Showing posts with label Greece. Show all posts
Showing posts with label Greece. Show all posts

Wednesday, August 3, 2016

The Roots of Nigeria's Chaos

A good interview to highlight couple of the points I've been blogging about since last year:

1. When "terrorists" attacked France last year, I blogged that nobody is looking at the real reasons behind the motivations of why these young people became or did what they did. Of course, what they did was wrong, but why did they do it. Just blaming Islam for its "hateful speech towards non-Muslims" is not sufficient enough reason.

The reason I said was these youths were venting their frustrations after watching & suffering injustices, mostly because of discrimination; racial, linguistic, religion, ethnicity etc. They were lashing out at an unjust & unfair society. Of course, their way of lashing out or venting their frustrations was wrong. In the same vein, the "terrorist" groups operating in several other 3rd-world countries are also lashing out after suffering injustices; perceived or otherwise. Be they "terrorist" groups be Boko Haram or ISIS or Al-Nusra or Al-Qaida etc.

As this Nigerian activist explains that there is a huge imbalance of wealth in Nigeria, in the North & the South, & I would add on to it that imbalance, & the perceived injustice growing out of it, drove many to join an amalgam of these groups that are collectively called, Boko Haram.

2. Then, the Nigerian activist goes on to explain how US foreign policy, multinational oil companies, IMF, & World Bank supported corruption in Nigeria or came up with monetary policies which, in effect, further exacerbated the wealth imbalance in the country, which, in turn, created the current conditions of lawlessness & "terrorism".

As I have also blogged previously that the governments of developed countries, through their foreign policies & support of their multinational companies, effectively plunder & rob the developing countries of their natural & intellectual resources, which, in turn, create a wave of cheap labour force for their own countries (immigration) & create more wealth for their own companies.

The Nigerian activist stated how Nigerian economy & politics are heavily dependent & thus "shaped by multinational corporations. ... We are running an economy that is based, basically, on oil rents, collection of royalties and rents from oil production by transnational oil corporations. They have overbearing influence on the political development of the country and on the economy. ... And so right now the oil companies operate above the law, because the government would not do anything ... whatsoever to offend them or to make them lose their profit. And so they break the law with absolute impunity."

He then goes on to explain how the overbearing & devastating influence of IMF & World Bank hobbled & effectively disabled the Nigerian economy & economic development. "... the influence of the International Monetary Fund and the World Bank has also been very significant in dislocating the pattern of growth of the Nigerian economy and African economy generally that was visible between--in the early '70s through the early 1980s. And that, of course, happened through the introduction of structural adjustment programs that opened up the economy for dumping of products from the Global North, from North America, from Europe, from Japan, Australia, and then also killing local production, local industries, killing local agriculture, and, making these countries kind of dependent on ... foreign aid and stuff like that. So we've seen a situation where the negative influence of multinational corporation has played a very, very big role in keeping our nation from being on the right path of progress."

Ironically enough, we've seen the devastating impact of these structural adjustment programs within European Union, too, within the past 5 years or so. European Union was effectively made by richer countries of Europe (Germany & France) to basically push their products on to the poorer economies of Europe (Greece, Portugal etc.). So, while Germany enjoyed positive trade balances due to exports to these countries, it also effectively killed the industries of Greece (& negative trade balances due to heavy imports) & made it dependent on German imports. When economy tanked, there was nothing to support Greek economy & it nosedived disastrously.

So, yes, I concede that there are corrupt politicians in developing countries & there is widespread corruption. But, the corruption can be overtaken if developed countries of the Global North stop meddling in the internal affairs of those countries. Political & economic meddling hobbles & destroys any chances of progress developing countries have & effectively push them back further in the hole.

Since, the developing countries keep trying to climb out the hole but the walls are kept out of reach by developed countries, economic development & proper distribution of wealth never takes place. That, in effect, create the perfect conditions for wrong elements of the society to rile up the young population against their own & any foreign influences. Then, the Global North (or developed countries) label those people "terrorists" & try to root them out with any means necessary. That in turn create more chaos & destruction without actually solving the problem, since, the root of the problem was never looked upon, deliberately or otherwise.

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PAUL JAY, SENIOR EDITOR, TRNN: Nigeria is in a state of semi-chaos. And the question I have, and I think most people following this story have, is: how did Nigeria get to a point where such events can take place?

Now joining us to help give some historical context to all of this ... is Nnimmo Bassey. He's a Nigerian architect, environmentalist, an author, a poet. He chaired the Friends of the Earth International from 2008 through 2012. He was executive director of Environmental Rights Action for two decades. And he now is the director of the Mother Earth Foundation.

So can you just give us quickly what's happening now on the ground in Nigeria and a little bit about who the Boko Haram is and what they represent?

NNIMMO BASSEY, DIRECTOR, HEALTH OF MOTHER EARTH FOUNDATION: As you said, Nigeria is undergoing very difficult times at the moment. But these had been building up over time. Usually in the past we had incidents of clashes over religious differences between the Muslims and Christians in the northern part of the country, but these were on-and-off incidents. But what we're seeing now is a sustained aggression by a diversity of groups who are generally grouped under the label Boko Haram. Boko Haram does not appear to be one single organization that has a command structure as such, but an amalgam of groups who share perhaps a philosophy of just wreaking destruction in the nation.

Nigeria gained political independence in 1960, but the structure was not perfect. And just as the nation was getting its act together, 6 years into independence, the military struck. ... the year after the military struck, Nigeria faced a civil war ... from a number of reasons. And when the Civil War ended in 1970, Nigeria wealth from oil revenue, crude oil revenue. And then, at that time, the military head of state said Nigeria had the problem of how to spend money, not how to make money. So that kind of settled the philosophy.

JAY: Before you get into the oil politics, 'cause I know it's such a big story, from after independence, 1960s and so on, it's at the height of the Cold War, and much of African politics, as I understand it, was shaped by the Cold War. What was the role of US policy in the development of the military dictatorship in Nigeria?

BASSEY: ... we had military rule in Nigeria from 1966 ... and this went on for about 3 decades, with just a little space of time that they left in 1979 and came back in 1983.

And also in this time, the US has maybe made a few noises against military dictatorship more generally. I believe the US was not really obviously against the governments in power. And, of course, Nigeria was a very strong frontline state against apartheid in South Africa at a time when US was ambivalent, the US was ambivalent about what was going on in South Africa. So it wasn't really a very smooth relationship all through this time.

But the military were not politicians, generally. They were just young man who grabbed power for whatever purpose. And they had to run the country down to the ground. And so what we're seeing now manifesting in the country now is a result of several years of misrule, both by politicians and by the military, and right now have been in meetings where the past military rulers go to great pains to explain that they cannot be to blame, because they always work with politicians. And, of course, with the local politicians, they also work with politicians from the US, from Europe, and from elsewhere.

But we had a situation where wealth has been concentrated in a few hands across the nation. If you look at statistics, right now the ... GDP, gross domestic product, is said to be growing at a rate of more than 6% per year, and just a couple of weeks ago the government announced: by recalculating the gross domestic product, Nigeria is now the biggest economy in Africa, bigger than South African economy.

But at the same time, what is not being told to the world, what is not being announced clearly, is that poverty is increasing rapidly also. So you have a situation where 70% of the population live in poverty, and then wealth is concentrated in a few hands. And in the northern part of the country, this disparity is much more sharper because of years of negligence, especially in educational sector, because some people ... manipulate the poor and the marginalized, children, especially, and the youth, into not obtaining suitable education, but just being put in a state where they have to depend on the rich for daily handouts and occasional days of festivities. And so you find in the northern part of the country very deep and desperate poverty besides incredible wealth here of a few people. And so over the years, this has built up. This has resulted in discontent, especially amongst the poor, young people.

And the problem generally across the nation has been that over--the years of military rule has made even the civilian politicians behave sometimes like--as if they were military overlords. And elections have not been fair and free most of the time. And politicians were very, very readily amenable to using political talks, some of whom have been armed with weapons. And if you look at the crisis that occurred in the South in about--around 2005 in the Niger Delta, in the oil fields, where militancy heightened, you find that some of the young people who were involved in this militancy had worked as help to politicians through elections, but they would not receive what they were promised at the end of the day. And so the politicians used to use and then dump them.

And a similar thing also occurred in the northern part of the country, but we are not in a position to say exactly how what has become the Boko Haram phenomenon grew, from what was the root. What is known is that the amalgam of groups generally operating under this name or under this nomenclature believe that anything Western must be rejected, especially Western education. And so they will fund a lot of attacks on schools, on public institutions, and then on the military, on whatever they feel would hurt the government.

But what has become very reprehensible is that over the past few months, these insurgents (as they're labeled these days) have concentrated on killing defenseless children, some in their sleep in their hostels, in secondary school hostels. They've recently ... abducted over 200 girls from a hostel in a school at Chibok in northeastern Nigeria. In Abuja about two weeks ago they set off explosions in a very densely packed motor park, a public transportation hall on the outskirts of Abuja, killing innocent workers and children who were either on their way to school or to their offices.

JAY: How much has the interests of big Western oil companies shaped the politics of Nigeria? I mean, you're talking about a handful of very, very wealthy, and in the north tremendous poverty, where all these events are taking place. But in terms of over the last decades, how much has Nigerian politics been shaped either by, you know, Western/American oil companies, and even directly with US CIA and such involvement?

BASSEY: Well, let me speak about how the Nigerian economy and politics have been shaped by multinational corporations. They've been very key in shaping the way politics has developed in the country and how the economy has grown. We are running an economy that is based, basically, on oil rents, collection of royalties and rents from oil production by transnational oil corporations. They have overbearing influence on the political development of the country and on the economy. In fact, the national budget of Nigeria has always been about ... what should be the benchmark of the price of crude oil. And so crude oil has been a determinant factor right from the early 1970s, when oil revenue became the major source of foreign exchange for the country. And so right now the oil companies operate above the law, because the government would not do anything ... whatsoever to offend them or to make them lose their profit. And so they break the law with absolute impunity.
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Now, because of the heavy dependence on oil revenue, as I said, these corporations have very heavy influence on politics. And rich people in the country are rich because they have a slice of oil revenue, not because they engaged in anything productive. And so we run a kind of voodoo economy, something that is more or less maybe beginning to change now because there are other sectors of the economy that are contributing to progress, and that is getting a bit more productive than before.

But as I say this, the influence of the International Monetary Fund and the World Bank has also been very significant in dislocating the pattern of growth of the Nigerian economy and African economy generally that was visible between--in the early '70s through the early 1980s. And that, of course, happened through the introduction of structural adjustment programs that opened up the economy for dumping of products from the Global North, from North America, from Europe, from Japan, Australia, and then also killing local production, local industries, killing local agriculture, and, making these countries kind of dependent on ... foreign aid and stuff like that. So we've seen a situation where the negative influence of multinational corporation has played a very, very big role in keeping our nation from being on the right path of progress.

Monday, November 30, 2015

This endless quest for growth will see Greece self-destruct

Although, this article is focused on Greece & its financial & economic woes, I really liked the author's view on how there is an "inherent contradiction of capitalism". I, myself, don't have a problem with capitalism, but the modern capitalism in itself does have a problem of continuously trying to make profits (which are essentially, surpluses -- gross revenue less costs = profits), which are not being re-invested in the economy but are being filtered up to few wealthiest individuals. Profit then stops there & more profits have to made for the other 99% to survive. Of course, since, the other 99% are making minimum wage or barely scraping by in life, the economy will eventually grind to a halt. Paragraphs 6 & 7, in the opinion piece below, very succinctly summarize this.

Think of it like a machine (for example, your car engine). If you keep driving your car for longer & longer distances & keep trying to extract as many kilometers (or miles) you can extract out of it before you need to service your car, or try to slowly reduce your frequency of regular car maintenance, you will eventually destroy your car engine & its related machinery, because your car's machinery is working harder for fewer servicing. It's the same case for human labour.

Anyway, so then the government is faced with only 2 choices (kind of being stuck between rock & a hard place) that it either try to juice up the "dead" economy through stimulus (like US did) or try to save billions through harsh austerity programs like Southern European nations did or are still doing. These two solutions are interlinked & become sort of a catch-22 problem. Government's primary source of revenue is taxes, but it can't really tax the public which in itself is not earning enough to survive. So tax revenue falls off the cliff. If tax revenue is insufficient for the government to institute stimulus programs, then it's only option is to bring more money from outside; either print more or borrow more. Either of these options will reduce the value of the national currency (assuming it's not part of a regional monetary bloc), & the price of everything essential in the marketplace for the public will rise, which will cause the general public to save more, instead of spend, which is required to revive the dead economy. Hence, we are back at the start of the problem, where the economy is still dead, & neither austerity nor stimulus is working to their full potential.

However, while the government is either cutting social spending or reducing the value of the currency, few individuals in its country are still becoming wealthier by the minute. That's why, the recession didn't hit the hardest all those wealthy 1-percenters. Heck, in their own little world, they didn't even feel it. Their wealth actually grew multiple folds during the recent recession.

Problem is that this inherent problem of modern capitalism & the social inequality it causes is only going to grow until there's chaos & anarchy on the national & global levels. There's no way to resolve this problem since the governments are now controlled by those same wealthy individuals who love this "inherent contradiction of capitalism," since it makes them wealthier & wealthier, & frankly, why would they care if a few millions of the general public suffers because of inequality. Prepare yourself for much more pain & suffering if you are one of those 99%.
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For many following the crisis for ... months, it has become clear that it is not just about Greek debt. Beneath the cultural tensions & ugly stereotypes, an ideological war is taking place. This battle is happening because the current economic system has only 2 answers to debt crises, recessions & slow economic growth: stimulus & austerity.


Stimulus is about the government pumping money into the economy to encourage consumer spending, which will theoretically lead to economic growth. In recent times, stimulus efforts have taken the form of the government spending money on infrastructure & other socially beneficial projects (think the New Deal) & quantitative easing. Austerity is a set of measures that aim to cut government spending & shrink the public sector to make the economy less dependent on it, which in theory should make room for & encourage a burgeoning free market (ie neo-liberalism).

The argument against government-led stimulus asks how the economy can grow if the government has to keep expanding its debt &/or money supply in order to start new projects & stimulate the economy. Surely the stimulation it provides will never compensate for growing levels of debt? Anti-austerity advocates, on the other hand, ask how the economy can grow if people make less money & taxes are higher – people will save, not spend, & economic growth is based on consumer spending.

The issue of austerity versus stimulus is often framed as the entire debate – if you don’t support one, you must support the other, because there are no alternatives. This is the same binary debate that has been going on for more than 100 years between the state versus the market. Yet, these dichotomies distract people from thinking about what’s really important – the goal of these policies, which is to grow the economy.

No analysis I’ve read thus far has questioned the damaging role that the endless quest for economic growth plays. Neither austerity nor government stimulus will ever be able to address the debt crises & recessions of the twenty-first century because what we’re dealing with here is an inherent contradiction of capitalism.

This contradiction comes from the surplus of the system (profit) being taken out of the real economy (the economy of physical goods and services) and put into the financial sector to generate more wealth for people who are already wealthy. This requires the economy to continually grow to compensate for the extraction of profit, which is essentially the extraction of the economy’s surplus.

However, this extraction of profit is the same mechanism at the root of soaring levels of inequality. A recent Oxfam report estimates that, by 2016, the richest 1% of the world’s population will own more than the other 99%. If the average person is making relatively less every year, or struggling just to maintain the same financial state, they can’t afford to buy ever more products & services, so the economy can’t grow as it did when we had more financial equality. Thus capitalism has always carried the seed of its own demise.

We are seeing this self-destruction in Greece. The ... Syriza government wants to go back to the negotiating table & create a new bailout agreement that will cut the debt to a more manageable size & reform the public sector in ways that won’t affect the most vulnerable. This would still be austerity, albeit a much milder version than that of the past 5 years. ...

If an agreement can’t be reached, Greece might well go back to the drachma. However, the government has no clear plan for this & an unplanned exit from the euro would be painful, with the poorest hit the hardest.

In all of these scenarios, the government’s goal would still be to re-start economic growth, even at the cost of creating more inequality. None of these options gets to the roots of capitalism’s inherent contradiction. There’s no way to grow ourselves out of this crisis; not for Greece, not for the rest of the world. What we are witnessing is the beginning of the collapse of capitalism.

So what is a sustainable path forward for Greece? If the Greek government could see that it won’t be able to re-start growth, and that GDP growth is a means to an end, not an end in itself, there are steps it could take to start paving a new path to prosperity for its people.

In addition to the basics – restructuring the Greek debt, deep reforms in the public sector to make it more transparent & accountable, & the strengthening of the solidarity economy – I suggest the following:
...


2.The government should nationalise the banks & encourage people to start credit unions. This will re-align the banking sector with the needs of citizens & make the banks more resilient. Credit unions would empower people to take financial matters into their own hands.

3.Greece should keep for-profit interests from buying up its common wealth. This could be done via land trusts, not-for-profits & amending the constitution to make it unconstitutional for the government to sell off the commons.

4.The Greek government should start using a wellbeing or happiness index to measure success, as Bhutan does. In this age of inequality, working class people & the unemployed can easily slip through the cracks of GDP growth.

5.Businesses & the government should shorten the working week & encourage job-sharing, so more people can have part-time employment. This would counter the current problem of some having no work while others work 50 hours a week.

6.Finally, the government should create legislation & encourage not-for-profit enterprise in every sector to prevent the extraction of profits from the real economy & encourage social entrepreneurs & innovators to start up their own not-for-profits. These enterprises would help alleviate the humanitarian crisis in Greece, create a more stable economy & keep the financial surplus in the real economy. By building an economy around social purpose, Greece could usher in the post-capitalist era, rather than fall victim to the unavoidable collapse of capitalism we are witnessing.


Jennifer Hinton is the co-author of How on Earth: Flourishing in a Not-for-Profit World by 2050, which will be published in October 2015.