Globalization and terror : horror and humbug from Peru to Nicaragua

by toni solo

Sometimes so many events and trends crowd any effort at making sense of imperialism's latest barbaric horror, only a resort to cliché offers any hope of producing a coherent account. Accordingly, in Rome over the weekend of June 13th, the G-8 finance ministers donned their white coats. They're going to help Dr. Frankenben and his Federal Reserve cronies drag Wall Street banking's rotten corpse up atop the most inflationary Gothic Gormenghast tower they can find. Then they'll cross their fingers and hope for a handy lightning strike. No wonder economics is called the dismal science.

They want growth, but refuse to admit the deceased asset price inflation they are trying to make live again will do little to increase real gross domestic product. When asset prices inflate, real-economy production tends to suffer. For most people that means pay and incomes stagnate. But prices rise. So the majority of people and their families go into debt to maintain living standards. Hardly astrophysics - but still Dr. Frankenben and his acolytes keep trying.

In discussions of the crisis dominated by macro-jabber, the fate of the majority of people on middle-to-low incomes tends to fade away. But more than a few writers have emphasized the steady pauperization of working class and middle class people in the most feckless rich-country economies. It was a key element in creating the perhaps unprecedented credit boom overseen by know-it-all-frauds like Alan Greenspan, for example, or Gordon Brown and their numberless "free market" accomplice-spawn. They refused to admit there is no such thing as a free market - only markets that are regulated either well or poorly. Hubristic and vain to a fault, they deregulated their way to catastrophe.

The pauperization of rich-country workers depended very much on selling the fake, glib, free-market claptrap that was used to promote corporate globalization. The world over, real incomes and wages were suppressed, natural resources wasted and degraded, as multinational businesses bullied and intimidated their way to impose lower production costs and grab higher profits. Countries whose governments resisted that process were targeted for destabilization. One thinks of President Jean-Bertrand Aristide's efforts to get a better deal for people in Haiti prior to the coup that deposed him, organized by the United States, France and Canada.

Screwing Latin America

Latin America and the Caribbean are an especially good place to encounter the stock banal horrors that result from Western Bloc corporate consumer capitalism's efforts to reproduce its murderous destructive anarchy. The massacre of indigenous environmental protesters in Peru this month resulted directly from the determination of recidivist mass murderer Alan Garcia's government to enforce terms of the corporate-love-in "ooh, do it, aah! yes, yes yes!..." free trade treaty agreed with the United States against the interests of Peru's impoverished majority. So far neither the US government nor the European Union have made any connection between the gross and deliberate abuse of fundamental rights by the Peruvian government and their aid relations with the Friday 13th Alan Garcia regime.

By contrast, both the US and the European Union are leaning very heavily on Nicaragua, the most successful country in Central America, in relative terms, on all kinds of measures, especially in terms of addressing poverty. On June 12th, the US government-supported Millennium Challenge Account announced it would cut US$62 million of funding for projects in Nicaragua because they argue Nicaragua's FSLN government has not met its obligations to promote democracy. That humbug pretext refers to the fact that local US and European political allies, who lost heavily in last year's municipal elections, insist pathetically on bogus, factitious claims of electoral fraud. When far more convincing claims of electoral fraud were made by Mexico's Andres Manuel Lopez Obrador in 2006, the US and European governments just looked the other way.

Now, representatives of the European Union and some of its member governments are likely to follow the US example and cut several tens of millions of dollars of aid to the Nicaraguan government. The lead player in the rich-country horror-movie treatment of Nicaragua is Jason Voorhees, masquerading in this re-make as Robert Callahan, the US ambassador. Callahan has escaped from the Crystal Lake horror-scene before, engaging in death squad sprees in Tegucigalpa as well as in Baghdad. In his old age, Jason Callahan seems content driving already vulnerable people even deeper into poverty – inflicting deaths slower than his previous gruesome performances, but just as certain.

Cranking up the humbug ratio

In Peru, government repression of indigenous peoples organizations, of the political opposition, of dissident media has been rife for years. That was the case under the previous Alejandro Toledo regime and is now again the case under the Friday 13th-Freddy's Back Alan Garcia regime. Garcia fled Peru in the early 1990s to avoid prosecution for wholesale corruption and also the consequences of human rights investigations into the massacres of hundreds of people under his previous government. Garcia, a sinister opera bouffe stereotype if ever there was one, is a notoriously corrupt politician. The latest massacre of indigenous environmental protesters marks a return to his previous form.

The contrast is shocking between the drastic measures the US government and its European allies apply to Nicaragua and the kid gloves they apply to Peru or to similar repressive regimes like those in Mexico and Colombia. That contrast indicates not just the characteristic hypocrisy of imperialist governments but also the chronic adolescent self-dramatization of their Walter Mitty elites. Against all the facts, whether it is Barack Obama humbug or Gordon Brown hypocrisy, the representatives of the US, Canada and their European allies regularly cast themselves as stalwart defenders of human rights and democracy and as determined advocates of poverty reduction.

In Latin America, Colombia, Mexico and Peru have stood out for many years for massive, consistent, systematic abuse of human rights. Hardly a day passes without some new abuse being reported in these countries : villagers fired on by soldiers and police, trades unionists attacked or murdered, right to free assembly denied, media workers threatened, illegal detentions, torture, rape and abuse by security forces. Even so the US government and its European allies have supported those countries' governments with hundreds of millions of dollars in aid and military assistance.

While US government and corporate venality and complicity in abuses has been well exposed, less so has been the thoroughgoing hypocrisy of the European Union and its member governments. The European Union and its member countries provide just under half of Peru's official development assistance but there is no sign of any effort to link that aid to respect for human rights by the murderous Garcia regime. As regards Mexico, the recent Sixth Joint Council of the EU and Mexico issued a communique including the following:

"Both Delegations... agreed that the main objective of this Partnership is the joint promotion of their common values and principles in the international arena, through closer consultations on global issues of mutual concern within key multilateral fora and international institutions, as well as providing a renewed thrust to bilateral cooperation in all fields."

The communique is an unusually candid and characteristically glib confirmation that Europe shares the Mexican government's values : electoral fraud, casual support for femicide, top-to-bottom corruption, brutal security forces and all.

"The Parties agreed that, in the bilateral arena, there are numerous areas where there could be closer and more effective cooperation, such as public security, education and culture, science, technology and innovation, economic and trade relations, environment and sustainable development, regional development and social cohesion."

The document springs from the fantasy world of selective double standards flowing naturally from Europe's strategic economic and political imperatives. In that fantasy world, mass violence and abuse of people in Atenco, in Oaxaca, the systematic harassmentf indigenous people in Chiapas and elsewhere, the femicide against women in Ciudad Juarez, the massive electoral fraud in 2006 - as Harold Pinter would have observed - none of it happened. For the European Union and its member States, Mexico seems to present no human rights issues or democracy issues worth any qualms or doubts.

In Colombia, the EU is actually increasing its aid, supposedly prioritizing efforts at dealing with the social problems caused by Colombia's decades-long civil war. They are doing this at the very same time President Uribe's narco-terror regime is increasing its harassment of legitimately elected opposition leaders like Piedad Cordoba and Jorge Enrique Robledo. Just as in Mexico and Peru, the US and the European Union resolutely ignore repression and abuses so as to prop up the odious corrupt Uribe regime. Once more, the contrast with their treatment of Nicaragua could hardly be greater.

In all these cases, as elsewhere in the world, for example in Palestine, Afghanistan, Congo, Sudan or Haiti, the Europeans act to supplement and complement US regional policy. Together they support regimes guilty of the most egregious abuses of the most basic rights to life and integrity of the person. - from Israel to Morocco, from Equatorial Guinea to Colombia, from Uzbekistan to Ethiopia. They support the impunity those governments' crimes enjoy. On the other hand, together they act to punish a profoundly humanitarian government like that in Nicaragua which has dramatically improved crucial social provision like education, health care, access to drinking water and social security.

The humbug wherefore-all

If one asks why the US government and its European allies are behaving to Nicaragua with even more than their customary sadism and hypocrisy than usual, the answer probably lies in meetings held over the last few days in both the Caribbean and in the Urals. On June 12th, the member countries of Petrocaribe, almost all the countries of the Caribbean and Central America, met in St. Kitts and Nevis to discuss deepening Petrocaribe's food and energy cooperation mechanisms. Also that same weekend, Brazil joined Russia, China and India in the city of Yekaterinburg to discuss cooperation on economic and trade matters, including discussions around the failure of the US dollar as a stable global reserve currency.

Independence, autonomy and the global economic crisis are high on the agenda of both summits. Nicaragua has played a key role in developing Petrocaribe in Central America and promoting it along with the more wide ranging economic and development cooperation framework of the Bolivarian Alternative for the Americas - ALBA. Much of the Nicaraguan government's success has stemmed from its ability to combine access to resources via ALBA and via its pro-Russian foreign policy and trade ties with Iran along with its traditional development cooperation relationships with the US, Canada and Europe and other countries like Japan and Taiwan.

By threatening and cutting Nicaragua's access to US and European aid money, the Western Bloc powers seek to deny Nicaragua's FSLN government the liquidity it needs to successfully implement its extremely successful programme of economic stability and social progress. Events are likely to move quite fast through the remainder of 2009. A key marker will be positions staked out at the forthcoming ALBA summit in Carabobo in Venezuela on June 24th at which existing ALBA members - Bolivia, Cuba, Dominica, Honduras, Nicaragua and Venezuela - will welcome Ecuador as a full member.

ALBA seems to be evolving into a robust, coherent economic cooperation and trading bloc. All the ALBA countries have agreed with Ecuador a common monetary unit called the SUCRE (Sistema Unico de Compensación Regional) in which future trade will be carried out with a view to moving eventually towards a common currency. The SUCRE will eliminate the need to use US dollars for trade between the ALBA countries. Elsewhere, Brazil, China and Argentina have already agreed currency swap procedures to eliminate the US dollar from their trading relationships. Russia and China may well do the same.

2009 - likely Latin American panorama

By the end of 2009 three or four economic blocs of countries - with some countries overlapping into each bloc - may well emerge in Latin America. One bloc will consist of strong US government allies like Mexico, Chile, Peru and Colombia. Another bloc will be the fence sitting countries of Mercosur, Brazil, Uruguay, Paraguay and Argentina (completion of Venezuela's membership of Mercosur has stalled on opposition from right wing politicians in Brazil and Paraguay). The ALBA countries very clearly opposed to US government foreign and economic policy will make up a very distinct bloc, which will also be wary of what Uruguayan writer Raul Zibechi has termed Brazil's "sub-imperialism".

The rest of the world is not going to wait while Europe and the US sort out the mess they have made of the global economy. Other regional blocs will work hard to undo the US-European ancien regime dead hand grip on the levers of international trade and investment. In political terms in Latin America, that was very much the significance of the recent US government defeat on Cuba in the Organization of American States. Most economic analysts agree that the emerging markets will probably cope better with the current deep global recession than the US and Europe. That means the rest of the global economy is likely to grow somewhat faster than the US and Europe, so demand for commodities is likely to steadily increase from now on, provoking price rises.

As current excess oil availability gets quickly used up, recent production cut-backs and under-investment (not just in production facilities but in refining facilities too) will probably mean supplies will quite quickly fail to match demand, making oil for a while more expensive. So the price may well jump up to US$90 or more later in 2009 before dropping back as production catches up again. The US financial authorities and their foreign central bank allies are unlikely to be able to engineer periodic "flights to safety" in US Treasury bonds as they did in the last quarter of 2008

Holders of US Treasury paper realise more urgently than ever before that the dollar debt they hold is never going to be paid at anything near the value for which they bought it. So the dollar will most likely resume the slide that ended so abruptly in July 2008. Domestic inflationary effects in the US may well accelerate with the faster increase in global activity outside the US and Europe thanks in part perhaps to a mismatch between the money velocity of dollars used in transactions outside the US and money velocity inside the US. While the scare of hyperinflation may be greatly exaggerated, stagflation is likely to haunt the US and Europe for the next couple of years.

The vindictive futility of the US in decline

It will be the rest of the world, principally, that rejigs the global economy, with political outcomes at which one can only guess. The astonishing refusal by the US authorities to relinquish their efforts at a return to the status quo ante has probably doomed the US economy to the doldrums for the next three or four years at least since, rather than restructure their finance system and invest productively and democratically, the US authorities have instead chosen to bail out their rotten finance sector so the oligarchs can go back to rigging and gaming securities, commodity and currency markets. By 2011-12 the rest of the world will have moved on and US productivity will be suffering from the kind of under-investment that dogged the United Kingdom during that country's relative decline as an imperial power.

In that context, by attacking Nicaragua, the US and Europe hope to hobble the development of ALBA and discourage other Central American countries from following Nicaragua's example. They hope that by crippling the FSLN's ability to deliver on its visionary social and economic programme, they will increase support for their allies in the Nicaraguan opposition and thus ensure electoral defeat for the FSLN in the 2011 presidential elections. If that means denying much needed development cooperation funding to ordinary people in Nicaragua, that is precisely what the US government and its European allies will do, in line with their almost interminable track record of hypocrisy and sadism.