Hearing of Chevron’s arbitration suit against Bangladesh deffered

December 31, 2008

NewAge, December 31, 2008

The International Centre for Settlement of Investment Disputes has deferred to May 18 the first hearing in the arbitration suit which the US-based company Chevron had lodged against Bangladesh over the row on wheeling charge worth millions of dollars for the Jalalabad Gas Field, Petrobangla officials said.

‘The hearing of the arbitration was scheduled in December, but the ICSID defer the hearing to May 18 following a Chevron’s appeal for submission of its reply,’ special assistant to the chief adviser, M Tamim, told New Age on Tuesday.

Both Tamim and Petrobangla chairman, Jalal Ahmed, who reviewed the suit with legal adviser, Dr Kamal Hossain, on Sunday, said that Petrobangla had an ‘outstanding chance’ for wining the suit.

The government in July last took decision to face the arbitration suit lodged by the Chevron with the ICSID, demanding back 4 per cent from the gas sale proceeds of the Jalalabad Gas Field it had paid to Petrobangla, in wheeling charge worth millions of dollars over the years.

Petrobangla deducts 4 per cent from the gas bills it pays to the Chevron, saying the agreement stipulates that the company is supposed to pay the wheeling or transmission charge for supplying the Jalalabad gas to domestic market.

Jalal Ahmed said Chevron was supposed to submit in November a reply to the ICSID on the counter memorandum, which Petrobangla’s legal adviser Dr Kamal Hossain had submitted challenging the suit.

Earlier, Chevron made an appeal to the ICSID for extending the time to till December for the reply and Chevron submitted it in December, he said, adding ‘the ICSID subsequently deferred the hearing schedule to May 18.’

‘We have reviewed the reply of Chevron with Dr Kamal Hossain and found that we have an outstanding chance to win the arbitration as the agreement with Chevron supports our claim,’ said Tamim.

He added, apart from the deal, the predecessors of Chevron, Unocal and Occidental of US, had paid the wheeling charge for four years without lodging any complaint, after the Petrobangla dismissed an Occidental claim for not deducting the wheeling charge.

The government in July last, decided to face the arbitration suit and withdraw a case it had filed against the Chevron with a Dhaka court in April 2006, seeking injunction on the Chevron’s move to go to the international dispute settlement centre.

Chevron claims, the agreement does not have the provision for the deduction and Chevron should not pay the wheeling charge as it is Petrobangla’s duty to supply gas to domestic market.

If the government loses the arbitration suit to Chevron, the US-based company will get millions of dollars from the Jalalabad Gas Field


The Coming Capitalist Consensus

December 25, 2008

By Walden Bello*, Foreign Policy in Focus, December 24, 2008

Not surprisingly, the swift unraveling of the global economy combined with the ascent to the U.S. presidency of an African-American liberal has left millions anticipating that the world is on the threshold of a new era. Some of President-elect Barack Obama’s new appointees – in particular ex-Treasury Secretary Larry Summers to lead the National Economic Council, New York Federal Reserve Board chief Tim Geithner to head Treasury, and former Dallas Mayor Ron Kirk to serve as trade representative – have certainly elicited some skepticism. But the sense that the old neoliberal formulas are thoroughly discredited have convinced many that the new Democratic leadership in the world’s biggest economy will break with the market fundamentalist policies that have reigned since the early 1980s.One important question, of course, is how decisive and definitive the break with neoliberalism will be. Other questions, however, go to the heart of capitalism itself. Will government ownership, intervention, and control be exercised simply to stabilize capitalism, after which control will be given back to the corporate elites? Are we going to see a second round of Keynesian capitalism, where the state and corporate elites along with labor work out a partnership based on industrial policy, growth, and high wages – though with a green dimension this time around? Or will we witness the beginnings of fundamental shifts in the ownership and control of the economy in a more popular direction? There are limits to reform in the system of global capitalism, but at no other time in the last half century have those limits seemed more fluid.

President Nicolas Sarkozy of France has already staked out one position. Declaring that “laissez-faire capitalism is dead,” he has created a strategic investment fund of 20 billion euros to promote technological innovation, keep advanced industries in French hands, and save jobs. “The day we don’t build trains, airplanes, automobiles, and ships, what will be left of the French economy?” he recently asked rhetorically. “Memories. I will not make France a simple tourist reserve.” This kind of aggressive industrial policy aimed partly at winning over the country’s traditional white working class can go hand-in-hand with the exclusionary anti-immigrant policies with which the French president has been associated.

Global Social Democracy

A new national Keynesianism along Sarkozyan lines, however, is not the only alternative available to global elites. Given the need for global legitimacy to promote their interests in a world where the balance of power is shifting towards the South, western elites might find more attractive an offshoot of European Social Democracy and New Deal liberalism that one might call “Global Social Democracy” or GSD.

Even before the full unfolding of the financial crisis, partisans of GSD had already been positioning it as alternative to neoliberal globalization in response to the stresses and strains being provoked by the latter. One personality associated with it is British Prime Minister Gordon Brown, who led the European response to the financial meltdown via the partial nationalization of the banks. Widely regarded as the godfather of the “Make Poverty History” campaign in the United Kingdom, Brown, while he was still the British chancellor, proposed what he called an “alliance capitalism” between market and state institutions that would reproduce at the global stage what he said Franklin Roosevelt did for the national economy: “securing the benefits of the market while taming its excesses.” This must be a system, continued Brown, that “captures the full benefits of global markets and capital flows, minimizes the risk of disruption, maximizes opportunity for all, and lifts up the most vulnerable – in short, the restoration in the international economy of public purpose and high ideals.”

Joining Brown in articulating the Global Social Democratic discourse has been a diverse group consisting of, among others, the economist Jeffrey Sachs, George Soros, former UN Secretary General Kofi Annan, the sociologist David Held, Nobel laureate Joseph Stiglitz, and even Bill Gates. There are, of course, differences of nuance in the positions of these people, but the thrust of their perspectives is the same: to bring about a reformed social order and a reinvigorated ideological consensus for global capitalism.

Among the key propositions advanced by partisans of GSD are the following:

  • Globalization is essentially beneficial for the world; the neoliberals have simply botched the job of managing it and selling it to the public;
  • It is urgent to save globalization from the neoliberals because globalization is reversible and may, in fact, already be in the process of being reversed;
  • Growth and equity may come into conflict, in which case one must prioritize equity;
  • Free trade may not, in fact, be beneficial in the long run and may leave the majority poor, so it is important for trade arrangements to be subject to social and environmental conditions;
  • Unilateralism must be avoided while fundamental reform of the multilateral institutions and agreements must be undertaken – a process that might involve dumping or neutralizing some of them, like the WTO’s Trade-Related Intellectual Property Rights Agreement (TRIPs);
  • Global social integration, or reducing inequalities both within and across countries, must accompany global market integration;
  • The global debt of developing countries must be cancelled or radically reduced, so the resulting savings can be used to stimulate the local economy, thus contributing to global reflation;
  • Poverty and environmental degradation are so severe that a massive aid program or “Marshall Plan” from the North to the South must be mounted within the framework of the “Millennium Development Goals”;
  • A “Second Green Revolution” must be put into motion, especially in Africa, through the widespread adoption of genetically engineered seeds.
  • Huge investments must be devoted to push the global economy along more environmentally sustainable paths, with government taking a leading role (“Green Keynesianism” or “Green Capitalism”);
  • Military action to solve problems must be deemphasized in favor of diplomacy and “soft power,” although humanitarian military intervention in situations involving genocide must be undertaken.

The Limits of Global Social Democracy

Global Social Democracy has not received much critical attention, perhaps because many progressives are still fighting the last war, that is, against neoliberalism. A critique is urgent, and not only because GSD is neoliberalism’s most likely successor. More important, although GSD has some positive elements, it has, like the old Social Democratic Keynesian paradigm, a number of problematic features.

A critique might begin by highlighting problems with four central elements in the GSD perspective.

First, GSD shares neoliberalism’s bias for globalization, differentiating itself mainly by promising to promote globalization better than the neoliberals. This amounts to saying, however, that simply by adding the dimension of “global social integration,” an inherently socially and ecologically destructive and disruptive process can be made palatable and acceptable. GSD assumes that people really want to be part of a functionally integrated global economy where the barriers between the national and the international have disappeared. But would they not in fact prefer to be part of economies that are subject to local control and are buffered from the vagaries of the international economy? Indeed, today’s swift downward trajectory of interconnected economies underscores the validity of one of anti-globalization movement’s key criticisms of the globalization process..

Second, GSD shares neoliberalism’s preference for the market as the principal mechanism for production, distribution, and consumption, differentiating itself mainly by advocating state action to address market failures. The kind of globalization the world needs, according to Jeffrey Sachs in The End of Poverty, would entail “harnessing…the remarkable power of trade and investment while acknowledging and addressing limitations through compensatory collective action.” This is very different from saying that the citizenry and civil society must make the key economic decisions and the market, like the state bureaucracy, is only one mechanism of implementation of democratic decision-making.

Third, GSD is a technocratic project, with experts hatching and pushing reforms on society from above, instead of being a participatory project where initiatives percolate from the ground up.

Fourth, GSD, while critical of neoliberalism, accepts the framework of monopoly capitalism, which rests fundamentally on deriving profit from the exploitative extraction of surplus value from labor, is driven from crisis to crisis by inherent tendencies toward overproduction, and tends to push the environment to its limits in its search for profitability. Like traditional Keynesianism in the national arena, GSD seeks in the global arena a new class compromise that is accompanied by new methods to contain or minimize capitalism’s tendency toward crisis. Just as the old Social Democracy and the New Deal stabilized national capitalism, the historical function of Global Social Democracy is to iron out the contradictions of contemporary global capitalism and to relegitimize it after the crisis and chaos left by neoliberalism. GSD is, at root, about social management.

Obama has a talent for rhetorically bridging different political discourses. He is also a “blank slate” when it comes to economics. Like FDR, he is not bound to the formulas of the ancien regime. He is a pragmatist whose key criterion is success at social management. As such, he is uniquely positioned to lead this ambitious reformist enterprise.

Reveille for Progressives

While progressives were engaged in full-scale war against neoliberalism, reformist thinking was percolating in critical establishment circles. This thinking is now about to become policy, and progressives must work double time to engage it. It is not just a matter of moving from criticism to prescription. The challenge is to overcome the limits to the progressive political imagination imposed by the aggressiveness of the neoliberal challenge in the 1980s combined with the collapse of the bureaucratic socialist regimes in the early 1990s. Progressives should boldly aspire once again to paradigms of social organization that unabashedly aim for equality and participatory democratic control of both the national economy and the global economy as prerequisites for collective and individual liberation.

Like the old post-war Keynesian regime, Global Social Democracy is about social management. In contrast, the progressive perspective is about social liberation.

*Walden Bello is a columnist for Foreign Policy In Focus, a senior analyst at the Bangkok-based Focus on the Global South, president of the Freedom from Debt Coalition, and a professor of sociology at the University of the Philippines.

An Open Call to the Global Water Justice Movement to Mobilize Against the False World Water Forum

December 22, 2008

People’s Water Forum

Let us join together in Istanbul, Turkey, March 16-22, 2009 to protect water as a human right, global commons and public good to expose the illegitimate power of the World Water Council!

Following the successes of past resistance against World Water Forums, most notably the mass mobilizations and Jornadas en Defensa del Agua in Mexico City in 2006,

Using the principles in the Mexico Declaration and previous joint declarations of the water justice movement as the basis for this call to action,

Respecting the struggles, waged daily by grassroots activists to improve water conditions for people and nature,

And standing in solidarity with our brothers and sisters from Turkey who are organizing an extensive slate of counter events in Istanbul and around the country in a strong show of resistance,

We call upon social movements, networks and individual water activists committed to principles of equity, justice and sustainability, to mobilize against the upcoming 5th World Water Forum.

This 5th World Water Forum, as with the previous 4 World Water Forums, is being organized by the World Water Council—a body created and controlled by the global private water industry and which continues to promote water privatization, commodification and commercialization, policies proven to harm people and communities.

The time is here to end the reign of these Water Barons and launch a truly inclusive and accountable forum to deal with the grave situation facing humanity and the planet.

Together we will work to counter privatization efforts—both around the world and in Turkey where the government has dangerously proposed the privatization of lakes and rivers.

We will continue to support local campaigns and social movements in both the South and North, working strongly with Red Vida, the Africa Water Network and the European Public Water Network. We commit to augment condemnation of the World Water Council with the promotion of viable alternatives such as Public-Public Partnerships, community-control models based on principles of the commons and water democracy.

This gathering simultaneously provides opportunities for water justice activists to learn from and support each other’s efforts, as well as to lobby government representatives who will be in attendance at the official Forum.

As in Mexico in 2006, Kyoto in 2003 and the Hague in 2000, it is important to challenge the destructive neo-liberal, pro-privatization agenda of the Forum organizers, but even more important is to launch a process and new Water Forum tied to actual State obligations, within a United Nations framework and working with local community-based efforts and actors to achieve water justice.


We call upon governments to join with the governments of Uruguay, Bolivia, Venezuela and Cuba, who in 2006 signed the 4th World Water Forum Counter Declaration, demanding implementation of a truly open and transparent multilateral process.

We call upon the United Nations and its member governments to accept your obligation, as the only legitimate global convener of multilateral forums, to publicly commit to hosting a Forum on Water, which is linked to state obligations and is accountable to the global community.

We call upon all organizations and governments who choose to attend the 5th World Water Forum, to commit to making this the last and to join in the launching of a legitimate Global Forum on Water, emerging from within the UN processes and supported by States.

We call upon all who share our commitment to mobilize in their own communities during the World Water Forum, in a show of solidarity with those struggling for water justice and as a call to the global community to mobilize on this critical issue.

We finally call upon all committed activists, elected representatives, government representatives and progressive organizations to join in the upcoming mobilization standing alongside our allies in Turkey.


Abdelmawlaa Ismail, Coordinator of Egyptian Cmte. for Right to Water and Right to Water Forum in the Arab Region

Africa Water Network

Aquattac, European Network of Attac water activists

Attac, Finland

Attac, Germany

BanglaPraxis, Bangladesh

Berlin Water Table, Germany

Blue Planet Project, Canada

Centre for Law, Policy and Human Rights Studies, Chennai, India

CeVI, Italy

Centre for Civil Society Environmental Justice Project, Durban, South Africa

Coalición de Organizaciones Mexicanas por el Derecho al Agua, COMDA, Mexico

Comité de Enlace de la Red VIDA, the Americas

Coordinadora de Defensa del Agua y de la Vida, Bolivia

Corporate Accountability International, USA

Corporate Europe Observatory

Council of Canadians

Canadian Union of Public Employees/ Syndicat Canadien de la Fonction Publique

Federación de Funcionarios de OSE, Uruguay

Federación de Trabajadores Fabriles de Cochabamba, Bolivia

Focus on the Global South

Food & Water Watch, USA

Frances Libertes, France

Friends of the Earth, Canada

Friends of the Earth, Finland

Hemantha Withanage, Centre for Environmental Justice, Sri Lanka

Italian Committee World Water Contract

Jubilee South – Asia/Pacific Movement on Debt and Development (JS APMDD)

National Commission in Defense of Water and Life, Uruguay

Playapart, Italy

Polaris Institute, Canada

Raja Kassab, Association pour un Contrat Mondial de l’Eau Maroc, Morocco and Right to Water Forum in the Arab Region

Solidarity Workshop, International 

SuKo, Germany

Transnational Institute, Europe

Water Movements Italian Forum

UK government withdraws support for GCM’s mining project in Bangladesh

December 20, 2008

World Development Movement, December 19, 2008

Minister backtracks on previous statements over controversial mine project following campaign by WDM

UK company Global Coal Management Resources’ (GCM) plans to build an open-cast coal mine in Phulbari, north-west Bangladesh appeared in jeopardy after a UK government minister withdrew official support for the project. If built the mine would take away the land of more than 40,000 people, and compromise the water supply of a further 100,000.

Since the start of 2008, the Asian Development Bank, Barclays and RBS have all withdrawn from investing in the project. However in April 2008 a parliamentary answer revealed UK government support for the project.

Gareth Thomas, Chairman of the Cooperative Party and UK Minister for International Development and Minister for Business said:

“We have provided support to Global Coal Management Resources PLC, through the British high commission in Dhaka. They have lobbied to ensure that the Government of Bangladesh take the company’s interests into consideration and do not prohibit opencast mining. The British high commission will continue to remain in touch with the company and will represent their interests as appropriate.”

In a further parliamentary answer Gareth Thomas stated:

“BERR officials have held regular discussions with officials from the Department for International Development on this subject, both in the UK and the British high commission in Dhaka.”

Since September 2008, WDM supporters have been emailing Gareth Thomas about the mine. In a bizarre game of ‘ping pong’ these emails have been bounced between both BERR and DfID. With responses from both departments requesting that the other be contacted.

On the 18th of November 2008, WDM finally received a response from Gareth Thomas, revealing a different approach to the mine:

“UKTI is not currently actively supporting GCM’s proposed project in Bangladesh”

He goes on to mention that “The British Government is committed to encouraging businesses to operate responsibly”

WDM welcomes the change in position, but will continue to monitor the situation to make sure there is no future UK government lobbying on behalf of GCM.

For more information and to take action go to:

Take Action

Kate Blagojevic
Press officer, World Development Movement
0207 820 4900/4913, 07711 875 345

Email: kate.blagojevic@wdm.org.uk

‘There is no alternative to socialism’

December 19, 2008

Interview with Egyptian economist Samir Amin.

By  Smitu Kothari and Benny Kuruvilla


“It was the financial corporations that asked the governments to step in and ‘nationalise’ them. The rescue package was drafted by them, and they are in control of most of the bailout money.”

THE financial crisis continues to spread rapidly across the world, crippling banks, stock markets and manufacturing industries and leaving hundreds of thousands jobless in its wake. Two days after the much hyped meeting of the Group of 20 in Washington, D.C., economist Samir Amin shared his insights into and analysis of the arduous road ahead for economic globalisation and the urgent need for a course change from capitalism and the possibilities of a new internationalism in the form of a Bandung II initiative.

The dominant view in the media and in policymaking circles is that the current financial crisis is the result of undue deregulation and the greed of a few in Wall Street. We feel that we need to go beyond the superficial and descriptive framing of the crisis and understand it historically and politically. What is your analysis?

The financial collapse is only the tip of the iceberg. Under the surface there is a deep crisis of accumulation of capital in the real productive economy, and deeper even there is a systemic crisis of capitalism itself. Let us look at the tip of the iceberg first – the so-called financial crisis. This is not the result of mistakes or irresponsibilities of the banking system operating freely in a deregulated environment. This flawed analysis gives the impression that if regulations are put in place the crisis will be corrected. This has been the expected response of the G-20 in Washington, D.C. And this should not be surprising since the G-20’s feeble declaration has been prepared beforehand by the International Monetary Fund [IMF] in concert with the G8.

I would like to submit another vision of this crisis, and for this we have to get rid of the notion of seeing this as a result of neoliberal globalisation. This is limiting because it is descriptive and not analytical. The reality of the current system is the extreme centralisation of capital and a limited number of large oligopolies, some 5,000 in number across the world, that control power at the global, regional and national levels. It is their decisions that are shaping the world. We are at a level of centralisation that is far higher and stronger than we were just 50 years ago. This extreme centralisation of capital has led to a fundamental shift in the logic of the management of the system – instead of investing in the productive economy to produce surplus value, of course with the exploitation of labour, the focus is now on the struggle to redistribute the profits of that surplus value between the oligopolies. This redistribution of profits among them is done through financial investments. Each one of them tries to widen its sphere of financial investment in order to redistribute the profits in its favour. These profits are of another nature – they are monopoly rents. And this is what is being called “financialisation”. And deregulation is essential in this struggle by the oligopolies for more profits through financialisation. And deregulation is not being fundamentally questioned as one can see from the new rules articulated in the November 15 G-20 communique.

The attempt of the oligopolies and their Western governments is to restore the system as it was, and this is not impossible in the short run. Let us assume that the injection of billions of dollars will avoid the breakdown of the major financial institutions and restore a minimum credibility of the monetary and financial system. The second condition for the system being restored is that protests of the victims of this crisis will be manageable. Through inflation, unemployment and reduced pensions, common people will pay, and their protests will be manageable, fragmented and will not disrupt the system. The third condition is that the global South accepts and plays by the rules of the game – that is, the need to maintain the globalisation of the monetary and financial system by being part of it. And that restoring the monetary and financial system needs the inclusion of the monetary and financial systems of the South into the global integrated one. That is the target of the meeting of the G-20 – to bring key emerging economies such as China, India, South Africa, Brazil and others into this project of restoring the system to what it was. Without having these countries on board, any restoration will not last long. Without having a crystal ball, I would say that even if it is restored it will not be for long. We will have another and deeper crisis within a few months, a few years, not much more than that.

What needs more research and more debate among us, people of the Left, is that the current breakdown is not the result of mistakes on regulation, etc. (which is the mainstream view), but a logic that is innate by the very centrality of the struggle for the redistribution of profits among the oligopolies. So the solution to this problem requires radical change, is long term and will come about when the oligopolies are nationalised with the objective of socialisation. This is, of course, not on the present agenda. And, therefore, we continue to be in a serious and continuous crisis of capitalism and imperialism, and not just of the financial markets. And this need not be the last one, and capitalism could come out of it sooner or later, but as long as cosmetic changes are applied, the world will continue to go from crisis to crisis.

There is an impression that this crisis offers new possibilities for the global South. Prime Minister Manmohan Singh claims that a significant shift is taking place, and emerging economies such as Brazil, China and India now have an equal standing at the high table of geopolitics. He has also claimed credit for anticipating the global crisis, stating that several protective measures have been put in place in India. And in this context, the reformist calls for the reorganisation of the World Bank and the IMF so that they reflect the current global stature of developing countries have gotten louder. Will the presidency of Barack Obama listen to any of this and be any different?

The last question first. For sure, Barack Obama is better than a John McCain. Also, from the point of view of the evolution of U.S. society, it is something positive for an African American to be elected President. But from the point of view of policies and politics of the U.S. vis-a-vis the rest of the world, little will change. Perhaps the tonality, the language will change but the targets will be the same. Remember that during the campaign, while Obama promised many changes on the domestic social front, he did not say anything important in respect to the U.S.’ global geopolitical strategy. So I do not expect any major shift in policy with regard to Iraq, Afghanistan nor for that matter with China and Russia.

Now to the earlier set of questions, which are more important and complex. On the G-20, there is no need to go into details of the communique. I hold that the set of policies which aims to restore the system was already decided on at the onset of the financial crisis a few months ago. And this was not decided by the governments of the U.S., Japan and Europe (the triad) but by the oligopolies themselves and accepted later by the former. It was the financial corporations that asked the governments to step in and “nationalise” them. The rescue package was drafted by them, and they are in control of most of the bailout money.

And simultaneously the calls for reform of the IMF are essentially moves to help the organisation function in a changed environment. In the past 10 years or so, several Southern countries have exited from IMF programmes because they got rid of their debt through export surpluses, etc. So the IMF became irrelevant, and the language of reform is now being used to integrate key emerging economies into the financial system. This way, the countries of the South will pay their share for restoring the system when they should logically be using the opportunity of the crisis to decouple and move out of the system. So you find the masquerade of the G-20 and the key countries of the South rubber-stamping the decisions of finance capital.

Let’s look at why China agreed to the G-20 measures. The G-20 communique is unimportant for China. It does not want a political conflict with the West and the U.S. in particular. China is not integrated in the global monetary and financial system and it is unlikely that it will move towards integration, so the decisions taken in the November 15 summit will have little consequence for it. There will be pressure on China to integrate with the system but it is unlikely to, and government officials have repeated this in the recent past.

But that is not the case for other countries of the South. Take India which is partially integrated with the global monetary and financial system. It has maintained exchange control, does not have capital account convertibility, has a number of major nationalised banks and has limited the operations of foreign banks. Instead of taking the opportunity of the crisis to move out of the system, the choice of the Government of India has been the opposite, that is, to move deeper into the system and accept empty flattery from the West of being an emerging global power with a seat at the high table. This is also related to political issues such as the nuclear cooperation agreement with the U.S. and the ambition of India to be a counter force to China in Asia with the support of the U.S. This is the choice of the ruling class in India. Whether this decision can be challenged by the Left and progressive forces and maybe even some sections of the ruling Congress party remains to be seen. If this remains unchallenged, it is very dangerous.

With respect to other countries in the G-20 such as South Africa, South Korea and Brazil, they are completely integrated with the system. Their only hope is that the system will not have them pay too much because of the current crisis. Malaysia did move out partially after the 1997 Asian financial crisis and could be in a situation similar to India’s.
This situation is indicative of the loss of legitimacy of the ruling classes in the South. One more related point on Prime Minister Singh’s statement that he had anticipated the crisis and had taken precautionary measures: this is pure political rhetoric, and to say that the crisis was expected is a lie. In terms of precautionary measures, the fiscal stimulus initiated by the Government of India is exactly what finance capital and big business wants.

All the conventional economists and therefore governments did not expect such a crisis. Even among the Left economists, there were very few who saw this coming. I wrote in 2003 in Obsolescent Capitalism that this continuous search for a redistribution of profits will lead to a breakdown of the financial system, but I also wrote that I did not have a crystal ball to predict when that would happen.

Even before the crisis broke out, trade liberalisation was having a rough time. The World Trade Organisation’s (WTO) Doha Round of negotiations continue to flounder into its 8th year. The WTO plus bilateral and regional free trade agreements are being negotiated but at a very slow pace. The crisis is likely to see a wave of protectionism in the developed world. President Obama will inherit an anti-trade U.S. Congress. Given this context, what do you see as possibilities for alternative frameworks outside of free trade such as the UNCTAD (United Nations Conference on Trade and Development)-led General System of Trade Preferences (GSTP) and the Latin American experiment with the Bolivarian Alternative for the Americas, or ALBA?

At a conceptual level we should distinguish trade from free trade. Being against free trade does not mean that you are against any kind of trade. Delinking from the free-trade paradigm does not mean moving to the moon. Unfortunately, for most Southern governments, speaking of trade has become synonymous with free trade. Free trade can be multilateral, regional or bilateral and it is undesirable in all three scenarios for the countries of the South. A third point is that the U.S. has been pro-free trade both at the multilateral and bilateral level, not for them but for their trading partners. The current U.S. Congress is opposed to free-trade rules being applied to the U.S. but it wants the same rules to access markets in the global South. This is very typical behaviour of a hegemonic power, that is, “you have to comply with international law, but I won’t”.

In all cases, free trade – multilateral or bilateral – is being questioned for a number of years. The blind alley into which the Doha Round has moved is just one example. The conflicts on agriculture subsidies and exports and services liberalisation will continue. So the current crisis is also a very good opportunity to move out of the concept of free trade to regulated and negotiated trade. This negotiation must be asymmetric because there is an objective asymmetry between the North and the South. This reminds me of a joke about the fisheries agreement between France and Senegal. “The French fleets are allowed to fish in the Senegalese waters and vice versa.” [Laughs] This kind of hypocrisy is not acceptable.

Indeed, UNCTAD has always suggested principles for global and regional trade negotiations. Among the proposals from the South, ALBA is the best and most advanced of the lot. ALBA is a project not of economic market integration of South America but of building complementarities that are planned, decided and negotiated by governments. This, importantly, also includes a common political stand. Unfortunately, ALBA is not effective yet because Brazil rejects the logic of ALBA. And an ALBA without Brazil means Cuba, Venezuela, Ecuador and Bolivia and this is not enough to change the balance of forces in Latin America.

You have been talking about the need for a Bandung II. Bandung I was underlined by a deep sense of idealism, with the participating leaders influenced by different kinds of socialisms. There is also a decline of the Left and its role as an emancipatory political force forging an alternative to capitalism. How do you see these processes?

When you say that there was a moral content in Bandung I, I would qualify it as nationalist. There was a nationalist feeling precisely because the states of Bandung were coming out of an emancipatory history of struggle for national independence, associated with radical reform like in China, or with semi-radical reform in some other countries, or with very little reform but still, nationalism. We can call it positive nationalism. But that was the limit of Bandung because it meant that nationalism was operated by the ruling classes, in the larger sense.

Today, most people have lost their confidence in nationalism. Bharat? What does it mean for an Indian child? Nothing. Other identities – Hinduism, regionalism, etc. – have become more important. This is a proof that the good nationalism which played its positive role in bringing together the peoples of India against the British is now losing credibility, but what is replacing it is not internationalism of working people; it is illusions of pseudo-nationalism, we could call them new nationalisms. This is a very dangerous trend.

This is what I am calling the liberal virus. The Left must get rid of this liberal virus. The liberal virus is the belief in two or three things. One – that there is something called a market system.

There is nothing which would qualify as a market economy. Markets exist, but there are capitalist markets, there could be socialist markets. There were markets even before capitalism as in India and elsewhere. There are market subsystems in an overall system, and we are dealing with capitalist markets, not markets. That is one dimension of the virus – accepting the language of the dominant powers that there are two types of economy, planned, that is, administratively managed, or market managed. There is nothing of the two. These are two ideological pictures of reality. Let us get rid of that and understand that there is nothing called the market economy. There is a capitalist economy, of course with markets, but markets are submitted to the logic of accumulation of capital. It’s not a market which produces, as a by-product, capitalist accumulation. Capital accumulation commands and controls the market.

The second belief is democracy separated from social questions. Today, democracy is being defined through parties, elections, fair elections more or less and some basic political rights. There is less concern about whether it is leading to social progress. What we need is democratisation of society, associated with social progress, not disassociated from it – associated with the task of giving full importance to social rights, to the right to food, to shelter, to employment, to education, to health, etc. This does not mean only putting them in the Constitution but creating the conditions where the exercise of those rights in order to achieve social progress limits the rights of property. The right of property can be recognised but [should be] submitted to the social rights.

This is a real revolution in the concept of democracy. Even the Left today accepts that pattern of, let’s call it bourgeois democracy if you want, or representative democracy or some caricature of democracy or masquerade. It accepts it as if socialism should be submitted to the absolute recognition of property rights. There is an absolute contradiction there. Socialism is socialisation of property; it’s not the absolute respect of property rights.

There are other dimensions to the liberal virus. The liberal virus is also working at the global level – that there is no alternative but to operate within the global system as it is dominated by imperialism; we have to unilaterally adjust to it.

That is part of the liberal virus, which has also been called structural adjustment; which is structural adjustment of India today to the requirement of accumulation of capital in the United States and not the opposite, of course. Not the adjustment of the United States to the needs of development in India. Now that is also something the Left has to get rid of.

You have been saying for several decades now that capitalism is on the decline – with indicators such as the polarisation of wealth, the loss of productive capacities of peoples and the destruction of the environment – but the fact is that it is still hegemonic. So where do you see the impulses of a people-centred socialism coming from in this hegemonic environment?

I am optimistic because I think we are moving towards the possibility of a Bandung II. That is, of a common front, an alliance, a rapprochement and a convergence of most of the countries of the South against the North or independent from the North at least to a certain degree. The content of such an alliance should be the following. One, it should move out of the current monetary and financial system as far as possible. Some countries will be able to do this. China is an example and perhaps Malaysia too. Perhaps, this will encourage other countries to move in this direction.

Second is to give priority to shift their internal development policies from outward-oriented export strategies towards the domestic popular market or the masses as far as possible. This is easy for continental countries such as China and India. There are signs that China is already doing this by moving out of the logic of global markets. India can do this but it is doing the opposite. China has six-odd special economic zones [SEZs] and they are highly regulated, and India is on the flawed path to set up some 500 SEZs, which will be practically open and unregulated. The other countries that are not as big as these two should give priority to regional cooperation instead of focussing on the markets of the North. Regional cooperation is not easy in South Asia because you have India, which is big, and the rest are small countries. And there is a rightful fear of Indian sub-imperialism in the region. But if you take Asia with China, India, South Asia and South-east Asia, then you get a more balanced picture and there is more room for genuine trade and economic cooperation. Such a response with key countries from Africa and South America is what I would like to call Bandung II.

And this will be different from the first Bandung conference with Asian and African states in 1955. The focus now can also be on issues like technology. These states, especially China, India and Brazil, are now in a position to develop technologies by themselves. This is a huge difference from the 1955 meeting because at that time these countries had hardly any industries and the level of technical and scientific knowledge was very low. So despite the lofty goals of the conclave, they had to import technologies and submit to the conditions of the West. UNCTAD did try to set up initiatives to absorb and learn from technologies and some countries did benefit.

Now the situation is different, and the challenge of the monopoly of technologies by the North can now be countered by the South. It is therefore no surprise that the WTO (through the Agreement on TRIPS [trade-related aspects of intellectual property rights]) is being used by the North to overprotect that monopoly. I think China is de facto using mechanisms to overturn this monopoly, and this is why you hear protests on China not protecting intellectual property rights. India could also do this but it is not. The city of Bangalore is a services powerhouse but sadly not geared towards the development of India but for the primary benefit of transnational corporations and raising their monopoly rents. And this is done with cheap but highly educated Indian professionals.

So Bandung II should be conceived very differently even at a political level. Bandung I was a meeting of the states and its peoples. China had just come out of a revolution, and India, Indonesia and Egypt were newly independent from colonialism. So to a large extent, these governments were legitimate in the eyes of their own people and there was a progressive nationalistic outlook. But now we are faced with ruling classes that are much more comprador and that benefit from their integration with the global system. And, therefore, they have little legitimacy, and Bandung II must be a Bandung of the people. If this popular mobilisation of the people can happen, maybe some governments will change.

In other words, this means it has to be a Bandung of the Left. And this obviously means that the Left does not act like it does now, that is, that there is no alternative to capitalism. What I am trying to say here is that the clear message should be that “there is no alternative to socialism” in the long run. And this is where the importance of internationalism comes in. If a new internationalism does not happen we will be faced with more of the crisis situations of the rise of political Islam, political Hinduism, political ethnicism and the like. This is an imminent danger because when people lose confidence in the power structures they will be easily manipulated by those illusions. And we should bear in mind that this is absolutely acceptable by imperialism, provided they don’t go too far into so-called “terrorism”.

The World Social Forum is entering its ninth year. It is going to be held in Belem. You have been quite critical about the WSF. What are your thoughts on that, as well as the role the WSF should be playing given the current crisis? Given that across the world, even in pockets, even if it is fragmented and disorganised, there is growing resistance to capitalism, how do you see us building the transitions? Institutionally, politically, organisationally, in terms of a new internationalism – somewhere you called this the fifth international?

Well, this also relates to the question of the World Social Forum. I think the gloomy years were very short. The first half of the 1990s, from the breakdown of freely existing socialism, the move on the capitalist road by China. Then movements of resistance and of protest started again. Everywhere in the world, in the North and in the South, in the East and in the West. Because the consequences of the implementation of the so-called neoliberal – it’s not neoliberal, its ultra reactionary, full stop.

Whether it was growing pauperisation, growing inequality, growing unemployment, growing precariousness, etc., it’s only normal that the people started resisting and organising themselves and protesting. It’s also absolutely normal that the resistance and its beginning is one, fragmented; because everyone is fighting on the immediate front to which he or she is confronted. Two, that they remain basically defensive that they want to defend what was acquired before, whether in the North defending the social democratic welfare state or in the South defending land reforms or the rights to education, free public health and free education or against privatisation and all that.

Now, the World Social Forum came naturally as a result of that growing protest and resistance as a forum open to all movements of protest. I’m not negative about it. I’m considering that it is positive to the extent that we, the World Forum for Alternatives, existed before the World Social Forum and played a role in it and will continue to do so. But, we believe that this is not enough, and that the challenge is far more serious than many of the social movements believe. They believe that through their fragmented resistance they can change the balance of forces.

I feel that this is wrong. The balance of forces cannot be changed unless those fragmented movements forge a common platform based on some common grounds. We, the World Forum for Alternatives, call it convergence with diversity, that is, recognising the diversity, not only of movements which are fragmented but of political forces which are operating with them, of ideologies and even visions of the future of those political forces; and that this has to be accepted and respected. We are no more in the situation where a leading party alone was creating the common front with transmission belts, etc. etc. It’s very difficult building that convergence in diversity, but unless this is achieved, I think the balance of forces will shift in favour of the popular classes.

In India, there is a growing trend of religion playing a more strident and aggressive role in politics, often deciding its course. And there is, therefore, a growing shift towards the Right, towards greater social conflict and violence, towards the kind of fragmentation that we are seeing. We are also witnessing a marriage of convenience between this religious Right and the forces of economic globalisation. Where do you see the potential for democratic political forces to intervene in this, to bring some constructive political outcome?

That’s a very difficult question. My judgment on this political Islam, political Hinduism is very negative. They are reactionary. It’s not because they are religions. It’s because of the content. And they are manipulated by the ruling classes.

I don’t think that this political Islam, political Hinduism has been the spontaneous product of the popular classes. To a great extent, they are operated and mobilised in order to avoid the Left. With a view to creating a wall which prevents the Left from penetrating the popular classes. It’s an illusion. It has worked precisely because the political elite has lost its credibility and its legitimacy. And these forces appear as alternatives.

If we look within their programmes, these are not only socially and culturally, in most cases, reactionary but they are economically and socially reactionary. They accept, de facto, existing capitalism, existing imperialism, and they compensate their submission to them by creating an internal enemy. Whether the Muslims here, the Hindus there or the Christians elsewhere. And this is really dangerous.

Now, how do we deal with this reality? It’s not easy for the Left. It’s a real challenge. And the Left cannot just remain at the level of principles. To say that the alternative is a secular state which separates itself from religion is not enough. It has also to develop how the influence of those reactionary forces on the popular classes can be defeated.

Through the Left moving into the masses to defend, not in rhetoric but in fact in action and through action, their real economic and social interests. This is the only way to marginalise the centrist and reactionary forces. As long as the Left is doing nothing within the popular classes, as long as most of their analyses and programmes are only on paper or in their political rhetoric, they will continue to be a marginal force. Nothing more than that.

Casino Crash: the end of neo-liberalism?

December 18, 2008

Barry Gills, Myriam Vander Stichele, Howard Wachtel, Susan George

The debate was held at Transnational Institute (TNI), Amsterdam, 7 November 2008.

The complete seminar is available in mp3 audio format. The recording was made by Maria (Indymedia) and originally posted on www.globalinfo.nl

Does the greatest financial crisis since the Wall Street crash of 1929 mean that the ‘capitalism as we know it’ has reached its end? TNI panelists analyse the causes and consequences of the on-going global financial crisis and discuss its profound implications for a changed world order.

The greatest financial crisis since the Wall Street crash of 1929 has been met by an unprecedented set of government actions to stem the tide of destruction. But is there also a coming sea change in economic theory and practice, as well as in politics, in the shift from a free market to intervention in the market? Is this the end of ‘capitalism as we know it? What are the power politics and prospects to achieve change? What are the alternatives to these catastrophically failed ideas behind the ‘neoliberal globalization’ and ‘corporate globalisation?


Susan George, Board Chair of TNI and Honorary President of Attac France.

Howard Wachtel, TNI Fellow and Professor of Economics at American University, Washington.

Barry Gills, Professor of Global Politics, editor Globalizations journal and ‘Rethinking Globalizations’ book series.

Myriam vander Stichele, Senior Researcher, Center for Research on Multinational Corporations (SOMO) and TNI fellow.

To leave a comment go to CasinoCrash.org

Poznan Climate Talks: fiddling while the earth burns

December 18, 2008

Oscar Reyes

Transnational Institute, 16 December 2008

The UN Climate Conference in Poznan, Poland failed to achieve any breakthrough towards a global climate deal – a sign not merely of bad timing, but of a fundamentally flawed system that takes no account of climate justice, argues Oscar Reyes.

11,000 delegates (including 1,500 corporate lobbyists), 13,000 tonnes of carbon consumed, and two weeks wasted: the UN Climate Change Conference in Poznan, Poland made only glacial progress towards a new global climate treaty, due to be signed a year from now in Copenhagen. “It´s going to take at least a riot to make any difference to the extraordinarily slow progress” joked Henry Derwent, CEO of the International Emissions Trading Association (IETA) at one side event in the conference venue. If things carry on at this pace, he should be careful what he wishes for. 

From binding global emissions targets to the limits of the carbon market, none of the main issues tabled at Poznan were resolved – and the more pressing discussion on how to leave fossil fuels in the ground went entirely untouched. The “biggest achievement of Poznan,” according to Poland’s environment minister Maciej Nowicki, who chaired the talks, was the start of the UN´s Adaptation Fund, which is designed to help the poorest countries tackle the severe effects of climate change that they are already experiencing. But it is hard to spin this failure as a success. With financial bailouts currently running into the trillions, the Fund´s starting figure of $80 million a year is derisory – even the UN´s own modest calculations talk of $28-67 billion per year needed for adaptation by 2030. 

The most optimistic interpretation that can be put on the Poznan conference was that the timing was bad. While delegates there were talking themselves to a standstill, French President Nicolas Sarkozy (who currently holds the EU Presidency) was ratcheting up air miles in a mission to agree a watered down EU climate policy. The US sent a lame duck delegation to Poznan with a mandate to agree nothing. 

Other industrialised countries followed suit. Canada loudly made excuses – variously ´waiting´ for the USA, China, India and Brazil to act – but was silent on its rush to exploit the Alberta Tar Sands, arguably the most environmentally destructive source of energy on the planet. Japan, meanwhile, provided a comic turn when its lead delegate explained his country´s commitment to technological innovation in terms of his own personal commitment to reduce his number of weekend showers from eight to three. 

Deeper reasons than just timing explain the failure at Poznan, though. The current pattern of each country or bloc waiting for the others to show its hand will not continue indefinitely, but the tendency to treat climate talks as trade negotiations is unlikely to change. Moreover, there remain a series of fundamental problems that are extremely unlikely to be addressed at Copenhagen. 

One of the most basic stumbling blocks is intrinsic to the UN negotiating process itself – where the intergovernmental bias pits one country or bloc against another, with each defending a conception of ´national interest´ that reflects elite class interests above the needs of the whole population. In Poznan, this meant that Indigenous Peoples and forest communities were shut out of discussions on deforestation – and continue to be denied any status parties to the negotiation – even as negotiators discussed how to commodify their land in the form of ´forest carbon´. 

The flip side of the same coin is that the corporate influence on the talks grows stronger by the year. The largest non-governmental organisation at Poznan was IETA, while roughly half of the event space within the conference grounds was ´privatised´. The result is that public interest organisations are being squeezed, even as corporations are courted with their own ´Business Day´ offering privileged access to negotiators, senior officials and ministers.

The issue is not simply one of who negotiates or has access, however, but of how those discussions are framed. Instead of seeing climate change as a cross-cutting issue, negotiations are parceled up into obscure sub-committees of sub-committees, which then further sub-divide the debate into an acronym soup of technicalities and private language games. For those wanting to follow the process, the main negotiations are currently take place in an Ad Hoc Working Group on Long Term Cooperative Action (AWGLCA), which talks about ´shared vision´ and ´long-term goal´ – in other words, what targets are needed for emissions reductions globally, who will be bound by these, and what structures will be put in place to ensure they are reached. 

The complexity of the negotiations cannot be explained by a reliance on scientific evidence either, since not only the solutions offered but even the scenarios discussed at the UN are inadequate to the scale of the climate crisis. While there is growing scientific evidence that 350 parts per million of CO2 in the atmosphere is a safe level at which to stabilise the climate, the scenarios under discussion tend to start only at 450 ppm – and these further flatten out the unpredictability of ´slow feedback mechanisms´ in an effort to create graphs that policymakers can digest.

Even then, optimistic graphs plotting a course to tackling climate change only bring us so far. While scenarios for emissions reductions show sweeping downward curves, the pattern of existing emissions all points in the opposite direction. The International Energy Agency´s World Energy Outlook 2008, for example, points to a growing energy demand of 1.6 per cent per year on average between 2006 and 2030 – an increase of 45 per cent. Emissions from agriculture and transport are growing even more rapidly. These are structural problems relating to how we produce energy and food globally, and which are ´locked in´ by – amongst other factors – a pattern of continued investment in fossil fuel based energy infrastructure, a food system based on large-scale industrialised agriculture, and a free market model that increases the gap between where products are produced and consumed. Yet instead of considering how to address these major drivers of the climate crisis, the UN climate regime accommodates itself to the continuation of this ´business as usual´, translating the climate crisis into a problem of market failure which it then looks to the market to resolve. 

The Kyoto Protocol, agreed in 1998 as the main international instrument for addressing climate change, is a case in point. At its heart lies a system of carbon trading, a multi-billion dollar scheme whose basic premise is that polluters can pay someone else to clean up their mess so that they don’t have to. The premise is that the ‘hidden hand’ of the market will then provide a guide to the cheapest emissions cuts. But this kind of economic efficiency is generally not what is the best for the climate. Such a market abstracts from the source of emissions – from mines to factories – to a commodity called ´carbon´. In the process, reductions from industrial sources are rendered equivalent to activities like tree planting (´sinks´, in the jargon) – a scientific nonsense, which as a side-effect has seen the international debate framed in predominantly financial terms. The price of this commodity is then set by the market itself, but this is driven by speculation rather than ecological fundamentals. What we are left with is a climate regime that is built around the same failed system that led to the recent financial collapse.

The problems with carbon trading in general are then compounded by the specific ´offset´ mechanism that lies at the heart of the UN´s largest carbon market scheme, the Clean Development Mechanism (CDM). This was initially billed as a means to drive sustainable investment in countries without binding emissions targets. Yet in practice, it has amounted to a zero-sum game for counting dubious ´emission reduction´ projects in the global South as a reduction in the North. By various extraordinary conjuring tricks, investments in large dams in China, coal plants and pig-iron factories in India, and palm oil refineries in Indonesia are treated as if they were the same as emissions reductions in Europe, Canada or Japan. The assumption that such expenditure is ´additional´, and therefore counts as a reduction – has been shown time and again to be bogus. One recent survey by International Rivers, a non-governmental organisation, found that 76 per cent of projects were already completed by the time they were approved as eligible for the scheme. 

In social terms, the CDM is also a disaster. Billed as a means of transferring cash for development, it has basically just outsourced the task of reducing emissions – with transfers going almost exclusively to large corporations, rather than affected communities. To take just one example, the Allain Duhangan Dam in the Indian Himalayas was approved for CDM registration in May 2007, despite the fact that the the Office of the Compliance Advisor/Ombudsman of the World Bank verified that the project developer had not ensured enough irrigation and drinking water for affected villages. The project was also temporarily halted and fined for blatant violations of Indian forest conservation law due to illegal felling of trees, dumping of waste and road construction. (For more cases see Carbontradewatch.org)

Which brings us, finally, to the most fundamental failure in the international climate regime: its lack of justice. Climate change is not a problem caused by ´humanity´ in general. It has been driven by the overexploitation of resources by one part of humanity for over 250 years, when Northern countries (and, at a later point in history, the former Soviet bloc) industrialised their economies on the basis of cheap energy prices. Climate justice means that these same countries should shoulder the responsibility for fixing the problem. The United Nations Framework Convention on Climate Change (UNFCCC) itself refers to ´common but differentiated responsibilities´, but unless this is taken seriously then there may be no deal in Copenhagen – or, even worse, a bad deal that exacerbates the climate divide rather than closing it.

A longer version of this article will be published shortly at carbontradewatch.org

See also Radical new agenda needed to achieve climate justice.