Washington Report on Middle East Affairs, July 2009, pages 32-33
United Nations Report
Granted Impunity From International Law, Israel Continues to Build, Bomb and Kill
By Ian Williams
“JUSTICE DELAYED is justice denied,” notes the old maxim. It has now been five years since the International Court of Justice (ICJ) ruled on Israel’s building of its wall through the West Bank. While it certainly broke no new legal ground, the ICJ reaffirmed the binding decisions of the U.N. Security Council on the status of the occupied territories and the application to them of the internationally accepted Geneva Conventions. The construction of the wall on Israel’s side of the Green Line would have been legal, but building it on occupied land violates international law.
It is interesting to recall that many of the news outlets immediately passed on the Israeli take on the ruling—that the court’s opinion was “not binding.”
This is as preposterous now as it was in 2004. The world’s most definitive international juridical body states the international law on the case, based on flawless precedents and Security Council judgments—of course it is binding! The real problem is the lack of political will to enforce the law, which is an entirely separate issue.
When I drive, I wear a seat belt, not because I am scared of the minimal chances of a fine from the N.Y. State troopers, but because it is a sensible thing to do. When I see defenseless old ladies out on their own on quiet streets, I refrain from mugging them, not because I might get caught, but because mugging is wrong. What makes a civilized society, globally as well as nationally, is the acceptance by the overwhelming majority of people that the rule of law is something we apply to ourselves without the need for coercion. It is not the fear of arrest and punishment that keeps us law-abiding, but our own commitment to civilized society.
Israel, of course, has defense in depth, but of flimsy substance, against the Court’s conclusions—something along the lines of “the dog ate our attorneys’ brief.” It does not consider the ICJ ruling binding and, in any case, disagrees with its conclusions. Despite the clear decisions of the U.N. and opinions even of Israel’s closest ally that the territories are undisputedly occupied, Israel insists that they are not occupied, but “disputed.” It is as if Bernie Madoff denied that the law prevented him from making off with his clients’ money.
The real problem is the lack of political will to enforce the law.
Indeed, even before the ICJ ruling, in 1993 at Oslo, Israel pledged that “negotiations on the permanent status will lead to the implementation of Security Council Resolutions 242 (1967) and 338 (1973).” And, regardless of its reservations about everyone else’s interpretation of law, at its commitment to the Quartet “road map” Israel renewed its promise to not expand settlements and to close “illegal” outposts. In fact, the “outposts”—with their electricity, water, roads and security provided by government departments—are no more or less illegal than the settlements themselves. In any case, apart from a few token towings of trailers, the promises on outposts have been flouted, while each successive Israeli government continues to expand settlements and build new ones around Jerusalem.
Perversely, the response of the international community, or at least the Western component thereof, to Israel’s breach of promise and law has been to boycott the legally elected Palestinian Hamas government and to treat Israel as the victimized party even as it breaks repeated promises to allow goods transit into Gaza.
Another Opportunity for Impunity
That sense of impunity resurfaced for the Gaza invasion. Quite apart from any alleged war crimes against Palestinians, the U.N. inquiry team documented extensive violations of the United Nations status in Gaza. This should have come as no surprise, since it followed similar depredations against the U.N. post and staff at Qana in 1996. In each case, one is led to the conclusion that such crimes were the result of IDF personnel who a) were incompetent and unfit to handle weaponry, b) were acting vindictively, confident of their impunity, or c) were obeying the orders of superior officers.
Israel dutifully investigated itself, and gave itself a spotless record. Under intense Israeli—and, sadly, U.S.—pressure, the U.N. secretary-general decided to issue only an executive summary of his own organizations’ report, shorn of the substantial evidence backing it up, and declare an end to the matter.
In the media, the denuded U.N. report now must compete with a detailed, albeit tendentious, Israeli version. Guess which one will be cited in all future news reports? Under pressure from the press, Ban Ki-moon mentioned seeking compensation from Israel for damaged U.N. facilities. It would, if ever it came off, be a good precedent for the EU and U.S., whose aid money so often ends up as Israeli targets. But it would be surprising if Israel ever paid.
The real reason for Israeli impunity is not that it has better lawyers, but Washington’s blanket pre-emptive pardon for all Israeli actions, added to the anti-terrorist hysteria of many of its Western allies, which has ensured that its defiance of international law has had little or no consequences. In contrast, neither Russia nor China behaves as if it had a dog in the Middle Eastern fight.
Durban II
Some of that became apparent in the much-reviled Durban II conference in Geneva on racism. International conferences are often characterized by sanctimoniously tedious rhetoric, but considering that most international human rights organizations and bodies like the Congressional Black Caucus testified in Geneva, this one was important. Darfur, Rwanda and indeed Bosnia demonstrate that racism goes way beyond the amount of melanin in peoples’ skins. And of course, as a rule of thumb, any conference excoriated by Benny Netanyahu and John Bolton deserves a degree of sympathy.
President Mahmoud Ahmedinijad of Iran did wonders for the neocon and Israeli cause by making a grandstanding speech aimed more at his impending election contest than improving the lot of the Palestinians. He gave a handful of Western states the excuse they wanted to follow Israel’s boycott call. (The U.S. had already gone.) The same states seemed unconcerned by Israel’s actions in Gaza against the U.N. and Palestinians. To its credit, the UK remained, withstanding the tendentious fury of the Likud lobby, whose views on boycotts and embargoes in general are demonstrably, to use their favorite accusation, “one-sided.” Germany, the Netherlands and what could be called settler states—Australia, Canada, New Zealand and the United States—all joined the boycott.
Barack Obama’s administration practiced a form of diplomatic coitus interruptus, defying the calls for boycotts, engaging in face-to-face intercourse with other delegates—and then withdrawing at the last moment, giving cover to the sycophantic settler states to pull out as well. It was sadly reminiscent of Clinton-era prevarication, when the U.S. would dilute international conventions to homeopathic proportions and then refuse to accept the result.
Fortunately the delegations that stayed in Geneva defeated the attempt to introduce into international law the concept of blasphemous libel that the British government tried to get through Parliament a few years ago. Luckily no one called for a boycott of the House of Lords, whose wisdom threw out the bill, but the Organization of the Islamic Conference (OIC) was persuaded to withdraw its international equivalent. More worrisome, every reference to Israel was purged from the final text.
A rare voice of sanity was the Nicaraguan president of the General Assembly, Miguel d’Escoto Brockmann, whose statement was a sober and realistic assessment, more in sorrow than in anger, of how much principle had been bent to defend the conference from Israeli-inspired attacks. It is worth quoting, since its palpable truth and sincerity is such a rebuke to all those who pretended that criticism of Israel is ipso facto anti-Semitic.
While welcoming the final document, d’Escote Brockmann wrote, “he regrets that the focus on the victims that was overwhelming at the Durban Conference of 2001 has been diminished in the current text.
“He also regrets that the reference contained in the Durban 2001 text recognizing the human rights of the Palestinian people, including the right to an independent State, was also left out of the current text.
“The U.N., and in particular the General Assembly, having passed Resolution 181 more that 60 years ago, continue to bear specific obligations in regards to the creation of the State of Israel and the still unrealized State of Palestine.
“It is a fundamental principle of International Law, and in particular, International Human Rights Law, that once a right is recognized, it cannot be denied or rescinded. U.N. Member States are obligated to respect, protect and promote human rights.
“It is the responsibility of the international community as a whole, and in particular of the United Nations, to progressively move forward the agenda in the defense, promotion, codification and implementation of these rights.”
Whether over the wall, Gaza, settlements or the occupation, the international community in general, but the U.S. and the West in particular, has certainly failed that responsibility.
pIt is surely significant that the Israeli government was lobbying around the world for countries to stay away—not to instead attend and resist any language or concepts it considers untenable—and it continued its campaign even when the conference conclusions dropped any reference to Israel. That is understandable. The conclusions of any international conference or convention on racism will put Israel’s behavior in the dock whether it is singled out or not. As if to celebrate Durban II, in April Israeli railways sacked 40 Israeli citizens—for being Arab!
Human Rights Council Elections
Shortly after the Durban II conference, the U.S. more definitively broke with Bush practice and the Bolton era, and stood for election in the Human Rights Council. It is generally accepted that one of the major flaws in the Council is the failure to hold competitive elections. Indeed, when it was being redesigned, human rights advocates fought long and hard to avoid the regional groups nominating simply as many candidates as there were seats. But the local cabals keep reverting to old U.N. practices of rotating seats and offices in predetermined order. This year was worse than usual—and ironically made even worse by Washington’s decision to run for a seat. Some quiet but hard words with New Zealand led the latter to fall on its diplomatic sword and drop out, leaving the U.S. a clear run in the Western group of states.
In the East European group, there was a contested election, in which Hungary beat Azerbaijan—which, based on relative human rights records, was as it should be. Russia won election, which is a mixed blessing. Traditionally members try to keep the permanent five Security Council members like Russia or China on board even if their human rights records do not merit it, and both Moscow and Beijing were returned. One pragmatic justification is that since they are part of the process, it can be cited against them if necessary. Also winning uncontested for an Asian seat was Saudi Arabia, whose record leaves even more to be desired—but, as a close U.S. ally, is unlikely to get much criticism from Washington.
The Latin Americans, with overwhelmingly democratically elected governments with impressive recent human rights credentials, also closed ranks and returned Cuba unopposed.
The Council has been under heavy pro-Israel attack, and its membership has done its best to put truth to the accusations. Attacking Israel’s human rights record is totally justifiable—but not while giving a free pass to other oppressive regimes. The Obama administration has shown some tentative signs that it will not necessarily dissipate its moral capital by giving Israel a get out of jail free card. However, if it maintains previous U.S. double standards, it will then give free rein to all the assorted kleptocrats and tyrants to claim that human rights are a hypocritical Western concept.
Over to you, Mr. President.
Politics, books, history, foreign affairs, Caribbean, Middle East, Palestine, Israel, Iraq, China, Britain, United Nations, Oil For Food, Bush the Deserter, sex and rum and 1776 and tequilla and lots of fun things from someone who has more columns than the Parthenon.
Wednesday, July 29, 2009
Wednesday, July 15, 2009
Cheney/CIA: Blame to Spare and Blame to Share
It is a yardstick of the degree of paranoia in former Vice President Dick Cheney’s messiah complex that he ordered the CIA counter terrorism programme to be kept secret from Congress, let alone that he also authorised secret wire tapping in defiance of the law.
All the evidence suggests that if he had had the good sense to put them both in the USA PATRIOT Act, and who knows, the outing of Valerie Plame as well, they would have been passed into law on the nod from both sides of Congress whipped into authoritarian frenzy by the title Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
After all, few if any of the legislators who voted for this massive erosion of civil liberties, Democrats included, read any longer than the lengthy title. Russ Feingold was the sole Solon to vote against. While Democratic leaders are shouting loudly now, they were hoodwinked and stampeded like lemmings into the Aye lobby, goaded along by patriotism. Cheney of course was one of the herdsman for the lemmings, culpable on every level. Certainly the Congressional Intelligence committees would have been unlikely to blench at the idea of a program to assassinate Al-Qaeda leaders in a personal sort of way, when neither they nor their colleagues have shouted over-much about the use of drones and missiles with a proven record of “collateral” damage.
Quite apart from the moral aspects, the political fallout from the drone attacks suggests, as the French statesman said about one of Napoleon’s over-enthusiastic executions, they are worse than a crime, they are blunders.
John Nance Gardner, who served two terms as Vice President to FDR said the office was "not worth a bucket of warm piss." (The same spirit of non-boat rockery that led the lemmings to vote for the PATRIOT Act, transformed the “piss” to “spit”). But he was VP to Franklyn Delano Roosevelt. Cheney was VP to George W. Bush who proudly did not do “nuance” and who let him have a free rein, indeed a free reign, far beyond the very limited powers and prerogatives of the Vice Presidential Office. In retrospect, one can only be very relieved that nothing happened to Air Force One on 9-11.
Cheney’s behavior should certainly be the subject of a public investigation, and on the evidence available, there are prima facie arguments for prosecution. But the complicity of the Democratic leaders in this pattern of repressive actions probably inhibits them from following through. They certainly were prepared to blink, if not wink, when faced with evidence of water-boarding and other forms of torture.
They should follow the example of Senator Robert Byrd who lamented his vote for the PATRIOT act, which he described as “a case study in the perils of speed, herd instinct and lack of vigilance when it comes to legislating in times of crisis. The Congress was stampeded, and the values of freedom, justice and equality received a trampling in the headlong rush." Democratic leaders should ’fess up to their complicity: and go after Cheney with vigor.
And promise never again to let themselves be railroaded by spurious patriots, presidents, or vice presidents into surrendering their prerogatives as legislators and their ethics as politicians.
All the evidence suggests that if he had had the good sense to put them both in the USA PATRIOT Act, and who knows, the outing of Valerie Plame as well, they would have been passed into law on the nod from both sides of Congress whipped into authoritarian frenzy by the title Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
After all, few if any of the legislators who voted for this massive erosion of civil liberties, Democrats included, read any longer than the lengthy title. Russ Feingold was the sole Solon to vote against. While Democratic leaders are shouting loudly now, they were hoodwinked and stampeded like lemmings into the Aye lobby, goaded along by patriotism. Cheney of course was one of the herdsman for the lemmings, culpable on every level. Certainly the Congressional Intelligence committees would have been unlikely to blench at the idea of a program to assassinate Al-Qaeda leaders in a personal sort of way, when neither they nor their colleagues have shouted over-much about the use of drones and missiles with a proven record of “collateral” damage.
Quite apart from the moral aspects, the political fallout from the drone attacks suggests, as the French statesman said about one of Napoleon’s over-enthusiastic executions, they are worse than a crime, they are blunders.
John Nance Gardner, who served two terms as Vice President to FDR said the office was "not worth a bucket of warm piss." (The same spirit of non-boat rockery that led the lemmings to vote for the PATRIOT Act, transformed the “piss” to “spit”). But he was VP to Franklyn Delano Roosevelt. Cheney was VP to George W. Bush who proudly did not do “nuance” and who let him have a free rein, indeed a free reign, far beyond the very limited powers and prerogatives of the Vice Presidential Office. In retrospect, one can only be very relieved that nothing happened to Air Force One on 9-11.
Cheney’s behavior should certainly be the subject of a public investigation, and on the evidence available, there are prima facie arguments for prosecution. But the complicity of the Democratic leaders in this pattern of repressive actions probably inhibits them from following through. They certainly were prepared to blink, if not wink, when faced with evidence of water-boarding and other forms of torture.
They should follow the example of Senator Robert Byrd who lamented his vote for the PATRIOT act, which he described as “a case study in the perils of speed, herd instinct and lack of vigilance when it comes to legislating in times of crisis. The Congress was stampeded, and the values of freedom, justice and equality received a trampling in the headlong rush." Democratic leaders should ’fess up to their complicity: and go after Cheney with vigor.
And promise never again to let themselves be railroaded by spurious patriots, presidents, or vice presidents into surrendering their prerogatives as legislators and their ethics as politicians.
Wednesday, July 08, 2009
First Resort of the Weak or Last Resort of Scoundrels?
MY thoughts on the Nation State are in the current edition of the World Policy Journal.
Be warned. It's long! click to get it.
Be warned. It's long! click to get it.
Tuesday, July 07, 2009
Time for Independence
Tribune July 3
This weekend, Americans celebrate July 4th, the Declaration of Independence. In British schools we were generally taught that this was a “good thing,” a slight misunderstanding from which everything that came out was really for the best. It was shades of Kipling’s shared “White Man’s Burden,” FDR’s Four Freedoms, the alleged “Special Relationship” and all that.
It is now time for Britain to adopt the real spirit of 1776, and declare independence from Washington. As we all know, at times, “it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station... etc.etc.”
There could not be a better time to do so. The USA is relatively weaker, politically, militarily and economically than for seventy years. It has a President who is a much less vindictive and more tolerant leader than his predecessors, and who shows no signs of Anglophilia, or indeed Anglophobia -which is all to the good since his father was a Kenyan nationalist who fought British domination. He is unlikely to care if the UK goes its own way and relinquishes its informal position as the 51st state.
I would be the last to want to reverse the Treaty of Paris recognizing American independence, not least since I think Britain is a better place without the colonies, but when I was researching my book “Rum: a Social & Sociable History of the Real Spirit of 1776,” it led me to seriously question the motives and methods, if not the consequences, of the Founding Fathers’ deed. It was not tea, but rum, molasses and slaves that were the cause of the conflict. The tea that was thrown overboard was tax-free- and that is why the smuggler-merchants of Boston ditched it because it undercut their warehouses full of the more expensive tea they had smuggled in when it was taxed.
Freed of the French threat that had loomed over them for almost two centuries, the revolutionaries wanted to avoid paying any taxes towards that cost of defeating France. It was the taxes, not the representation that bothered them. They never actually asked for representation, and the motley crowd of rum-makers, smugglers and slave traders who were a major motivating force were every bit as assiduous in avoiding paying local colonial dues as they were in dodging British excise taxes.
Many of their other stated motivations were equally dubious. They objected to Catholic emancipation in Quebec, and wanted to invade and ethnically cleanse the Indian nations with whom Britain had signed treaties guaranteeing their lands. George Washington himself was a major speculator in these lands. In the South, the planters were worried by Lord’s Mansfield judgment, which declared that under English law slavery was illegal. The colonists made a connection with Parliament’s declaration that British law superseded colonial law, even though Parliament was only thinking about revenue collection. Virginia’s Patrick Henry may have resoundingly declared, “Give me liberty or give me death,” but he did not offer the choice to his slaves, any more than Washington, Jefferson and the rest of the crew. Hence Samuel Johnson’s perennially unanswered question “How is it that we hear the loudest yelps for liberty among the drivers of Negroes?”
This frequently overlooked heritage is at least as important as the “Rights of Man” in the history of American Independence. So unsurprisingly, Tom Paine was soon ostracized and the binary, with us or against us, mindset that still afflicts many Americans became apparent at that time with purges against Loyalists, the denial of due process to them, confiscation of their assets and demands for loyalty oaths for those who stayed, and exile to those who refused. The subsequent history of lynching, segregation, ballot rigging, gerrymandering and general intolerance of non-conformity is as American as apple-pie.
This is not intended to be anti-American, merely to soften the blow of the declaration of independence that Britain should be preparing freed from any sloppily inaccurate sentiment about shared values and culture. The New Labour obsession with the American model is in its own way as blinkered and one-sided as those who drool over Castro and Chavez and salute Ahmadinejad and Saddam Hussein without noticed the substantial spots on these “socialist” and anti-imperialist suns.
The Blair years led us to compromise our own values almost terminally by deferring to that pious coprophagic rubbish about our shared values and the virtues of American enterprise. It made a Labour government complicit in illegal wars, torture, kidnapping, spying on the United Nations Secretary General and helped flush Britain’s finances, economy and rapidly dwindling prestige in the world down the sewer of neo-conservatism. The British armed forces became sepoys for the new imperial power, while getting little or nothing in return.
Simply contrast the UK’s position with the real special relationship, where Israel gets immense subsidies and backing for making the US hated across the world, while Britain gets hated across the world for its slavish loyalty to Washington which in return screws it on almost every occasion where a serious conflict of interest occurs.
If Britain has a creative global role, it is in a European union within which Britain can negotiate as an equal and indeed, since as Labour used to know, unity is strength, stand together on an equal footing to maintain common interests against, or even with, China, Russia, Japan and others on the world stage. Time to cast off those chains.
This weekend, Americans celebrate July 4th, the Declaration of Independence. In British schools we were generally taught that this was a “good thing,” a slight misunderstanding from which everything that came out was really for the best. It was shades of Kipling’s shared “White Man’s Burden,” FDR’s Four Freedoms, the alleged “Special Relationship” and all that.
It is now time for Britain to adopt the real spirit of 1776, and declare independence from Washington. As we all know, at times, “it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station... etc.etc.”
There could not be a better time to do so. The USA is relatively weaker, politically, militarily and economically than for seventy years. It has a President who is a much less vindictive and more tolerant leader than his predecessors, and who shows no signs of Anglophilia, or indeed Anglophobia -which is all to the good since his father was a Kenyan nationalist who fought British domination. He is unlikely to care if the UK goes its own way and relinquishes its informal position as the 51st state.
I would be the last to want to reverse the Treaty of Paris recognizing American independence, not least since I think Britain is a better place without the colonies, but when I was researching my book “Rum: a Social & Sociable History of the Real Spirit of 1776,” it led me to seriously question the motives and methods, if not the consequences, of the Founding Fathers’ deed. It was not tea, but rum, molasses and slaves that were the cause of the conflict. The tea that was thrown overboard was tax-free- and that is why the smuggler-merchants of Boston ditched it because it undercut their warehouses full of the more expensive tea they had smuggled in when it was taxed.
Freed of the French threat that had loomed over them for almost two centuries, the revolutionaries wanted to avoid paying any taxes towards that cost of defeating France. It was the taxes, not the representation that bothered them. They never actually asked for representation, and the motley crowd of rum-makers, smugglers and slave traders who were a major motivating force were every bit as assiduous in avoiding paying local colonial dues as they were in dodging British excise taxes.
Many of their other stated motivations were equally dubious. They objected to Catholic emancipation in Quebec, and wanted to invade and ethnically cleanse the Indian nations with whom Britain had signed treaties guaranteeing their lands. George Washington himself was a major speculator in these lands. In the South, the planters were worried by Lord’s Mansfield judgment, which declared that under English law slavery was illegal. The colonists made a connection with Parliament’s declaration that British law superseded colonial law, even though Parliament was only thinking about revenue collection. Virginia’s Patrick Henry may have resoundingly declared, “Give me liberty or give me death,” but he did not offer the choice to his slaves, any more than Washington, Jefferson and the rest of the crew. Hence Samuel Johnson’s perennially unanswered question “How is it that we hear the loudest yelps for liberty among the drivers of Negroes?”
This frequently overlooked heritage is at least as important as the “Rights of Man” in the history of American Independence. So unsurprisingly, Tom Paine was soon ostracized and the binary, with us or against us, mindset that still afflicts many Americans became apparent at that time with purges against Loyalists, the denial of due process to them, confiscation of their assets and demands for loyalty oaths for those who stayed, and exile to those who refused. The subsequent history of lynching, segregation, ballot rigging, gerrymandering and general intolerance of non-conformity is as American as apple-pie.
This is not intended to be anti-American, merely to soften the blow of the declaration of independence that Britain should be preparing freed from any sloppily inaccurate sentiment about shared values and culture. The New Labour obsession with the American model is in its own way as blinkered and one-sided as those who drool over Castro and Chavez and salute Ahmadinejad and Saddam Hussein without noticed the substantial spots on these “socialist” and anti-imperialist suns.
The Blair years led us to compromise our own values almost terminally by deferring to that pious coprophagic rubbish about our shared values and the virtues of American enterprise. It made a Labour government complicit in illegal wars, torture, kidnapping, spying on the United Nations Secretary General and helped flush Britain’s finances, economy and rapidly dwindling prestige in the world down the sewer of neo-conservatism. The British armed forces became sepoys for the new imperial power, while getting little or nothing in return.
Simply contrast the UK’s position with the real special relationship, where Israel gets immense subsidies and backing for making the US hated across the world, while Britain gets hated across the world for its slavish loyalty to Washington which in return screws it on almost every occasion where a serious conflict of interest occurs.
If Britain has a creative global role, it is in a European union within which Britain can negotiate as an equal and indeed, since as Labour used to know, unity is strength, stand together on an equal footing to maintain common interests against, or even with, China, Russia, Japan and others on the world stage. Time to cast off those chains.
Thursday, July 02, 2009
I see the future in the Stans
Uzbek dreams
Ian Williams visits one of the Stans
Speculator, IR magazine June 2009
No credit, no crunch; it might seem a logical equation. In Uzbekistan, however, the crunch came without the credit, and globalization is showing its all-too-visible hand. Most Uzbeks do not trust banks, and commerce involves toting around sackfuls of currency. A safe haven is cash under a mattress, and for most people credit involves families and friends or 50 percent interest rates.
The economy grinds along a little above subsistence. The country’s property boom is collapsing. Uzbeks were investing remittances from abroad in apartment buildings as a perceived safe haven. But when the global crisis caused emigrant Uzbeks to be laid off, the bubble burst. Ironically, Uzbeks are now hoarding dollars, which is not my idea of a safe haven but – as in the US – cash is king, and the greenback is its most liquid form.
In the last days of the Soviet Union, President Gorbachev sought advice from the same western economists who designed the global financial system now collapsing around our ears. They warned him that the overhang of massive unspent Soviet savings would cause inflation. So he combined western counsel with Soviet-style diktat and simply confiscated the savings balances, which is one reason why, despite his popularity in the West, Russians would not vote for him.
The bereft Uzbek citizens got the inflation anyway: once with the Soviet ruble, and again with the independent Uzbek som, so the value of their pensions followed their savings around the U-bend. In the meantime, Russian apparatchiks looted public assets and gave them to party bosses and gangsters who ‘bought’ them with loans from the Treasury in rapidly devaluing currency. Western advisers did not call it a bailout but – in now-familiar terms – assured the Kremlin it was a necessary expenditure of social capital.
In Uzbekistan, the dollar is now worth 1,500 som. Street value is 1,800 som, which is another reason why few people want to deal with banks. The biggest denomination note is 1,000 som, so buying an airline ticket, for example, would require a baggage trolley full of cash.
Today the old oligarchs of New York and Washington, like the new Russian oligarchs, are shamelessly looting the public purse while assuring us that ‘there is no alternative’. The dollar is like Tinker Bell, kept aloft only by the belief that we can defy the laws of economics and gravity. Hoards of cash sit around unused because no one trusts investments that could disappear overnight between the machinations of governments and banking principals.
As an advanced technological economy, there is no need for the US to drive the printing presses to the brink of breakdown. A few clicks of a banker’s keyboard are all it takes to conjure trillions of dollars out of thin air. Even the Chinese have woken from their complacency and are beginning to worry about their T-bonds.
Which leads to central Asian speculation. I’ve seen the future – and it’s not pretty. Will we soon sleep unsoundly on mattresses lumpy with paper currency?
Ian Williams visits one of the Stans
Speculator, IR magazine June 2009
No credit, no crunch; it might seem a logical equation. In Uzbekistan, however, the crunch came without the credit, and globalization is showing its all-too-visible hand. Most Uzbeks do not trust banks, and commerce involves toting around sackfuls of currency. A safe haven is cash under a mattress, and for most people credit involves families and friends or 50 percent interest rates.
The economy grinds along a little above subsistence. The country’s property boom is collapsing. Uzbeks were investing remittances from abroad in apartment buildings as a perceived safe haven. But when the global crisis caused emigrant Uzbeks to be laid off, the bubble burst. Ironically, Uzbeks are now hoarding dollars, which is not my idea of a safe haven but – as in the US – cash is king, and the greenback is its most liquid form.
In the last days of the Soviet Union, President Gorbachev sought advice from the same western economists who designed the global financial system now collapsing around our ears. They warned him that the overhang of massive unspent Soviet savings would cause inflation. So he combined western counsel with Soviet-style diktat and simply confiscated the savings balances, which is one reason why, despite his popularity in the West, Russians would not vote for him.
The bereft Uzbek citizens got the inflation anyway: once with the Soviet ruble, and again with the independent Uzbek som, so the value of their pensions followed their savings around the U-bend. In the meantime, Russian apparatchiks looted public assets and gave them to party bosses and gangsters who ‘bought’ them with loans from the Treasury in rapidly devaluing currency. Western advisers did not call it a bailout but – in now-familiar terms – assured the Kremlin it was a necessary expenditure of social capital.
In Uzbekistan, the dollar is now worth 1,500 som. Street value is 1,800 som, which is another reason why few people want to deal with banks. The biggest denomination note is 1,000 som, so buying an airline ticket, for example, would require a baggage trolley full of cash.
Today the old oligarchs of New York and Washington, like the new Russian oligarchs, are shamelessly looting the public purse while assuring us that ‘there is no alternative’. The dollar is like Tinker Bell, kept aloft only by the belief that we can defy the laws of economics and gravity. Hoards of cash sit around unused because no one trusts investments that could disappear overnight between the machinations of governments and banking principals.
As an advanced technological economy, there is no need for the US to drive the printing presses to the brink of breakdown. A few clicks of a banker’s keyboard are all it takes to conjure trillions of dollars out of thin air. Even the Chinese have woken from their complacency and are beginning to worry about their T-bonds.
Which leads to central Asian speculation. I’ve seen the future – and it’s not pretty. Will we soon sleep unsoundly on mattresses lumpy with paper currency?
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