27 Jul 2011

India forgets past, exploits Africa's future

(Photo by Philipp Hedemann)

This is 'Red', an 8-year old Ethiopian boy on Karmjeet Singh Sekhon's farm in western Ethiopia. According to a Swiss website, Red works in blistering 40 Degrees Celsius heat to dig up weeds.

Karmjeet, on the other hand is a 68-year old investor/manager of a "huge farm, which covers an area of ​​nearly 300,000 hectares in western Ethiopia."

(I wonder if it's a part of Karuturi Global's Farmistan.)

What makes it even more disgraceful is that according to the United Nations, "4.5 million people in Ethiopia are currently in need of aid as a result of a devastating drought" - while most of the produce on massive Indian, Chinese and GCC states-owned mega-farms are ear-marked for export!

According to the World Bank, "at least 35 million hectares of land has been bought or leased" in Africa.

And the Ethiopian government says that (companies from) 36 countries including India, China, Pakistan and Saudi Arabia have leased farm land there.

26 Jul 2011

How life in the 21st Century looks like the fruition of ideas from the 20th Century

Edward Louis Bernays was the nephew of the illustrious psychoanalyst Sigmund Freud. He is widely acknowledged as a pioneer in the field of Public Relations.

The following excerpt from his book, Propaganda shows just how uncannily closely the world has followed the scripts of early 20th Century writers like Bernays' Propaganda (1928), Orwell's 1984 (1948), and Aldous Huxley's Brave New World (1931).

"In theory, every citizen makes up his mind on public questions and matters of private conduct. In practice, if all men had to study for themselves the abstruse economic, political, and ethical data involved in every question, they would find it impossible to come to a conclusion about anything. We have voluntarily agreed to let an invisible government sift the data and high-spot the outstanding issues so that our field of choice shall be narrowed to practical proportions. From our leaders and the media they use to reach the public, we accept the evidence and the demarcation of issues bearing upon public questions; from some ethical teacher, be it a minister, a favorite essayist, or merely prevailing opinion, we accept a standardized code of social conduct to which we conform most of the time.

In theory, everybody buys the best and cheapest commodities offered him on the market. In practice, if every one went around pricing, and chemically testing before purchasing, the dozens of soaps or fabrics or brands of bread which are for sale, economic life would become hopelessly jammed. To avoid such confusion, society consents to have its choice narrowed to ideas and objects brought to its attention through propaganda of all kinds. There is consequently a vast and continuous effort going on to capture our minds in the interest of some policy or commodity or idea.

It might be better to have, instead of propaganda and special pleading, committees of wise men who would choose our rulers, dictate our conduct, private and public, and decide upon the best types of clothes for us to wear and the best kinds of food for us to eat. But we have chosen the opposite method, that of open competition. We must find a way to make free competition function with reasonable smoothness. To achieve this society has consented to permit free competition to be organized by leadership and propaganda."

George Santayana, a Spanish-American philosopher wrote, "Those who cannot remember the past are condemned to repeat it." He wrote it in The Life of Reason (1905-06).

Have there really been no new ideas since?

20 Jul 2011

Is Foreign Policy just euphemism for Corporate Agenda

In June 2011, India's Finance Minister visited the US along with a delegation of bureaucrats, industry regulators and businessmen. The highlight of the visit perhaps was the discussion organised jointly by the Confederation of Indian Industry (CII) and the Brookings Institution.

Now, if you remember, the former Head of the CII, Tarun Das, was embroiled in a rather unsavoury taped telephone conversation with corporate lobbyist Niira Radia in what was allegedly the planning stage of the 2G Spectrum Scam. The CII chief appeared to admit that he was lobbying the PMO for certain Ministerial berths for specific individuals in the UPS government - including Telecom Ministry for A. Raja.

(Outlook India has all the details on the Niira Radia tapes if you're interested.)

CII office-bearers apparently have enviable and unfettered access to the uppermost echelons of the government.

At last month's CII-Brookings event India's Finance Mukherjee, Pranab Mukherjee, regaled the audience of corporate heads and the U.S. Treasury Secretary, Tim Geithner, with the claim that India had "untapped potential" to absorb Foreign Direct Investment (FDI) worth $1 trillion.

This is very vast sum - one that dwarfs the $60 billion annual budget that the World Bank says is enough to meet the Millennium Development Goals - for the entire world!

The minister also promised more "reforms" and "investor-friendly" policies. Access to Indian financial and retail sectors seemed to be what most interested US businesses. In turn, India's major concern seemed to largely revolve around H1B visas!

Well, this theme is not one-off. The topic under furitive negotiations on the India-EU Free Trade Agreement (FTA) seems very familiar.

This is British MEP, Nick Griffin of the nationalist BNP...

Here is he is on radio, elaborating the issue a little more...

Mode 4 is NOT new.

At the World Bank (WB)-World Trade Organisation (WTO) Symposium on Mode 4 in 2002, India had strong participation - including a presentation by the represenative of the Indian software services sector, NASSCOM.

Another presentation - a paper called 'Economic Implications of Liberalising Mode 4 Trade' presented by Prof. Alan Winters, School of Social Sciences, University of Sussex spells out the concept and socio-economic implications of Mode 4.

Some interesting point:
- It is mainly to do with "the temporary movement of natural persons (TMNP) from developing to developed member countries"

- TMNP can "often argued to be analytically no different from ordinary goods trade"

- In fact, "admitting less-skilled workers under a Mode 4 liberalisation is fundamentally no different from admitting imports of labour intensive goods under a GATT liberalisation"

- One of the draws for developed economies is that TMNP "offers the foreign workers no rights under the (social security) systems"

- And... "(I)t is the flow of unskilled (or, strictly, less skilled) workers from developing to developed countries that promises the larger returns"

- With 'free-trade' in cheap labour, the benefit for big businesses is that "if firms can control the number of jobs in a labour market, they can drive wages down"

Now, I may be over-reacting, but just imagine columns of millions of unskilled or semi-skilled Indian workers in uniform overalls, tagged and numbered by UID - and ready for export.

Proudly 'Made in India'.

13 Jul 2011

Debunking the myth of Indian democracy

From 2008 to 2009, India nearly doubled its number of billionaires according to Forbes' Rich List to 52. In 2011, the country increased its tally to 55 billionaires.

The combined net worth of India's 100 wealthiest people in 2009 was $276 billion. More than China's 100 wealthiest with $170 billion.

According to a Reuters article, they also account for one-fourth of India's GDP. Let that sink in... 100 people make up about 25% of India's economy.

Before the collective Indian chest swells to bursting-point with pride, consider that the International Monetary Fund (IMF) calculates India's per capita GDP in 2010 at $1,265. Less than Yemen with $1,282.

The combined net worth of 1 million average Indians is $126.5 billion - still less than half the top 100 individuals.

But that's just the White Economy...

According to data provided by the Swiss Bankers Association, Indians have $1,456 billion in Black Money stashed in Swiss Accounts. That's more than the rest of the world combined!

Who do you suppose those Indians are? A report by Global Financial Integrity confirms that "High Net-Worth Individuals (HNWIs) and private companies were found to be the primary drivers of illicit flows out of India's private sector." (I'd posted about this earlier.)

I don't begrudge the rich. But I do have something to say to the ignoramus thumping his chest about living in the "largest democracy": "You don't count, buddy!"

India's economic growth story is not - I repeat, NOT - about you. At best you'll be held up as one of the bottomfeeders benefiting from the "trickle down".

If you are naive enough to believe that the government is of, by and for the "common man", I pity you.

Look up the list - if you can find a comprehensive one - of individuals and bureaucrats who accompanied the Finance Minister of India, Mr Pranab Mukherjee for discussions and negotiations with US bureaucrats and businessmen. India will open up its Financial and Retail sectors. And the US may widen the H1B visa allotments to Indian companies.

Look up the list of private business people who went with Manmohan Singh on his visit to Addis Ababa. You have no idea what our government is complicit in. Read this Open Letter to the People of India from an African.

You think reforms and liberalisation is to give YOU a better standard of living? Far from it... According to the Human Development Index, India ranks next to East Timor. And incredibly, the Indian States that have the least industrialisation and the least investor-friendly environment are the best off.

Coincidence? Hardly...

The same report on India's Black Economy by Global Financial Integrity adds: "In the post-reform period of 1991-2008, deregulation and trade liberalization accelerated the outflow of illicit money from the Indian economy."

There's one more thing... Some 58% of India's Members of Parliament are multi-millionaires in Rupee terms. And you find the same inverse relation between MPs' wealth and Human Development Index, states-wise. And the average declared assets (yes, just the declared wealth) of MPs grew 186% over a 5-year period from 2004.

Do you still think democracy is what you thought it meant?

10 Jul 2011

Heads I Win, Tails You Lose

The Green Revolution around the world involved increased usage of modern agricultural tools and techniques, building of irrigation infrastructure - but most crucially the revolution centred around the use of genetics to develop and then distribute hybrid seeds, synthetic fertilizers, and chemical pesticides to farmers, especially in the then Third World. Much of the 'scientific' co-ordination was done by the Consultative Group on International Agricultural Research (CGIAR) created by the Rockefeller Foundation.

The Rockefeller Family had huge interests in petroleum and international financing - both essential components of the Green Revolution.

In early 1963, the Rockefeller Foundation sent Norman Borlaug to India. A former employee of DuPont, and then Director of the International Wheat Improvement Program (funded in part by the Rockefeller Foundation) in Mexico, Borlaug earns the sobriquet, "Father of the Green Revolution". And he goes on to win the Nobel Peace Prize and the Padma Vibhushan, India's second highest civilian honour. He is sometimes credited with saving 1 billion people from starvation.

Environmental activist, Vandana Shiva, doesn't agree.

She points out that the new agribusiness model promotes excessive chemical use, causes large-scale loss of biodiversity, and condemns farming community to a viscious cycle of financial indebtedness.

But there's a kicker...

Apparently, "alarmed by the loss of crop diversity and the vulnerability of the world’s seed collections", the Rockefeller Foundation, and the increasingly everywhere Bill & Melinda Gates Foundation, are funding the Svalbard Global Seed Vault.

A doomsday bunker built deep inside a snow covered mountain on a remote island halfway between mainland Norway and the North Pole, the vault will store "millions of seeds representing every important crop variety available in the world."

The storage facility is, it would seem, "built to stand the test of time – and of natural or manmade disasters."

Manmade disaster? You mean, like the one you financed in the 70s?

7 Jul 2011

Greece is for sale. Greeks aren't.

Greece's politicians put €50 billion of national assets on sale in the ballroom of the uber-exclusive Claridge's Hotel, the most iconic 5-star hotel in Mayfair. Among the overall Greek assets for sale are 39 airports, 850 ports, railways, motorways, sewage works, a couple of energy companies, banks, defence groups, thousands of acres of land for development, casinos and the national lottery.

However, despite rates being pegged "cheaper" than market value, buyers aren't all that enthused.

The "risks are too high," according to Aref Lahham, Managing Director of Orion Capital Managers. What risk?


And them.

And all of them don't seem to quite agree with their "elected representatives" hawking-off the country while sipping perrier water in a plush 5-star hotel ballroom...

Next stop Portugal, where credit ratings agency Moody's has downgraded the country's bonds to junk status! With Spain, Ireland and others... on the way, perhaps the ECB should keep an open booking on the ballroom at the Claridge's?

Meanwhile, the first Keiser Report of July 2011 focuses on Greece... and why the Greek people are readying for Thermopylae all over again.

6 Jul 2011

How will your $1 trillion "infrastructure" help India's people, Mr. Mukherjee?

Indian Finance Minister Pranab Mukherjee and U.S. Treasury Secretary Tim Geithner were part of the high-powered CII-Brookings Conference on "U.S.-India Economic and Financial Partnership" in Washington on Monday, 4 July 2011.

Mr. Geithner (I assume, politely) indicated that although the U.S. valued its strategic relationship with India, there were more important things... He apparently made no bones of the fact that (now that the $100 billion defence purchase is a done deal) the most important thing was for India to “allow a little bit more access” for U.S. firms in its financial and "multi-brand retail" sectors.

Mr. Mukherjee and R. Gopalan, the Secretary of the Department of Economic Affairs, then pulled out and dangled an irresistable carrot. They both claimed that there was a $1 trillion worth of "untapped potential" for investments to meet India’s infrastructural demand. However Mr. Gopalan admitted, “There are issues such as land acquisition, environmental clearances, rehabilitation of displaced persons...” (It's them pesky peasants again!)

Let's pause and consider for a minute how "infrastructure" that would both displace people from their lands and impact their environment negatively would possibly be of any benefit to them! Perhaps, the more pertinent question would be: Is the "infrastructure" that the honourable minister speaks about even meant for the common man - a.k.a. Aam Aadmi?

Anyway Mr. Gopalan reassure the audience that there is a “sustained and continuous policy churn which is happening in these areas, with a view to resolving these impediments.” In plain English, what he meant was essentially this: "Give Infosys, TCS and other accompanying Indian oligarchs what they need - and leave the pesky peasants to us."

To conclude, the taxpayer paid for the entire trip - and the best he can hope for in return is a place in a line at a Walmart in India! Some deal.

Now let us come back to the astronomical figure of $1 trillion...

The following is what a World Bank study estimates to be "(t)he cost of attaining the Millennium Development Goals" for the entire world...

Firstly, what are Millennium Development Goals (1990-2015)?

1. Eradicate extreme poverty and hunger
• Halve the proportion of people with less than one dollar a day.
• Halve the proportion of people who suffer from hunger.

2. Achieve universal primary education
• Ensure that boys and girls alike complete primary schooling.

3. Promote gender equality and empower women
• Eliminate gender disparity at all levels of education.

4. Reduce child mortality
• Reduce by two thirds the under-five mortality rate.

5. Improve maternal health
• Reduce by three quarters the maternal mortality ratio.

6. Combat HIV/AIDS, malaria and other diseases
• Reverse the spread of HIV/AIDS.

7. Ensure environmental sustainability
• Integrate sustainable development into country policies and reverse loss of environmental resources.
• Halve the proportion of people without access to potable water.
• Significantly improve the lives of at least 100 million slum dwellers.

8. Develop a global partnership for development
• Raise official development assistance.
• Expand market access.
• Encourage debt sustainability.

The document puts "a rough breakdown" of the costs of achieving the goals as follows:
Educational Goals: $05 - $21 billion
Health Goals: $10 - $30 billion
Environmental Goals: $20 - $25 billion
Total: $35 - $76 billion

The World Bank document states, "(W)e conclude that a global estimate of the additional aid required to attain the MDGs is somewhere between $40 billion and $60 billion a year." And that this cost estimate "was roughly consistent with estimates for individual goals obtained by other agencies (UNICEF and WHO in particular)..."

All that for $60 billion per year? Wow.

Mr. Mukherjee, what will your $1 trillion in infrastructure actually do for India's people... not counting dispossessing them of their land, turning their environment into toxic sludge, or shackling coming generations to an unpayable foreign debt burden?

Infrastructure, indeed. C'mon!

4 Jul 2011

Economics for Dummies

Loss of soverignity takes many forms - but generally the common man (and woman) end up at the receiving end. Europe's ex-democracies in Ireland, Portugal, Finland and Greece find that even politics is not the same anymore. Apparently citizens can vote for anyone, but the result of the ballots cannot alter any prior decision by the EU bosses.

All risk (e.g. national debt) are socialised - i.e. spread across the entire population. And most benefits (e.g. corporate profit) are privatised.

My view of how economics works isn't Keynesian or Hayekian. It's just common sense.

Who's being bailed-out in Greece?

Even according to the voice-of-the-establishment, The Economist, the current credit rollover is simply "a bank bail-out by another name". You see, a 'rollover' does not mean that the creditors (mainly private banks) forgo their pound of flesh - au contraire - they would just be lending it back at a higher interest rate... All while liquidating as much of Greece's national assets as possible in the name of austeriy and economic 'restructuring'.

Greece WILL default... But by then, the financial vultures would have stripped the country to the bone - and immovable Greek assets, like land and major utilities, would be monopolised by powerful friends.

The 'rollover' according to the Economist... "Take a deep breath; here’s how it would work. As Greek bonds mature over the next three years, the country would repay holders. Banks would pocket 30% of the cash and “voluntarily” buy new, 30-year Greek debt with the rest. Greece in turn would pass on about 20% of the original bonds’ value (or 30% of the amount being rolled over) to a special-purpose vehicle (SPV) that would buy AAA-rated bonds maturing in 30 years. If Greece defaults, these bonds would be used as collateral to repay banks the principal they loaned. "

Nothing but monetary sleigh-of-hand really... But what's the bottomline for Greece and its citizens?

Again, in the words of The Economist: "For Greece, the bargain is far less compelling. The 30-year plan does nothing to reduce Greece’s debt burden and could complicate any eventual restructuring. Since Greece would pay interest on all of its borrowings, but could use only part of them, its cash interest rate over 30 years would be about 10-11%. Some rescue."

(Keep in mind that at 10-11% compunded interest, Greece may have paid back in interest the same amount as the princpal in less than 7 years! So even if Greece defaults, the banks essentially lose nothing.)

One must also remember that banks were part of the problem! According to a Feb 2010 article, The New York Times says, "Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere."

But how did they "mask", you ask? The answer is two words: Credit Rating.

Banks are not alone responsible for the rot in the system... The Credit Rating cartel, consisting of Standard & Poor's, Fitch, and Moody's, take money from the big banks to rate their own instruments. So although they have the power to wreck nations, they are almost completely at the mercy of big financial institution. As long as no-one rocks the boat, everyone's safe.

But the status quo for ordinary people are boom-bust cycles that tend to always move wealth one way - UPWARD!

3 Jul 2011

Greece: A Guinea PIIG?

The Greek nation today is part of a truly epic experiment!

Soon Portugal, Italy, Ireland - and others like Britain even - may join Greece in what seems to be a corporate takeover of a soverign nation.

A month ago, on 3 June 2011, Jean Claude Trichet, head of the European Central Bank (ECB) - and one evil prong of the "troika", which also includes the European Union (EU) and the International Monetary Fund (IMF) - called for the creation of a European Finance Ministry with the power to "veto national economic decisions" if countries in debt don't impose "austerity" measures on citizens when required by the bankers and elites (a.k.a. the "experts"). This effectively would mean an end to nationhood in Western Europe.

Fortunately, Mr. Trichet is leaving the ECB soon. He will be replaced by the the former head of Goldman Sachs in Europe, Mario Draghi... But not to worry, Mr. Draghi has intimate knowledge of the Greek implosion. Goldman Sachs may have helped create it!

Mr. Draghi, of course, claims he was not "involved" in the deal that lit the fuse.

Anyway, today we hear the news that Jean-Claude Juncker, Chairman of the Eurogroup - the quasi-finance ministry of the EU, which actually makes political decisions regarding the Eurozone and its currency, the Euro - told a German magazine that "(t)he sovereignty of Greece will be massively limited."

Greece can looks forwad to suffering more job losses; loss of national assets through privatisation; and having "to accept expertise from the Eurozone". He added that the Greek tax collection system was "not fully functional." Probably, implying that the "Troika" would collect Greece's taxes!

The illustrous, Mr. Junker has been Prime Minister of Luxembourg since 1995, and was formerly head of the World Bank and then the IMF.

The model by which he wishes to take apart the Greek nation is neither new nor creative (he is a mere bean counter after all). His recommendation for selling off the country that gave us the words, democracy and republic, is on the lines of the Treuhandanstalt (German, for 'Trust Agency') that helped, literally, liquidate East Germany.

Between 1990 and 1994, that esteemed private-public organisation (largely run by some of Europe's top corporate bosses) took over and sold tens of thousands of firms, as well as whole million-hectare swathes of the most fertile agricultural land and forests in Germany... And it still managed to end up 270 billion Deutsche Marks in DEBT! (To find out who actually profited, we may have to ask Mr. Juncker.)

But what happened to the East Germans? Well 2.5 million out of 4 million government employees lost their jobs - and it would seem all hope too... Today, almost 20 years later, areas coming under former-East Germany, still have double the rate of unemployment compared to the Western part. The living conditions have prompted about 12% of the population to leave - alarmingly, in some regions, the number of women between 20 and 30 has dropped by more than 30%. And 57% of East German children are born out of wedlock!

So what does the future hold for ordinary Greeks?

Well, according to Germany's finance Minister, German Finance Minister Wolfgang Schaeuble, there is an 81% chance that Greece will eventually default! But it doesn't take a Harward Degree to see an 'EPIC FAIL!' coming when the purported "solution" to a debt crisis consists of forcing the debtor to take on a bigger loan while simultaneously stripping their assets and impoverishing them.

Well, grab a large popcorn, sit back, and let us watch Act II of this Greek tragedy unfold...

P.S: You might want to keep a pitchfork and torch handy. Just in case.