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British troops withdrawal
from Basra embitters US
Barrister Harun ur Rashid
When President Bush made a surprise visit on 3rd September to Baghdad on his way to Australia to attend the summit of the 21- member APEC (Asia-Pacific Economic Cooperation Forum), he was told that the British troops numbering 550 left the port of Basra for Britain and the Basra city has no coalition troops now for the first time since March 2003 when war was commenced. The news is a setback for the US President.
New British Prime Minister Gordon Brown on 3rd September denied the withdrawal of troops from the Iraqi port of Basra was a defeat, insisting it was a "pre-planned and organised move."
The pullout is highly symbolic and foreshadows Britain's full withdrawal from Iraq amid growing tensions with the US over the conduct of occupation in Iraq. British Prime Minister Brown wants to announce the withdrawal of troops from Basra to the House of Commons when MPs return from summer recess.
Now it seems certain that Britain will withdraw 5,000 soldiers from Iraq gradually by the end of the year and the Bush administration is aware of it and is very unhappy about. It appears that the US is likely to be the only power to be left in Iraq to "face the music".
British Prime Minister who is anxious not to inflame tensions with the US over the withdrawal insisted there was no "time table" for exit of the British troops. He reportedly told a media diplomatically that "There are decisions we need to make to go from combat to over watch. We have obligations both to the government of Iraq and the international community".
Some US military officials attacked the British decision of withdrawal and termed it as "losing Basra". Furthermore, many Iraqi officials say that British abandoned Basra to the Shi'ite Mehdi militia, led by fiery Moqtada al-Sadr. The militia is widely reported to have infiltrated the Iraqi security forces.
British commanders say they have pulled out because their continued presence draws attacks and that the main problem in Basra is not an insurgency but criminal gangs.
Brown wants to be different from Blair in his policy and recent news poll shows that his popularity has increased considerably and the opposition conservative leader David Cameron has serious problems with the electorate. There is a speculation that the Prime Minister may call a snap general election this year, much ahead of the scheduled election which is at least 2 years away.
A BBC poll suggested most British voters felt the campaign in Iraq was being lost despite the deaths of 168 members of the British military over the past four years.
Meanwhile two retired British Generals who had roles in the war in Iraq have made stinging attacks on the US post-war plan and described former US defence Secretary Rumsfeld as "intellectually bankrupt" for failing to prepare for the consequences of the removal of the Saddam regime.
More broadly retired General Sir Mike Jackson, the former head of the British army, in his forthcoming autobiography, reportedly criticised the White House's counter terrorism strategy, saying it relied too heavily on military power at the expense of nation-building and diplomacy.
The attacks on the US plan were not seen kindly by the Bush administration. A former senior US Commander in Iraq retired General Keane criticised the British handling of the security situation in Basra.
Furthermore, the strains between Britain and the US have emerged as the British military leadership attempts to shift the focus of Britain's overseas military operations from Iraq to Afghanistan.
Impact of withdrawal
Commentators say that Iran is likely to see the withdrawal as a victory for their policy against the US and British forces. The power vacuum is likely to be filled by Iran and its allies, in particular militia led by Moqtada al-Sadr.
On the other hand, the wider Arab world will likely to be deeply concerned. Kuwait is just across Basra and a silent confrontation is taking place by the US, Israel and its Arab allies (Egypt, Jordan, Saudi Arabia and the Gulf States) to limit Iran's influence in the region. The Arab world except Syria will worry that Iran is on the march and that a new showdown may be in the horizon.
Causes of instability
There are many reasons for instability in Iraq. The bottom line is that the Iraqi Shi'ite- dominated government has failed to obtain support from the Sunnis. In fact some observers suggest that their differences have grown because the policies of the government continue to be tinged with sectarianism.
Unless the government is willing to share oil wealth with Sunnis and amend the Constitution, it is likely that destabilisation will continue in Iraq. Furthermore, the role of tribal chiefs within Iraqi community has been marginalised. To ordinary Iraqis, their loyalty is to the tribal chief and not to local government officials and until and unless chiefs cooperate with the Iraqi government, mayhem in the country is likely to prevail, according to commentators.
Observers believe the extra US troops sent to Iraq had no impact on the messy situation in the country. Jan Schakowsky, Illinois Congresswoman, reportedly said that there was no end in sight to the war, after her recent visit to Baghdad.
Former US Deputy Secretary of State, Richard Armitage on 3 September criticised that the Bush administration was neglecting Asia since the US had been bogged down in Iraq. As a result he said "In every measure China is making real hay right throughout Asia." He reportedly criticised the US Secretary of State Dr. Rice for skipping two of the three annual meetings which would bring the US closer to ASEAN.
The writer is a former Bangladesh Ambassador to the UN, Geneva.
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Global politics of environment change Fight over cutting greenhouse gases
A United Nations meeting in Vienna signaled the start of a long and complex battle among countries on how much the emissions of greenhouse gases have to be cut, by when and by who if the world is to avoid catastrophic climate change, writes Martin Khor
A United Nations meeting on climate change in Vienna late last month has recognized recent scientific data by the Intergovernmental Panel on Climate Change that global emissions of Greenhouse Gases should reach its peak within the next 10 to 15 years, and it then needs to decline to very low levels - well below half the levels in 2000 by the middle of this century, in order to prevent dangerous global warming.
The meeting held between 27 through 31 August, under the UN Convention on Climate Change (UNFCCC) in effect started a negotiation on how much the developed countries will have to commit to cut their emissions, in order to avoid a catastrophic warming of the world's temperature.
After several days of negotiations, a working group of the Convention in August agreed to initially consider an emission reduction range of 25 - 40 per cent below 1990 levels by 2020 for developed countries.
An earlier proposal championed by the European Union to already adopt this range as a target was rejected by other developed countries, including Japan, Canada and Russia. The real battle on actual commitments will thus take place later.
The Vienna meeting was a prelude to a full meeting of the UNFCCC and its Kyoto Protocol in Bali on 3-11 December. The Bali meeting will be a crucial milestone in getting countries to commit to combat climate change in the period after 2012, when the present phase of the Protocol expires.
The climate issue has gained great international prominence following three reports launched this year by a panel of over a thousand scientists detailing how the present trends in emissions of carbon dioxide and other gases will lead to a significant increase in temperatures, causing sea level rise, melting of glaciers, floods, drought and agricultural decline.
The global mean temperature has already risen by 0.74 degrees centigrade between 1906 and 2005. It is now widely believed that if the temperature rises by more than 2 degrees above pre-industrial levels, there would be catastrophic effects. With present trends, the temperature will increase by 3 to 6 degrees or more, threatening life on Earth.
To limit temperature rise to 2 degrees, the concentration of Greenhouse Gases in the atmosphere has to be limited to 450 parts per million (ppm) of carbon dioxide equivalent.
We are already very near this danger level, thus the urgency of reaching an agreement to cut emissions as fast and as much as possible.
One major impediment is the understandable fear of developing countries that reducing their emissions, or even slowing their emission growth, may be at the expense of their economies, if this is not accompanied by sufficient and timely upgrading and changing of technology.
Only developed countries are presently bound to reduce their emissions, due to their historical responsibility, higher emissions and capacity to change. But they are now pressing some developing countries to also commit in a new post-2012 regime.
The per capita Greenhouse Gas emissions of developing countries are still relatively low, averaging about 4 tons of carbon dioxide equivalent compared to the 16 tons average of developed countries in 2004. In terms of carbon dioxide emissions alone, the US level is about 20 tons per capita, Canada and Australia 18 tons, Germany and Japan 10, China 3, India 1 ton, and African countries below 1.
Most developing countries are resisting being placed under legal obligations to limit their emissions, arguing that this would be unfair since their per capita emissions are still far below the industrial countries' levels and that they have the right to more emission growth to enable development.
In Vienna, the European Union proposed targets that global emissions be cut by 50per cent and developed countries' emissions be cut by 60-80 per cent by 2050 compared to 1990.
Although there was no explicit target for developing countries, in fact there is an implicit target for them. Since developed and developing countries each account for about half of the total global emissions, a 70 per cent cut for developed countries implies a 30 per cent cut for developing countries (given a global cut of 50 per cent).
Since population will roughly double between 1990 and 2050, this would also imply a 65 per cent reduction of per capita emissions in developing countries, on the whole.
That is a very steep cut. The recent scientific reports explain that the required emission reductions can be made at little cost, with economic growth rates reducing by only 0.12 per cent a year.
But as pointed out by a participant at the Vienna meeting, it would be a tremendous challenge to show how developing countries can maintain economic growth rates of, say, 6 per cent a year and still be able to reduce their emissions per capita by 65 per cent in that period.
The climate issue is shaping up to be not only the biggest environmental but also the biggest economic issue of our times. The amount of emissions a country is allowed to have in future will influence its method of production and level of economic output.
Thus, the commitments to be made by rich and poorer nations will also influence the future division of incomes in the world.
There is rising awareness in developing countries that they will suffer most from climate change and thus they have a stake in a strong regime to curb emissions. But they also want justice - that developed countries that were most responsible for the pollution have to reduce, while poorer countries can still increase their emissions, up to a point.
The German Chancellor, Angela Merkel, made a path-breaking statement during her recent Asia visit, agreeing to a "per capita" approach, in which the rich countries have to reduce and poor nations can increase their per capita emissions until both sides reach a similar per capita emission level to be determined.
This position is unlikely to win over countries like the United States for now. But it is a very good start for a developed country leader. The run-up to Bali and the Bali meeting itself will be crucial in the global politics of climate change.
- Third World Network Features
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Congress must restore basic rights
Jennifer Daskal
Five years after President Bush opened the hastily built detention centre at the U.S. Naval Base in Guantanamo Bay, Cuba, nearly 400 men, so-called unlawful enemy combatants, remain trapped there. Not a single one of these allegedly high-level terrorists have been brought to trial for their crimes and only 10 have ever been charged. This means that neither the prisoners nor the American public have gotten the accounting they deserve.
The continued detention of hundreds of men without charge has become a rallying cry of the Bush administration's critics. The administration's response has been to shroud its actions even further in secrecy and eliminate one of the most important mechanisms for keeping the government honest-access to courts.
With a new Congress about to take over, it's time to set U.S. policy on a new course. The first order of business should be the reinstatement of the nation's basic checks and balances and restoration of one of the most important elements of American justice: habeas corpus.
Known as the "Great Writ," habeas corpus is the legal proceeding that allows prisoners to challenge the legality of their detention. It is designed to protect against arbitrary arrest and detention, and ensure a judicial check on a government's ability to arrest and detain.
It is a right so ancient and fundamental to Western society that it was enshrined in early English law, establishing the principle that even the king is bound by law. Thomas Jefferson called it one of the essential components of a free nation. Alexander Hamilton described it as an indispensable protection against arbitrary government.
Even George Bush called it "a heckuva writ."
But legislation passed by the outgoing Congress stripped away this basic right for any non-citizen determined by the president to be an "unlawful enemy combatant." This is an enormous expansion of presidential power with terrifying implications.
Any of the 11.6 million legal residents in this country-including green-card holders who have been in the United States for decades-could be declared an unlawful enemy combatant by the president, thrown into military custody, and denied the chance to contest his detention before an independent court. Neither the detainee nor his or her family would even have the right to be shown the evidence against them.
The administration insists that it has not-and will not-abuse its power. It claims that it is holding dangerous terrorists and that the courts should not interfere with the president's broad authority as commander in chief.
But habeas corpus is not interference. It is a mechanism for keeping the government honest. If the administration's narrative is true-that the detainees in U.S. custody pose the threat to American security that the administration claims they do-then it has nothing to fear. Habeas hearings will confirm the administration's allegations and silence many of its critics.
But if the administration's claims are false, then it is possible that the United States has been holding innocent men, many of whom have already been locked up for five years without any opportunity to know or contest the basis of their detention before a military or civilian court.
There is good reason to think that the administration has abused its power and may be holding the wrong men. Evidence suggests that many of the detainees at Guantanamo Bay were sold to the United States by bounty hunters and rival clan members to settle vendettas.
Intelligence and military experts now suspect that the Pakistani government and others turned over to the United States a large number of insignificant Taliban fighters or entirely innocent people, even as it protected more important figures who had connections to Pakistani intelligence services or the money to buy their freedom.
If these experts are right, then the United States is less safe than the administration claims. Dangerous terrorists are on the loose, while the continued detention of potentially innocent men provides a false sense of security. Habeas proceedings could expose what may have been a fundamental flaw in U.S. counterterrorism policy. And the administration's attack on habeas may really be an attempt to cover up its incompetence and intelligence failures.
Giving the detainees their day in court will require the expenditure of time and money. But these are resources well worth spending. Proving to a sceptical world that the detainees are who the president says they are will restore faith in the United States. And if the detainees are not who the administration says they are, Americans have a right to know.
The fight against terrorism is to a large extent a fight for hearts and minds. Restoring habeas should be an easy first task for the new Congress. It will reinstate the U.S. moral authority needed to successfully combat terrorism, prevent a gradual slide toward tyranny and send a message to the president that he is not above the law.
Jennifer Daskal is Advocacy Director, U.S. Program, Human Rights Watch.
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Siege of lebanese camp ends
An introduction to Mideast chaos
Rannie Amiri in Beirut
At long last, the fight between the Lebanese Army and Fatah al-Islam in the Palestinian refugee camp of Nahr al-Bared came to an end. After a withering three months, the Army finally managed to defeat the few hundred militants holed up inside, albeit at a steep price. One hundred sixty-three soldiers were killed during the siege, a surprisingly high number for the relatively small force.
The celebrated "victory" against Fatah al-Islam (now referred to by the government after months of intense battle as just a "gang") was anything but. The mere length of time it took to re-take the camp and the losses incurred as a result belie such a ridiculous description. The events which transpired outside Tripoli instead serve as a potent reminder of the lethality of this enemy. Indeed, the opening salvo of what may be called 'The Battle of the Camps' has been launched.
Of all the ironies and paradoxes that constitute Lebanon, one of the greatest is that Fatah al-Islam was brought into the country - not by the Syrians, not by the Iranians - but by the government of Prime Minister Fouad Siniora and the March 14 parliamentary coalition of Saad Hariri, son of the late Prime Minister Rafiq Hariri. For those who remain incredulous of this assertion as first reported by Seymour Hersh in the New Yorker, a basic understanding of the current geopolitical alliances in the region give it credence.
The wealthy Rafiq Hariri was especially close to the Saudi royal family and ties between the two countries were strong during his rule. It is also Saudi Arabia, in one fashion or another, which has been the primary sponsor or financial backer of most of the radical Salafi groups operating in Iraq and beyond. As divisions in the Middle East fall more and more along sectarian lines, the regional alliance of Saudi Arabia, Jordan and Egypt as representatives of Sunni Islam, has strengthened. This not only to stem Iran, but Iraq, where the majority Shia have finally come to power after centuries of (often harsh) Sunni rule, and Hezbollah.
Under the leadership of Sayyid Hassan Nasrallah, it is Hezbollah which has most challenged the nature of the power structure of the Middle East, aptly represented by King Abdullah of Saudi Arabia, King Abdullah of Jordan and (King) Mubarak of Egypt. Also included are Palestinian President Mahmoud Abbas and Hariri's successor, Fouad Siniora. All enjoy the perks and privileges of servants of the United States and indirectly, Israel.
To undermine Hezbollah, radical anti-Shia groups like Fatah al-Islam were invited into Lebanon (or let out of its prisons) by the current Lebanese government, with the junior Hariri calling on old friends in Saudi Arabia for assistance. But deals with devils often do not go as planned; hence the outbreak of violence in Nahr al-Bared. But similarly-minded organizations remain sprinkled throughout the Palestinian refugee camps of Lebanon, including its largest, Ain al-Hilwah, located near Sidon in southern Lebanon. In it, the extremist group Asbat al-Ansar resides.
Attacks against UNIFIL troops there are likely at the hands of these Sunni militant outfits. In the case of Asbat al-Ansar, they have conveniently taken up residence in the Shia-dominated part of the country under the protection of the camps, where the government is prohibited from entering by law. Most others function as true "sleeper cells," slowly recruiting and stoking resentment amongst Palestinians in the teeming camps, where unemployment, poverty and desperation also have found sanctuary.
When will sleeper cells awake?
It is quite predictable actually. As the United States war drums beat louder and louder against Iran, expect these Saudi, Jordanian and Lebanese hired guns to agitate against Hezbollah, almost on cue. For if there is to be a war against Iran, there will also be a simultaneous one by proxy against Hezbollah.
The saga of 'The Battle of the Camps' has just begun and you may not have long to wait before reading Chapter 2.
Rannie Amiri is an independent commentator on the Arab and Islamic worlds. He may be reached at: rbamiri@yahoo.com. Source: CounterPunch.
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Osama on 9/11, US empire
Red blood for black oil
Michael Dickinson
It's that time of the anniversary of the attack on the Twin Towers of New York City on September 11th 2001. Regardless of what theories you may have about the facts behind the shocking assault, there's no disputing the fact that it happened: the buildings collapsed and nearly 3000 lives were lost.
This week, after a yearlong period of silence, the self-confessed perpetrator of the attack, Al Qaida leader Osama bin Laden spoke, ending speculation that he may have died. On a blurry video tape first shown on Al Jazeera Television, the soft-spoken icon delivered an address to the American people.
Predictably, the media dismissed the tape as threats and propaganda, focusing instead on appearance ('he's put on weight!', 'he's dyed his beard!') and sensationalism ('He tells America to embrace Islam!'). The meat of the matter of his message was ignored. Perhaps unsurprisingly, for as Bin Laden points out during the opening of his speech:
Media's incredibility
"Your information media during the first years of the war lost its credibility and manifested itself as a tool of the colonialist empires, and its condition has often been worse than the condition of the media of the dictatorial regimes which march in the caravan of the single leader."
And it's unlikely that many, if any, American TV channels or popular newspapers will present their listeners and readers with the most urgent part of Bin Laden's message. God forbid! It might make sense to them. It might make even them think.
After examining the transcribed text of Osama's address, I found much of what he said made sense to me. After condensing and editing, this following version of the speech might make sense to you too.
Blatant lies about Iraq
"Why are the leaders of the White House keen to start wars and wage them around the world, and make use of every possible opportunity through which they can reach this purpose, occasionally even creating justifications based on deception and blatant lies, as you saw in Iraq?
Rumsfeld and his aides murdered two million villagers in Iraq. When Kennedy took over the presidency and deviated from the general line of policy drawn up for the White House and wanted to stop this unjust war, hat angered the owners of the major corporations who were benefiting from its continuation.
"And so Kennedy was killed, and those corporations were the primary beneficiaries from his killing. The war continued after that for approximately one decade. But after it became clear to you that it was an unjust and unnecessary war, you made one of your greatest mistakes, in that you neither brought to account nor punished those who waged this war, not even the most violent of its murderers, Rumsfeld.
"Even more incredible is that Bush picked him as Secretary of Defence in his first term after picking Cheney as his vice president, Powell as secretary of state and Armitage as Powell's deputy, despite their horrific and bloody history of murdering humans. It was a clear signal that his administration - the administration of the generals- didn't have as its main concern the serving of humanity, but rather, was interested in bringing about new massacres. Yet in spite of that, you permitted Bush to complete his first term, and stranger still, chose him for a second term, which gave him a clear mandate from you - with your full knowledge and consent - to continue to murder our people in Iraq and Afghanistan.
Genocide, Chomsky
History shows the genocide and holocausts which took place at your hands: only a few specimens of Red Indians were spared, and just a few days ago, the Japanese observed the 62nd anniversary of the annihilation of the cities of Hiroshima and Nagasaki by your nuclear weapons.
Then you claim to be innocent! It is impossible to humor any of you in the arrogance and indifference you show for the lives of humans outside America, or to humor your leaders in their lying, as the entire world knows they have the lion's share of that. Not taking past war criminals to account led to them repeating that crime of killing humanity without right and waging this unjust war in Mesopotamia.
"This war was entirely unnecessary, as testified to by your own reports. Among the most capable of those from your own side who speak to you on this topic is Noam Chomsky, who spoke sober words of advice prior to the war, but the leader of Texas doesn't like those who give advice. The entire world came out in unprecedented demonstrations to warn against waging the war and describe its true nature in eloquent terms like "no to spilling red blood for black oil," yet he paid them no heed.
Lies about Iraq
It is time for humankind to know that talks of 'the rights of man' and 'freedom' are lies produced by the White House and its allies in Europe to deceive humans, take control of their destinies and subjugate them.
Among the things, which catch the eye of the repercussions of your unjust war against Iraq is the failure of your democratic system, despite its raising of the slogans of 'justice, liberty, equality and humanitarianism'. It has not only failed to achieve these things, it has actually destroyed these and other concepts with its weapons - especially in Iraq and Afghanistan - in a brazen fashion, to replace them with fear, destruction, killing, hunger, illness, displacement and more than a million orphans in Baghdad alone, not to mention hundreds of thousands of widows. Americans statistics speak of the killing of more than 650,000 of the people of Iraq as a result of the war and its repercussions.
People of America: the people of the world have recently come to know that, after several years of the tragedies of this war, the vast majority of you want it stopped. Thus, you elected the Democratic Party for this purpose, but the Democrats haven't made a move worth mentioning. On the contrary, they continue to agree to the spending of tens of billions to continue the killing and war there, which has led to your disappointment.
And here is the gist of the matter, so one should pause, think and reflect: why have the Democrats failed to stop this war, despite them being the majority?
The answer to this question is: they are the same reasons, which led to the failure of former president Kennedy to stop the Vietnam war. Those with real power and influence are those with the most capital. And since the democratic system permits major corporations to back candidates, be they presidential or congressional, there shouldn't be any cause for astonishment in the Democrats' failure to stop the war.
US democracy
You're the ones who have the saying, "Money talks." After the failure of your representatives in the Democratic Party to implement your desire to stop the war, you can still carry anti-war placards and spread out in the streets of major cities, then go back to your homes, but that will be of no use and will lead to the prolonging of the war.
It has now become clear to you and the entire world the impotence of your 'democratic' system and how it plays with the interests of the peoples and their blood by sacrificing soldiers and populations to achieve the interests of the major corporations.
It has become clear to all that they are the real tyrannical terrorists. In fact, the life of all of mankind is in danger because of the global warming resulting to a large degree from the emissions of the factories of the major corporations. Despite that, the representative of these corporations in the White House insists on not observing the Kyoto accord, with the knowledge that the statistic speaks of the resulting death and displacement of millions of human beings, especially in Africa. This greatest of plagues and most dangerous of threats to the lives of humans is taking place in an accelerating fashion as the world is being dominated by the 'democratic' capitalist system, which confirms its massive failure to protect humans and their interests from the greed and avarice of the major corporations.
"And despite this brazen attack on the people, the leaders of the West - especially Bush, Blair, Sarkozy and Brown- still talk about 'freedom' and 'human rights' with a flagrant disregard for the intellects of human beings. So is there a form of terrorism stronger, clearer and more dangerous? This is why I tell you: as you liberated yourselves before from the slavery of monks, kings, and feudalism, you should liberate yourselves from the deception, shackles and attrition of the capitalist system.
"The capitalist system seeks to turn the entire world into a fiefdom of the major corporations under the label of "globalisation" in order to protect 'democracy'.
Iraq, Afghanistan
"Iraq and Afghanistan and their tragedies; the reeling of many of you under the burden of interest-related debts, insane taxes and real estate mortgages; global warming and its woes; and the abject poverty and tragic hunger in Africa - all of this is but one side of the grim face of this global system.
So it is imperative that you free yourselves from all of that and search for an alternative, upright methodology in which it is not the business of any class of humanity to lay down its own laws to its own advantage at the expense of the other classes as is the case with you, since the essence of the laws under which you live is that they serve the interests of those with the capital and thus make the rich richer and the poor poorer."
Bin Laden ends his address by suggesting that Americans choose Islam as the 'alternative 'upright methodology' he mentioned, but I can hardly imagine the average citizen of America bowing down five times a day in the local mosque to pray in the direction of Mecca, stoning adulterers, and cutting off the hands of shoplifters.
The capitalist system is rotten and unfair, and choosing to be governed by corporation-grovelling millionaires like Bush or Obama will only prolong the agony, but the alternative need not be an authoritarian God-fearing Theocracy.
Or, for those with an inclination for the Divine, what better words than those of Benjamin Franklin, who believed in a benevolent Deity: "The most acceptable service to God is doing good to his other children."
And Benjamin Franklin was an American!
Michael Dickinson can be contacted via his website http://yabanji.tripod.com or at: michaelyabanji@gmail.com
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Economic crisis hit Sri Lanka
Jehan Perera
Over the past 22 months Sri Lanka's people have been facing an economic crisis that is worrying the administration. The concern about the economic crisis faced by people is most pronounced in the urban areas, where the self-sufficiency that buffers the rural economy is not at all present. The rate of inflation has touched 20 per cent, with prices of essential commodities such as milk, rising by an even greater percentage. The government blames the increase in world prices and also the depreciation of the rupee as the cause for the rise in prices. To this must be added the printing of billions of rupee notes by a cash strapped government that have made more money chase after the same goods.
This crisis is felt all over the country, and not only in Colombo, but even in President Mahinda Rajapaksa's home base of Hambantota. Some of those who worked for the President's electoral victory in November 2005 are deeply disappointed, and angry, as I found last week in Hambantota. The constant complaint is that inflation has made life very difficult for the masses, including themselves, and the difficulties extend to the rural areas also. There were allegations that the government was only laying foundation stones of development projects, and that corruption swallowed most of the initial investment before government funding came to a halt.
A major problem faced by the government is its budget deficit. By printing large sums of currency notes the government has been trying to meet its basic financial obligations, such as paying of salaries to government sector employees. It is also resorting to new taxes, such as on mobile phones, to enable the government to meet its bills. But the printing of rupee notes and increasing taxes are only helpful in meeting the government's domestic obligations. It will not help in meeting the country's international obligations. If the government is not earning enough foreign exchange from the country's exports, remittances from workers abroad and grants by donor agencies, it needs to go in for loans.
Sovereign bond
The government's plan to raise USD 500 million through the issue of a sovereign bond on the international market has ignited a controversy within the country. On the one hand, the foreign exchange that comes in through this transaction can give the government breathing space to meet its financial obligations. On the other hand, there is apprehension that an international loan taken on commercial terms, with no specific limitations on its use, could be used for expenditures that are in the nature of consumption rather than investment.
Taking a loan makes perfectly good economic sense if it is used for productive purposes, where the loan leads to the building up of an economic asset that leads to the generating of a stream of income that could be utilized to repay the loan. However, if a loan is taken at commercial rates of interest, and is used for the purpose of consumption without creating a new economic asset, then repaying the loan is going to be a big burden in the future on the people who are already over burdened with taxes and inflation. Whether the money that becomes available as a result of the loan is used for investing in economic assets or is used for consumption which can take many forms, including salaries and weaponry or for subsidies for short term electoral gain, become an important question.
The government's main justification for floating the bond on the international market is that it needs investment funds to develop the war-destroyed economic infrastructure in the east. The government argues that it is unable to get concessionary finance from donor agencies because Sri Lanka is now a middle income country. Unlike commercial loans that have a high rate of interest but give the borrower flexibility in the usage of those funds, concessionary loans from donor agencies have low rates of interest and strict conditions placed on how they may be utilized. The tragedy is that four years ago the country's main donors pledged USD 4.5 billion to develop the country, but on the condition that the peace process continued.
The present low intensity war that the government and LTTE are engaged in creates an unstable and insecure environment especially in the north and east. The militarisation of daily life in the north and east is illustrated by the requirement in Jaffna that every resident over the age of 10 years should carry around an identity card issued by the military authorities. Even areas that are under the control of the government are subject to regular LTTE infiltration and guerilla attack. The prevailing situation in the country makes it unlikely that the government will be able to fulfill its promise of using the proceeds of the sovereign bond to develop the infrastructure in the east.
Urgent priorities
The stark reality is that the government has yet to resettle some of the tsunami victims in the east who were displaced from their homes over two years ago. In these circumstances, it is almost certain that the foreign exchange that is made available to the government by the sovereign bond will not be utilised for infrastructure development in the east. Instead, that money will be utilised to meet the most urgent priorities of the government. Chief amongst these would be to face the military challenges that have arisen from its strategy, to meet the government's considerable salary bill and to reduce the cost of living even temporarily through subsidies.
The LTTE's deployment of light aircraft to bomb the international airport and oil storage tanks a few months ago sent shock waves through the country, and prompted the government to find its answer in ultra sophisticated MiG 29 fighter aircraft. Despite protests that the expenses on these aircraft are disproportionate to the threat posed by the LTTE aircraft, the government has shown itself determined to go ahead with the deal that is reported to cost as much as USD 300 million.
It can also be expected that the army, which is doing the bulk of the fighting against the LTTE, will have its own demands for equally significant military procurements. So long as the war continues the conditions in the north and east will not permit any major infrastructure development projects.
A government that has been unable to implement such infrastructure projects in other parts of the country, even in the President's home base of Hambantota, is unlikely to be able or be willing to make the commitment that such a choice entails. The more likely scenario is the utilization of the proceeds of the sovereign bond for the purposes of consumption, without the prospect of generating economic assets that could provide a larger stream of income to repay this loan.
Politics
The issue of the loan has now become unfortunately politicised with the major opposition party challenging its viability and legitimacy. However, precisely for this reason it has also become highly publicized instead of being slipped through without public discussion like most government decisions. Opposition Leader Ranil Wickremesinghe has stated that a new government headed by him will not repay the loan and will even cancel the license of the Hongkong Bank, which is one of the banks that is floating the bond on the international market, if it is found to be contrary to Sri Lankan law. He has also warned that he will call on the people to demonstrate outside the HSBC in the event of further economic hardship to the people.
Critics of Mr Wickremesinghe's position have pointed out that international law is clear in affirming the duty of a successor government to honor the legal obligations of predecessor governments. However, international law is also a rapidly evolving arena of morality and ethical responsibility. The call of former colonies for reparations for past injustices and of comfort women for past violations of their human rights, and the positive responses of some of the culprit governments, are part and parcel of an evolving international community. The concept of corporate social responsibility in economic contracts may become a new feature of international law in the future.
The issue of the sovereign bond is enabling Mr Wickremesinghe to change his image with the general public who are likely to be receptive to the economic rationality of his arguments. Economic rationality notwithstanding Mr Wickremesinghe has had to live down a reputation for being too much oriented towards the international community.
Conflict within
What is tragic about the unfolding drama is that once again Sri Lanka is heading on a course of confrontation with more conflict within itself and with those who would rather be its partners than its enemies. The Hongkong Bank has been doing business in Sri Lanka for over a hundred years and is a symbol of the international economic presence that has linked the country to the global economy. Now it is caught in a pincer between contending political forces. A country that needs healing and reconciliation is growing more polarized and the conflicts it is involved in are becoming more intense. Sri Lanka needs peace at all levels if the economic resources of the international community are to bring development and prosperity to the people.
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Afghanistan: Opium's threat
second only to terrorism
Although more than 90 per cent of the world's opium is grown in Afghanistan, most Afghans never see any of the profits generated by this illicit crop.
Jane Morse
Opium production is second only to terrorism as a threat to the economic development of Afghanistan.
Opium, like terror, is a dead end for the Afghan people, according to John Walters, director of the U.S. President's Office of National Drug Control Policy. At a special briefing at the State Department recently, Walters said that although more than 90 per cent of the world's opium is grown in Afghanistan, most Afghans never see any of the profits generated by this illicit crop.
Those who drive the illegal opium industry, Walters said, "are the landowners, who force sharecroppers to grow poppy, rather than licit agricultural products."
The State Department estimates that in 2006, the total export value of Afghanistan's opium was $3.1 billion, representing approximately 32 per cent of the country's total (licit and illicit) gross domestic product.
"The big money made off of opium in Afghanistan is made by the upper levels of the chain - the warlords, the traffickers, the corrupt individuals who are involved in this," Walters said.
"The poor people of Afghanistan are not getting rich off of opium. They haven't in the last decade," Walters said.
But finding an alternative crop that can match the potential income of opium poppies is difficult, acknowledged Thomas Schweich, coordinator for counternarcotics and justice reform in Afghanistan and the acting assistant secretary of state for international narcotics and law enforcement.
"There is no miracle crop," Schweich said at the briefing. "There's nothing that really will equal the income you can get from poppy." The chief benefit of not growing the opium poppy, which is a highly labor-intensive crop, is the security of not having to deal with corrupt and violent organizations, he said.
Successful and sustainable agricultural endeavors, Walters said, require electricity, roads and market access. "It's important," he added, "to remember there's a pathway to go from being a subsistence farmer to having a future for your children and your family that's better off."
In explaining the U.S. Counternarcotics Strategy for Afghanistan, released last month, the officials said the United States plans to focus on high-yield crops such as fruits and nuts that come closer than other crops to replacing the income from the poppy.
The 2007 alternative development campaign, for example, with annual expenditures of $120 million to $150 million, includes short-term cash-for-work projects and comprehensive agricultural and business development projects.
According to the report, over the past few years, nonpoppy agricultural production in Afghanistan has nearly doubled, thereby increasing farmers' incomes. The U.S. government, the report says, has paid $32 million in cash-for-work salaries for infrastructure rehabilitation resulting in the construction of 1,000 kilometers of rural roads and improved irrigation for 3 per cent of Afghanistan's arable land. More than $3 million in credit has been disbursed, and more than 100,000 farmers have been trained in improved agricultural practices.
Through programs administered by the U.S. Agency for International Development (USAID), between fiscal years 2002 and 2006, more than half a million farmers across all 34 provinces in Afghanistan have received 40,000 metric tons of fertilizer and 14,000 metric tons of wheat seed. Another 278,900 farmers received vegetable seeds and fertilizers, and more than $17 million was generated in sales from the vegetable seed program.
USAID programs also helped farmers plant 1,500 hectares of apricot, apple, peach, plum persimmon and almond orchards, distributed saplings and rehabilitated neglected orchards.
The U.S. Department of Agriculture (USDA) has been providing advisers to Afghanistan since 2003. So far, some 33 advisers have served in the country on nine-month rotating assignments to advise farmers and government officials. Eighty per cent of Afghanistan's population is involved with farming or herding, but 23 years of war have devastated the agricultural sector.
USDA's assistance in Afghanistan has focused on both the physical and institutional reconstruction of the country's agricultural sector and helping the government rebuild markets while conserving natural resources. With funding from the State Department, USDA has established the Afghan Conservation Crops program, a massive, community-based employment project in which thousands of Afghans get jobs on projects for tree planting, water conservation and erosion control.
Although Afghanistan's opium production is high, the country today "is not a place of uniformly exploding opium [production]," Walters said. In many parts of Afghanistan, he said, poppy production is declining, and some areas even have become poppy free.
"But in the areas, particularly where there is less secure control, the poppy cultivation has grown dramatically," Walters acknowledged, condemning the opium trade as "the economic development program of the terrorists and the criminals."
- SAN-Feature Service /usinfo
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