A deal-breaker for India
By M K Bhadrakumar
History never ceases to surprise. What began as the "Great Middle East" strategy in the minds of a neo-conservative Connecticut Yankee from Texas may end up in the democratization of India. Yes, paradoxically, the legacy of the George W Bush era for South Asia may turn out to be that the 60-year old democratization process in India took a quantum leap.
In a colonial bungalow on a leafy street in central Delhi on Sunday afternoon, a group of political leaders gathered. What is unfolding is indeed a historical process, and like when forces of history begin to unfold them, old dykes are bound to give away. Indians are holding breath. What lies ahead is how torrential the flow becomes as it gathers speed. Indian politics is never going to be the same again.
Curiously, it all began with the civilian nuclear cooperation agreement between the Bush administration and the coalition known as the United Progressive Alliance (UPA) which rules in Delhi - known somewhat aptly in India as "the deal". Now, the deal is highly likely to unravel, primarily for the reason that transparency was lacking in its negotiation.
The US-India nuclear deal would provide India with access to American civilian nuclear technology in exchange for nuclear-armed India agreeing to oversight by the United Nations' International Atomic Energy Agency.
Given the deal's far-reaching consequences, and considering that such a strategic direction to India's foreign and security policy didn't even figure as part of the so-called Common Minimum Program that formed the basis of the present coalition government in Delhi, the UPA ought to have felt a greater need than ever for public accountability while embarking on such an initiative.
But exactly the contrary happened. An extraordinary veil of secrecy was maintained by the UPA, so much so that the Indian public came to depend on information that trickled in from time to time from US discourses on the Internet. The UPA went back on assurances to the Indian parliament, where the majority opinion consistently voiced reservations over the deal right from the outset, that it wouldn't hustle such an important initiative through.
Instead, the government blatantly resorted to manipulative methods of dissimulation and doublespeak to sidestep parliament. The latest Delhi grapevine is that the government has been bribing members of parliament to come on board the deal and that the going rate of purchase of loyalty is US$6.25 million per member. Surely, that is corruption on an epic scale for even a notoriously corrupt country like India, which Transparency International places at somewhere near the bottom of the pit in the world community.
The Congress party-led UPA faces a no confidence debate in parliament on Tuesday. This follows the withdrawal of support to the government by its left-wing allies in protest against the deal with the US. If the government loses the vote, early elections are likely - they are currently scheduled for May next year - and the deal could be abandoned.
The Bush administration will be watching closely the efficacy of pushing such a controversial deal through against robust opinion in a democratic society. It sets an important precedent. Two crucial tests lie ahead in Central Europe - deployment of the components of the US missile defense system in the Czech Republic and Ukraine's membership of the North Atlantic Treaty Organization - where the majority opinion is manifestly against deal-making with the US, but the Bush administration is pressing ahead regardless.
The brashness with which US officials kept pressing the UPA to conclude the deal has badly exposed the Indian government's claim that it is all about India's energy security. By now, it is fairly well substantiated that the deal which was projected as in India's favor benefits Washington immeasurably.
Business deals to the tune of $100 million are expected to follow by way of selling nuclear reactors to India; there is a pronounced non-proliferation agenda in the deal in so far as Delhi virtually surrenders its right to have nuclear tests and agrees to monitoring of its nuclear program, including fissile material production in perpetuity; the deal envisages that Indian foreign policy will be congruent to US global strategies, especially on acute problem areas such as Iran; the deal enables the US to selectively waive its embargo on dual-use technology to India, which, in turn, enables the American military-industrial complex to enter the huge Indian market as an arms supplier; and places India incrementally as an ally in the US's Asian strategies against Russia and China, or at the very least ensures against a future Russia-China-India entente cordiale.
From the Indian point of view, of course, it is crystal clear that the raison d'etre of the deal is its burning ambition to become a "great power". Clearly, even if India implements the deal in its entirety in a full-throttled way - which seldom happens, given the high rate of waste, inefficiency and corruption - nuclear energy, which presently meets 3% of India's power needs, may account for 7% of estimated needs in a 15-20 year timeframe, though the cost per unit of power production will be significantly higher for nuclear energy. And, indeed, India has far from exhausted its potential to tap other conventional methods of power production, such as coal or hydo-electric power, and is yet to take a serious look at other renewable forms, such as solar or wind energy.
There are acolytes of the deal nonetheless in India. The unabashedly pro-US leadership in India, especially Prime Minister Manmohan Singh, sees it as "locking in" India as a strategic partner of the US, with the all-round benefits that it is expected to bring for the country in its passage through the coming decades.
Ideologically speaking, they are convinced that India is a "natural ally" of the US. They envisage that the deal makes the India-US "strategic partnership" virtually irreversible. That is, the deal forms an integral part of a wholesome agenda. For the Indian strategic community, the deal finally opens up the door to US military technology, especially the fascinating US missile defense system, which promises the only means whereby India could hope to neutralize China's strategic capability. Indian strategists visualize that even as Delhi begins to cope with the immense challenge of coming to terms with China's phenomenal rise, it needs US support and protection.
For corporate India, especially a handful of powerful business houses, the deal signifies a gravy train that will run on for decades to come. (The US-India Business Council estimates there could be anywhere up to $ 150 billion worth of business generated by the deal.) Conceivably, for the ruling Congress party, which is highly experienced in government, that makes sound pork-barrel politics of unprecedented proportions.
For the great Indian middle class, which is enamored of everything connected with "Amrika", the deal provides the key to a dream world in which Indians could indulge in consumerism and happily live ever after as Americans do. (Bush's rating is the highest anywhere in the world among the Indian middle class.) Surprisingly, even sections of the Indian intelligentsia, including much of the English-speaking media, suspend all disbelief and root for the deal - some even putting forth such exotic arguments that if Delhi doesn't clinch the deal after Manmohan having given word to Bush, India's international standing will suffer and the world community will not take India seriously. But, then, there has been a pervasive US penetration of Indian media organizations and think-tanks in recent years.
Thus, a sharp polarization is taking place in Indian opinion, spearheaded on the one hand by the government led by Manmohan, a former World Bank official, and a range of opinion that opposes the deal tooth and nail, which includes political parties, the scientific community and sections of the Indian intelligentsia.
This split will surface in the vote in parliament on Tuesday. The opposition has threatened it will vote out the government and thereby scotch the deal. The government is determined that it will do its damndest to see that doesn't happen. It is canvassing the support of even three members of parliament who are serving jail terms on murder charges. It is leaving nothing to chance. The establishment apparatus is working overtime, arm-twisting the reluctant or undecided to fall in line.
The silver lining is that against this unseemly backdrop of wheeling and dealing, a massive realignment of political forces has also ensued, which now seems poised to leap far beyond the deal controversy and profoundly remake India's political landscape. The deal holds the potential of becoming a defining moment in India's political economy. India's left parties, which staunchly oppose the deal, have taken the initiative of reaching out to like-minded political forces. And these forces include an important segment of India's political spectrum representing the dispossessed and humiliated and historically oppressed sections of Hindu society - known as "dalits" and "backward classes" - and alienated Muslims which are numerically large and have lately begun asserting their rights and prerogative for social and political accommodation in India's highly stratified "democratic" system.
The significance of Sunday's gathering in Delhi is that it is for the first time that in such a pronounced way, the forces of radical change in Indian politics are reaching out to each other and creating a critical mass of awakening. All indications are that beyond the deal controversy, a coalition of political forces is emerging. There is bound to be high drama, as the main "dalit" party, Bahujan Samaj Party (BSP) , which hitherto has substantial influence in India's populous northern province (Uttar Pradesh), where it is the ruling party already, is now poised to enter national politics, thanks to an alliance with the left parties. There is already talk that the proposed alliance will be inclined to project the BSP's charismatic leader, Kumari Mayawati, as India's future prime minister.
The very thought of Mayawati wearing the mantle of prime ministership has fired up public imagination. The Indian urban middle class was hitherto cocksure that the country would never allow such an "outrageous" thing to happen. Its favorite ploy has always been to co-opt and assimilate promising dalit leaders by corrupting them.
Ironically, the staunch middle class supporters of the deal have been stunned into silence. Even if "Amrika" is fascinating, even if the strategic cooperation will enable Delhi to stare eyeball-to-eyeball at Beijing, even if it brings such goodies as fanciful weapon systems for the armed forces, even if it provides for mind-boggling levels of kickbacks and political sleaze - still, nonetheless is it worthwhile if it may open the way for a lowly dalit agitator to become India's prime minister? This is the question that has haunted proponents of the deal in the secret attics of their minds for the past 48 hours.
Indians seldom discuss their caste prejudices. They prefer to pretend they are above caste prejudices. Therefore, the present dilemma of the political elite and the ruling class over Mayawati is acute. Her rise cannot be blocked as it will be in perfect accordance with democratic principles. She will only assume power on the basis of a popular mandate in a democratic election. But, still, even then, something militates in the mind of the ruling elite. The heart of the matter is that they loathe and dread the prospect. The rightly apprehend that once the dispossessed sections of Indian society capture political power in Delhi, that could turn out to be the beginning of the end of the 60-year established political order in independent India.
The mainstream political parties - Congress and the Bharatiya Janata Party - are extremely nervous that they stand to lose heavily if the forces of radical change gain political ascendancy and encroach into the center stage of Indian politics. In fact, the BSP's passage to power as a national party lies through the graveyards of both the Congress and the BJP.
For India's medium- and long-term development as a modern democratic state, it is imperative that the BSP moves into the mainstream of national politics. Social and political oppression of the dalits is a continuing blight on India's stature as a modern, civilized country. What is democracy worth if people cannot walk the streets on account of their lowly caste or drink water from a village well or can have no access to the due process of law because they have been "untouchables" for millennia?
The sad reality is that Indian democracy has given a wide berth to those hundreds of millions of Indians. Simply put, there hasn't been sufficient enough change through the past 60 years that representative rule ought to have provided.
Ironically, the India-US nuclear deal is becoming the harbinger of change in the country, but for a most unexpected reason. The deal will have served a great purpose if it logically leads to the rise of Mayawati as Manmohan's worthy successor. The political initiative taken by the Indian left to reach out to the BSP is of historical significance. It comes as a wind of change that promises to clear away accumulated debris. The class struggle in Indian conditions cannot be envisaged without addressing the social and political oppression that goes on in the name of caste in Hindu society.
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Monday, 21 July 2008
Wednesday, 16 July 2008
India's Nuclear Deal - What's In It For Us?
Chandan Mitra
| 16 Jul 2008, 0000 hrs IST, | |
| Does India need a civilian nuclear energy agreement with the US? Is this the best deal we could have got? Why is the Bush administration trying so hard to push India into signing this deal? Has the prime minister gone about it in the best possible way? Are we bartering away our nuclear sovereignty in the process, thereby endangering our goal to maintain a credible nuclear deterrent? These are some of the key questions that needed to be satisfactorily answered in the context of the ongoing controversy that has snowballed to a point where it threatens the stability of the Manmohan Singh government. Unfortunately, the political rhetoric that is flying thick and fast for the last one year and more has obfuscated the core issues involved. Enough has been spoken and written about the need to secure India's energy needs, especially in view of rising oil prices and India's near-total dependence on imports. Sceptics, on the other hand, have argued that even after investing billions of dollars to set up new reactors, nuclear power will contribute just about 7 per cent of the country's energy requirements by 2020. But even if it is conceded that India needs every extra megawatt of energy that can be generated, whatever the source, the question still remains whether the Indo-US nuclear deal in its present form is the best that we could have bargained for. On balance, it appears that the deal is good for everybody else, apart from India. First, we will end up putting huge sums into the coffers of foreign manufacturers of nuclear reactors — mainly French, Russian and American. Second, the estimated cost per unit of nuclear energy will be prohibitively high compared to coal, gas and even crude. Can India afford power at such a high cost when alternative sources have not been exhausted? Without getting into the nuclear sovereignty issue, it can be asserted that the additional energy to be generated through uranium-based reactors will be of dubious benefit. It is often argued that the US administration has been exerting pressure on the Indian establishment because President George W Bush, reeling under unfavourable popularity ratings, wants to exhibit it as his one great foreign policy success. This is utterly fallacious: most Americans have not even heard of this deal, given their proverbial insularity and self-obsession. Further, the Republicans are hardly expected to make this an issue in the November presidential election. Interestingly, most western powers have been vigorously pushing for the deal, although with greater sophistication than the sledgehammer tactics characteristically employed by Americans. Diplomacy, after all, is not based on altruism. Surely, they are not falling over one another out of love or compassion for India. Apart from the business potential, the deal is being driven in western capitals by the motive of firmly roping India into the non-proliferation regime. India has an unblemished record here, but there are concerns about the future in view of the volatility of the Asian theatre. Since India cannot officially be admitted into the NPT, the deal has attempted to manoeuvre us into a situation where New Delhi becomes a de facto signatory to the NPT, just as we will be conferred the dubious distinction of being a de facto nuclear weapons state once we sign the deal. Following the disclosure of the text of the IAEA safeguards agreement, it is abundantly clear that, while international inspection and safeguards shall be imposed permanently on our reactors, the exemptions remain doubtful. It is widely known that for all practical purposes no further testing shall be permitted. The government has repeatedly highlighted the "walk out" clause to claim that India can test whenever it wants and even if the US imposes sanctions, we can still negotiate with other countries in the Nuclear Suppliers Group to maintain uninterrupted uranium imports. This is complete hogwash. Can anybody in his right mind believe that the US will patronisingly oversee the supply of fissile material by other countries even after India conducts another nuclear test? It would be more honest to admit that the Indo-US nuclear deal is a three-in-one document comprising a civilian energy cooperation agreement with the US, de facto NPT and de facto CTBT. A discussion on the merits and demerits of the deal would be meaningful only if we begin from this premise instead of deluding ourselves into believing that, possessed by a burning desire to help India, the US wants to hand out a "give-give" agreement with us and that nothing will change as far as our military nuclear programme is concerned. Whichever way you look at the deal, honestly or deceitfully, it is a huge political albatross. Manmohan Singh has been forced to risk his government's fate and enter into a questionable alliance with a party not known for scrupulous adherence to norms of probity in public life. When the prime minister first challenged the Left to pull out last September, it was perhaps the best moment for the Congress to go for an early election buoyed by high growth, manageable inflation and opposition incoherence. Today, all three factors are ranged unfavourably against the ruling party. Manmohan Singh has never claimed to be a master strategist, but others in his party are known for their political acumen and manipulative skills. However, they got cold feet last year and now the Congress is set to pay a price for their vacillation. In politics, as in other spheres of life, you win only if you dare; defeat is inevitable if you dither and delay. (The writer is a member of the Rajya Sabha) |
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Sunday, 13 July 2008
The more sex we get, the more we want
Christina Patterson:
Bedroom farce, on stage, page or double-page spread, is, for the most part,numbingly banal
Saturday, 12 July 2008
"Sex," says the 17-year-old narrator of The Catcher in the Rye, "is something I really don't understand." Well, mate, nor do I. I only know (yes, I'm afraid I do know) that the arms of someone you don't even like – who your head, and your friends, tell you is a total shit – can feel like your natural home on this planet.
And that it's perfectly possible – drearily commonplace, in fact – to feel that a fleeting muscular contraction involving neurotransmitters, endorphins and the sure knowledge that you're king or queen of the universe, is well worth swapping for your marriage, your family, and your pride.
Whatever the Victorians, or Ann Widdecombe, or the smug marrieds on both sides of the political spectrum may say, it was ever thus. From Catullus to Chaucer to Shakespeare to those men of God, Donne and Herbert, right through to that bespectacled owl for whom sexual intercourse famously began "too late", poetry has celebrated the lips, and breasts, and buttocks, and charms of women – and men – who are not their wives. As poet and playwright John Wilmot, Earl of Rochester in The Libertine, the ever-versatile Johnny Depp reminded us that the sexual pirates of 17th-century London were just as adventurous as those in the Caribbean. He was starring with John Malkovich, whose sexually voracious Vicomte de Valmont in Les Liaisons Dangereuses will remain, for many of us, a (rather sexily) sinister but enduring image of aristocratic, decadent, pre-revolution France.
Restoration comedy bristles with brittle asides from loose ladies and rich rakes apparently set on triathlons of sexual licentiousness in plots which served as a kind of 17th-century precursor to sudoku. The tradition continued, in drama, and in life. At my mother's local theatre in Guildford the other day, I saw a play by Dion Boucicault, an Irish playwright hailed by Richard Eyre as "a Victorian Andrew Lloyd Webber", and the writer who inspired Oscar Wilde. The play, London Assurance, was written at about the time that the Brontës were dreaming up role models for future prime ministers. Lacking the wit of a Wilde, or the passion of a governess, it was, alas, merely a reminder that bedroom farce, on stage, page or in a double-page spread in a red-top, is, for the most part, numbingly, grindingly banal.
"I married him," announces a Lady Spanker at one point, "for my freedom and he married me for protection." If this was a mild subversion of the historical sexual status quo, but one not that uncommon in Western aristocracies of the past millennium, it was a relatively pithy statement of the kind of pragmatism in affairs of the heart, and genitals, that has generally prevailed. Not always able to match the biblical ideal of a man and woman joined exclusively, and monogamously, for ever and ever and ever, men, and even the odd woman, have made "arrangements". The most common, of course, has been that indispensable marital accessory, a blind eye, but some have been more complicated. H G Wells, Katherine Mansfield and Vera Brittain, according to a new book on literary love lives between the wars, are just some of the writers whose domestic, and extra-marital, lives were constructed to provide maximum freedom and minimum fuss. Not, perhaps, for the lovers squeezed into the tiny gaps in these busy, busy lives, or for the children, but you can't make a nice libertarian omelette without breaking a few little eggs.
In this lovely, liberal world, a world of kings and princes and lords and sometimes poets, cakes were eaten and retained, and laundry that was already scattered around public parks could not be seized and washed. And if your love life was alluded to in the Daily Courant or the London Gazette, who cared? You were red-blooded, goddammit, you were lusty. You had more important things to worry about than a glimpsed tryst with Emma, or Kate or Nell. Publish? Well, why not? As Wellington famously wrote on the blackmail note he returned to his lover, the courtesan Harriette Wilson, "Publish and be damned!"
That, of course, was an ice-age ago, when the market value of a private life was more on a par with poetry and less on a par with a Damien Hirst. Sex, like chocolate, and Kettle Chips,is a kind of drug – and so, unfortunately, is the media coverage of the sex lives of so-called celebs. The more we get, the more we want. It's a terrible shame, but that's the way the chocolate-chip cookie of the zeitgeist crumbles. Your love of a stripy uniform, or a Chelsea strip, or a juicy orange, allied with a nice whip, or garter, or noose, may or may not be an indication of a damaged childhood, an ability to do a job, or a lively sense of humour. And it may or may not matter.
But if you have any claims to fame, or fortune, or public office, and any sex life beyond the constraints of a 1950s-constructed norm, a sense of humour is precisely what you're going to need, in spades. We have, it seems, made our bed – or basement, or sand dune, or desk at the Admiralty Arch – and now, in the full glare of the media, and the internet, and YouTube and, of course, our children, we're just going to have to lie in it.
Bedroom farce, on stage, page or double-page spread, is, for the most part,numbingly banal
Saturday, 12 July 2008
"Sex," says the 17-year-old narrator of The Catcher in the Rye, "is something I really don't understand." Well, mate, nor do I. I only know (yes, I'm afraid I do know) that the arms of someone you don't even like – who your head, and your friends, tell you is a total shit – can feel like your natural home on this planet.
And that it's perfectly possible – drearily commonplace, in fact – to feel that a fleeting muscular contraction involving neurotransmitters, endorphins and the sure knowledge that you're king or queen of the universe, is well worth swapping for your marriage, your family, and your pride.
Whatever the Victorians, or Ann Widdecombe, or the smug marrieds on both sides of the political spectrum may say, it was ever thus. From Catullus to Chaucer to Shakespeare to those men of God, Donne and Herbert, right through to that bespectacled owl for whom sexual intercourse famously began "too late", poetry has celebrated the lips, and breasts, and buttocks, and charms of women – and men – who are not their wives. As poet and playwright John Wilmot, Earl of Rochester in The Libertine, the ever-versatile Johnny Depp reminded us that the sexual pirates of 17th-century London were just as adventurous as those in the Caribbean. He was starring with John Malkovich, whose sexually voracious Vicomte de Valmont in Les Liaisons Dangereuses will remain, for many of us, a (rather sexily) sinister but enduring image of aristocratic, decadent, pre-revolution France.
Restoration comedy bristles with brittle asides from loose ladies and rich rakes apparently set on triathlons of sexual licentiousness in plots which served as a kind of 17th-century precursor to sudoku. The tradition continued, in drama, and in life. At my mother's local theatre in Guildford the other day, I saw a play by Dion Boucicault, an Irish playwright hailed by Richard Eyre as "a Victorian Andrew Lloyd Webber", and the writer who inspired Oscar Wilde. The play, London Assurance, was written at about the time that the Brontës were dreaming up role models for future prime ministers. Lacking the wit of a Wilde, or the passion of a governess, it was, alas, merely a reminder that bedroom farce, on stage, page or in a double-page spread in a red-top, is, for the most part, numbingly, grindingly banal.
"I married him," announces a Lady Spanker at one point, "for my freedom and he married me for protection." If this was a mild subversion of the historical sexual status quo, but one not that uncommon in Western aristocracies of the past millennium, it was a relatively pithy statement of the kind of pragmatism in affairs of the heart, and genitals, that has generally prevailed. Not always able to match the biblical ideal of a man and woman joined exclusively, and monogamously, for ever and ever and ever, men, and even the odd woman, have made "arrangements". The most common, of course, has been that indispensable marital accessory, a blind eye, but some have been more complicated. H G Wells, Katherine Mansfield and Vera Brittain, according to a new book on literary love lives between the wars, are just some of the writers whose domestic, and extra-marital, lives were constructed to provide maximum freedom and minimum fuss. Not, perhaps, for the lovers squeezed into the tiny gaps in these busy, busy lives, or for the children, but you can't make a nice libertarian omelette without breaking a few little eggs.
In this lovely, liberal world, a world of kings and princes and lords and sometimes poets, cakes were eaten and retained, and laundry that was already scattered around public parks could not be seized and washed. And if your love life was alluded to in the Daily Courant or the London Gazette, who cared? You were red-blooded, goddammit, you were lusty. You had more important things to worry about than a glimpsed tryst with Emma, or Kate or Nell. Publish? Well, why not? As Wellington famously wrote on the blackmail note he returned to his lover, the courtesan Harriette Wilson, "Publish and be damned!"
That, of course, was an ice-age ago, when the market value of a private life was more on a par with poetry and less on a par with a Damien Hirst. Sex, like chocolate, and Kettle Chips,is a kind of drug – and so, unfortunately, is the media coverage of the sex lives of so-called celebs. The more we get, the more we want. It's a terrible shame, but that's the way the chocolate-chip cookie of the zeitgeist crumbles. Your love of a stripy uniform, or a Chelsea strip, or a juicy orange, allied with a nice whip, or garter, or noose, may or may not be an indication of a damaged childhood, an ability to do a job, or a lively sense of humour. And it may or may not matter.
But if you have any claims to fame, or fortune, or public office, and any sex life beyond the constraints of a 1950s-constructed norm, a sense of humour is precisely what you're going to need, in spades. We have, it seems, made our bed – or basement, or sand dune, or desk at the Admiralty Arch – and now, in the full glare of the media, and the internet, and YouTube and, of course, our children, we're just going to have to lie in it.
Friday, 11 July 2008
The Nuclear Deal And Democracy
By Suvrat Raju
10 July, 2008
Countercurrents.org
While much has been written about the Indo-US nuclear deal, a central question remains unasked: "Why is the deal important enough to precipitate a crisis in the government?".
The answer that the proponents of the deal provide –- that the deal is essential for energy security –- is, evidently, simple minded. According to figures provided by Anil Kakodkar –- the chairperson of the Department of Atomic Energy –- the deal will increase India's installed energy capacity by 2.5% by 2020 (1). While the Prime Minister may be perspicacious, this stretches the bounds of sagacity; simply put, governments do not risk self sacrifice for small gains in energy production, 12 years in the future. When one compounds this insignificant gain with the considerable uncertainty that the deal will actually clear the American congress before September, the energy security argument becomes completely untenable.
Indeed, the very desperation of the government to pass this deal indicates, more clearly than anything else, that the deal is not just about energy. While it is clear that the deal is about a larger strategic relationship with the US, this begs the question; most aspects of this relationship, including closer military and economic ties seem to be independent of the deal. So, what is the fuss about?
This question is answered candidly in the American strategic discourse. An alliance with the US entails an essential prerequisite: the government should be in a position to fulfill American demands, irrespective of domestic political considerations. Although, this is deeply undemocratic, this makes sense. Imagine the horror of American legislators if they were to help India obtain a seat in the security council only to find the Indian government arguing against American interference in Venezuela!
Incidentally, this doctrine applies to any bilateral relationship involving the US. During the Iraq war, Rumsfeld dismissed France and Germany as belonging to `old' Europe. As Chomsky pointed out (2), the countries of `new' Europe –- like Italy or Spain –- were those that supported Washington in spite of strong domestic opposition.
Viewed from this perspective, India has behaved well in recent years. Ashley Tellis, an influential advisor to the US government, arguing for the deal in a testimony to the US House of representatives approvingly noted at least 10 instances –- including India's vote against Iran, its support for the war in Afghanistan and its endorsement of American positions on climate change, missile defense and chemical weapons -- where the Indian government acted against domestic opposition and long held policies to support the US.(3)
On the other hand, the existence of an independent democratic discourse in India is a matter of great concern for the US. Ashton Carter, a member of the Clinton administration, lamented to the US senate that the fact that India was a democracy meant that "no government in Delhi can ... commit it to a broad set of actions in support of U.S. Interests" before pointing out that India's "... stubborn adherence to independent positions regarding the world order, economic development, and nuclear security" created a serious hazard for Indo-US strategic ties.(4)
These testimonies merely articulate what is public knowledge. Washington expects compliance from its allies. If India is to be a trusted ally it cannot protest loudly against the oppression of Palestinians, organize developing countries in defense of Iran or repudiate iniquitous conditions laid down by the WTO; it must support the US in diplomatic forums and provide logistical support for US military operations in Asia. Furthermore, and this is critical for American policy makers, this support cannot be contingent on the vagaries of Indian politics. Hence, while the Indian elite is quite willing to accede to these demands, it must first convince the US that its house is in order. It must tame the complexities of Indian democracy so that it can deliver on what it promises. The importance of this cannot be overstated.
In this context, the nuclear deal provides a high profile test case. The passage of the deal, although materially insignificant, is an extremely important matter of principle. If domestic political considerations cause the government to balk, that sets a terrible example and leaves India –- in the words of Ronen Sen –- with "zero credibility".(5) The consequent loss of trust that this will engender in Washington will damage ties with the US for years to come.
In any case, Indian ruling classes have been impatient with democratic dissent since it creates difficulties in their attempts to ram through an elite agenda. As Chidambaram put it (6), "Indian ... democracy has often paralyzed decision making ... this approach must change." After the deal was stalled last year, Manmohan Singh wondered whether a "single party state" would be preferable!(7)
India's newly empowered elite now finds that this frustrating political process threatens its global aspirations. This has brought together powerful interests ranging from India Inc. to NRI lobby in an attempt to remove roadblocks to the deal. These forces are strong enough to impel the government to risk its own survival.
The message, conveyed to the G8, was that India is ruled by a government that is willing to make (in the words of Nicholas Burns, the American negotiator for the nuclear deal), "courageous decisions" (8) -- and bulldoze domestic dissent -- if this is demanded by Washington or Brussels!
This is bad news for Indian democracy. The Indian system, despite its tremendous iniquities and imperfections is based on the notion that governments privilege their survival over all else. The idea that a government may imperil its own existence to fulfill commitments made to a foreign government is antithetical to the idea of democracy. The recent baffling actions of the Manmohan Singh government must be understood as a worrying loss of democratic space.
----------------
References
----------------
(1)The Hindu, 31 October, 2007 and "Energy for India in the coming decades", Anil Kakodkar,
http://www.dae.gov.in/iaea/ak-paris0305.doc
(2)Znet, 31 October, 2003
(3)Testimony by Ashley J. Tellis before the House Committee on International Relations, November 16, 2005
(4)Ashton Carter, Testimony Testimony before the Committee on Foreign Relations, United States Senate, November 2, 2005.
(5)Rediff, Aug 20, 2007: http://www.rediff.com/news/2007/aug/20inter.htm
(6)Convocation Address, IIM Ahmedabad, March 31, 2007 http://financeminister.gov.in/public_speeches/pdf/2007.
3.31%20Convocation%20Address,%20IIM,%20Ahmedabad.pdf
(7)Inaugural Address to the 4th International Conference on Federalism, November 5, 2007
(8)The Hindu, March 1, 2008
Suvrat Raju is a physicist and an activist. He just completed his PhD at Harvard.
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It's The Oil, Stupid!
By Noam Chomsky
10 July, 2008
Khaleej Times
The deal just taking shape between Iraq's Oil Ministry and four Western oil companies raises critical questions about the nature of the US invasion and occupation of Iraq — questions that should certainly be addressed by presidential candidates and seriously discussed in the United States, and of course in occupied Iraq, where it appears that the population has little if any role in determining the future of their country.
Negotiations are under way for Exxon Mobil, Shell, Total and BP — the original partners decades ago in the Iraq Petroleum Company, now joined by Chevron and other smaller oil companies — to renew the oil concession they lost to nationalisation during the years when the oil producers took over their own resources. The no-bid contracts, apparently written by the oil corporations with the help of U.S. officials, prevailed over offers from more than 40 other companies, including companies in China, India and Russia.
"There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract," Andrew E. Kramer wrote in The New York Times.
Kramer's reference to "suspicion" is an understatement. Furthermore, it is highly likely that the military occupation has taken the initiative in restoring the hated Iraq Petroleum Company, which, as Seamus Milne writes in the London Guardian, was imposed under British rule to "dine off Iraq's wealth in a famously exploitative deal."
Later reports speak of delays in the bidding. Much is happening in secrecy, and it would be no surprise if new scandals emerge.
The demand could hardly be more intense. Iraq contains perhaps the second largest oil reserves in the world, which are, furthermore, very cheap to extract: no permafrost or tar sands or deep sea drilling. For US planners, it is imperative that Iraq remain under U.S. control, to the extent possible, as an obedient client state that will also house major U.S. military bases, right at the heart of the world's major energy reserves.
That these were the primary goals of the invasion was always clear enough through the haze of successive pretexts: weapons of mass destruction, Saddam's links with Al-Qaeda, democracy promotion and the war against terrorism, which, as predicted, sharply increased as a result of the invasion.
Last November, the guiding concerns were made explicit when President Bush and Iraq's Prime Minister Nouri Al Maliki signed a "Declaration of Principles," ignoring the U.S. Congress and Iraqi parliament, and the populations of the two countries.
The Declaration left open the possibility of an indefinite long-term U.S. military presence in Iraq that would presumably include the huge air bases now being built around the country, and the "embassy" in Baghdad, a city within a city, unlike any embassy in the world. These are not being constructed to be abandoned.
The Declaration also had a remarkably brazen statement about exploiting the resources of Iraq. It said that the economy of Iraq, which means its oil resources, must be open to foreign investment, "especially American investments." That comes close to a pronouncement that we invaded you so that we can control your country and have privileged access to your resources.
The seriousness of this commitment was underscored in January, when President Bush issued a "signing statement" declaring that he would reject any congressional legislation that restricted funding "to establish any military installation or base for the purpose of providing for the permanent stationing of United States Armed Forces in Iraq" or "to exercise United States control of the oil resources of Iraq."
Extensive resort to "signing statements" to expand executive power is yet another Bush innovation, condemned by the American Bar Association as "contrary to the rule of law and our constitutional separation of powers." To no avail.
Not surprisingly, the Declaration aroused immediate objections in Iraq, among others from Iraqi unions, which survive even under the harsh anti-labour laws that Saddam instituted and the occupation preserves.
In Washington propaganda, the spoiler to US domination in Iraq is Iran. U.S. problems in Iraq are blamed on Iran. US Secretary of State Condoleezza Rice sees a simple solution: "foreign forces" and "foreign arms" should be withdrawn from Iraq — Iran's, not ours.
The confrontation over Iran's nuclear programme heightens the tensions. The Bush administration's "regime change" policy toward Iran comes with ominous threats of force (there Bush is joined by both US presidential candidates). The policy also is reported to include terrorism within Iran — again legitimate, for the world rulers. A majority of the American people favours diplomacy and oppose the use of force. But public opinion is largely irrelevant to policy formation, not just in this case.
An irony is that Iraq is turning into a US-Iranian condominium. The Maliki government is the sector of Iraqi society most supported by Iran. The so-called Iraqi army — just another militia — is largely based on the Badr brigade, which was trained in Iran, and fought on the Iranian side during the Iran-Iraq war.
Nir Rosen, one of the most astute and knowledgeable correspondents in the region, observes that the main target of the US-Maliki military operations, Moktada Al Sadr, is disliked by Iran as well: He's independent and has popular support, therefore dangerous.
Iran "clearly supported Prime Minister Maliki and the Iraqi government against what they described as 'illegal armed groups' (of Moktada's Mahdi army) in the recent conflict in Basra," Rosen writes, "which is not surprising given that their main proxy in Iraq, the Supreme Iraqi Islamic Council dominates the Iraqi state and is Maliki's main backer."
"There is no proxy war in Iraq," Rosen concludes, "because the U.S. and Iran share the same proxy."
Teheran is presumably pleased to see the United States institute and sustain a government in Iraq that's receptive to their influence. For the Iraqi people, however, that government continues to be a disaster, very likely with worse to come.
In Foreign Affairs, Steven Simon points out that current US counterinsurgency strategy is "stoking the three forces that have traditionally threatened the stability of Middle Eastern states: tribalism, warlordism and sectarianism." The outcome might be "a strong, centralised state ruled by a military junta that would resemble" Saddam's regime.
If Washington achieves its goals, then its actions are justified. Reactions are quite different when Vladimir Putin succeeds in pacifying Chechnya, to an extent well beyond what Gen. David Petraeus has achieved in Iraq. But that is THEM, and this is US. Criteria are therefore entirely different.
In the US, the Democrats are silenced now because of the supposed success of the US military surge in Iraq. Their silence reflects the fact that there are no principled criticisms of the war. In this way of regarding the world, if you're achieving your goals, the war and occupation are justified. The sweetheart oil deals come with the territory.
In fact, the whole invasion is a war crime — indeed the supreme international crime, differing from other war crimes in that it encompasses all the evil that follows, in the terms of the Nuremberg judgment. This is among the topics that can't be discussed, in the presidential campaign or elsewhere. Why are we in Iraq? What do we owe Iraqis for destroying their country? The majority of the American people favour US withdrawal from Iraq. Do their voices matter?
10 July, 2008
Khaleej Times
The deal just taking shape between Iraq's Oil Ministry and four Western oil companies raises critical questions about the nature of the US invasion and occupation of Iraq — questions that should certainly be addressed by presidential candidates and seriously discussed in the United States, and of course in occupied Iraq, where it appears that the population has little if any role in determining the future of their country.
Negotiations are under way for Exxon Mobil, Shell, Total and BP — the original partners decades ago in the Iraq Petroleum Company, now joined by Chevron and other smaller oil companies — to renew the oil concession they lost to nationalisation during the years when the oil producers took over their own resources. The no-bid contracts, apparently written by the oil corporations with the help of U.S. officials, prevailed over offers from more than 40 other companies, including companies in China, India and Russia.
"There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract," Andrew E. Kramer wrote in The New York Times.
Kramer's reference to "suspicion" is an understatement. Furthermore, it is highly likely that the military occupation has taken the initiative in restoring the hated Iraq Petroleum Company, which, as Seamus Milne writes in the London Guardian, was imposed under British rule to "dine off Iraq's wealth in a famously exploitative deal."
Later reports speak of delays in the bidding. Much is happening in secrecy, and it would be no surprise if new scandals emerge.
The demand could hardly be more intense. Iraq contains perhaps the second largest oil reserves in the world, which are, furthermore, very cheap to extract: no permafrost or tar sands or deep sea drilling. For US planners, it is imperative that Iraq remain under U.S. control, to the extent possible, as an obedient client state that will also house major U.S. military bases, right at the heart of the world's major energy reserves.
That these were the primary goals of the invasion was always clear enough through the haze of successive pretexts: weapons of mass destruction, Saddam's links with Al-Qaeda, democracy promotion and the war against terrorism, which, as predicted, sharply increased as a result of the invasion.
Last November, the guiding concerns were made explicit when President Bush and Iraq's Prime Minister Nouri Al Maliki signed a "Declaration of Principles," ignoring the U.S. Congress and Iraqi parliament, and the populations of the two countries.
The Declaration left open the possibility of an indefinite long-term U.S. military presence in Iraq that would presumably include the huge air bases now being built around the country, and the "embassy" in Baghdad, a city within a city, unlike any embassy in the world. These are not being constructed to be abandoned.
The Declaration also had a remarkably brazen statement about exploiting the resources of Iraq. It said that the economy of Iraq, which means its oil resources, must be open to foreign investment, "especially American investments." That comes close to a pronouncement that we invaded you so that we can control your country and have privileged access to your resources.
The seriousness of this commitment was underscored in January, when President Bush issued a "signing statement" declaring that he would reject any congressional legislation that restricted funding "to establish any military installation or base for the purpose of providing for the permanent stationing of United States Armed Forces in Iraq" or "to exercise United States control of the oil resources of Iraq."
Extensive resort to "signing statements" to expand executive power is yet another Bush innovation, condemned by the American Bar Association as "contrary to the rule of law and our constitutional separation of powers." To no avail.
Not surprisingly, the Declaration aroused immediate objections in Iraq, among others from Iraqi unions, which survive even under the harsh anti-labour laws that Saddam instituted and the occupation preserves.
In Washington propaganda, the spoiler to US domination in Iraq is Iran. U.S. problems in Iraq are blamed on Iran. US Secretary of State Condoleezza Rice sees a simple solution: "foreign forces" and "foreign arms" should be withdrawn from Iraq — Iran's, not ours.
The confrontation over Iran's nuclear programme heightens the tensions. The Bush administration's "regime change" policy toward Iran comes with ominous threats of force (there Bush is joined by both US presidential candidates). The policy also is reported to include terrorism within Iran — again legitimate, for the world rulers. A majority of the American people favours diplomacy and oppose the use of force. But public opinion is largely irrelevant to policy formation, not just in this case.
An irony is that Iraq is turning into a US-Iranian condominium. The Maliki government is the sector of Iraqi society most supported by Iran. The so-called Iraqi army — just another militia — is largely based on the Badr brigade, which was trained in Iran, and fought on the Iranian side during the Iran-Iraq war.
Nir Rosen, one of the most astute and knowledgeable correspondents in the region, observes that the main target of the US-Maliki military operations, Moktada Al Sadr, is disliked by Iran as well: He's independent and has popular support, therefore dangerous.
Iran "clearly supported Prime Minister Maliki and the Iraqi government against what they described as 'illegal armed groups' (of Moktada's Mahdi army) in the recent conflict in Basra," Rosen writes, "which is not surprising given that their main proxy in Iraq, the Supreme Iraqi Islamic Council dominates the Iraqi state and is Maliki's main backer."
"There is no proxy war in Iraq," Rosen concludes, "because the U.S. and Iran share the same proxy."
Teheran is presumably pleased to see the United States institute and sustain a government in Iraq that's receptive to their influence. For the Iraqi people, however, that government continues to be a disaster, very likely with worse to come.
In Foreign Affairs, Steven Simon points out that current US counterinsurgency strategy is "stoking the three forces that have traditionally threatened the stability of Middle Eastern states: tribalism, warlordism and sectarianism." The outcome might be "a strong, centralised state ruled by a military junta that would resemble" Saddam's regime.
If Washington achieves its goals, then its actions are justified. Reactions are quite different when Vladimir Putin succeeds in pacifying Chechnya, to an extent well beyond what Gen. David Petraeus has achieved in Iraq. But that is THEM, and this is US. Criteria are therefore entirely different.
In the US, the Democrats are silenced now because of the supposed success of the US military surge in Iraq. Their silence reflects the fact that there are no principled criticisms of the war. In this way of regarding the world, if you're achieving your goals, the war and occupation are justified. The sweetheart oil deals come with the territory.
In fact, the whole invasion is a war crime — indeed the supreme international crime, differing from other war crimes in that it encompasses all the evil that follows, in the terms of the Nuremberg judgment. This is among the topics that can't be discussed, in the presidential campaign or elsewhere. Why are we in Iraq? What do we owe Iraqis for destroying their country? The majority of the American people favour US withdrawal from Iraq. Do their voices matter?
Wednesday, 9 July 2008
When the going gets tough, economists go very quiet.
They're happy to take the credit in the good times, but the disciples of this false science are hard to find as recession looms
-
- The Guardian,
- Wednesday July 9, 2008
So the Footsie has tumbled again. Forgive me for asking, but where are the economists? As the nation approaches recession, an entire profession seems to have vanished over the horizon, like conmen stuffed with cash, and thousands left destitute behind. They said recessions were over. They told politicians to leave things to them and all would be fine. Yet they failed to spot the sub-prime housing crash, and now look at the mess.
When I studied economics we were told we would be masters of the universe. Ours was not a dismal but a noble science. It had harnessed the verities of maths to those of human behaviour and would go on to conquer politics. Rampant recession would go the way of hyperinflation. Like leprosy and cholera, they were epidemics that modern medicine had rid from our shores.
It did not matter if the economists were welfare Keynesians such as Myrdal, Robinson and Galbraith or free-marketeers such as Marshall, Friedman and the Institute of Economic Affairs. All were "social scientists". They claimed to have cracked the DNA of economic exchange, to have turned the base metal of money into political gold.
We believed them. We believed the Keynesians until we slumped into stagflation. We believed light-regulation capitalists such as Margaret Thatcher and Gordon Brown, that they could convert boom-bust into an upward sloping plane of glory. We believed the Bank of England when it said that, in its hands, inflation was dead and prosperity eternal. Bliss was it in that dawn to be alive - and an economist.
If Britain were now in the grip of bubonic plague, there would be all hell to pay from some profession or other. An "influential" Commons committee would be summoning the chief medical officer and subjecting him to the third degree. Why no national rat strategy? Why no crash inoculation? Why so many planning delays on plague pits?
The espionage pundits were likewise castigated for wrongly leading the nation to war against Iraq, for giving dud professional assessments on fallacious intelligence. The architectural profession has taken the rap (very occasionally) for the grotesque failures of public housing in the 1970s. Climate scientists may yet be damned for the costly lunacy of new energy sources, such as wind turbines and biofuels.
Yet economics is a Teflon profession. A quarter of a century ago 364 practitioners wrote a letter denouncing the policies of the then Thatcher government as having "no basis in economic theory". They were wrong in fact and wrong in judgment. Thatcher's policies laid the groundwork for a strategic shift in the underpinning of British prosperity. There was no inquiry, no hearing, no peep of retraction or remorse.
Since then economists have flooded into government; there were roughly a thousand at the last count. What do they all do? Despite reports of demoralisation in the Treasury, that department remains the home base for public sector management through financial aggregates. During the Blair/Brown era it has held government in thrall.
Economic managers have always claimed credit for the success of Brown's Treasury regime. They have espoused quantifiable outputs, targets and delivery indicators. They invented the celebrity consultant and the maxim that only what measures matters. Above all, the economics profession (and its house journal, the Economist) was ecstatic when Brown delegated monetary control to the Bank of England. This was supposed to isolate the economy from political pressure, subcontracting the regulation of interest rates and markets.
Today we are older and wiser. Controlling the agencies of credit has proved beyond the finest professional minds in the game. Where now are the effortless pundits of the Treasury and the Bank? Where now the gilded ones of Moody's and Standard & Poor's, credit raters to the mightiest in the land? They should have stuck to goose entrails.
Alan Greenspan, former chief of the US Federal Reserve Board and a Brown adviser, is unrepentant. He recently declared that "anticipating the next financial malfunction ... has not proved feasible". There is nothing so unseeing as a wronged economist. The Bank of England's apologias over Northern Rock have been protests that regulation is a mess and government indecisive.
When muck hits fan, economists always blame politicians. They would have some justice if they did not take credit when things go right. I was always uncomfortable at the overselling of economics as a science, when it is rather a branch of psychology, a study of the peculiarities of human nature. Its spurious objectivity, manifest in its ridiculous love affair with maths, induced a "Jupiter complex", a conviction that scientific certainty, applied with enough rigour to any problem, triumphs over all.
Economic management is and always will be about politics, about the clash of needs and demands resolved through the constitutional process. The delegation of interest rates to the Bank of England worked when it ran in parallel with politics, but not any more. Now that reflation seems urgent for recovery, the system is biased against common sense, yet no politician dare tell the Bank to cut rates and risk inflation.
The newest craze is "nudge" economics, from the Americans, Richard Thaler and Cass Sunstein. They put the subject firmly among the behavioural sciences - if not the arts. Human actions are too mysterious and unpredictable to be liable to quantification and modelling. They are responsive to what the academic Paul Ormerod called "butterfly economics". Nudge steers, but does not order or plan.
This requires knowledge of the working of markets, incentives, expectations and panics. But converting micro-economics into macro has always been a dangerous game. Much has been made of the success of Spain's dirigiste banking regulators in putting security before runaway profit. But this was a triumph of politics over economics. Greenspan may laconically remark that "we can never have a perfect model of risk", but we can have alertness to risk and we can have caution.
Economics has long traded on being a science when it is not. In this it is like war. For a third of a century since the 1976 IMF crisis it has enjoyed great influence over British policy. Now it has met its Waterloo and a little humility would be in order. Once again economics must be rescued by that true master of all things, politics.
When I studied economics we were told we would be masters of the universe. Ours was not a dismal but a noble science. It had harnessed the verities of maths to those of human behaviour and would go on to conquer politics. Rampant recession would go the way of hyperinflation. Like leprosy and cholera, they were epidemics that modern medicine had rid from our shores.
It did not matter if the economists were welfare Keynesians such as Myrdal, Robinson and Galbraith or free-marketeers such as Marshall, Friedman and the Institute of Economic Affairs. All were "social scientists". They claimed to have cracked the DNA of economic exchange, to have turned the base metal of money into political gold.
We believed them. We believed the Keynesians until we slumped into stagflation. We believed light-regulation capitalists such as Margaret Thatcher and Gordon Brown, that they could convert boom-bust into an upward sloping plane of glory. We believed the Bank of England when it said that, in its hands, inflation was dead and prosperity eternal. Bliss was it in that dawn to be alive - and an economist.
If Britain were now in the grip of bubonic plague, there would be all hell to pay from some profession or other. An "influential" Commons committee would be summoning the chief medical officer and subjecting him to the third degree. Why no national rat strategy? Why no crash inoculation? Why so many planning delays on plague pits?
The espionage pundits were likewise castigated for wrongly leading the nation to war against Iraq, for giving dud professional assessments on fallacious intelligence. The architectural profession has taken the rap (very occasionally) for the grotesque failures of public housing in the 1970s. Climate scientists may yet be damned for the costly lunacy of new energy sources, such as wind turbines and biofuels.
Yet economics is a Teflon profession. A quarter of a century ago 364 practitioners wrote a letter denouncing the policies of the then Thatcher government as having "no basis in economic theory". They were wrong in fact and wrong in judgment. Thatcher's policies laid the groundwork for a strategic shift in the underpinning of British prosperity. There was no inquiry, no hearing, no peep of retraction or remorse.
Since then economists have flooded into government; there were roughly a thousand at the last count. What do they all do? Despite reports of demoralisation in the Treasury, that department remains the home base for public sector management through financial aggregates. During the Blair/Brown era it has held government in thrall.
Economic managers have always claimed credit for the success of Brown's Treasury regime. They have espoused quantifiable outputs, targets and delivery indicators. They invented the celebrity consultant and the maxim that only what measures matters. Above all, the economics profession (and its house journal, the Economist) was ecstatic when Brown delegated monetary control to the Bank of England. This was supposed to isolate the economy from political pressure, subcontracting the regulation of interest rates and markets.
Today we are older and wiser. Controlling the agencies of credit has proved beyond the finest professional minds in the game. Where now are the effortless pundits of the Treasury and the Bank? Where now the gilded ones of Moody's and Standard & Poor's, credit raters to the mightiest in the land? They should have stuck to goose entrails.
Alan Greenspan, former chief of the US Federal Reserve Board and a Brown adviser, is unrepentant. He recently declared that "anticipating the next financial malfunction ... has not proved feasible". There is nothing so unseeing as a wronged economist. The Bank of England's apologias over Northern Rock have been protests that regulation is a mess and government indecisive.
When muck hits fan, economists always blame politicians. They would have some justice if they did not take credit when things go right. I was always uncomfortable at the overselling of economics as a science, when it is rather a branch of psychology, a study of the peculiarities of human nature. Its spurious objectivity, manifest in its ridiculous love affair with maths, induced a "Jupiter complex", a conviction that scientific certainty, applied with enough rigour to any problem, triumphs over all.
Economic management is and always will be about politics, about the clash of needs and demands resolved through the constitutional process. The delegation of interest rates to the Bank of England worked when it ran in parallel with politics, but not any more. Now that reflation seems urgent for recovery, the system is biased against common sense, yet no politician dare tell the Bank to cut rates and risk inflation.
The newest craze is "nudge" economics, from the Americans, Richard Thaler and Cass Sunstein. They put the subject firmly among the behavioural sciences - if not the arts. Human actions are too mysterious and unpredictable to be liable to quantification and modelling. They are responsive to what the academic Paul Ormerod called "butterfly economics". Nudge steers, but does not order or plan.
This requires knowledge of the working of markets, incentives, expectations and panics. But converting micro-economics into macro has always been a dangerous game. Much has been made of the success of Spain's dirigiste banking regulators in putting security before runaway profit. But this was a triumph of politics over economics. Greenspan may laconically remark that "we can never have a perfect model of risk", but we can have alertness to risk and we can have caution.
Economics has long traded on being a science when it is not. In this it is like war. For a third of a century since the 1976 IMF crisis it has enjoyed great influence over British policy. Now it has met its Waterloo and a little humility would be in order. Once again economics must be rescued by that true master of all things, politics.
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Friday, 4 July 2008
Big Oil's Iraq deals are the greatest stick-up in history
The country's invaders should be paying billions in reparations not using the war as a reason to pillage its richest resource
Naomi Klein The Guardian,
Friday July 4, 2008
Once oil passed $140 a barrel, even the most rabidly rightwing media hosts had to prove their populist credibility by devoting a portion of every show to bashing Big Oil. Some have gone so far as to invite me on for a friendly chat about an insidious new phenomenon: "disaster capitalism." It usually goes well - until it doesn't.
For instance, "independent conservative" radio host Jerry Doyle and I were having a perfectly amiable conversation about sleazy insurance companies and inept politicians when this happened: "I think I have a quick way to bring the prices down," Doyle announced. "We've invested $650bn to liberate a nation of 25 million people, shouldn't we just demand that they give us oil? There should be tankers after tankers backed up like a traffic jam getting into the Lincoln Tunnel, the stinkin' Lincoln, at rush-hour with thank-you notes from the Iraqi government ... Why don't we just take the oil? We've invested it liberating a country. I can have the problem solved of gas prices coming down in 10 days, not 10 years."
There were a couple of problems with Doyle's plan, of course. The first was that he was describing the biggest stick-up in world history. The second that he was too late. "We" are already heisting Iraq's oil, or at least are on the brink of doing so.
It started with no-bid service contracts announced for Exxon Mobil, Chevron, Shell, BP and Total (they have yet to be signed but are still on course). Paying multinationals for their technical expertise is not unusual in itself. What is odd is that such contracts almost invariably go to oil service companies - not to the oil majors, whose work is exploring, producing and owning carbon wealth. The contracts only make sense in the context of reports that the oil majors have insisted on the right of first refusal on subsequent contracts handed out to manage and produce Iraq's oilfields. In other words, other companies will be free to bid on those future contracts, but these companies will win.
One week after the no-bid service deals were announced, the world caught its first glimpse of the real prize. After years of backroom arm-twisting, Iraq is officially flinging open six of its major oilfields, accounting for half of its known reserves, to foreign investors. According to Iraq's oil minister, the long-term contracts will be signed within a year. While ostensibly under the control of the Iraq National Oil Company, foreign corporations will keep 75% of the value of the contracts, leaving just 25% for their Iraqi partners.
That kind of ratio is unheard of in oil-rich Arab and Persian states, where achieving majority national control over oil was the defining victory of anti-colonial struggles. According to Greg Muttitt, a London-based oil expert, the assumption up until now was that foreign multinationals would be brought in to develop new fields in Iraq - not to take over those which are already in production and therefore require minimal technical support. "The policy was always to allocate these fields to the Iraq National Oil Company," he told me. "This is a total reversal of that policy, giving the Iraq National Oil Company a mere 25% instead of the planned 100%."
So what makes such lousy deals possible in Iraq, which has already suffered so much? Paradoxically, it is Iraq's suffering - its never-ending crisis - that is the rationale for an arrangement that threatens to drain Iraq's treasury of its main revenue source. The logic goes like this: Iraq's oil industry needs foreign expertise because years of punishing sanctions starved it of new technology, while the invasion and continuing violence degraded it further. And Iraq needs to start producing more oil urgently. Why? Also because of the war. The country is shattered and the billions handed out in no-bid contracts to western firms have failed to rebuild it.
And that's where the new contracts come in: they will raise more money, but Iraq has become such a treacherous place that the oil majors must be induced to take the risk of investing. Thus the invasion of Iraq neatly creates the argument for its subsequent pillage.
Several of the architects of the Iraq war no longer even bother to deny that oil was a major motivator for the invasion. On US National Public Radio's To the Point, Fadhil Chalabi, one of the primary Iraqi advisers to the Bush administration in the lead-up to the invasion, recently described the war as "a strategic move on the part of the United States of America and the UK to have a military presence in the Gulf in order to secure [oil] supplies in the future". Chalabi, who served as Iraq's oil undersecretary of state and met with the oil majors before the invasion, described this as "a primary objective".
Invading countries to seize their natural resources is illegal under the Geneva conventions. That means the huge task of rebuilding Iraq's infrastructure - including its oil infrastructure - is the financial responsibility of Iraq's invaders. They should be forced to pay reparations, just as Saddam Hussein's regime paid $9bn to Kuwait in reparations for its 1990 invasion. Instead, Iraq is being forced to sell 75% of its national patrimony to pay the bills for its own illegal invasion and occupation.
Naomi Klein The Guardian,
Friday July 4, 2008
Once oil passed $140 a barrel, even the most rabidly rightwing media hosts had to prove their populist credibility by devoting a portion of every show to bashing Big Oil. Some have gone so far as to invite me on for a friendly chat about an insidious new phenomenon: "disaster capitalism." It usually goes well - until it doesn't.
For instance, "independent conservative" radio host Jerry Doyle and I were having a perfectly amiable conversation about sleazy insurance companies and inept politicians when this happened: "I think I have a quick way to bring the prices down," Doyle announced. "We've invested $650bn to liberate a nation of 25 million people, shouldn't we just demand that they give us oil? There should be tankers after tankers backed up like a traffic jam getting into the Lincoln Tunnel, the stinkin' Lincoln, at rush-hour with thank-you notes from the Iraqi government ... Why don't we just take the oil? We've invested it liberating a country. I can have the problem solved of gas prices coming down in 10 days, not 10 years."
There were a couple of problems with Doyle's plan, of course. The first was that he was describing the biggest stick-up in world history. The second that he was too late. "We" are already heisting Iraq's oil, or at least are on the brink of doing so.
It started with no-bid service contracts announced for Exxon Mobil, Chevron, Shell, BP and Total (they have yet to be signed but are still on course). Paying multinationals for their technical expertise is not unusual in itself. What is odd is that such contracts almost invariably go to oil service companies - not to the oil majors, whose work is exploring, producing and owning carbon wealth. The contracts only make sense in the context of reports that the oil majors have insisted on the right of first refusal on subsequent contracts handed out to manage and produce Iraq's oilfields. In other words, other companies will be free to bid on those future contracts, but these companies will win.
One week after the no-bid service deals were announced, the world caught its first glimpse of the real prize. After years of backroom arm-twisting, Iraq is officially flinging open six of its major oilfields, accounting for half of its known reserves, to foreign investors. According to Iraq's oil minister, the long-term contracts will be signed within a year. While ostensibly under the control of the Iraq National Oil Company, foreign corporations will keep 75% of the value of the contracts, leaving just 25% for their Iraqi partners.
That kind of ratio is unheard of in oil-rich Arab and Persian states, where achieving majority national control over oil was the defining victory of anti-colonial struggles. According to Greg Muttitt, a London-based oil expert, the assumption up until now was that foreign multinationals would be brought in to develop new fields in Iraq - not to take over those which are already in production and therefore require minimal technical support. "The policy was always to allocate these fields to the Iraq National Oil Company," he told me. "This is a total reversal of that policy, giving the Iraq National Oil Company a mere 25% instead of the planned 100%."
So what makes such lousy deals possible in Iraq, which has already suffered so much? Paradoxically, it is Iraq's suffering - its never-ending crisis - that is the rationale for an arrangement that threatens to drain Iraq's treasury of its main revenue source. The logic goes like this: Iraq's oil industry needs foreign expertise because years of punishing sanctions starved it of new technology, while the invasion and continuing violence degraded it further. And Iraq needs to start producing more oil urgently. Why? Also because of the war. The country is shattered and the billions handed out in no-bid contracts to western firms have failed to rebuild it.
And that's where the new contracts come in: they will raise more money, but Iraq has become such a treacherous place that the oil majors must be induced to take the risk of investing. Thus the invasion of Iraq neatly creates the argument for its subsequent pillage.
Several of the architects of the Iraq war no longer even bother to deny that oil was a major motivator for the invasion. On US National Public Radio's To the Point, Fadhil Chalabi, one of the primary Iraqi advisers to the Bush administration in the lead-up to the invasion, recently described the war as "a strategic move on the part of the United States of America and the UK to have a military presence in the Gulf in order to secure [oil] supplies in the future". Chalabi, who served as Iraq's oil undersecretary of state and met with the oil majors before the invasion, described this as "a primary objective".
Invading countries to seize their natural resources is illegal under the Geneva conventions. That means the huge task of rebuilding Iraq's infrastructure - including its oil infrastructure - is the financial responsibility of Iraq's invaders. They should be forced to pay reparations, just as Saddam Hussein's regime paid $9bn to Kuwait in reparations for its 1990 invasion. Instead, Iraq is being forced to sell 75% of its national patrimony to pay the bills for its own illegal invasion and occupation.
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