By STEVEN R. WEISMAN
Published: January 17, 2008
WASHINGTON — Six months after taking over as president of the World Bank, Robert B. Zoellick faced new turmoil on Wednesday over a campaign against corruption in bank lending, with the resignation of the chief of the bank’s antifraud unit.
Bank officials said that despite Mr. Zoellick’s efforts to heal the wounds left from the stormy tenure of his predecessor, Paul D. Wolfowitz, the resignation of Suzanne Rich Folsom, Mr. Wolfowitz’s top deputy in his anticorruption campaign, was stirring new bitterness. They said that several of Ms. Folsom’s aides were also resigning.
Mr. Wolfowitz, who had made the battle against corruption a priority, was ousted as bank president last year after the disclosure that he had arranged a pay increase and promotion for his companion, a bank employee, in 2005.
“There is just a lot of bad blood,” said a bank official, speaking on the condition of anonymity in order to discuss internal matters. He added that many in the bank remained “allergic” to efforts to prosecute cases of fraud. Another official said that ties between Ms. Folsom and the bank had been on a “downward spiral” in recent months.
Associates of Ms. Folsom said she had decided to leave her job because she had accomplished the goal of making the battle against corruption a major priority, but realized that opposition to her work by others had made it difficult for her to go on.
News of her departure stirred mixed reactions within the bank, where many welcomed her decision, saying she had been selective in her prosecutions or overly aggressive, while others said she had done much to combat complacency.
Relations between Mr. Zoellick and Ms. Folsom, which were positive in the beginning, were described by many inside the bank as increasingly frayed in recent weeks, especially after editorials in The Wall Street Journal cited internal investigations and suggested that Ms. Folsom was being undercut and driven out.
A spokesman for Mr. Zoellick, Marwan Muasher, a senior vice president for external affairs, said that Ms. Folsom had not been pushed out and that Mr. Zoellick had been entirely supportive.
“He did not force her out in any way, shape or form,” Mr. Muasher said of Mr. Zoellick, adding that when Ms. Folsom told Mr. Zoellick last year that she wanted to leave for a job in private business, he offered her a different job at the bank and then asked her to stay until the bank completed its investigation of corruption in India.
The report on India was released Friday, and it found extensive corruption in several Indian lending programs. The report was filled with pictures of shoddy construction work at hospitals, clinics and other facilities that had been certified as adequate. It also contained pledges by India to work with the bank on improving its procedures, but some officials in the bank said these were similar to ones made and not kept in the past.
Ms. Folsom’s resignation was announced Wednesday morning in a posting in the bank’s internal Web site, without a statement praising her from Mr. Zoellick.
Mr. Zoellick’s office initially said he would make no comment about her departure so as not to interject himself into the matter, but later in the afternoon an aide issued a statement from him saying: “Suzanne has done a tremendous amount to push the anticorruption agenda forward, and I’m grateful for her service.”
Mr. Zoellick’s aides say that, like Mr. Wolfowitz, he believes corruption is a high priority but that he intends to pursue the issue in a less divisive or confrontational way than had been the case in the past.
Corruption is widely described as a problem in the bank’s $30 billion annual lending programs for poor countries, but the extent is in dispute. Last September, an outside panel led by Paul A. Volcker, the former Federal Reserve chairman, found weak management, distrust and internal resistance to combating fraud at the bank.
Mr. Zoellick, according to his aides, has sought to carry out broad changes in the way Ms. Folsom’s unit interacts with other bank officials, and to install procedures on competitive bidding, inspections and disclosure that would prevent corruption instead of just prosecuting cases after the fact.
“It’s all very well to talk about corruption and to have these reports,” said Ngozi Okonjo-Iweala, a managing director at the bank and former finance minister of Nigeria, who negotiated the India agreement. “Bob Zoellick is geared toward implementation, and how we sustain this and embed it in a country.”
Ms. Okonjo-Iweala negotiated the arrangement with India to set up ways to rid programs of fraud. By contrast, Mr. Wolfowitz abruptly suspended aid to India after accusations of fraud in 2005, and that suspension angered board members and helped pave the way for his downfall, many bank officials say.
Mr. Volcker praised Ms. Folsom and the integrity unit she headed last year, when he issued his report, but he also recommended changes in the way the unit functioned.
Several bank officials said, however, that Mr. Volcker privately recommended to Ms. Folsom that since her work had been largely vindicated, she should consider resigning as a way of easing the toxic atmosphere left behind by Mr. Wolfowitz and by the fights between her department and others at the bank.
Instead, Ms. Folsom stayed on, though associates say she had been pursuing possibilities of working outside the bank. Ms. Folsom declined to comment.
Mr. Zoellick appointed an acting director to run the integrity unit, and his office said he would conduct a thorough search for a successor. One reason Ms. Folsom incurred the anger of bank staff was that she had served as an adviser to Mr. Wolfowitz before he appointed her over others recommended by a search committee.
Ms. Folsom, a onetime activist in Republican Party politics, had been a partner in a law firm specializing in ethics issues. Defenders and critics said that she had considerable difficulties overcoming the perception in the bank, where employees tend to be liberal in their politics, that she was part of a coterie of conservative advisers around Mr. Wolfowitz.
Bankers go to Baghdad
By Patrick Bond
The World Bank and International Monetary Fund's annual meeting in Washington earlier this month witnessed the members' rejection of two big ideas - debt cancellation and institutional democratisation. No surprise. There wasn't much pressure from either Third World finance ministers or the US branch of the global justice movement (apparently in hibernation until 3 November).
However, important financial developments are now unfolding, reflective of Washington's geopolitical imperatives in Iraq. Bank and IMF activity there was relegitimised at the annual meeting, but in a contradictory and untenable manner.
A recent IMF report on Iraq claimed that 'macroeconomic stability' has been achieved and the economy will have grown 52% in 2004. This was in part justification for the IMF's recent $436 million loan to the Washington-imposed Baghdad regime. The report also revealed that the IMF has been coordinating macroeconomic technical assistance, drawing together a team from the Bank, US Treasury, US AID, the British Department for International Development and the Bank of England.
Another IMF justification was that after the invasion, 'A number of important policy reforms then began to be implemented to facilitate progress toward a more market-oriented economy. These reforms included the completion of a national currency exchange, the approval of new central bank and commercial bank laws, the liberalization of interest rates, approval of a foreign direct investment law, the establishment of the Trade Bank of Iraq, the passage of the Financial Management Law and a new tax law, and the simplification of the trade regime.'
These measures, introduced by viceroy Paul Bremer, not only represent legalized looting, but also appear totally ineffectual for the attraction of foreign investment, as is brilliantly documented in Naomi Klein's new Harpers magazine article 'Baghdad Year Zero: Pillaging Iraq in pursuit of a neocon utopia' (http://www.harpers.org/BaghdadYearZero.html).
Also last week, speaking at the UN Economic Commission on Africa in Addis Ababa, Bank president James Wolfensohn predicted his institution would push more than $400 million to the US-imposed Baghdad regime by the end of 2004: 'Obviously all of this is to some extent held up by the situation on the ground because it is not easy to operate. So far as the lending from the Bank is concerned, which will be $5 billion, the Iraqis are looking at grants first because if they can get grants, it is money for nothing and does not increase the debt burden, which is already very high at about $120 billion.'
As an aside, that vast debt burden was being unevenly reduced by the efforts of US special envoy James Baker - until, that is, Klein blew the whistle through her investigative report in Britain's Guardian newspaper, also last week. Baker's Carlyle Group was then forced to withdraw from a consortium which sneakily offered to help Kuwait reclaim $27 billion from the Iraqi people at the same time Baker was trying to get French, German and Russian debt relief for Iraq. A more blatant scam could hardly be found, outside a Paul Erdman novel.
Does the Bank have anyone as unethical and hardnosed as a Baker, Richard Armitage or John Negroponte to guide the vast sums of new loans to their primary destination: US contractor profits? And will a future democratic government in Baghdad have the guts to formally declare today's Bank and IMF loans 'odious' - just as odious as Saddam's debts - and hence not liable for repayment?
(Notwithstanding South African president Thabo Mbeki's stance against reparations for odious apartheid-era lending, the country's Jubilee campaigners continue making the same plea, in the ongoing lawsuits against US and European bankers.)
Hypocrisy on debt relief - Iraq gets waves, Africa only trickles - worries not only excellent groups like Jubilee South and the 50 Years is Enough network, who insist on 100% cancellation. In early October even Malawi's neoliberal finance minister Goodal Gondwe complained of double standards during the IMF/Bank meetings: 'What I am afraid of is that putting Nigeria together with Iraq we may emphasize for sentimental reasons that are currently in the air politically, that talking about Iraq could be at the expense of Nigeria.'
The man the Bank chose for loan-pushing in a highly risky Baghdad environment is Christiaan Poortman, vice president for the Middle East and North Africa region, and a former Bank country director in the Balkans. I came across Poortman in Zimbabwe, and am compelled to pass along some warnings to Iraqi readers of ZNet about his work there as Resident Representative during the early 1990s, especially if the Bank also takes on more 'donor coordination' functions.
Poortman, after all, already runs the multi-donor Iraq Trust Fund and disbursed $60 million in grants for school building and repair last week. He pledged $150 million in resources for water and sanitation, and, according to the Bank press office, 'also said he wants to turn some of the money pledged into financing for electrical and water projects that will be left unfunded because of the transfer of funds earmarked by the US for reconstruction to security spending.'
A year ago, the Bank and United Nations estimated that $35.8 billion would be required to meet Iraqi needs. Typical advice in their 'Joint Iraq Needs Assessment' was 'to encourage private sector participation in the State Owned Enterpises (SOEs) along with separating the ownership responsibilities of government from its policy and operating responsibilities. SOEs that are internationally viable will eventually be able to shoulder higher input prices as trade liberalization frees controls on their output prices. Other
SOEs will ultimately face adjustment pressures from the hardened budget constraints.'
Zimbabweans will recognise this sort of language. The country's health minister during the 1990s, Dr Timothy Stamps, reported that spending on health was down by 37% per person from 1990-93, because Poortman considered health a social expenditure which 'had to be cut'. The government of Robert Mugabe had become 'so miserly that we are killing ourselves because we want to save a few cents,' Stamps admitted.
This was just one of several problems Poortman faced winning hearts and minds in Harare. When the IMF and World Bank insisted on tighter monetary policy in 1991, interest rates on certain government securities rose from 27% to 44% in a single day, which shattered business confidence and caused stock market and property sector crashes.
Hence even conservatives grew fed up with the ineffectual 'economic structural adjustment policy' (termed ESAP) imposed from Washington. Financial Times correspondent Tony Hawkins - also head of the local university's business school - condemned Poortman's dubious macroeconomic analysis in 1993: 'Every year, the World Bank officials dutifully prepare invariably over-optimistic assessments designed to show the worst is past and that the client state, whose economy is under the microscope, is on the brink of sustained recovery.'
Hawkins renewed his criticism in 1995: 'The World Bank's conduct in the Zimbabwean case raises a very serious issue. If the Bank had done its job properly, then Zimbabwe's budget and public sector crises need not have reached the dimensions that they have since. The debt burden would be less; the new taxes to be imposed would be less severe and the public spending cuts less drastic... The Bank has needlessly delivered 11 million Zimbabweans into the hands of harsher austerity than should have been necessary'.
The editor of a local business paper, Iden Wetherell, agreed: 'Everybody repeats the official mythology that the recent drought has slightly derailed ESAP, while insisting (the wish being father to the thought) that economic reform is otherwise on course. The most notable representative of this starry-eyed approach is the World Bank's chief in Harare, Mr Christiaan Poortman. His emollient statements over the past 18 months reflect the devotion of a faith unmoved by facts.'
Myopically, in a review of the Bank's impact during Poortman's stint, an internal reported boasted that Poortman had 'fostered an awareness of the need for a broad-based economic policy reform'. Indeed, 'informal work and advice provided by the Resident Mission was instrumental' in shaping ESAP even prior to Poortman's arrival.
The following promises were extracted from Mugabe by the Bank and IMF in the 1991 design of ESAP: by the end of 1995 there would be a 25% cut in the civil service, and the demise of all labour restrictions, price controls, exchange controls, interest rate controls, investment regulations, import restrictions, and government subsidies. Most were accomplished. By 1995 'rapid privatisation of the key parastatals' providing telecommunications, electricity, water and transportation had become one of the Bank's central demands.
The Bank's 1995 Project Completion Report for ESAP gave the best possible final grade for the first stage of the utterly failed programme: 'highly satisfactory.' The Bank acknowledged playing 'a key role in the dissemination of the programme and in building support amongst the wider donor community.' Hence Bank staff also rated their own performance as 'highly satisfactory' (again, top marks) for identification and appraisal, and 'satisfactory' for preparation assistance and supervision.
In the book Zimbabwe's Plunge (Merlin Press, 2003), my coauthor Simba Manyanya and I looked back a decade on Poortman's role, and argued that ESAP fatally weakened the state's developmental capacities. Social desperation worsened - Poortman's reign included the first of several major 'IMF Riots' in Harare - and ESAP was, in any case, unsuccessful in stimulating investment and capital accumulation.
All indicators of economic activity and social progress worsened during Poortman's stay. Zimbabwe's exemplary social policy during the 1980s - reducing infant mortality from 86 to 49 per 1,000 live births, raising the immunisation rate from 25% to 80% and life expectancy from 56 to 62 years, doubling primary school enrollment, etc - witnessed ominous reversals.
In turn, Poortman and his colleagues created the conditions under which an official opposition based on the urban poor and workers emerged finally in 1999, leading Mugabe to zig-zag into left-rhetorical authoritarianism in early 2000, as he desperately sought to retain power and patronage within a crumbling economy.
Simba was chief economist in Zimbabwe's finance ministry but by the end of the 1990s became so fed up with Mugabe's blunders and awful 'advice' imposed from Washington that he quit to work for Morgan Tsvangirai's Zimbabwe Congress of Trade Union Unions. (Framed by Mugabe allies in early 2002, Tsvangirai was acquitted on a trumped up treason charge last week. But his Movement for Democratic Change appears still intent on boycotting the March 2005 parliamentary vote due to Zimbabwe's Florida-style electoral conditions.)
What was the popular reaction to Poortman and ESAP? Sidney Malunga, a progressive ruling-party MP until his suspicious 1994 death in a car accident, was brutally honest: 'To the masses of Zimbabwe, the poor people of Zimbabwe, the sum total of ESAP can best be described as a loathsome economic monster which is ravaging and destroying decent lives by incapacitating the poor and further condemning them to abject poverty.'
According to a survey of 200 poor people by the Africa Community Publishing and Development Trust at the end of Poortman's Harare gig, 'ESAP was listed as a cause of poverty even more often than drought and the shortage of land. The combination of retrenchment on a large scale, with a sharp increase in the price of basic goods and having to pay for health and education, has driven many families into poverty.'
'Deep down,' Zimbabwe's great novelist Chengerai Hove divulged in 1994, 'I harbour fear, a persistent fear which, like an ominous shadow, refused to abandon me. There is the smell of the Structural Adjustment Programme in the wind, with its flags swamping those of political independence. "Sure Advice to Poverty" local pub humorists have nicknamed this World Bank-IMF economic beverage. It tastes sour from the beginning, a cartoonist once wrote as he watched friends and foes losing jobs in Harare's industries under the banner of die today so as to live tomorrow.'
It's a fear that the wretched people of Iraq can now add to so many others.
Read more!
Thursday, January 17, 2008
Head of World Bank Fraud Unit Resigns
Saturday, November 24, 2007
Green Capitalism, Climate Change, GMOs
Against all historical evidence, the EU is claiming that rapid liberalization will "help Africa develop." In a new draft agreement on Economic Partnership Agreements with the East African Community (Kenya, Uganda, Tanzania, Burundi and Rwanda), Brussels is asking the EAC to remove tariffs on 80% of products within 15 years. Kenyan farmers have attempted to file a lawsuit in Kenyan courts to prevent the government from signing the agreement. Facing a Threat to Farming and Food Supply By Rick Weiss Monday, November 19, 2007 Worse, some African countries, including Senegal and war-torn Sudan, are on track to suffer what amounts to complete agricultural collapse, with productivity declines of more than 50 percent. Even the emerging agricultural powerhouse of Latin America is poised to suffer reductions of 20 percent or more, which could return thriving exporters such as Brazil to the subsistence-oriented nations they were a few decades ago. And those estimates do not count the effects of new plant pests and diseases, which are widely expected to come with climate change and could cancel out the positive "fertilizing" effects that higher carbon dioxide levels may offer some plants. Scenarios like these--and the recognition that even less-affected countries such as the United States will experience significant regional shifts in growing seasons, forcing new and sometimes disruptive changes in crop choices--are providing the impetus for a new "green revolution." It is aimed not simply at boosting production, as the first revolution did with fertilizers, but at creating crops that can handle the heat, suck up the salt, not desiccate in a drought and even grow swimmingly while submerged. The work involves conventional breeding of new varieties as well as genetic engineering to transfer specific traits from more resilient species. As part of those efforts, scientists are also busily preserving seeds from thousands of varieties of the 150 crops that make upmost of the world's agricultural diversity, as well as wild relatives of those crops that may harbor useful but still unidentified genes."For agriculture to adapt, crops must adapt," said Ren Wang, director of the Consultative Group on International Agricultural Research, a network of agricultural research centers. "It's important that we have a wide pool of genetic diversity from which to develop crops with these unique traits."At the same time, scientists are finding that agriculture and related land uses, which today account for about one-third of all greenhouse gases emitted by human activities, can be conducted in much more climate-friendly ways. But time is of the essence if a worldwide crisis in food security is to be avoided, said William R. Cline, a senior fellow at the Center for Global Development and the Peterson Institute for International Economics, Washington-based nonpartisan economic think tanks."You'll have a tripling of world food demand by 2085 because of higher population and bigger economies, and I would not be surprised to see as much as one-third of today's agricultural land devoted to plants for ethanol," Cline said. "So it's going to be a tight race between food supply and demand."The work of developing adaptive plants has begun to pay off. Researchers have discovered ancient varieties of Persian grasses, for example, that have an incredible tolerance for salt water. The scientists are breeding the grasses with commercial varieties of wheat and have found they are growing well in Australia's increasingly salty soils. Other research is building on the recent discovery of a gene that helps plants survive prolonged periods underwater. Even rice, which grows in wet paddies, will die if it is fully submerged for more than three or four days, said Robert Zeigler, director general of the International Rice Research Institute in the Philippines. But recent tests on farms in Bangladesh show that a new line of rice containing the flood-resistance gene can live underwater for two weeks. That's going to be important, Zeigler said, because 70 percent of the world's poor live in Asia -- most of them in south Asia -- where rice is the staple. Yet 50 million acres of that region are already subject to seasonal flooding that can temporarily submerge plants under 10 to 12 feet of water. And the problem is predicted to worsen as climate change brings more intense rainfall there."Crops grow in weather, not in climate," Zeigler said, meaning they must be able to survive not only the anticipated average rises in temperature but also the day-to-day extremes that come with climate change. Corn is another staple that is getting gussied up to party with the hardy--in this case in preparation for dry spells, which are predicted to increase in Latin America and other corn-growing regions, with a potential 20 percent drop in production over the next 25 years. Recent tests in South Africa showed that drought-resistant maize plants, created by breeding, produced 30 percent to 50 percent more corn than traditional varieties under arid conditions. But the real test, scientists say, will be to splice in potent drought-resistance genes from plants such as sorghum and millet, which are famously productive even in parched, sub-Saharan Africa. That assumes consumers and regulators will accept such engineered crops, which have been shunned in many countries because of economic and environmental concerns. To the extent that plants cannot adapt to change, farmers will have to. In Uganda, where coffee is an important cash crop but where temperature increases are expected to devastate the plants, researchers are hoping that by planting shade trees, growers can preserve the industry while perhaps even increasing biodiversity. In other parts of Africa, farmers are being taught to add fruit trees to their subsistence farms. The trees can survive droughts and waterlogging better than crops planted annually, and so can serve as an economic bridge across hard times. Farmers in developed countries must also prepare, experts say. A recent study by researchers at the International Maize and Wheat Improvement Center in Mexico concluded that wheat growers in North America will have to give up some of their southernmost fields in the next few decades. But they will be able to farm a full 10 degrees north of their current limit, which extends from Ketchikan, Alaska, to Cape Harrison, Labrador. That means amber waves of grain will be growing less than 2 degrees south of the Arctic Circle, and Siberia will become a major notch in the wheat belt. By changing their practices, and not just their crops, farmers can also temper the buildup of greenhouse gases. New technologies that measure soil nutrient levels are allowing farmers to add only as much fertilizer as is really needed--important because the excess nitrogen in those chemicals gets converted in the soil into nitrous oxide, which has 300 times the greenhouse activity of carbon dioxide. Studies also show that by plowing or tilling less frequently -- planting seeds in the stubble of a previous crop, for example --farmers can significantly reduce evaporation in dry areas and also cut the amount of carbon dioxide released from the soil (and from the exhaust of their tractors, if they have them). Crops grown this way also trap carbon more effectively, becoming part of the solution instead of adding to the problem. For the truly pessimistic, there is always the "doomsday vault," a seed bank being constructed in a Norwegian mountainside that nations around the world are stocking with every kind of seed imaginable. After all, you never know what kind of plant trait is going to save humanity if the climate makes an unexpected turn, said Cary Fowler, executive director of the Global Crop Diversity Trust, which is leading the effort and who has boasted that the vault will be protected in part by the region's polar bears.That is assuming, of course, that rising temperatures or the newly arrived wheat farmers will not have driven them away.
The greed and cynicism of the EU, which is matched by the US in its dealings with Latin America, Asia and Africa, is all the more striking in the context of climate change. Right now, a bevy of forecasts from NGOs and governments alike are predicting agricultural declines in the southern hemiphere due to climate change; hundreds of millions of farmers could be driven off the land in the next half-century.
But the loudest European and North American voices on the subject of agriculture in the South are the agribusiness lobbies clamoring for easy access to overseas markets, followed by think tanks and research foundations arguing for a "second Green Revolution." The latter claim that genetically engineered drought- and salt-resistant crops will be the answer to climate-induced agricultural declines. But one has to ask whether the forces driving this research are altruism and contrition over past exploitation, or a coalition of "green capitalists," such as those pushing biofuels like jatropha.
The following article, published earlier this week in the Washington Post, makes truly chilling reading on several levels: the genocidal scenarios bandied about like movie plots; the GMO schemes discussed without mention of possible ecosystemic side effects.
Meanwhile, new social science research suggests a persistent historical correlation between climate, war and population declines. Building on the work of University of Hong Kong geographer David Zhang, Georgia Tech political scientist Peter Brecke and a team of researchers compared a database of 4,500 wars between 1400 and 1900 with climate change records assembled by paleo-climatologists. They found a persistent pattern of turbulence and warfare during colder periods, followed by migration and population declines, and relative calm in warmer periods. But the researchers argue that the effect of climate change could be analogous to temperature declines in the past, as extreme heat, like extreme cold, will disrupt agriculture and increasing migration pressures. I will reserve judgment until I get a chance to read the paper. But their conclusions are interesting.
Read more!
Climate change may be global in its sweep, but not all of the globe's citizens will share equally in its woes. And nowhere is that truth more evident, or more worrisome, than in its projected effects on agriculture. Several recent analyses have concluded that the higher temperatures expected in coming years--along with salt seepage into groundwater as sea levels rise and anticipated increases in flooding and droughts-- will disproportionately affect agriculture in the planet's lower latitudes, where most of the world's poor live. India, on track to be the world's most populous country, could see a 40 percent decline in agricultural productivity by the 2080s as record heat waves bake its wheat-growing region, placing hundreds of millions of people at the brink of chronic hunger. Africa--where four out of five people make their liviing directly from the land--could see agricultural downturns of 30 percent, forcing farmers to abandon traditional crops in favor of more heat-resistant and flood-tolerant ones such as rice.
Wednesday, October 31, 2007
What Guides U.S. Latin America Policy
Last month, Defense Secretary Robert Gates embarked on a five-nation tour of Latin America. His stops included five Bush administration allies with poor human rights records: El Salvador, Colombia, Suriname, Peru and Chile. Gates, unsurprisingly, used his scheduled press conferences to take a few jabs at Hugo Chavez and Fidel Castro. From Agence-France-Press:
At a joint news conference with Salvadoran President Antonio Saca, Gates called El Salvador "one of the most faithful coalition partners" and praised its "important role in humanitarian and peacekeeping operations worldwide." Gates then warned that Venezuelan President Hugo Chavez's leftist government was a threat mainly "to the freedom and economic prosperity of the people of Venezuela." Chavez "has been very generous in offering(Venezuela's) resources to people around the world, when perhaps these resources could be better used to alleviate some of the economic problems facing the people of Venezuela," Gates said. Analysts said the goal of Gates's Latin American trip is both to bolster US allies and to counter Chavez's influence in Latin America.
Gates also criticized Venezuela’s arms purchases, but neglected to mention that Chile—his third stop on the trip, where he met with military officials—is undertaking the largest military build-up in Latin America at the moment. Chile has spent $2.8 billion on fighter jets, submarines, tanks and other weaponry since 2000. Although Chile has made the transition from military dictatorship to democracy since the 1980s, the disproportionate budgetary and political power of the military persist. Gates also touted the delivery of aid packages in rural Surinam by U.S. navy personnel, a competitive gesture vis-à-vis the delegations of Cuban and Venezuelan doctors currently working in Surinam.
All of this competition for influence invites a comparison of U.S. allies in the region with Washington’s tropical Axis of Evil: Castro, Chavez, Morales and perhaps Correa. If we undertake such a comparison (even using State Department human rights reports, let alone radical sources), it is obvious that human rights enter policy calculations mainly as public relations tools, and economic and strategic interests are primary. Because it is not merely that economic and strategic interests determine who is and is not supported by the U.S. government and major media outlets; they determine who is not scrutinized for human rights violations. The near-exclusive focus of U.S. government and media criticism on Castro, Chavez and Morales would be inexplicable if this were not the case, because those criticisms apply far more easily (measured by body counts, police/military brutality, corruption scandals) to U.S. allies like Alvaro Uribe, Elias Antonio Saca, Martin Torrijos, Oscar Berger, Alan Garcia, Manuel Zelaya and Nicanor Duarte.
If we rarely see criticisms (or indeed mentions) of these leaders in the U.S. media, this is not a reflection of their superior record, but of their acquiescence to demands from the U.S. and U.S firms and financial institutions.
Below, I will sketch the state of “human rights, democracy and corruption” in the countries of these rarely criticized U.S. allies, and discuss their economic policies. Then, I will compare them with Cuba under Castro, Venezuela under Chavez, and Bolivia under Morales, and consider the validity of criticisms of those leaders in the U.S. media.
El Salvador under Elias Antonio Saca
Elias Antonio Saca is a right-wing media mogul and member of the ARENA party, which “was linked to death-squad killings in the 1980's,” the New York Times notes. The founder of ARENA, Eduardo D’Aubuisson, was found by a United Nations commission to have orchestrated the killing of El Salvador’s Roman Catholic primate, Archbishop Óscar Arnulfo Romero, in 1980. Romero was guilty of denouncing the violent repression of the military government during his weekly radio sermons.
ARENA, whose colors are red, white and blue, has abandoned the national currency, the colon, and replaced it with the U.S. dollar. There is no property tax in El Salvador, but the sales tax is 13%, and banks take a large cut of the $3 billion in remittances sent home by the 2.5 million Salvadorans living in the United States. Poor Salvadorans and their relatives (mostly indigenous and mestizo) working as landscapers, janitors and dishwashers in the U.S. thus subsidize the primarily white elite in El Salvador with their purchases and remittances. 43% of Salvadorans live below the poverty line, while 1% of landowners control 40% of the arable land. Measures for democratization and redistribution are hampered by official corruption. According to a 2005 report by the University of Central America,
Salvadoran public administration is not transparent and has never tried to be, as proved by the deep-rooted nature of the most pernicious forms of corruption. The successive ARENA governments have tolerated this corruption, largely because the very structure of these governments is conceived to allow its proliferation.
This corruption, moreover, is not simply a matter of low-level graft. Links between ARENA, death squads and organized crime persist. According to Jaime Martinez of the Institute of Comparative Studies in Criminal and Social Science (INECIP), death squads in El Salvador today “are the visible face of organised crime,” and “criminal groups are embedded” in the government security forces. 622 possible cases of death squad killings were documented between January 2001 and August 2005 alone.
According to Human Rights Watch, the Salvadoran government also ignores widespread labor abuses. Abuses are particularly notorious on plantations and in factories that supply U.S. firms like Del Monte, Wal-Mart, J.C. Penney and Liz Claiborne, HRW notes.
But none of this is sufficient to warrant criticism of Saca by either U.S. officials or the U.S. media, because Saca has passed CAFTA, the southward extension of NAFTA; privatized water utilities; and provided a stable investment climate for mining and fruit companies, textile manufacturers, and commercial loggers. As in Guatemala and Honduras, CAFTA has produced a trade deficit with the U.S., as U.S. corn, beans and myriad manufactured goods imports have flooded the Salvadoran market, while Salvadoran exports to the U.S. have fallen. As CISPES reports:
All of this was predicted by Salvadoran activists, who had already seen the results of NAFTA in Mexico. They organized widespread protests against CAFTA, which were broken up by riot police.
The Harvard- and Oxford-educated Uribe is the son of wealthy cattle rancher Alberto Uribe, who was connected by marriage to the Ochoa family of the Medellin drug cartel. The elder Uribe was a personal friend of Pablo Escobar, and was wanted by the U.S. government for drug trafficking charges when he was killed in a kidnapping attempt by the FARC in 1983. Santiago Uribe, President Uribe’s brother, was investigated for organizing paramilitary death squads from the family hacienda.
Before being outlawed, the Convivirs displaced some 200,000 campesinos, mostly from the Uraba region.
Expropriation remains a practice of the "demobilized" paramilitaries, as lands belonging to campesinos, indigenous peoples and Afro-Colombians are taken by force for oil exploration, mining, palm oil plantations and logging. On the Pacific coast, where Afro-Colombians make up a majority of the population, they are being uprooted by paramilitaries in the pay of plantation companies looking to expand their acreage for palm oil cultivation. Colombian palm planters already sell 35% of their products as biofuels, benefiting from the increasing demand for petroleum alternatives in the U.S. But expanded production has been made possible by land theft, much of it done under the aegis of “resettling” the paramilitaries, for which the U.S. Congress has granted the Uribe government $21 million. In 1998, Afro-Colombian leader Francisco Hurtado was assassinated by the paras for protesting for land rights, and thousands of Afro-Colombians have been pushed into the slums of Colombian cities since then.
Finally, the Uribe government has enthusiastically followed the Washington Consensus recipe of privatization, most recently by selling off a slice of state-owned Ecopetrol to foreign investors. If the proposed Colombian-U.S. free trade agreement is passed, David Bacon of Dollars & Sense estimates that 80,000 small farmers will be forced off the land by competition with U.S. agribusiness. Their likely destination? The slums of Medellin, Cali, Bogota, and myriad smaller cities and towns.
Guatemala has the second-highest murder rate in Latin America, after Colombia. According to the New York Times:
This small country of 12.3 million people has more than 5,000 homicides a year, many of them vigilante killings or gangland murders, human rights advocates say. Arrests are made in only 2 percent of the cases.
This violence pales in comparison to Guatemala’s history of state violence against the indigenous population, stretching from the colonial era to the present. As the NY Times also notes,
Some 200,000 people were killed or went missing in Guatemala from 1960 to 1996, mostly Mayan Indian civilians. A United Nations-backed truth commission found that 90 percent of those deaths were caused by the military.
The U.S. was forced to officially suspend arms sales to the Guatemalan military in 1990, when “it was learned that soldiers were involved in the killing of an American named Michael Devine.” 1 American death was evidently worse for public-relations purposes than 200,000 Guatemalan ones, even if they were “mostly Maya Indian civilians.” According to the Arms Sales Monitoring Project of the Federation of American Scientists, the CIA continued to provide Guatemala with $5-7 million annually after 1990. Then, despite ongoing allegations of violence by security forces, the U.S. officially lifted its ban on military aid to Guatemala in 2005.
Adriana Beltrán, an expert on Guatemala with the Washington Office on Latin America, a research institution, said Mr. Berger's government had done very little to stop private groups of gunmen from intimidating and killing people who were working to uncover past and present human rights abuses in Guatemala. Rewarding the government with arms sends the wrong message, she said.
Guatemala is also one of the poorest countries in Latin America. Over 57% of Guatemalans live below the poverty line, and 3.2 million of the 8.2 million people in Guatemala of working age are unemployed. The richest fifth of the population receives 60% of the GNP, and the richest 10% possess about 46% of the wealth. The distribution of land in Guatemala is, also, staggeringly unequal. In 1998, .15% (yes, that’s 1.5%, not 15%!) of landowners had 70% of the arable land, while 96% of landowners had 20%. The distribution is similar to that in South Africa: the land is overwhelmingly concentrated in the hands of a white elite, while indigenous smallholders are relegated to marginal, inferior lands. The maintenance of this essentially colonial structure has, inevitably, led many smallholders to take matters into their own hands by squatting on landowners’ property. In 2004, when the businessman and landowner Oscar Berger came to power, he predictably entered the conflict on the side of landowners, using security forces to evict squatters by whatever means necessary, including the burning of homes. According to the UN Commission for Guatemala:
The change in Administrations [with the election of Berger] also brought with it a troubling increase in forced, sometimes violent, evictions of squatters, a trend that gave the impression of undue deference by the Government to the demands of landowners. Peasant groups mounted nationwide demonstrations and road blockades in June 2004 to demand land and rural development policies and to protest the evictions, which created a serious humanitarian problem for peasant families thrown off properties.
Berger, a wealthy landowner himself, further demonstrated his loyalties by using the military to crush protests against a World Bank mining project in Guatemala city. Troops killed one protestor and injured dozens more. According to the Vox Latina institute, 95% of the people surveyed in the northern towns of San Miguel Ixtahuacán and Sipacapa (which will be most affected by the mine) oppose the project, believing it will damage the local environment. The following video is worth watching in this regard.
What voters are left with for the Nov. 4 runoff is the tired choice between a military strongman and an oligarch, representing two segments of the population largely responsible for the continued destruction of the country.
Honduras under Manuel Zelaya
Honduras is one of the poorest countries in the hemisphere, with 65% of the population living on less than $2 a day. Even according to the Honduran government, 46% of Hondurans are “extremely poor.” Nevertheless, the Zelaya administration has cut the minimum wage in the south of Honduras (where most of the “free trade zones” are located) from 74 cents an hour to 57 cents an hour. The justification given has been competition with China, where workers in many export industries are making even less. As always, pursuing “comparative advantage” means racing to the bottom.
Despite some positive steps, government corruption, impunity for violators of the law, and virulent gang violence exacerbated serious human rights problems in the country. The following human rights problems were reported: unlawful killings by members of the police, arbitrary and summary executions committed by vigilantes and former members of the security forces, the disappearance of a former dissident, beatings and other abuse of detainees by security forces, harsh prison conditions, failure to provide due process of law, lengthy pretrial detention, political interference in the judicial system, judicial corruption and institutional weakness, illegal searches, erosion of press freedom, violence and discrimination against women, child prostitution and abuse, trafficking in persons, discrimination against indigenous people, discrimination against persons based on sexual orientation, ineffective enforcement of labor laws, and child labor.
Meanwhile, the Financial Post of Canada reports that some 5,000 street children have been killed by death squads in Honduras since the late 1990s:
Jose Daniel Villed, a senior editor at the leading national daily newspaper La Tribuna, figures police are involved in as many as 40% of the murders. At least 10 officers have been convicted of killing youths in recent years, but Jose Roberto Romero Luna, the national police director, dismisses any suggestions police routinely act as vigilantes. There appear to be several paramilitary units unofficially dedicated to killing gang members and organized crime figures, who control a thriving drug trade that has seen this nation of 7.3 million people become a key transit point for Colombian cocaine en route to North America and Europe. […] Corruption is rampant, more than half [the country’s] people live in poverty and the new government of Manuel Zelaya Rosales is wrestling with massive unemployment -- 28% last year.
Press freedom is a problem in Honduras as well. A small number of business magnates control the nation’s media, and earlier this year Zelaya ordered all radio and television stations to broadcast two hours of government propaganda a day.
Since taking office on Jan. 27, 2006, Zelaya's government has been the target of more than 10 allegations of corruption, including theft of electrical energy by high administration officials, irregularities in tenders for health supplies, the hiring of advisers for nonexistent jobs, waste of resources in the telephone company, influence peddling and the abuse of power in handing out road building and energy generation contracts. The latest scandal broke out in July, when an investigative commission appointed by the president confirmed irregularities in contracts approved by the head of the Road Fund, Ramiro Chaccentsn. But once the commission had reported its findings, Zelaya rewarded Chaccentsn by offering him the post of vice minister in the Secretariat of Public Works, Housing and Transport.
The Honduran Congress passed CAFTA in 2005. The lobbyist website freetradehonduras.org writes enthusiastically:
CAFTA is further harming the agricultural sector of Honduras, which was devastated by Hurricane Mitch.
The most striking physical manifestation is a real estate boom that is transforming the skyline of Panama City, where apartments are being built at twice the rate of those in Miami – to house foreign executives but also with an eye on the growing market of US baby boomers seeking a retirement home in the sun.
Meanwhile, 40% of Panamanians live below the (low) poverty line, and per capita income is $5,000. Wealth is overwhelmingly concentrated in the hands of a small, white elite. Torrijos approved CAFTA, which will force Panamanian farmers to compete with ADM, Tyson and Conagra. The beef and poultry sector, which is very important in Panama, will be particularly vulnerable to U.S. meat imports.
On the police:
On racism:
Mexico under Felipe Calderon
In a trip to Mexico August 2007, Amnesty International Secretary General Irene Khan criticized Felipe Calderon’s human rights record. She told a press conference:
The flaws in the public security and criminal justice system in Mexico currently allow for arbitrary detention, torture, ill-treatment, denial of due process, unfair trials, political interference in the administration of justice, and widespread impunity. The poorest and most vulnerable are often victims of these abuses. […] A lottery of human rights is unacceptable. Oaxaca is a prime example. Following a year of monitoring, extensive field visits to Oaxaca and meetings with officials at state and federal level, survivors of human rights violations and civil society, Amnesty International's report Oaxaca: clamour for justice documents a pattern of police abuse (including, arbitrary arrest, torture and ill-treatment and harassment) committed by state as well as federal officials.
In March 2007, Mexico’s National Human Rights Commission documented 1,600 cases of human rights abuse during the police and military repression of the seven-month-long teacher’s protest in Oaxaca. The pattern was repeated during protests in July. According to Amnesty International:
President Duarte is a member of the right-wing Colorado or Red Party, which has ruled Paraguay since 1947. Although the Colorado Party was originally moderate-liberal, it was driven to the extreme right by dictator Alfredo Stroessner, who ruled from 1954 until his removal in a 1989 military coup. Stroessner ordered the deaths of over 900 dissidents and the torture of thousands. His successor, Andres Rodriguez Pedotti, was accused of heroin trafficking; Pedotti’s successor, Juan Carlos Wasmosy, was in turn charged with fraud and sentenced to 4 years in prison. In 2006, when President Duarte announced his plans to alter the Paraguayan constitution in order to run for re-election, 40,000 people protested in the streets of the capital, Asunción.
Just 351 Paraguayan landowners possess 9.7 million hectares (24 million acres), while, according to civil society organizations, there are 350,000 campesina families with little land, or without land altogether. This situation is one of the central causes of starvation and malnutrition in the Paraguayan countryside, where 22.8 percent of the rural population lives in extreme poverty. These families’ average incomes only cover just over 58 percent of the average daily bread basket costs.
Paraguay has, meanwhile, become the largest U.S. military platform in Latin America. There is evidence that U.S. troops have been advising paramilitaries used by soy planters to crush campesino protests.
Peru under Alan Garcia
Alan Garcia’s re-entry into Peruvian politics is a bit remarkable, given the fact that he fled the country on corruption charges before the end of his first term in 1985-1990. He was accused of embezzling millions of dollars from the state. According to Human Rights Watch, under Garcia’s first term Peru had the largest number of forced disappearances of any country in the world. Considering the competition at the time, in Latin America alone, this was quite a grisly accomplishment.
Garcia won the 2006 elections on the strength of not being Ollanta Humala, a perceived Chavista and “loose cannon.” Garcia’s support of an FTA with the United States, moreover, has won him some powerful friends north of the Rio Grande. The trade lobbyist website “Business Roundtable” contains a promotional “issue brief” on the U.S.-Peru Trade Promotion Agreement (PTPA). Business Roundtable argues (how thoughtful of them!) that the PTPA will "level the playing field" for U.S. agribusiness in competition with Peruvian peasants:
In the USA, 25,000 cotton producers receive approximately $3.5 billion per year in subsidies. Of this amount, 80 per cent goes to 10 per cent of the farmers who receive subsidies. Production costs vary from $0.68 to $0.72 per pound. The 28,000 cotton producers of Peru receive no subsidies, but they have a tariff of 12 per cent as protection against sudden drops in international prices. The FTA would eliminate this tariff immediately (zero tariff), causing devastation to production and the livelihoods of farmers. The USA is currently the CAN’s main cotton supplier. Under the trade preference system (currently the ATPDEA), it allowed imports of Peruvian textiles to US markets provided they were manufactured using mainly US cotton. This meant that cotton imports to Peru increased significantly: 45,000 tonnes of subsidised US cotton were imported into the country in 2005 alone. This has led to a radical reduction in cotton production in Peru: 260,000 hectares of cotton were grown in Peru in 1960; in 2004 the figure was barely 89,000 hectares.
So “reciprocal access to U.S. markets” requires the importation of raw or semi-finished U.S. cotton, rather than Peruvian cotton, but U.S. textile producers are not required to import cotton from non-subsidized Peruvian producers. The class of Peruvian investors who Garcia represents, however, will benefit from domestic manufacturers using cheaper U.S. cotton. They don’t care what happens to Indios in the southern highlands.
As Amnesty International points out, part of the official rationale for the U.S. trade embargo on Cuba (like the U.S.-Euro sanctions on Iraq in the 1990s) is that it will increase state repression and, as a result, the likelihood of popular upheaval. As in Iraq, the effect in practice is to punish the population for the refusal of their government to revert to U.S. client status.
Venezuela under Chavez
The most serious human rights violations in Venezuela under Chavez have been committed by rogue elements of the military and police, and contract killers in the pay of large landowners. Human Rights Watch reports that "In April 2006 Attorney General Isaías Rodríguez reported that 6,110 officials were implicated in alleged killings between 2000 and 2005, yet only 760 had been charged, and only 113 convicted." This negligence may be related to the tenuous hold of the Chavez government on the police and military, which contain substantial anti-Chavez elements which supported the 2002 coup attempt, and have clashed with government supporters in street battles on several occasions. In 2005, known arms and drug trafficker Oliver North fumed in an article at the right-wing website Freedom Alliance:
Last week, Mr. Chavez ousted the last five U.S. military advisors from a program that had been in place for 35 years – claiming that the Americans were “waging a campaign in the Venezuelan military…criticizing the president.”
Conversely, the Venezuelan opposition has accused pro-Chavez security forces of violating the rights of anti-government protestors. Reviewing the charges, Amnesty International concludes:
While many opposition supporters took part in legitimate peaceful demonstrations, a significant number of these protests were violent with the use of barricades, stones, Molotov cocktails, and fireworks and, in some cases, firearms. It is the duty of the state to guarantee public order, respecting the rule of law in accordance with international standards. However, the response of the Guardia Nacional and other branches of the security forces frequently involved excessive use of force, apparently contributing to spiralling violence rather than preventing or controlling it.
It might be noted that anti-government protestors using “barricades, stones, Molotov cocktails, and fireworks and, in some cases, firearms” in the streets of Colombia, El Salvador, Guatemala or Paraguay (etc.) would probably be shot dead by security forces on the spot. Still, no one doubts that the Venezuelan police and military continue to commit human rights abuses, largely because they retain a degree of vigalantist autonomy from the administration. Poor barrio residents and peasants are far more vulnerable to their depredations than middle-class anti-Chavistas.
In 1998 there were 1,628 primary care physicians for a population of 23.4 million. Today, there are 19,571 for a population of 27 million. […] In 1999, there were 335 HIV patients receiving antiretroviral treatment from the government, compared to 18,538 in 2006.
The coup attempt caps a crescendo of anger and frustration over the economic reforms that have written such a macroeconomic success story but have failed to benefit the lives of most Venezuelans and have embittered many. The rebel troops who for several hours seized the Miraflores government palace and the La Casona presidential residence early yesterday were apparently seeking to take advantage of mounting unrest over price rises and poor public services. The rebels were no doubt emboldened by a poll published last week suggesting 81 per cent of Venezuelans had little or no confidence left in 69-year-old President Carlos Andres Perez.
Although the coup was unsuccessful, Perez was suspended from office in 1993 after being indicted for the misappropriation of $17.2 million. His successor, Rafael Calfera, was elected on an anti-neoliberal platform, but nonetheless followed in Perez’s footsteps. In 1997, Caldera agreed to an IMF agreement to cut federal spending, deregulate the entry of foreign capital, and privatize more public assets. A massive strike was carried out to protest the policies. Deutsche Press-Agentur reported on November 20th, 1997:
Further privatizations of utilities, telecommunications and oil contributed to increasing unrest. The outcome of all of this was the election of Chavez in 1998.
U.S. critics of Morales have not yet been able to find human rights violations committed by his government. They have focussed on his status as an advocate for cocaleros (conflating, falsely, coca growing with cocaine production), and nationalization. It goes without saying that the latter is the issue that matters to the Wall Street Journal.
Like Chavez, Morales has nationalized assets that formerly belonged to the state. Bolivian natural gas had been nationalized in the 1920s, and was only privatized in 1996 by President Gonzalo Sanchez de Lozada. Under the privatization (which Lozada had pursued on the recommendation of the IMF and World Bank), royalties owed by oil multinationals to the state were reduced from 50% to 18%. The loss was made particularly significant by a pending deal with Brazil. Prior to the privatization, writes Benjamin Kohl, the Bolivian state oil company (Yacimientos Petrolíferos Fiscales de Bolivia, or YPFB) was “on the verge of completing a contract to build a pipeline to connect Bolivian gasfields to Brazilian markets,” which would have increased profits “by at least $50 million a year for 40 years. These earnings, instead, were largely transferred to private firms that borrowed capital from the same international institutions that had previously offered loans to YPFB.” This amounted to “a giveaway that could cost the nation hundreds of millions, if not billions, of dollars over the next 40 years.”
[...] the price of gas of $5 usd per million cubic feet to Argentina was 40% below the world price –and Brazil’s payment, one year after ‘nationalization’ was still the same $4 dollar—in some instances as low as 1.9 usd—as during the Sanchez de Losado-Mesa period.
Then, in February 2007, Morales announced the re-nationalization of a mineral processing plant owned by the Swiss company Glencore International AG. An Associated Press article at the time noted:
At the same time, Morales has accepted tight budgetary policies, modest social spending and new joint agreements with foreign multinationals in banking, agribusiness, mining and natural gas. In other words, while his speeches have been radical, his policies have been center-left. As a result, he is being criticized from the left as a closet neoliberal and from the right as a puppet of Chavez.