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Archive for February, 2012

IMF should stay out of this Greek tragedy

IMF should stay out of this Greek tragedy

By Daily Mail Comment

Yesterday, in a monumentally cynical act of legerdemain, Europe’s ruling class hailed the latest Athens bailout – this time worth a mere £110billion – as a deal to ‘secure Greece’s future in the euro’.

Preposterously, even George Osborne joined in, saying it was ‘good for Britain’ – which will contribute, via the IMF, £1billion – and a ‘really significant step’ towards resolving the eurozone crisis.

If only… For, even as the politicians recited their words, a leaked ‘strictly confidential’ document, prepared for Brussels officials, revealed that, in reality, the rescue programme was way off track, and highly unlikely to succeed.

Firstly, there are grave doubts whether the Greek people – who are already rioting in the streets, have mass unemployment and who bitterly resent having their budget dictated by Brussels – will accept further swingeing cuts.

And, even if the austerity programme is implemented, how is a devastated Greek economy, which has shrunk by 7 per cent in the past year, supposed to achieve the growth required to have even a chance of long-term survival, while it remains inside the strait-jacket of the euro?

In truth, the eurocrats know Greece is probably doomed, but fear that – when it defaults on its debts – the contagion will spread across the continent, killing the euro and crushing their dream of full economic and political union.

Thus, they are prepared to ignore all the evidence and keep throwing their own good money after bad in order to buy more time to try to find an almost certainly non-existent miracle cure.

The scandal, however, is that – given the IMF is expected to contribute up to £20billion to the bailout, including the £1billion from Britain – it is not just their money they are wasting: it’s ours.

The simple fact is that the IMF should not even be involved. Its role is to help countries that lack the economic means to survive – not to prop up a Franco-German ideology.

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What role for the Diaspora in Somalia’s future?

What role for the Diaspora in Somalia’s future?

Remittances of up to $2bn a year from Somalis living abroad would suggest the diaspora is crucial to the country’s survival

In the run-up to the 23 February London conference on Somalia, a flurry of meetings have been held with Somalis in the diaspora to elicit their thoughts on the way forward for the country. This kind of engagement may be unprecedented; the Foreign Office’s efforts to include as many people as possible in this consultation period have included several meetings with Somalis in the UK as well as in Nairobi and Qatar. The foreign minister, William Hague, hosted a Q&A via Twitter, and the FO has fostered discussion via that medium as well as on Facebook and its online blog.

With up to 1.5 million Somalis living abroad, and remittances estimated at $1.3bn-$2bn a year, it is clear the diaspora is immensely important to the country’s survival. But what role exactly is there for the diaspora to play in the political future of the country?

I recently led a team of researchers who were tasked with investigating the role of the Somali diaspora in relief, development and peacebuilding for the United Nations Development Programme (UNDP). We conducted research in six diaspora cities – Dubai, London, Minneapolis, Nairobi, Oslo and Toronto, as well as in Somaliland, Puntland and south/central Somalia. Three of our six sites in the south were under the control of the Islamist al-Shabaab militia at the time, and three were allied with the transitional federal government.

We found that in all areas, the diaspora was heavily involved in promoting education, healthcare, public infrastructure and private enterprise. In the relatively peaceful north the emphasis was on post-conflict reconstruction and development, whereas in the south the more dire humanitarian picture meant more people were involved in providing life-saving support to their relatives and communities.

We found that, in many areas, people from the diaspora were returning temporarily to provide technical skills, advice and leadership in addition to their financial support. Support came not only from older people, but crucially – and unexpectedly – from young Somalis as well, even people who had been born and raised outside the Horn of Africa.

However, the picture was not entirely rosy. On the ground, many expressed concern that people from the diaspora were taking jobs that could have been done by local Somalis. Some complained that diaspora members came with their money and their university degrees but did not understand the political and practical realities of living in present-day Somalia. Diaspora returnees complained local people did not appreciate what they were trying to do for them.

During the 2010 Somaliland presidential elections, many locals I interviewed in Hargeisa said they welcomed the financial backing, and even the active campaigning that members of the diaspora did during their summer holidays on visits back home. However, they did not think members of the diaspora should be allowed to vote from abroad, because they did not have a sufficiently clear sense of what the local priorities were.

Many of those who have returned – notably many of the ministers who have served in the transitional federal government – have been distrusted because of their diaspora pedigree. The most successful are those who have taken the time to talk to, build partnerships with, and listen to local people who have been in Somalia throughout the past 20 years of state collapse. They have built up constituencies and, through that, gained a measure of legitimacy, which is essential for anyone hoping to have influence over the country’s future direction.

Then there are the difficulties Somalis face in organising themselves outside the country. It might be more appropriate to refer to multiple diasporas, since Somalis possess and respond to a variety of identities and political interests that often clash with one another. The diaspora consultation at Chatham House in London on 8 February was an excellent example of how difficult it is for people to agree on a way forward – clan interests, the status of the self-declared Republic of Somaliland, and suspicions about one or other political actor dominated the discussion, and made debates on political solutions or security highly contentious.

The organisers of the London meeting say they want to support a more inclusive political process, and that they recognise the solutions to Somalia’s problems will have to come from Somalis themselves. The consultative process will have demonstrated to them how difficult this process will be. In practice, it is likely to require significant negotiation between members of the diaspora and locals inside the country.

There is a limited direct role for the international community in this process. Western governments in particular are deeply resented by many Somalis for being too interventionist, so too much international support for the diaspora’s peacebuilding work, before it is considered legitimate by locals, could derail their efforts.

At the same time, the dedication of people in the diaspora, their willingness to remain engaged, the skills that many of them bring, and their desire to be part of a possible future solution is one of the few reasons to have hope for the country.

• Laura Hammond is a senior lecturer in the department of development studies at the School of Oriental and African Studies in London

 

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12 Scary Debt Facts for 2012

12 Scary Debt Facts for 2012

 

1. The U.S. national debt on Jan. 1, 1791, was just $75 million dollars. Today, the U.S. national debt rises by that amount about once an hour.

2. Our nation began its existence in debt after borrowing money to finance the Revolutionary War. President Andrew Jackson nearly eliminated the debt, calling it a “national curse.” Jackson railed against borrowing, spending and even banks, for that matter, and he tried to eliminate all federal debt. By Jan. 1, 1835, under Jackson, the debt was just $33,733.

3. When World War II ended, the debt equaled 122 percent of GDP (GDP is a measure of the entire economy). In the 1950s and 1960s, the economy grew at an average rate of 4.3 percent a year and the debt gradually declined to 38 percent of GDP in 1970. This year, the Office of Budget and Management expects that the debt will equal nearly 100 percent of GDP.

4. Since 1938, the national debt has increased at an average annual rate of 8.5 percent. The only exceptions to the constant annual increase over the last 62 years were during the administrations of Clinton and Johnson. (Note that this is the rate of growth; the national debt still existed under both presidents.) During the Clinton presidency, debt growth was almost zero. Johnson averaged 3 percent growth of debt for the six years he served (1963-69).

5. When Ronald Reagan took office, the U.S. national debt was just under $1 trillion. When he left office, it was $2.6 trillion. During the eight Reagan years, the US moved from being the world’s largest international creditor to the largest debtor nation.

6. The U.S. national debt has more than doubled since the year 2000.

  • Under President Bush: At the end of calendar year 2000, the debt stood at $5.629 trillion. Eight years later, the federal debt stood at $9.986 trillion.
  • Under President Obama: The debt started at $9.986 trillion and escalated to $15.3 trillion, a 53 percent increase over three years.

7. FY 2013 budget projects a deficit of $901 billion in 2013, representing 5.5 percent of GDP, down from a deficit of $1.33 trillion in FY 2012, which was the fourth consecutive year of more than $1 trillion dollar deficits.

8. The U.S. national debt rises at an average of approximately $3.8 billion per day.

9. The US government now borrows approximately $5 billion every business day.

10. A trillion $10 bills, if they were taped end to end, would wrap around the globe more than 380 times. That amount of money would still not be enough to pay off the U.S. national debt.

11. The debt ceiling is the maximum amount of debt that Congress allows for the government. The current debt ceiling is $16.394 trillion effective Jan. 30, 2012.

12. The U.S. government has to borrow 43 cents of every dollar that it currently spends, four times the rate in 1980.

By Jill Schlesinger

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12 Scary Debt Facts for 2012

12 Scary Debt Facts for 2012

 

1. The U.S. national debt on Jan. 1, 1791, was just $75 million dollars. Today, the U.S. national debt rises by that amount about once an hour.

2. Our nation began its existence in debt after borrowing money to finance the Revolutionary War. President Andrew Jackson nearly eliminated the debt, calling it a “national curse.” Jackson railed against borrowing, spending and even banks, for that matter, and he tried to eliminate all federal debt. By Jan. 1, 1835, under Jackson, the debt was just $33,733.

3. When World War II ended, the debt equaled 122 percent of GDP (GDP is a measure of the entire economy). In the 1950s and 1960s, the economy grew at an average rate of 4.3 percent a year and the debt gradually declined to 38 percent of GDP in 1970. This year, the Office of Budget and Management expects that the debt will equal nearly 100 percent of GDP.

4. Since 1938, the national debt has increased at an average annual rate of 8.5 percent. The only exceptions to the constant annual increase over the last 62 years were during the administrations of Clinton and Johnson. (Note that this is the rate of growth; the national debt still existed under both presidents.) During the Clinton presidency, debt growth was almost zero. Johnson averaged 3 percent growth of debt for the six years he served (1963-69).

5. When Ronald Reagan took office, the U.S. national debt was just under $1 trillion. When he left office, it was $2.6 trillion. During the eight Reagan years, the US moved from being the world’s largest international creditor to the largest debtor nation.

6. The U.S. national debt has more than doubled since the year 2000.

  • Under President Bush: At the end of calendar year 2000, the debt stood at $5.629 trillion. Eight years later, the federal debt stood at $9.986 trillion.
  • Under President Obama: The debt started at $9.986 trillion and escalated to $15.3 trillion, a 53 percent increase over three years.

7. FY 2013 budget projects a deficit of $901 billion in 2013, representing 5.5 percent of GDP, down from a deficit of $1.33 trillion in FY 2012, which was the fourth consecutive year of more than $1 trillion dollar deficits.

8. The U.S. national debt rises at an average of approximately $3.8 billion per day.

9. The US government now borrows approximately $5 billion every business day.

10. A trillion $10 bills, if they were taped end to end, would wrap around the globe more than 380 times. That amount of money would still not be enough to pay off the U.S. national debt.

11. The debt ceiling is the maximum amount of debt that Congress allows for the government. The current debt ceiling is $16.394 trillion effective Jan. 30, 2012.

12. The U.S. government has to borrow 43 cents of every dollar that it currently spends, four times the rate in 1980.

By Jill Schlesinger

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Greece’s austerity measures.

The question has always been, and remains to be, who benefits from neo liberal economic policies?

M.H

 

Who will benefit from the new set of Greek austerity measures? According to author and consultant Adrian Salbuchi, it’s the bankers.

There are two key questions that have to be asked, the first of which is who runs Greece. “Is it the Greek people? Or is it the IMF? The European Central Bank?The European Union? Germany and the private bankers?

The second question, according to Salbuchi, is who all this money is owed to. The sovereign debt crisis, he notes, happens time and again.

Are bankers that stupid that they always make the mistake of lending too much money to countries? And are governments that stupid that they take loans for much more than they can pay back? Or I insist is this part of a model where, like Shylock’s pound of flesh, the unpayability of these sovereign debts is later used to control entire countries?

Salbuchi concluded by saying that all governments struggling with the sovereign debt crisis have to make a choice whether to serve the people or the bankers.

All governments, whether it’s in Greece, in Italy, in Spain, in the UK, in Argentina, all governments today have two choices: they can either govern for the people, or they can govern to favor the bankers and that means that they will always be against the people.

P.S. You need to read Salbuchi’s writings on Globalization.

 

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The World Bank desperately needs to revive its fortunes after years of lacklustre leadership and shrinking role – which is precisely why former US president Bill Clinton is among the names being touted as its next head to replace Robert Zoellick.

Lael Brainard, under-secretary for international affairs at the US Treasury, has been responsible for drawing up the White House’s shortlist of candidates to replace Zoellick.

Alongside names such as Larry Summers and Tim Geithner, speculation in Washington has been rampant if unsourced that Bill Clinton’s name is in the frame, and the constant rumours that Hillary Clinton was interested in the job – repeatedly denied by her – were in fact a misunderstanding over which Clinton was a candidate.

Hillary Clinton’s role as US secretary of state would be a bar to Bill taking the top job at the Bank – but Hillary’s decision to step down after the US presidential election later this year removes that obstacle.

But another obstacle to Bill Clinton – or any of the other American candidates – is the US’s pledge to open up the top job to candidates that don’t hold a US passport, including a commitment made at the G20.

Since the IMF and the World Bank were established, the pair of multilateral finance institutions have had their leadership carved up between the Europeans in the IMF and America in the World Bank. And for years activists have been trying to overturn that situation, especially in the case of the Bank because of its wider role in the developing world.

But the current voting structures favour the status quo, with the Europeans and Americans able to impose their own candidate if things got ugly, while the US alone can effectively veto a candidate it didn’t approve.

President Obama could take the bold decision to open the Bank presidency to a non-US citizen. But it remains too tempting to use that power to reward a political ally, especially for a desirable post that doesn’t require a battle with Congress for confirmation.

Obama has also come under fire from the Republican presidential contenders for “apologising for America” – in Mitt Romney’s words – and for lacking leadership. Appointing a non-American to a job previously seen as a US satrapy by the US Congress could give substance to those attacks. With an election looming Obama may take the easy option, along with some window dressing of including one or two names of well qualified candidates from the developing world such as Nigeria’s minister of finance Ngozi Okonjo-Iweala.

The attraction of a Bill Clinton candidacy is that his reputation makes him acceptable to Americans and many non-American critics alike, preserving the US government’s commitment to an open appointment process while keeping the post in US hands.

The only major question mark over Bill Clinton would be his health – if the 65-year-old is unwilling to undergo medical tests and the potential humiliation if he is rejected on grounds of fitness.

One close observer of the Bank said that Bill Clinton “has the stature” to be a transformative president, “able to change the Bank and the courage to take it in new directions,” by overhauling its management structure.

And there is one possible candidate said to be interested in the job who would be a ground-breaking non-American choice while still placating US critics: Tony Blair. The former British prime minister has privately expressed interest but how seriously remains an open question. Blair’s candidacy would not be embraced by the current British government. But if the White House was open to it then No 10’s opinion would hardly sway them.

Guardian-UK

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Newt Gingrich and What Black People Need: Intellectualizing Racism

Over the last few weeks, Republican Party presidential nominee, Newt Gingrich, has found a way to make himself relevant again. Not to the Republican Party, because they are trying to find a way to sink him. Newt has become relevant to the always dysfunctional (and uncomfortable) race discourse in this nation.

This time around, Newt is trying to explain the class divide in America by constructing an hypothesis around who attracts wealth and who doesn’t, and why. Newt says Blacks and Latinos don’t understand how to attract wealth. He says Asians do.

Newt suggests that it is somehow a racial work ethics problem and if blacks would just let go of welfare, their lives would change forever. Really?? This follows his analysis – if you can call it that – around how black men can find work by simply picking up a broom. Newt has a skewed perspective on race. Always has. And he has this thing about wealth being tied to black people. Welfare is not a “black thang” or a “Latino thang.”

Whites statistically have more people receiving welfare, but Blacks and Latinos have a greater percentage of recipients per their percentage in the population. That’s how he gets away with that. Newt knows that discussing welfare resonates with the struggling middle class in this country. This time around, instead of attacking people on welfare – his tack was to suggest ways people can get off welfare while assailing President Obama as the “Welfare President.” Newt is quick with it, and he is slick with it. He has made an art of trying to intellectualize racism…for political advantage, of course.

In the 1990s, after the Republicans took over the House of Representatives for the first time in 50 years, Newt led the 1994 “takeover” with a people’s mandate to reduce government spending. Called the “Contract with America,” Newt led an anti-taxation, anti-affirmative action, anti-welfare platform that pushed then President Bill Clinton to the wall on welfare reform. It played Clinton’s two largest support bases, poor black and middle whites against each other.

Congress passed welfare reform legislation and Clinton, facing re-election, was forced to sign it. Gingrich won. Clinton lost. The “welfare to work” job training aspect of the legislation was largely a failure, producing fewer jobs than the Republicans give Obama credit for creating. It contributed to the explosion of homeless in the African American community, but it was by and large ignored.

The fate of the poor continues to be ignored by Congress today. For those people who have become staunch poverty advocates and wonder why the poor are ignored, you only have to look as far as Newt Gingrich. He is the one who intellectualized racism by codifying race. Poor translated to almost exclusively black, as did welfare. “Urban” translated to wherever blacks lived, so money and resources where diverted away from the poor and urban areas.

What we know about African Americans is that they don’t have the same access to capital as even poor or middle class whites have, largely because of the stigmas and codes that have been put in place by the leader of the new school of racism, Newt Gingrich.

As a Presidential candidate, he is reintroducing that same codified rhetoric into the President’s race. His term for Obama as “Welfare President” is a code. Every time he says “Welfare President,” he is seeking to remind his base, and others to never forget that there is a “Black President”. We know Newt Gingrich…the intellectual racist. And we know what he is doing by continuing to stigmatize African Americans.

By intellectualizing racism, Gingrich is leaving his signature card with Americans that still have a race problem with Obama. We can’t let it work.

Anthony Samad

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