Egypt Rejects IMF, Revolution Lurches Forward

by Jonathan Rashad

Egyptians have evaded a great pitfall in their quest for freedom, democracy and sovereignty in their rejection this week of loan proposals from the IMF.  Nations across the world, especially in Africa, have time and again during periods of turmoil been tempted into bailouts and loan deals with the IMF and World Bank, always with strings attached: Steeled strings which pull the borrowing nation apart.

While successful in the ouster and trial of Hosni Mubarak, as with any revolution, the true test for Egypt is now coming after the removal of the regime’s figurehead.  A ratification of the revolution is yet to be completed, as the protest movement continues to fight against the faceless architecture of Egyptian power, which is still concentrated in the military, the oligarchy and foreign capitals.  Continued dealings with institutions such as the IMF would leave intact a central pillar of that architecture. 

Among other things which helped to destroy the Egyptian economy was the Mubarak regime’s system of patronage, as well as its borrowing from lenders such as the IMF; who always dictate how their loans are to be spent, as well as dictate economic and social policies generally as conditions for their lending.  These two forces helped to gut social projects, create massive unemployment and exacerbate poverty- ironically laying the groundwork and providing impetus for popular revolt.  Now the IMF and multinational corporations who did much business with Mubarak and who are the ultimate destination for IMF loans- loans which the taxpayers of the host nation must repay- want back in, but the Supreme Military Council has rejected the loans for now, amid popular distrust of the IMF in Egypt. 

Indeed, regardless of whether or not one would argue as to the virtue of the IMF loan package, one cannot deny that democracy has been served:  The people of Egypt do not want dealings with the IMF.  In fact, a rejection of the dictates of foreign influence, international finance and corporate power, in which the IMF is at the center, was a critical theme of the revolution.  While this fact mostly escaped the western media, Egypt’s current leadership is at least aware of it. 

Revolution:  Still in progress...

Apr 8 - Tahrir Square protests continue - Jonathan Rashad

Protests have continued since General Mubarak was finally forced from office on February 11.  There was much speculation afterwards as to how far Mubarak’s ouster would go in assuaging public outrage, which until earlier this year was for a long time a widespread but unexpressed reality.  Would the Egyptian street be placated by a simple rotation of figureheads?  This was the hope of the beneficiaries of the regime in Egypt, the US and in Israel.  According to Reuters, the Mubarak regime had been receiving an average of $2billion per year since 1979, making it the second largest recipient of US “aid” money, neighbouring Israel being the first.  It was always well known that the lion’s share of this money went to paying and equipping the coercive police/military apparatus which held the population in check through violence, subterfuge and torture.  As such, it is not surprising that the US administration did not support the ouster of their ally until the very last, until it became clear that such was already inevitable and perhaps necessary to stifle a more complete revolution which would sweep away not just Mubarak, but in one fell swoop the political, economic and military assets the US has bought in that country.  While Barack Obama spoke platitudes about freedom and democracy in Egypt, US and other foreign officials were working busily in the background to preserve the framework of Mubarak’s regime and find a successor who would be equally compliant to US interests, in spite of the aspirations to freedom of the populist, secular, anti-violent movement which demanded change at Tahrir Square and across Egypt. 

April 9 - Military crackdown continues - Jonathan Rashad

Since February 11, the Supreme Military Council of Egypt has been the official seat of power in that country.  It is made up of close allies of General Mubarak, and has been “overseeing” the transition to democracy in Egypt.  Under this “new” administration, Egyptians have continued to see crackdowns on protesters and torture of detainees.  The hope in the latter case is simply that the wretched habits of police and torturers die hard; however, in the former case the Supreme Military council is responsible for using violence to quell continued protests and criminalising the protesters through trials in military courts without due process.  Roughly 7000 sentences of groups of protesters have been meted out to up to 50,000, whom military officials continue to label as “thugs.” There is still an organised and determined enemy of the revolution wielding power in Egypt.

The land of the Pharaohs has also become a den of spies, with reports and arrests of foreign agents, most recently of one Mr. Ilan Grapel, a dual American Israeli citizen who has been in Egypt since February, and is reported as a former Israeli paratrooper wounded in the 2006 Israel-Lebanon war, a journalist, a law student and/or a spy, depending on what source one checks.  The truth of Mr. Grapel’s intentions in Egypt may never be revealed, but what is on record is that countries with vested interests in Egypt, such as Israel and the US, have in their respective and massively funded intelligence agencies a secretive behemoth with a mandate for espionage, disinformation and interference in favour of the interests of their employers.  This is while the aims of the Egyptian revolution are in vocal opposition to those interests.  Parsing between reality and contrived fiction, between honest help and the Faustian kind, between empty rhetoric and veiled threats is one of the prime challenges to the revolution in Egypt. 

How successful they are at such parsing will be in evidence later this Fall.  Former officials and collaborators of the Mubarak regime are busy rebranding themselves ahead of Presidential and Parliamentary elections set for later this year, with the hopes of maintaining their influence and access to the public treasury.  Other forces whose intentions are less clear are also clamouring; some looking perhaps to exploit divisions which in the past characterised Egyptian society.  The revolution is further threatened by the economic impact of the deconstruction of Mubarak's corrupt economic system and the loss of tourist dollars, which is to say that things always get worse before they get better.  Officials with much to lose in Egypt, foreign and domestic, are beginning to blame the revolution for continued rising unemployment and inflation- people such as the cheerleaders for the rejected IMF loans- as if Egypt’s economic woes are not the culmination of 3 decades of Mubarak’s cannibalistic policies.

However, if an honest parliament can be elected, who with the help of an engaged public can bring out of Tahrir and institutionalise the spirit of dignity, unity and humanity that struck Mubarak down and still grips most of the country, Egypt can begin to pull itself along the long road to reclaiming all that it has lost in more than a half-century:  Having suffered military invasion by Britain, France and multiple times by Israel, trade sanctions and threats by the US and the World Bank, and the wholesale looting of the country’s wealth by Mubarak’s three decades of international cronyism, Egypt now finds itself in a deep hole.  Printed everywhere on signs, painted on walls, sprayed on tanks and chanted on the streets is the continued call of the people of Egypt, as well as Arabs across Syria, Yemen, Tunisia, Bahrain and so on:   

“Aash’ab yureed issqaat in-nithahm!”

“The people want the fall of the system/regime!”

 (!الشعب يريد إسقاط النظام)

By rejecting the IMF, the people of Egypt have rejected the nonsensical idea of digging themselves out of their hole with the same tools that got them there.  

 “Aash’ab yureed issqaat in-nithahm!” 

Hear the people of Tahrir square and across the Arabic world

Read more about Egypt and the IMF:

http://www.bbc.co.uk/news/world-middle-east-13914410

Egypt since Mubarak’s fall:

http://www.cswatch.org/user/179/article/egypt-after-mubarak-the-military-fist

http://www.ibtimes.com/articles/111640/20110211/egypt-high-military-council-egypt-supreme-council-of-armed-forces.htm

Conflicting sources on the strange case of Ilan Grapel:

http://www.bbc.co.uk/news/world-middle-east-13761173

http://www.haaretz.com/news/diplomacy-defense/report-suspected-israeli-spy-arrested-in-egypt-was-traveling-to-libya-1.367596?localLinksEnabled=false

http://www.presstv.ir/detail/184561.html

http://www.thedailybeast.com/articles/2011/06/19/egypt-s-dubious-spy-arrest.html

China: Fear of its Rise is Fear of Ourselves

A recent Economist article, The dangers of a rising China, leads a 14 page report loosely discussing the dangers posed to the world by China's eclipsing of the USA's international economic and military order.  The article attempts to draw parallels in the power-balance shift between Britain and Germany which led to the first World War, and that between the US and Britain, which is seen to have been peaceful.  Alternatively positive and negative outlooks are presented as The Economist offers its superficial analysis and weak solutions, but as to how to foster peace between the People's Republic of China and the West, the article does offer one shining and perhaps accidental insight.    

San Fran Olympic Torch Rally by tomnono

The parallels drawn between the hegemonic shifts of the 20th century at first appear credible.  Indeed, the competitive quest for empire and economic primacy on the European continent and elsewhere was the cause for the British-German arms race, ultimately which manifested in the orgiastic violence of the Great War which saw 16 million deaths and 21 million wounded, civilian and military.  This pessimistic view is countered with the absurd assertion that "Unlike the 19th-century European powers, it (China) is not looking to amass new colonies."  If colonialism was a method of expropriating the wealth of and creating markets in foreign lands, then China will surely remain at odds with the West on this basis, as both compete as Germany and Britain once did; in Asia, Africa and Latin America, employing trade agreements, capital and cooperation with corruption, as well as providing economic and military advisors to grease the wheels of neocolonialism; that which is the demonstrable policy of both the West and of China.

The Economist also looks hopefully to the main hegemonic shift of the 20th century, that from British to American.  This is ironic, since it was the devastating global conflagration of World War 2 which dismembered the British Empire and broke the British people's will to maintain it.  The British homeland itself was left in ruins, and thereby a hegemonic shift was a defacto result.  Thus it was war that ushered in the shift of global power, eventually in favor of the US.  However, the American global order was not immediately secured, but only itself born out of a further 40 years of global militaristic/economic expansion; major US wars in Korea and Vietnam; the Soviet war in Afghanistan; the littany of military actions across the third world; and a Nuclear standoff with Soviet Russia.  That this hegemonic shift "went well" as The Economist puts it, seems in the light of history preposterous.

What The Economist's hopeful bias will not permit in its report is a recognition that economic, technological and social structures are infinitely different than at any time in history, thus such a shift as it would happen today or in the future is without any useful precedent.  To start, the previous examples involve competing powers sharing in European heritage, culture and languages, and a similarity of social ethics, aspirations, and global outlook.  In the case of China, these are much different.  Not only are there vast differences in all these catergories between China and the West, but Chinese Nationalism is keenly aware of its recent history as a colonial subject of the West, and sees the economic and political elites in the US as the inheritors of that imperialist know-how and infrastructure.

Chinese Nationalism looks upon its long-time enemy Japan, perhaps correctly, as simultaneously a base for the projection of American military and economic power, and an unapologetic beligerrent whose political class still absolves and honors as heroes the Imperial Army Generals and Soldiers who committed the occupation of China and the rape of Nanking.  Offerings by Japanese Prime Ministers, most recently in 2009 by Taro Aso, at the Yasukuni Shrine and War Memorial where recognised war criminals are honored, have created tremendous popular backlashes in China.  China sees itself surrounded by the American military and its proxies in the pacific, with the US Navy sitting in South Korean and Taiwanese waters within shooting distance of the Chinese coast.  Such a situation could only be hypothetically balanced in size and proximity by China's occupying Cuba, the Bahamas and the Canadian Province of Nova Scotia with 70,000 troops and therein installing and equipping dozens of Naval, Air-Force, and Army bases to the tune of billions of dollars. This is to say nothing of the demonstrated willingness of the US to apply its military resources in China's neighborhood, such as in the Korean War and the holocaustal Vietnam War wherein millions died.  These both took place within living Chinese memory.  Taking place now: "The US Navy has begun to deploy more forces in the Pacific," The Economist reports.

A brief study into the history of China's relations with its neighbors and the West reveals fact after fact lending support to the attitude of indignation in China towards the US and Europe.  The Economist article asserts that a number of things will help to ease the transition.  These range from the briefly insightful to the absurd.  It suggests that "America and China need rules for disputes" and "America and China should try to work multilaterally (in Asia)"  But in the absence of demonstrated trust and mutual respect, rules and agreements will be broken, and multilateral discussions and organisations will be but another battlefield for diplomatic and economic clout.  The article comes close to the spirit of the answer to this terrifying question when it posits that "If America wants to bind China to the rules-based liberal order it promotes, it needs to stick to the rules itself."  This is a remarkable admission by the Economist of the US's hypocrisy.

Moreso, such is a tacit recognition that the current Empire must lead by example and act under the principles that it can only hope China will abide by once it overtakes the seat of global power.  The US must do much more to value economic equality, education and democracy at home, and respect the sovereignty and human rights of those abroad.  It must do more to promote freedom and peace for all nations; Not attempt to impose them as a pretext to military intervention in places such as Iraq and Afghanistan.  The US must make difficult decisions as to how to unwind the relationship between its military and its economy; these are understood in China and other quarters as so entwined that the US must perpetuate conflict and imperialism in order to survive.  China will never see in the US plutocracy a credible partner in any undertaking, but only a group of self-serving aristocrats guided by the ethics of capitalism, greed and consolidation.  It may be possible to avoid a conventional military conflict between China and the US during this great hegemonic shift if the US recognises China's military and economic clout and begins to bargain away its stack of chips in Taiwan, the South China Sea, Japan, Korea etc.  But such is likely to promote the further moulding of China into a militarist/imperialist economy whereby all of the fears of an opaque and unaccountable Chinese world leadership will be realised. Such will not lead to any type of greater peace.

The only chance for a true and peaceful resolution of the conflicting interests of China and the US to come about is by a change in those very interests:  Away from militaristic/economic dominion and global paternalism which sows discord, misery and disenfranchisement everywhere; toward finally abiding by the principles which the people of the West have always espoused: Peace, human rights and equality of opportunity for everyone everywhere.  Continued posturing by the US as the world's indomitable military and economic power requires China to assert itself globally through economic control of resources and military capability.  A graduation by the West to a higher moral ground; by a recognition of reality and a genuine redress of the ills of its own and society abroad, through education and democratic change; only these changes can compell lasting peace and inspire in China the changes it requires to be a more just and accountable world power. 


Read the Economist Article:
http://www.economist.com/node/17629709

Read more about it:
http://www.taipeitimes.com/News/editorials/archives/2010/09/27/2003483897
http://www.opendemocracy.net/democracy-china/nationalism_3456.jsp

East eats West?

This week's Economist magazine's headlining articles and cover-page, 'Buying up the world- The coming wave of Chinese takeovers' highlight the process and nature of foreign takeovers by Chinese firms.  The piece offers surprisingly little discussion or speculation as to China's deeper motivations and timing in its recent takeover bids for large multinational companies, or as to the reasoning of other governments and critics who would resist the emerging trend before concluding that rejecting China's advances would "be a disservice to future generations." 

There is something absurd about the reasoning in these articles, which do point out the "opaque and arbitrary" nature of authority within large Chinese companies, and which do briefly note that takeover bids are most often made on companies working in strategic resource sectors; but which base their conclusions on speculation that Chinese firms will "bring new energy and capital to flagging companies around the world," that "Chinese companies will have to adapt" and that its investments in the global economy will help to make China's interests "increasingly aligned with the rest of the world's."  That the Economist can readily admit to not understanding the motivations and interests of "opaque" Chinese government and authority but then predict its evolution is a failure of logic and a cause for concern should policy makers around the world find agreement with this thesis.

A steady accumulation of bonds and hard currency in all denominations, especially of its largest rivals in the US and Euro-zone, coupled with a well timed and targeted increase in the rate of takeover of global means of production and access to raw materials represents an obvious, well planned, forward looking and ongoing effort to supplant Western hegemony in favor of an ill-defined future global order over which a preeminent China presides.

This is the Chinese mission according to Chinese leaders and state-owned news outlets, as discussed in a 2008 CSIS report which states among other things: "The PRC-owned Hong Kong daily Wen Wei Po opined that the elevation of the “harmonious world” theory in the congress work report indicates that Hu (Jintao) is “assuming an even more important role in international affairs that is, as ‘formulator, participant and defender of world order,’ in order push the entire world toward harmony.”  Other such thinking among leading Chinese thinkers is evident in Zhao Tingyang’s The Tianxia System: The Philosophy for the World Institution (2005) and Liu Mingfu’s book The China Dream: Great Power Thinking and Strategic Positioning of China in the Post-American Age (2010).  All of these sources are united in their assumption that a Chinese eclipse of Western economic power is inevitable, though they may differ on their view of that post-ecliptic world.  Without knowing the truth about China's aims, the West should be wary of allowing a monolithic foreign government access to its strategic resources and internal economies.  

The Economist article gives further evidence that China's entry into global capitalism is not motivated by the usual basic greed and desires of Western investors when it reports that "Natural-resources firms can become captive suppliers to China, rather than selling on the open market... Westerners realised their new objective was to maximise production, not profits" and "Chinese firms... risk political fallout if they fail.  Their sense of mission makes them 'transparent', says one European executive."  That China's is a long term view is undeniable in the context that they would forgo immediate profit by selling to the highest bid on the market in favor of repatriating newly exploited resources. 

Western economic domination of the world reached its zenith in the 20th century, when according to this weeks Economist articles "Britain owned 45% of the world's FDI (Foreign Direct Investment) in 1914; America's share peaked at 50% in 1967."  It is undeniable that, in competition and in concert, Western powers used their public institutions and militaries to further their economic-imperial goals, making the 20th century the bloodiest and most warlike known to history.  Entire continents were subjugated and looted in the pursuit of profit and 'civilisation',- including China, and large parts of Central and South America, Asia and Africa remain captive to the national and corporate institutions which have inherited that legacy.  While the West so often points out China's human rights abuses and excesses of power, the Chinese are always quick to point out the hypocrisy of such criticisms, as it did in its recent report on the US's human rights record published in the China-daily; a startling and credible list of very recent abuses.  If there are any worries among people in the West as to the waning of Western power in favor of Chinese influence, it should perhaps not be in lament of a lost golden age of economic and military triumph, but in fear that the emerging power in China, accountable to no one and secretive in their aims and motivations, will as it hijacks a global economic system which promotes greed and consolidation of power, look upon and treat the West in the same manner that the West has China and the rest of the world.  


Read the Economist reports and other related articles here:

The Economist:
http://www.economist.com/node/17463473
http://www.economist.com/node/17460954

Regarding Chinese policy and statements about US human rights abuses:
http://csis.org/files/media/csis/pubs/080129_murphydecoding.pdf
http://www.chinadaily.com.cn/china/2010-03/12/content_9582218.htm

Regarding takeovers:
http://news.bbc.co.uk/2/hi/7967604.stm
http://www.cbc.ca/money/story/2010/11/03/potash-ottawa-review.html 
http://www.thetrumpet.com/?q=6336.4792.0.0