Planck said that, "Science advances one funeral at atime." And Keen concurs: "You cannot persuade people who believe amythical vision of reality and their whole lives are dedicated to believingthat way."

Keen aptly states, "If economics is to become less of a religion and moreof a science, then the foundations of economics should be torn down andreplaced." We are on the way.

· 12/22/2011 Philip Mirowski's The Seekers, or How MainstreamEconomists Have Defended Their Discipline Since 2008 Part 1, Part 2, Part 3, Part 4 via NakedCapitalism

· 12/31/2011 - Marginal revolutionaries in the Economist

The crisisand the blogosphere have opened mainstream economics up to new attack.

· 1/19/2012 - Economists: A Profession at Sea:How to keep economists from missing the next financial crisis from Time

· 1/26/2012 - What future for economics?

orthodoxeconomics had, in the years leading up to the crisis, become more a cult than ascience, particularly with the assumption that what exists in competitivemarkets has to be the best possible outcome, since, if it were not, it couldnot exist. So, if crises are not predicted, it is because they cannot be: theyare the result of unexpected shocks, by assumption.

· 2/6/2012 - How Economics Contributed to theFinancial Crisis

Some other recent books discussing the state of economics.

· 4/8/2010 - How the Economy Works: Confidence,Crashes and Self-Fulfilling Prophecies by Roger E. A. Farmer

"Of allthe economic bubbles that have been pricked," the editors of The Economistrecently observed, "few have burst more spectacularly than the reputationof economics itself." Indeed, the financial crisis that crested in 2008destroyed the credibility of the economic thinking that had guided policymakersfor a generation.

· 6/21/2010 - The Puzzle of Modern Economics:Science or Ideology? by Roger Backhouse

Doeseconomics hold the key to everything or does the recent financial crisis showthat it has failed?

· 1/1/2011 - Maynard's Revenge: The Collapse ofFree Market Macroeconomics by Lance Taylor

It is nowwidely agreed that mainstream macroeconomics is irrelevant and that there isneed for a more useful and realistic economic analysis that can provide abetter understanding of the ongoing global financial and economic crisis. LanceTaylor’s book exposes the unrealistic assumptions of the rational expectationsand real business cycle approaches and of mainstream finance theory.

7/13/2011- What Went Wrongwith Economics: The flawed assumptions that led economists astray byMichael Reiss

To see the orginal article, click here

To read more on this topic, check out Debunking Economics by Steve Keen, available from Zed Books

Naked Capitalism: The Global Minotaur: An Interview with Yanis Varoufakis

2012-02-13T17:57:00.000Z

Yves here. I hate to throw a spanner in the works, but as much as Varoufakis’ view may sound persuasive, I strongly suggest you read Andrew Dittmer’s translation of a very important paper by Claudio Borio and Piti Disyatat of the Bank of International Settlements, “Global imbalances and the financial crisis: Link or no link?”

Yanis Varoufakis is a Greek economist who currently heads the Department of Economic Policy at the University of Athens. From 2004 to 2007 he served as an economic advisor to former Greek Prime Minister George Papandreou. Yanis writes a popular blog which can be found here. His latest book ‘The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy’ is available from Amazon.

Interview conducted by Philip Pilkington

Philip Pilkington: In your book The Global Minotaur: America, The True Origins of the Financial Crisis and the Future of the World Economy you lay out the case that this ongoing economic crisis has very deep roots. You claim that while many popular accounts – from greed run rampant to regulatory capture – do explain certain features of the current crisis, they do not deal with the real underlying issue, which is the way in which the current global economy is structured. Could you briefly explain why these popular accounts come up short?

Yanis Varoufakis: It is true that, in the decades preceding the Crash of 2008, greed had become the new creed; that banks and hedge funds were bending the regulatory authorities to their iron will; that financiers believed their own rhetoric and were, thus, convinced that their financial products represented ‘riskless risk’. However, this roll call of pre-2008 era’s phenomena leaves us with the nagging feeling that we are missing something important; that, all these separate truths were mere symptoms, rather than causes, of the juggernaut that was speeding headlong to the 2008 Crash. Greed has been around since time immemorial. Bankers have always tried to bend the rules. Financiers were on the lookout for new forms of deceptive debt since the time of the Pharaohs. Why did the post-1971 era allow greed to dominate and the financial sector to dictate its terms and conditions on the rest of the global social economy? My book begins with an intention to home in on the deeper cause behind all these distinct but intertwined phenomena.

PP: Right, these trends need to be contextalised. What, then, do you find the roots of the crisis to be?

YV: They are to be found in the main ingredients of the second post-war phase that began in 1971 and the way in which these ‘ingredients’ created a major growth drive based on what Paul Volcker had described, shortly after becoming the President of the Federal Reserve, as the ‘controlled disintegration of the world economy’.

It all began when postwar US hegemony could no longer be based on America’s deft recycling of its surpluses to Europe and Asia. Why couldn’t it? Because its surpluses, by the end of the 1960s, had turned into deficits; the famous twin deficits (budget and balance of trade deficits). Around 1971, US authorities were drawn to an audacious strategic move: instead of tackling the nation’s burgeoning twin deficits, America’s top policy makers decided to do the opposite: to boost deficits. And who would pay for them? The rest of the world! How? By means of a permanent transfer of capital that rushed ceaselessly across the two great oceans to finance America’s twin deficits.

The twin deficits of the US economy, thus, operated for decades like a giant vacuum cleaner, absorbing other people’s surplus goods and capital. While that ‘arrangement’ was the embodiment of the grossest imbalance imaginable at a planetary scale (recall Paul Volcker’s apt expression), nonetheless, it did give rise to something resembling global balance; an international system of rapidly accelerating asymmetrical financial and trade flows capable of putting on a semblance of stability and steady growth.

Powered by America’s twin deficits, the world’s leading surplus economies (e.g. Germany, Japan and, later, China) kept churning out the goods while America absorbed them. Almost 70% of the profits made globally by these countries were then transferred back to the United States, in the form of capital flows to Wall Street. And what did Wall Street do with it? It turned these capital inflows into direct investments, shares, new financial instruments, new and old forms of loans etc.

It is through this prism that we can contextualise the rise of financialisation, the triumph of greed, the retreat of regulators, the domination of the Anglo-Celtic growth model; all these phenomena that typified the era suddenly appear as mere by-products of the massive capital flows necessary to feed the twin deficits of the United States.

PP: You seem to locate the turning point here at the moment when Richard Nixon took the US off the gold standard and dissolved the Bretton Woods system. Why is this to be seen as the turning point? What effect did de-pegging the dollar to gold have?

YV: It was a symbolic moment; the official announcement that the Global Plan of the New Dealers was dead and buried. At the same time it was a highly pragmatic move. For, unlike our European leaders today, who have spectacularly failed to see the writing on the wall (i.e. that the euro-system, as designed in the 1990s, has no future in the post-2008 world), the Nixon administration had the sense to recognise immediately that a Global Plan was history. Why? Because it was predicated upon the simple idea that the world economy would be governed by (a) fixed exchange rates, and (b) a Global Surplus Recycling Mechanism (GSRM) to be administered by Washington and which would be recycling to Europe and Asia the surpluses of the United States.

What Nixon and his administration recognised was that, once the US had become a deficit country, this GSRM could no longer function as designed. Paul Volcker, who was Henry Kissinger’s under-study at the time (before the latter moved to the State Department), had identified with immense clarity America’s new, stark choice: either it would have to shrink its economic and geopolitical reach (by adopting austerity measures for the purpose of reigning in the US trade deficit) or it would seek to maintain, indeed to expand, its hegemony by expanding its deficits and, at once, creating the circumstances that would allow the United States to remain the West’s Surplus Recycler, only this time it would be recycling the surpluses of the rest of the world (Germany, Japan, the oil producing states and, later, China).

The grand declaration of 15th August 1971, by President Nixon, and the message that US Treasury Secretary John Connally was soon to deliver to European leaders (“It’s our currency but it is your problem.”) was not an admission of failure. Rather, it was the foreshadowing of a new era of US hegemony, based on the reversal of trade and capital surpluses. It is for this reason that I think the Nixon declaration symbolises an important moment in postwar capitalist history.

PP: The old banking proverb: “If you owe a bank thousands, you have a problem; owe a bank millions, the bank has a problem” comes to mind. Was this, then, the end of the hegemony of the US as lender and the beginning of the hegemony of the US as borrower? And if so, does this provide us with any insights into the financial crisis of 2008?

YV: I suppose that Connally’s “It’s our currency but it is your problem” turned out to be the new version of the old banking adage that you mention. Only there is an important twist here: in the case of the banks, when they fail, there is always the Fed or some other Central Bank to stand behind them. In the case of Europe and Japan in 1971, no such support was at hand. The IMF was, let’s not forget, an organisation whose purpose was to fund countries (of the periphery mostly) that faced balance of payments deficits.

Connally’s phrase was aimed at countries that had a balance of payments surplus in relation to the United States. Additionally, when a heavily indebted person or entity tells the bank that it is the one with the problem, and not the indebted, this is usually a bargaining ploy by which to secure better terms from the bank, a partial write down on the debt etc. In the case of Connally’s trip to Europe, shortly after the Nixon announcement, the United States was not asking anything from Europeans. It was simply announcing that the game had changed: energy prices would rise faster in Europe and in Japan than in America, and relative nominal interest rates would play a major role in helping shape capital flows toward the United States.

The new hegemony was thus beginning. The hegemon would, henceforth, be recycling other people’s capital. It would expand its trade deficit and pay for it via the voluntary flows of capital into New York; flows that began in earnest especially after Paul Volcker pushed US interest rates through the roof.

PP: And this new hegemony grew almost organically out of the preeminence of the dollar as a world reserve currency that had grown up in the post-war years, right? Could you say something about this?

YV: The ‘exorbitant privilege’ of the dollar, courtesy of its reserve currency status, was one of the factors that allowed the United States to become the recycler of other people’s capital (while America was busily expanding its trade deficit). While crucial it was not the only factor. Another was the United States’ dominance of the energy sector and its geostrategic might. To attract wave upon wave of capital from Europe, Japan and the oil producing nations, the US had to ensure that the returns to capital moving to New York were superior to capital moving into Frankfurt, Paris or Tokyo. This required a few prerequisites: A lower US inflation rate, lower US price volatility, relatively lower US energy costs and lower remuneration for American workers.

The fact that the dollar was the reserve currency meant that, in a time of crisis, capital flew into Wall Street anyway (as it was to do again years later when, despite Wall Street’s collapse, foreign capital rushed into Wall Street in the Fall of 2008). However, the volume of capital flows that had to flood Wall Street (in order to keep the US trade deficit financed) would not have materialised had it not been for the capacity of the United States to precipitate a surge in the price of oil at a time when (a) US dependence on oil was lower than Japan’s or Germany’s, (b) most oil trades were channeled via US multinationals, (c) the US could suppress inflation by raising interest rates to levels that would destroy German and Japanese industries (without totally killing American companies) and (d) trades unions and social norms that prevented a ruthless suppression of real wages were far ‘softer’ in the US than in Germany or Japan.

PP: You write in the book that US officials were actually not that concerned about the rising oil prices in the 1970s, why do you say this? And do you think that the recent speculative pressures on oil and food prices – emanating from Wall Street itself – have been largely tolerated by US officials for similar reasons?

YV: The reason is in the old joke that has one economics professor asking another “How is your wife?” and receives the reply: “Relative to what?” The whole point about attracting capital and gaining competitiveness over another company or, indeed, another country, is that what matters is not absolute but relative costs and prices. Yes, the US authorities were concerned about inflation and oil prices. They did not like their increases, especially when they could not control them fully. But there was one thing that they feared more: An incapacity to finance the growing US trade deficit (that would result if the returns to capital were not improving relative to similar returns elsewhere). It was in this context that their considered opinion was that a hike in energy prices, to the extent that it boosted German and Japanese costs more than it did US costs, was their optimal choice.

As for the comparison with the recent rise in oil and, primarily, food prices, I think this is quite different. For one, I do not see what US interests are being served by the ways in which derivatives in the Chicago marker are pushing food prices to a level that threaten the Fed’s quantitative easing strategy courtesy of the inflationary pressures they are causing. Additionally, back in the early 1970s, the US government was far more in control of financial flows and speculative drives than it is today. Having allowed the genie of financialisation out of the bottle, US authorities are watching it wreak havoc almost helplessly – especially given the inherent ungovernability of the United States, with Congress and the Administration locked into mortal combat with one another. In sharp contrast, back in 1971-73, the US government had a great deal more authority over the markets now.

PP: I’d like to move on to what I think is the key point of your book: namely, that the rest of the world is funding the US’s twin deficits – that is, the rest of the world is funding both the US trade deficit and the US government deficit.

When the twin deficits began to open up in the US there was a fundamental change in the nature of the US economy. Could you talk about this a little?

YV: The change was earth-shattering for America’s social economy. The strategy of allowing the deficits to expand inexorably came hand-in-hand with a series of strategies whose purpose was, quite simply, to draw into the United States the capital flows, from the rest of the world that would finance these growing deficits. In my book I tried to detail four major strategies that proved crucial in generating the capital tsunami which kept America’s deficits satiated: (1) a global boost in energy prices that would affect disproportionately Japanese and German industries (relatively to US firms), (2) a hike in America’s real interest rate (so as to make New York a more attractive destination for foreign capital), (3) a much cheapened American labour that is, at once, greatly more productive, and (4) a drive toward Wall Street financialisation that created even greater returns for anyone sending capital to New York.

These strategies had a profound effect on American society for a variety of reasons: To keep real interest rates high, the nominal interest rate was pushed upwards at a time that the administration, and the Fed, engineered a reduction in wages. The increasing interest rates shifted capital from local industry to foreign direct investment and transferred income from workers to rentiers. The cheapening of labour, which also necessitated a wholesale attack against the trades unions, meant that American families had to work longer days for less money; a new reality that led to the breakdown of the family unit in ways which had never been experienced before. The more family values were becoming the emerging Right’s mantle, the greater their destruction at the hands of the Global Minotaur that the Right was keenly nourishing.

The loss of wage share meant, moreover, that families had to rely more greatly on their home as a cash cow (using it as collateral in order to secure more loans) thus turning a whole generation away from savings and towards house-bound leverage. A new form of global corporation was created (the Wal-Mart model) which imported everything from abroad, used cheap labour domestically for manning the warehouse like outlets, and propagated a new ideology of cheapness. Meanwhile, Wall Street was using the capital inflows from abroad to go on a frenzy of lucrative take-over and merger activity which was the breeding ground for the financialisation which followed. By combining the domestic hunger for credit (as the working class struggled to make ends meet, even though they worked longer hours and much more productively than before), a link was created between financial flows built upon (i) the humble home of the bottom 60% of society and (ii) the financial inflows of foreign capital into Wall Street. As these two torrents of capital merged, Wall Street’s power over Main Street rose exponentially. With labour losing its value as fast as regulatory authorities were losing their control over the financial sector, the United States was changing fast, losing all the values and ditching all the social conventions that had evolved out of the New Deal. The world’s greatest nation was ready for the Fall.

PP: You mentioned the Wal-Mart model just now. In the book you make a good deal out of this model. Could you explain to the readers why you do and what the significance of it is for the broader economy?

YV: Wal-Mart symbolises a significant change in the nature of oligopolistic capital. Unlike the first large corporations that created wholly new sectors by means of some invention (e.g. Edison with the light bulb, Microsoft with its Windows software, Sony with the Walkman, or Apple with the iPod/iPhone/iTunes package), or other companies that focused on building a particular brand (e.g. Coca Cola or Marlboro), Wal-Mart did something no one had ever thought of before: It packaged a new Ideology of Cheapness into a brand that was meant to appeal to the financially stressed American working and lower-middle classes. In conjunction with its fierce proscription of trades unions, it became a bulwark of keeping prices low and of extending to its long suffering working class customers a sense of satisfaction for having shared in the exploitation of the (mostly foreign) producers of the goods in their shopping basket.

In this sense, the significance of Wal-Mart for the broader economy is that it represents a new type of corporation which evolved in response to the circumstances brought on by the Global Minotaur. It reified cheapness and profited from amplifying the feedback between falling prices and falling purchasing power on the part of the American working class. It imported the Third World into American towns and regions and exported jobs to the Third World (through outsourcing). Wherever we look, even in the most technologically advanced US corporations (e.g. Apple), we cannot fail to recognise the influence of the Wal-Mart model.

PP: Finally, where do you see us headed now as we emerge from the shadow of the Global Minotaur?

YV: The Minotaur is, of course, a metaphor for the strange Global Surplus Recycling Mechanism (GSRM) that emerged in the 1970s from the ashes of Bretton Woods and succeeded in keeping global capitalism in a rapturous élan; until it broke down in 2008, under the weight of its (and especially Wall Street’s) hubris. Post-2008, the world economy is stumbling around, rudderless, in the absence of a GSRM to replace the Minotaur. The Crisis that began in 2008 mutates and migrates from one sector to another, from one continent to the next. Its legacy is generalised uncertainty, a dearth of aggregate demand, an inability to shift savings into productive investment, a failure of coordination at all levels of socio-economic life.

A world without the Minotaur, without a functioning GSRM, but one that is ruled by the Beast’s handmaidens, is an illogical, absurd place. And who are the Minotaur’s surviving handmaidens? They are Wall Street, Walmart, Germany’s provincial mercantilism, the European Union’s absurd pretence that a currency union can prosper without a surplus recycling mechanism, the growing inequities within the United States, within Europe, within China, etc., etc.

The best example of our world’s inability to come to terms with its conundrum is the way in which public debate deals with the so-called global imbalances: the systematically increasing trade surplus of some countries (Germany and China are good examples), which are mirrored in increasing trade deficits in others. All commentators are now in agreement that increasing global imbalances are a terrible thing. One would, consequently, be excused for imagining that a reduction in global imbalances would have been welcomed. But alas, the opposite is the case. When the imbalances shrink (e.g. China’s trade surplus declines) this is a sign of trouble, rather than an improvement. The reason is that the cause of the imbalance’s shrinkage is not a better, a more productive recycling of surpluses, but rather a deepening recession in the countries that used to provide the demand for someone else’s net exports. So we are in the weird situation of exorcising global imbalances, while at the same time suffering when they diminish.

The West, caught in Bankruptocracy’s poisonous web, unable to rise to the challenges of the post-2008 world, will keep stagnating, losing its grip on reality, failing to match its outcomes to its capacities or to create new ‘realities’. As for the emerging economies, bristling with people ready to transcend constraints, to spawn new ‘realities’, to expand existing horizons, they will be caught in a trap of low overall demand for their wares. Unless a new GSRM materialises soon, the future of the global economy will remain bleak. What will it take to fashion a GSRM from scratch? One thing is certain: markets will not spontaneously generate one. A new GSRM must be the result of concerted political action. Just like Bretton Woods once was.

How Ellen Johnson-Sirleaf Won Re-Election as President of Liberia

2012-02-13T17:49:00.002Z

An African World TV Exclusive on How Ellen Johnson-Sirleaf Won Re-election as Liberia President

Watch the interview here

So how did she pull it off? The Chairman of Sirleaf’s ruling Unity Party, Varney Sherman, answers this and other questions about Sirleaf’s victory and her broad plans for a second term in an exclusive interview with the African World.

Many expected Ellen Johnson-Sirleaf to face a tough time winning re-election last fall. First elected in 2005 for a 6-year term, she had made progress on solving some of the many problems Liberia faces after more than a decade of civil strife and war, but many challenges, such as reducing the country’s high unemployment rate and what some perceived as her indifference to tackling widespread corruption, loomed as she prepared for re-election last year. Despite these problems, Sirleaf easily garnered over 40 percent of the vote in the first round, sending her into the second round against Winston Tubman of the Congress for Democratic Change Party (CDC) of former soccer star George Weah, which she won without much sweat after the CDC boycotted the polls, claiming fraud and bias on the part of the National Election Commission.

Steve Keen, Debunking Economics

2012-02-13T17:37:00.001Z

A profession that has completely failed as a service to society has been economics. When we need it most, wise counsel, full and clear explanatons, non political motivations, the Economist went missing in action!

Steve Keen of DebtDeflation.com explains the truth about economics. For the investor you need to know economics so the Economist cant fool you!

A long video, but worth every minute!

For more on this topic, check out the new revised and expanded edition of Debunking Economics, available from Zed Books

Somalia: Why Latest Foreign 'Re-Colonisation' Project Is Doomed to Fail

2012-02-13T16:36:00.001Z

In the first two decades of the 20th century, Somali warrior-poet Seyyid Mohammed Abdulle Hassan (nicknamed the "Mad Mullah" by the British) fought against European forces trying to assert their influence in Somalia. His attempts were ultimately unsuccessful, but Hassan remains a source of inspiration among Somalis.

Foreign intervention and occupation have always been violently resisted in Somalia, as demonstrated right from the "Black Hawk Down" incident that led to the evacuation of US forces from Somalia in the early 1990s to the recent retreat of Ethiopian forces when they tried to assert their authority in Mogadishu after the fall of the Islamic Courts Union.

Some argue that the quagmire in Somalia is the result of too much -- not too little -- foreign interference, be it in the form of military invasions, humanitarian aid, and even the extreme form of Islam (Salafism) imported from Saudi Arabia by Al-Shabaab.

Even when the intervention appears to be for the good of Somalia -- such as providing aid during a famine -- failure by outsiders to understand the fiercely independent character of Somalis contributes to more conflict and misunderstanding, as pointed out by BBC journalist Mary Harper in her new book Getting Somalia Wrong?

That is why a conference set to take place in London next week is viewed with suspicion by many Somalis. Hosted by the British Government, the conference aims to "deliver a new international approach to Somalia" by bringing together more than 40 countries and multilateral organisations that will decide how Somalia is to be governed once the term of the Transitional Federal Government expires in August this year.

Among the proposals for the way forward are the establishment of a supreme authority and a Joint Financial Management Board (comprising mainly donor countries) that will manage and coordinate how donor and domestic funds and resources are to be used (essentially, doing the work of a Finance ministry) and increased funding for Amisom and Somali security forces.

An even more absurd proposal has been submitted by the government of Italy, which has suggested the establishment of a joint United Nations/African Union international administration comprising a core group of key "stakeholders", such as the United States, the European Union, and the Inter-Governmental Authority on Development.

Many Somalis are understandably disgusted by these proposals because they view them as yet another attempt to "colonise" Somalia. Abdirizak Mohamed, the editor of Hiraan Online, says that he was particularly dumbfounded by the Italian submission as it proposes an international administration to be named as caretaker for Somalia from August 2012 to December 2013.

The Italian proposal is equivalent to the Paul Bremen-led authority imposed by the United States in Iraq after the overthrow of Saddam Hussein.

Although the Somali Transitional Federal Government has been invited to the conference, it lacks the legitimacy and authority to make decisions on an equal footing with the other so-called "stakeholders".

While the conference purports to address security concerns, particularly piracy and terrorism, the ultimate intention of the conference, according to many Somali analysts, could be to undermine Somalia's sovereignty and subject the Somali people to a new form of colonialism -- including by "proxy states" such as Kenya and Ethiopia, which are sending high-level delegations to the conference.

The sense of humiliation that many Somalis feel about the conference is best described by Arman, who in an op-ed article in Eurasia Review writes: "At this dreadful moment in its history -- when the obituary of a nation on life-support is being written -- political correctness is a luxury that Somalis cannot afford."

He proposes that Somalia adopt a new paradigm and engage with less intrusive partners (probably a reference to Turkey, which has been active in delivering humanitarian aid and reconstruction in Somalia). Many Somali academics and analysts have also called for home-grown solutions to the Somali crisis.

What the British Government and its allies must realise is that their top-down, Eurocentric approach in Somalia may look good on paper, but will most likely face fierce resistance on the ground.

Source: AllAfrica.com

Copyrights: Rasna Warah

Liberia: Judges Reject Taylor's Request to Reopen Case

2012-02-13T16:17:00.000Z

Judges of the Special Court for Sierra Leone in The Hague have rejected a request by former Liberian President Charles Taylor to reopen his defense case.

On February 9, the judges unanimously ruled that the Taylor defense "has failed to establish any justification for the re-opening of its case."

Taylor's defense team filed a motion on January 31, 2012 to reopen its case in order to seek the admission of a December 2011 report of a UN Panel of Experts on Liberia. The UN Experts report discusses the participation of Liberian mercenaries in the conflict in neighboring Ivory Coast and this, defense lawyers say, does not lay blame on the current Liberian government as being involved or complicit in the movement of fighters from its country to a neighboring country.

Defense lawyers argue this report supports their argument that during the Sierra Leonean conflict, it was possible for fighters to cross from Liberia into Sierra Leone "without being under the direction and control of Mr. Taylor and without the implicit approval of the Government of Liberia." Defense lawyers further stated in their motion that one person named in the UN report as a Liberian mercenary fighter in Ivory Coast is Joseph Zig Zag Marzah, a prosecution witness who testified that his movement into Sierra Leone to provide assistance to Sierra Leonean rebels was directed by Taylor. His movement into Ivory Coast in 2010 and 2011 shows that he easily could have moved into Sierra Leone as a mercenary solely for his own benefit and this discredits his evidence against Taylor.

On February 7, prosecution lawyers responded to the defense motion arguing, among other things, that "excerpts of the Report...have no probative value or relevance to support the defense arguments," that "admission of the proposed evidence at this advanced stage prejudices the Prosecution which will have no opportunity to address the issues before the trial judgment is delivered," and that "proceedings are at an advanced stage and admitting the proposed evidence could delay the completion of the judicial process."

In its decision issued yesterday, the judges said they considered the effect that reopening of the case would have on this stage of the proceedings as well as the fact that the crime base and time frame, which are subjects of the charges against Taylor, do not bear correlation to the subject of the Expert Panel Report that talks about the flow of Liberian fighters into Ivory Coast.

"The Trial Chamber considers that at this advanced stage of the proceedings, re-opening the trial would result in undue delay," the judges noted in their decision.

Referencing the correlation between the events in Sierra Leone and those in Ivory Coast, the judges noted that "no parallels can validly be drawn between events that took place in Cote d'Ivoire during the period 2010/2011 and events that took place in Sierra Leone during the indictment period."

"The Trial Chamber therefore finds that the Report is not relevant to the issues to be decided in this case and has no probative value," the judges concluded.

The evidence phase of the proceedings against the former Liberian president was concluded in early 2011 when both prosecution and defense lawyers made their closing submissions. The judges then commenced deliberations on the evidence in order to deliver their trial judgment which would determine the guilt or innocence of Mr. Taylor.

Taylor is charged with 11 counts of war crimes, crimes against humanity, and other serious violations of international humanitarian law committed in the territory of Sierra Leone from November 1996 to January 2002. Taylor has denied the charges against him and has called his trial a conspiracy of Western countries, mainly the United States and the United Kingdom to get him out of Liberia. He says that his involvement in Sierra Leone was to help bring peace to the war-torn West African nation.

It is anticipated that the trial judgment in this case will be delivered in the early part of this year. Depending on the outcome of the judgment, both prosecution and defense will have the opportunity to file appeals.

Copyrights: Alpha Sesay
Source: AllAfrica.com

To learn more about Liberia and Charles Taylor read

Charles Taylor and Liberia

by Colin M. Waugh

Capital FM News: DR Congo president’s aide killed in plane crash

2012-02-13T16:02:00.001Z

KINSHASA, Feb 13 – A close aide to DR Congo President Joseph Kabila was killed and the country’s finance minister seriously injured in a plane crash on Sunday in the east of the country, the president’s office said.

Two American crew members also died, as well as two people crushed by the plane as it came down at Bukavu airport.

The statement identified Kabila’s aide as Augustin Katumba Mwanke, 48, considered a key member of Kabila’s entourage, who had the ear of the president.

Finance Minister Augustin Matata Ponyo was in a serious condition, while Sud-Kivu governor Marcellin Tshisambo had suffered fractures in both legs, said an airport official.

The plane overshot the runway at Bukavu airport, the president’s office said.

“The toll is three dead among those on board the plane: Mr. Katumba Mwanke, the American pilot and copilot,” Interior Minister Katumba Mwanke told reporters.

“There were also two farmers, whose bodies were found under the plane,” he added. The plane was carrying nine people, including the crew, he said.

Mwanke and the pilot had “died on the spot,” a source at the presidency said.

The twin-engine Gulfstream 200 had flown in from the capital Kinshasa via Goma and apparently missed its landing at Bukavu airport, in the vast country’s east.

“It touched down only halfway down the runway and went skidding into a ditch beyond the runway. The plane is damaged,” a Bukavu airport official told AFP on condition of anonymity.

“The weather was good, I think (the pilot) might have misjudged the runway because (this is) the first time this crew was flying to Bukavu,” he added.

The accident happened at around 2:00 pm (1200 GMT).

Antoine Ghonda, a lawmaker who had previously served as a roving ambassador for Kabila, was also among the injured, the airport official added.

Mwanke had won re-election last year as an MP from southern Katanga for the ruling People’s Party for Reconstruction and Democracy (PPRD), of which he was a co-founder.

He was criticised in a report by UN panel of experts as having used his leverage in Kinshasa to obtain substantial tax exemptions for a mining company of whose board he was a member.

This network had transferred assets worth $5 billion from the state-owned mining sector to the private companies they controlled, without paying any compensation to the treasury, said the UN report.

The UN panel had recommended sanctions including travel bans, freezing personal assets and barring access to banking facilities against Mwanke and several other officials.

They were all suspected of links to criminal cartels, which included Congolese and Zimbabweans, that were plundering the country’s mineral resources.

Tshisambo was a political adviser to Kabila before his election as Sud-Kivu governor in 2010.

Plane crashes are frequent in the DR Congo.

Some 50 airlines operate in the vast central African country, all of which are on a European Union blacklist barring them from operating in the EU because of their safety record.

'Women in Israel' Review

2012-02-13T15:49:00.001Z

A new version of "Women in Israel - the state and citizenship", Nahla Abdo to
48 Lord of the p
Date Published: 25/08/2011 - Last updated: 23:00

Recently released the new version of the book "Women in Israel - the state and citizenship", the feminist researcher, Professor Nahla Abdo, from Carleton University in Canada.

This book provides an in-depth reading of the reality in Israel Women's from a new perspective, and focuses on marginalized groups and relations between them and the dominant group Alo_kinaziat.

The first edition of the Arabic language was published in 2009 by the Foundation over the - the Palestinian Center for Israel Studies, and containing Edition Alaclezah new published recently, theoretical background and historical about experiences living waged by marginalized women, of the population the indigenous, ie, Palestinian, and Jewish belly.

Professor Nahla Abdo, feminist activist and Arab political, lecturer in sociology at the University of Carleton in Canada, and her many contributions to women's issues, racism, nationalism and the state in the Middle East, which is specialized in studies of Palestinian women.

Put Abdo study of women in Israel in its historical context, through the dismantling of the relationship feminist state and identity, and how it reflected Ptsaad Ala_kinaziat on the belly, certainly, and before that, the reflection character of the colonial state on Palestinian women, and the fabric of her life the social and economic-related land that robbed most of them.

Says Professor Leila Abu wattle, The strength of this book comes from the strength of evidence and the evidence provided, and in-depth analysis of the intersection of gender, race and class.

The professor Yuval Nera - Davis, says about the book that he was able to discuss the issue of citizenship and social status did not provide a comprehensive way of

As Prof. Nicola Pratt, she had seen in the search method conceptual adopted in the book - a method of political economy - a quantum leap gives new life to the feminist discourse on women and citizenship; added Dr. Rosemary Sayigh, that this book has succeeded greatly in the integration of scientific, literary, or theories of meeting with women's literature.

The book consists of four chapters: Chapter I in the literature of Israeli citizenship generally, and seeks at the same time that provides a framework feminist to analyze the citizenship of women; Chapter II deals with the historical context of the specified, and the moments that have affected the situation of different groups of women in Israel, and set up and then re-formed , together with the results and the effects of the nature of the Israeli state to develop and the conditions of women's economic, social, and political, through a detailed examination of the two areas vital to life and experience: economic rights and the economic situation on the one hand, and educational experiences on the other.

Chapter III deals with the economic status of women in Israel, which is compared to the conditions of Palestinian women with the conditions of Jewish women and Ala_kinaziat Almzrahiat, using the comparative method.

The fourth and final chapter addresses the issue of women's education, by focusing on two groups of women Manmstein: Palestinian Arab, and Jewish Almzrahiat, as victims of Israeli policies of racism, then place the comparison between the two groups and among women Alo_kinaziat.

Click here for the orginial article in Arabic

Check out Women in Israel, available from Zed Books

'A Liberal Peace?' Book Launch

2012-02-13T14:20:00.000Z

Zed Book - 'A Liberal Peace?'

Hosted by the University of Westminster Department of Politics and International Relations

Editors David Chandler and Meera Sabaratnum will be guest speaking

Time - 5:30

Address - Westminster Forum, 5th Floor

Department of Politics and

International Relations

University of Westminster

32-38 Wells Street

(Near Oxford Circus Station)

Royal African Society Event- DR Congo: Beyond the 2011 elections

2012-02-13T12:11:00.000Z

Title:: DR Congo: Beyond the 2011 elections
When:: 14 February, 2012
Where:: SOAS, Thornhaugh Street, Russell Square - London,WC1H 0XG
Category:: Events/Meetings

DR Congo: Beyond the 2011 elections

Date/Time: February 14th

- Panel 1: 16:00 - 17:30

-Panel 2: 18:00 - 19:30

Venue: School of Oriental and African Studies (SOAS), Lecture Theatre G2, Russell Square Campus

The official results of the recent presidential elections in the Democratic Republic of Congo (DRC) gave incumbent Joseph Kabila victory with 48.95% of the vote against 32.35% for the runner-up, Étienne Tshisekedi.

President Kabila campaigned for his second term in office under the slogan "for a united Congo". However, the country now stands divided into two camps, between those who believe his re-election to be legitimate and those who don’t.

International observers have also cast doubts over the integrity of the polls, citing allegations of vote-rigging, reports of electoral violence and media restrictions.

DR Congo is a vast, resource-rich country with a painful history of international interference - from Belgian colonialism and Cold War politics to war with Uganda and Rwanda and the recent economic partnership with China.

How then can the people of Congo build a more stable and effective democracy? Is there scope to find long-lasting solutions to the many challenges facing the country - from reform in the natural resource sector through improved infrastructure and wealth distribution to putting an end to the on-going violence? What can both domestic and international actors do to this end?

Join the Royal African Society and the Oxford Central Africa Forum in this high profile event, which will consider the consequences of the DRC’s 2011 elections both at home and abroad and discuss the possibilities for the country’s future.

Panel 1 – THE ELECTIONS AND THE INTERNATIONAL COMMUNITY, 16:00 - 17:30

Professor Koen Vlassenroot, Director of the Conflict Research Group, Ghent University
Koen Vlassenroot is the Director of the Conflict Research Group at Ghent University. He is a political scientist specialising in the political economy of conflict, non-state armed actors, the processes of identity formation, land access and food security. His work has mainly focussed on Central Africa, especially the Democratic Republic of Congo.

Théodore Trefon, Belgian Royal Museum for Central Africa
Théodore Trefon is a Congo expert specializing in the politics of state-society relations. He has devoted the past 25 years to Congo as a researcher, lecturer, author, project manager and consultant. He heads the Contemporary History Section of the Belgian Royal Museum for Central Africa and is Adjunct Professor of International Relations at Boston University Brussels. Trefon is also the author of Congo Masquerade: The Political Culture of Aid Inefficiency and Reform Failure (African Arguments / ZED Books).

Madame Marie-Thérèse Nlandu Mpolo Nene, human rights lawyer & political leader
Marie-Thérèse Nlandu is a leading human rights lawyer from the DRC. She is also the President of Congo-Pax, the Party for Peace in Congo. Due to her work as a political leader and lawyer, Marie-Thérèse has been in exile twice: From 1993-2002 in Belgium and from 2007-present in the UK. In November 2006, Marie-Thérèse was arrested by agents of the Special Services police and charged with “organising an insurrectionary movement” and “illegal possession of firearms”. She was subsequently detained in Kinshasa's central prison and became an Amnesty International Prisoner of Conscience. Pressure from Amnesty International and other human rights groups allowed for her eventual acquittal and release. Marie-Thérèse is married with 4 children.

Chair: Harry Verhoeven, Oxford University
Harry Verhoeven has just finished a doctorate at the Department of Politics and International Relations at Oxford University, St Cross College. Harry has a keen interest in the issues of regional conflict, relations between regimes and rebel movements and natural resources, writing on Sudan, Ethiopia, Congo, Uganda and Rwanda. He is the Convenor of Oxford University’s China-Africa Network (OUCAN) and Oxford’s Central Africa Forum (OCAF) and is writing a book on the internal dynamics of Africa's Great War.

Panel 2 – THE FUTURE OF CONGO POST-ELECTIONS - 18:00 - 19:30

Kris Berwouts, Independent Expert on Central Africa

Kris Berwouts studied African languages and history at the University of Ghent in Belgium. Over the past 25 years, he has worked with both Belgian and international NGOs on peace and reconciliation, security and democratic processes. He was the director of the Belgian-based European Network for Central Africa (EurAc) between 2007 and 2012. Now he works as an independent expert on Central Africa.

Eric Joyce MP, Chair of the All-Party Parliamentary Group on the Great Lakes Region of Africa
Eric Joyce has been a Member of Parliament for Falkirk since 2005. As well as having an interest in defence and military issues, Eric is also interested in Africa and development issues and he is currently the Chairman of the All-Party Parliamentary Group on the Great Lakes Region of Africa.

Devon Curtis, Cambridge University
Devon Curtis is a University Lecturer in the Department of Politics and International Studies (POLIS) and has been a Fellow of Emmanuel College since 2007. Both her research interests and written work have largely focused on power-sharing and governance, post-conflict, rebel movements in Africa, conflict, peace-building and development. Her field research has taken her to various parts of the Great Lakes Region, including Burundi, Rwanda and the Democratic Republic of Congo. She has also worked with both the Canadian government and the UK’s Department for International Development (DIFID) as well as the Overseas Development Institute (ODI).

Chair: Marco Jowell, School of Oriental and African Studies
Marco Jowell is a former Senior Research Analyst at the Foreign and Commonwealth Office with a particular focus on Central Africa. He is currently a doctoral candidate at SOAS.

Please rsvp to rsvp@royalafricansociety.org

For more information on the Democratic Republic of the Congo, check out Congo Masquerade by Theodore Trefon, available from Zed Books

BBC: Greece MPs pass austerity plan amid violent protests

2012-02-13T10:56:00.003Z

Greek MPs have approved a controversial package of austerity measures, demanded by the eurozone and IMF in return for a 130bn euro ($170bn; £110bn) bailout.

The vote was carried by 199 in favour to 74 against.

Coalition parties expelled more than 40 deputies for failing to back the bill.

Tens of thousands protested in Athens, where there were widespread clashes and buildings were set on fire. Violent protests were reported in cities across the country.

Protesters outside parliament threw stones and petrol bombs, and police responded with tear gas. Scores of police and protesters were injured.

Prime Minister Lucas Papademos urged calm, insisting that the austerity package would "set the foundations for the reform and recovery of the economy".

Late into the night, buildings in Athens were burning. It was clear that in some areas of the city police had effectively lost control, if only for a short time.

Violence has occurred during votes before, but buildings have not been set ablaze for some time. Every event chips away at the confidence that the state is holding things together.

Emotions were also running high in parliament, with no-one voting for the plan with much enthusiasm. Greeks on the streets feel that the country cannot bear any more austerity. The eurozone's strategy for its survival is feeling the full force of public anger.

"Vandalism, violence and destruction have no place in a democratic country and won't be tolerated," he said in a speech in parliament before the vote.

The bill passed parliament easily as the two largest parties in the coalition - Pasok and New Democracy - account for more than two-thirds of the deputies.

The austerity measures include:

15,000 public-sector job cuts
liberalisation of labour laws
lowering the minimum wage by 20% from 751 euros a month to 600 euros

Eurozone ministers must now ratify the measures at a meeting in Brussels on Wednesday before bailout funds can be released.

The ministers rejected proposals put forward by the Greeks last week, which they said fell 325m euros short of the cuts needed.

The BBC's Mark Lowen in Athens says the public are increasingly angry with the austerity measures and feel that the impact is beyond the value of the bailout.

At least 80,000 people were reported to have joined demonstrations in Athens, with another 20,000 protesting in Thessaloniki.

Running battles with police continued in the capital until late on Sunday, although no new clashes were reported after the vote.

Protesters hurled flares and chunks of marble torn up from the square. Some had tried to break through a cordon of riot police around the parliament.

Several historic buildings, including cafes and cinemas, were set alight.

Ioannis Simantiras, 34, said the protesters were boxed in by police.

"Nobody could get away from the gas," he told the BBC.

"When it engulfed everybody, and everybody was choking the police drew back and opened up a corridor for us away from the parliament - that's when everybody made a run for it."

Violent protests also spread to other Greek towns and cities, including the islands of Corfu and Crete, according to state TV.

Finance Minister Evangelos Venizelos said the question was not "whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions".

"When you have to choose between bad and worse, you will pick what is bad to avoid what is worse," he said.

Greece needs the bailout the make its next repayment on its huge sovereign debt.

If it cannot make the payment, it will default and in effect become bankrupt.

Analysts say such a "chaotic default" could endanger Europe's financial stability and possibly even leading to a break-up of the eurozone.

As part of the deal with international lenders, Greece will also be able to write off 100bn euros of privately held debt.

Earlier this week several ministers from the coalition government, including two from Pasok, quit in protest at the measures.

The leader of the far-right Laos party, the junior coalition member, announced his 15 deputies would not back the austerity measures.

George Karatzaferis complained that the measures amounted to Greeks being "humiliated" by Germany.

The eurozone bloc has demanded "strong political assurances" that the packages will be implemented regardless of which party wins a general election due in April.

BBC © 2012

To learn about the current economic crisis occurring in Greece and across the Eurozone, check out The Global Minotaur available from Zed Books

An Eerie Calm in the DRC

2012-02-10T16:16:00.001Z

Following heavily disputed elections, why has the violence many predicted not been seen?

Source: Think Africa Press by Alistair Smout

Western writers commentating on the Democratic Republic of the Congo are more used to describing political violence than accounting for its absence. However, since Joseph Kabila was re-elected president last month in elections that were described as “too flawed to be credible”, the violence that followed, although tragic, has been less extensive and damaging than many feared.

John Campbell, in his article for the Atlantic “Anti-Christian Violence, and Maybe Worse, in Congo” attempts to account for the “apparent passivity of the Congolese population” while comparing it to the more impassioned responses of other citizenries, specifically Kenya in 2007 and Zimbabwe in 2008. But while Campbell poses an interesting question and points to important factors of diversity and ethnic rivalry, he fails to qualify or contextualize them. In the course of his argument, however, Campbell makes some substantive claims, which are worth examining in more detail.

Alienation

Campbell argues that in Nigeria and Congo much of the population has historically felt alienated from the government, which is seen as following its own agenda with little input from the general populace. This sense of alienation may empower secessionism, as seen historically in the Biafran War, or movements in Katanga or Kasai. However, Campbell seems ready to ascribe both political apathy and secessionist politics to the effects of alienation. This is not implausible, but other variables must be taken into account to provide a comprehensive explanation of these varying responses.

The idea of alienation as engendering resignation rather than anger has some traction, particularly in the case of the DRC. In her book In the Footsteps of Mr Kurtz, Michela Wrong, for example, traces such a culture in Congolese history, in which political hegemony is established by King Leopold II, transformed yet maintained by Mobutu, and the Congolese people are blunted into acceptance, diverting their efforts into pursuits other than changing politics. Similarly, Adam Nossiter observes that daily struggles to find food are enough without needing to be concerned by Kinshasa politics.

While there is truth in this interpretation, however, it may be overly deterministic. Before the recent elections in the DRC there was a great deal of hope and optimism that the elections might bring about real change.

Pre-election optimism, however, turned to resignation amidst post-election violence. And it seems that alienation is not inevitable but at least partly a consequence of repression.

The opposition

What could lift the sense of resignation and alienation from politics and provide a sustained threat to a policy of repression? A well organised opposition seems a good place to start.

Etienne Tshisekedi, who has been placed under house arrest by Kabila since declaring himself the true president of the DRC, can talk coherently of the DRC’s problems and how he might tackle them. Having served in some of Mobutu’s early governments, he has managed to stay consistently in opposition for 30 years. He played a lead role in the attempted democratisation of Zaire in the early-90s, and at one time managed to hold the position of Prime Minister while managing to frustrate both Mobutu-ists and former president Laurent Kabila’s AFDL.

He has also managed to emerge from years of war in the DRC without being implicated in the violence, a big step for Congolese opposition politicians, given that Joseph Kabila’s main opponent in the 2006 elections of 2006, Jean-Pierre Bemba, is now on trial at the ICC from war crimes.

However, Tshisekedi is not always perceived as the most unifying of figures and Michela Wrong describes him as “mulish”. Theodore Trefon puts it more bluntly, commenting, "stubborn and megalomaniac, Tshesikedi (sic) is also unpredictable”. This makes him far from the ideal opposition leader. And indeed, his political strategies neither enabled him to win the majority of votes in the election nor handle the post-election environment in a way that would be politically beneficial for him.

This may be to the collective benefit of the Congolese people, and maybe Tshisekedi should take credit for maintaining the fragile peace over the Congo. Such credit might be more deserved, however, if he had been advocating peaceful resistance, for example. Instead there has been a strange mixture of bullish defiance and belligerent rhetoric, occasionally bordering on delusional. Any hope that his supporters had that he is substantially different to previous leaders, or that he can somehow harness political discontent in a peaceful way, has been dwindling.

Gérard Prunier wrote of Tshisekedi’s similarly erratic approach to the 2006 elections (where he flip-flopped as to whether he was going to contest them) that:

Kinshasa, the capital of the Democratic Republic of Congo

“The old fighter seemed oddly unresponsive to the new political environment, and the often heard remark about him was that 'he was frozen in 1992', the year of his greatest glory, when he had become prime minister of the Conférence Nationale Souveraine during Mobutu’s aborted 'democratic transition'”

Perhaps this antiquated “mandate” was the basis of his declaration that he had won the 2011 elections before they’d even happened. Either way, his tactics have played straight into Kabila’s hands.

Electoral process

Kabila didn’t win the election when polls opened on November 28, 2011. Nor did he win it when the results were announced on December 9, 2011. He won it almost a year earlier on January 5, 2011.

That was the day the government amended the constitution, abolishing the need for a second round presidential run-off. Unlike his opponent, Kabila has proved himself to be a shrewd political operative. Ten other candidates are easier for an incumbent to beat than one. Even a fantastically charismatic opposition leader, with broad-based support, might find it hard to gain a plurality in such circumstances.

If Tshisekedi had won a plurality of the vote, there is a good chance we would not have known about it. But given that debates on electoral irregularities have focused on the technical side of things (such as on how turnout in some districts exceeded 100%) rather than the consequences of the vote, the assumption seems to be that Tshisekedi was not the true winner.

As it was, Tshisekidi’s parallel inauguration appeared like a bizarre sideshow, not the anointment of a rightful king. And this explains the differing response by the international community that this presidential election received compared to that in the Ivory Coast.

This does not, however, mean the elections were legitimate. Nevertheless, it is still the case that opposition responses have been defanged by Tshisekedi’s failure to demonstrate that he would be a more legitimate leader. Anger, where there is anger, seems to be on the whole directed at the fact that Kabila did not really win, not that Tshisekedi did win. Tshisekedi does not have much political capital to go on to fulfil any mandate he feels he has gained. He can order the government to resign or for a boycott of parliament, but no-one will listen. And the eerie silence over the DRC will remain.

Find out more about CONGO from this fasicnating book by Theodore Trefon