Bushwar not going well, but at least our phones will be tapped

[Roger Baker]

OK, OK, so maybe bin Laden is foxier than we thought, and maybe this
nation-building thing isn't as easy as it looks. The recipe for 
enduring freedom takes lots of bombs and CIA agents and luck to 
make it work. Thank god Congress is going to allow our phones
to be tapped at will so we can root out any subversive sceptics.

Then at the bottom see how a Nobel prize winning economist insider 
explains how the World Bank ensnares its victim nations. Wow!!! 

            *********************************************

What do the Indians make of it all? Cartoon link:
http://216.34.146.180/cartoon/dubs.htm

             *********************************************


http://www.nytimes.com/2001/10/15/international/asia/15STRA.html

October 15, 2001
MILITARY ANALYSIS 
Military Campaign Outstripping American Diplomatic Maneuvers

By MICHAEL R. GORDON

WASHINGTON, Oct. 14 
 
"...But while United States has pursued Osama bin Laden and sought to 
neutralize the Taliban that shelters him, the behind-the-scenes effort to
organize a regime that would replace Taliban leaders has made no discernible
 progress.

The Central Intelligence Agency has made little progress in organizing 
resistance to the Taliban among the Pashtun tribes in the south, United States
officials disclosed. Nor is the C.I.A. working with all of the factions 
that make up Northern Alliance, the anti-Taliban groups in the north that is
dominated by Uzbeks and Tajiks, officials said.
 
The ethnically diverse groups that oppose the Taliban regime have also made 
scant progress in forging a broad coalition that could rule Afghanistan
should Washington find Osama bin Laden and drive the regime that supported 
him from power. The result is that Washington is still struggling to
assemble a durable coalition that could take over if the Taliban fragments 
or is toppled... 

>From the start, the American goal has not been merely to hunt down Mr. bin 
Laden and destroy his Al Qaeda terrorist network. It has also been to
ensure that Afghanistan did not remerge as a haven for a new set of terrorists 
that would threaten the United States and destabilize the region...

Seeking to avoid the impression that it is calling all the shots, the Bush 
administration has said publicly that the future governing arrangements in
Afghanistan are up to the Afghans. But now that the National Security Council 
review has been completed and the Administration has settled on the goal
of speeding up the removal of the Taliban U.S. officials plan to step up the 
behind-the- scenes efforts to establish a new coalition government. 

Administration officials hope the C.I.A. will be more successful in fomenting 
resistance to the Taliban in the south. The C.I.A., some officials say,
has also plenty of work to do with anti-Taliban groups in the North.
 
The agency's intelligence agents, officials say, are working with General 
Mohammed Fahim, who became defense chief of the Northern Alliance after
Ahmed Shah Massoud was assassinated by two suicide bombers in September-an 
attack which U.S. intelligence believes was ordered by Mr. bin Laden.
General Fahim is from the dominant group in the Northern Alliance, the 
Jamiat Islam, which occupies ethnic Tajik territory in the northeast part of
the country.
 
But the C.I.A., an official said, has not established an effected working 
relationship with other factions within the Northern Alliance, including the
Hazara group led by Muhammad Karim Khalili, the Uzbek faction led by Abdul 
Rashid Dostum and a Shiite group led by Karim Khalili. The difficulties in
forcing a broad anti-Taliban coalition, however, do not stem only from Washington. 
The diverse array of groups that oppose the Taliban have done
little to cement their union.

The attempt to create a grand coalition revolves around the 86- year-old 
former king of Afghanistan, Mohammad Zahir Shah, who lives in Rome. The
exiled king is a Durrani Pashtun, like the Taliban leaders. The thinking is 
that he could serve as the symbolic head of a broad group that would
include other Afghans who are not Pashtuns.

But the Northern Alliance and Pashtun leaders associated with the king
have yet to convene an 120 member council to discuss proposals for a
transitional government once the Taliban have been ousted and lay the 
foundation for a more formal loya jirga or traditional Afghan assembly. 
In fact, the alliance has yet to choose any of its 60 delegates for the council.

             ******************************************** 


http://www.GregPalast.com/printerfriendly.cfm?artid=78

The Globalizer Who Came In From the Cold
Observer, London
Wednesday, October 10, 2001

JOE STIGLITZ: TODAY'S WINNER OF THE NOBEL PRIZE IN ECONOMICS
by Greg Palast

The World Bank's former Chief Economist's accusations are eye-popping 
- including how the IMF and US Treasury fixed the Russian elections

"It has condemned people to death," the former apparatchik told me. 
This was like a scene out of Le Carre. The brilliant old agent comes 
in from the cold, crosses to our side, and in hours of debriefing, 
empties his memory of horrors committed in the name of a political 
ideology he now realizes has gone rotten.

And here before me was a far bigger catch than some used Cold War 
spy. Joseph Stiglitz was Chief Economist of the World Bank. To a 
great extent, the new world economic order was his theory come to 
life.

I "debriefed" Stigltiz over several days, at Cambridge University, in 
a London hotel and finally in Washington in April 2001 during the big 
confab of the World Bank and the International Monetary Fund. But 
instead of chairing the meetings of ministers and central bankers, 
Stiglitz was kept exiled safely behind the blue police cordons, the 
same as the nuns carrying a large wooden cross, the Bolivian union 
leaders, the parents of AIDS victims and the other 
'anti-globalization' protesters. The ultimate insider was now on the 
outside.

In 1999 the World Bank fired Stiglitz. He was not allowed quiet 
retirement; US Treasury Secretary Larry Summers, I'm told, demanded a 
public excommunication for Stiglitz' having expressed his first mild 
dissent from globalization World Bank style.

Here in Washington we completed the last of several hours of 
exclusive interviews for The Observer and BBC TV's Newsnight about 
the real, often hidden, workings of the IMF, World Bank, and the 
bank's 51% owner, the US Treasury.

And here, from sources unnamable (not Stiglitz), we obtained a cache 
of documents marked, "confidential," "restricted," and "not otherwise 
(to be) disclosed without World Bank authorization."

Stiglitz helped translate one from bureaucratise, a "Country 
Assistance Strategy." There's an Assistance Strategy for every poorer 
nation, designed, says the World Bank, after careful in-country 
investigation. But according to insider Stiglitz, the Bank's staff 
'investigation' consists of close inspection of a nation's 5-star 
hotels. It concludes with the Bank staff meeting some begging, busted 
finance minister who is handed a 'restructuring agreement' 
pre-drafted for his 'voluntary' signature (I have a selection of 
these).

Each nation's economy is individually analyzed, then, says Stiglitz, 
the Bank hands every minister the same exact four-step program.

Step One is Privatization - which Stiglitz said could more accurately 
be called, 'Briberization.' Rather than object to the sell-offs of 
state industries, he said national leaders - using the World Bank's 
demands to silence local critics - happily flogged their electricity 
and water companies. "You could see their eyes widen" at the prospect 
of 10% commissions paid to Swiss bank accounts for simply shaving a 
few billion off the sale price of national assets.

And the US government knew it, charges Stiglitz, at least in the case 
of the biggest 'briberization' of all, the 1995 Russian sell-off. 
"The US Treasury view was this was great as we wanted Yeltsin 
re-elected. We don't care if it's a corrupt election. We want the 
money to go to Yeltzin" via kick-backs for his campaign.

Stiglitz is no conspiracy nutter ranting about Black Helicopters. The 
man was inside the game, a member of Bill Clinton's cabinet as 
Chairman of the President's council of economic advisors.

Most ill-making for Stiglitz is that the US-backed oligarchs stripped 
Russia's industrial assets, with the effect that the corruption 
scheme cut national output nearly in half causing depression and 
starvation.

After briberization, Step Two of the IMF/World Bank one-size-fits-all 
rescue-your-economy plan is 'Capital Market Liberalization.' In 
theory, capital market deregulation allows investment capital to flow 
in and out. Unfortunately, as in Indonesia and Brazil, the money 
simply flowed out and out. Stiglitz calls this the "Hot Money" cycle. 
Cash comes in for speculation in real estate and currency, then flees 
at the first whiff of trouble. A nation's reserves can drain in days, 
hours. And when that happens, to seduce speculators into returning a 
nation's own capital funds, the IMF demands these nations raise 
interest rates to 30%, 50% and 80%.

"The result was predictable," said Stiglitz of the Hot Money tidal 
waves in Asia and Latin America. Higher interest rates demolished 
property values, savaged industrial production and drained national 
treasuries.

At this point, the IMF drags the gasping nation to Step Three: 
Market-Based Pricing, a fancy term for raising prices on food, water 
and cooking gas. This leads, predictably, to Step-Three-and-a-Half: 
what Stiglitz calls, 'The IMF riot.'

The IMF riot is painfully predictable. When a nation is, "down and 
out, [the IMF] takes advantage and squeezes the last pound of blood 
out of them. They turn up the heat until, finally, the whole cauldron 
blows up," as when the IMF eliminated food and fuel subsidies for the 
poor in Indonesia in 1998. Indonesia exploded into riots, but there 
are other examples - the Bolivian riots over water prices last year 
and this February, the riots in Ecuador over the rise in cooking gas 
prices imposed by the World Bank. You'd almost get the impression 
that the riot is written into the plan.

And it is. What Stiglitz did not know is that, while in the States, 
BBC and The Observer obtained several documents from inside the World 
Bank, stamped over with those pesky warnings, "confidential," 
"restricted," "not to be disclosed." Let's get back to one: the 
"Interim Country Assistance Strategy" for Ecuador, in it the Bank 
several times states - with cold accuracy - that they expected their 
plans to spark, "social unrest," to use their bureaucratic term for a 
nation in flames.

That's not surprising. The secret report notes that the plan to make 
the US dollar Ecuador's currency has pushed 51% of the population 
below the poverty line. The World Bank "Assistance" plan simply calls 
for facing down civil strife and suffering with, "political resolve" 
- and still higher prices.

The IMF riots (and by riots I mean peaceful demonstrations dispersed 
by bullets, tanks and teargas) cause new panicked flights of capital 
and government bankruptcies. This economic arson has it's bright side 
- for foreign corporations, who can then pick off remaining assets, 
such as the odd mining concession or port, at fire sale prices.

Stiglitz notes that the IMF and World Bank are not heartless 
adherents to market economics. At the same time the IMF stopped 
Indonesia 'subsidizing' food purchases, "when the banks need a 
bail-out, intervention (in the market) is welcome." The IMF scrounged 
up tens of billions of dollars to save Indonesia's financiers and, by 
extension, the US and European banks from which they had borrowed.

A pattern emerges. There are lots of losers in this system but one 
clear winner: the Western banks and US Treasury, making the big bucks 
off this crazy new international capital churn. Stiglitz told me 
about his unhappy meeting, early in his World Bank tenure, with 
Ethopia's new president in the nation's first democratic election. 
The World Bank and IMF had ordered Ethiopia to divert aid money to 
its reserve account at the US Treasury, which pays a pitiful 4% 
return, while the nation borrowed US dollars at 12% to feed its 
population. The new president begged Stiglitz to let him use the aid 
money to rebuild the nation. But no, the loot went straight off to 
the US Treasury's vault in Washington.

Now we arrive at Step Four of what the IMF and World Bank call their 
"poverty reduction strategy": Free Trade. This is free trade by the 
rules of the World Trade Organization and World Bank, Stiglitz the 
insider likens free trade WTO-style to the Opium Wars. "That too was 
about opening markets," he said. As in the 19th century, Europeans 
and Americans today are kicking down the barriers to sales in Asia, 
Latin American and Africa, while barricading our own markets against 
Third World agriculture.

In the Opium Wars, the West used military blockades to force open 
markets for their unbalanced trade. Today, the World Bank can order a 
financial blockade just as effective - and sometimes just as deadly.

Stiglitz is particularly emotional over the WTO's intellectual 
property rights treaty (it goes by the acronym TRIPS, more on that in 
the next chapters). It is here, says the economist, that the new 
global order has "condemned people to death" by imposing impossible 
tariffs and tributes to pay to pharmaceutical companies for branded 
medicines. "They don't care," said the professor of the corporations 
and bank loans he worked with, "if people live or die."

By the way, don't be confused by the mix in this discussion of the 
IMF, World Bank and WTO. They are interchangeable masks of a single 
governance system. They have locked themselves together by what are 
unpleasantly called, "triggers." Taking a World Bank loan for a 
school 'triggers' a requirement to accept every 'conditionality' - 
they average 111 per nation - laid down by both the World Bank and 
IMF. In fact, said Stiglitz the IMF requires nations to accept trade 
policies more punitive than the official WTO rules.

Stiglitz greatest concern is that World Bank plans, devised in 
secrecy and driven by an absolutist ideology, are never open for 
discourse or dissent. Despite the West's push for elections 
throughout the developing world, the so-called Poverty Reduction 
Programs "undermine democracy."

And they don't work. Black Africa's productivity under the guiding 
hand of IMF structural "assistance" has gone to hell in a handbag. 
Did any nation avoid this fate? Yes, said Stiglitz, identifying 
Botswana. Their trick? "They told the IMF to go packing."

So then I turned on Stiglitz. OK, Mr Smart-Guy Professor, how would 
you help developing nations? Stiglitz proposed radical land reform, 
an attack at the heart of "landlordism," on the usurious rents 
charged by the propertied oligarchies worldwide, typically 50% of a 
tenant's crops. So I had to ask the professor: as you were top 
economist at the World Bank, why didn't the Bank follow your advice?
"If you challenge [land ownership], that would be a change in the 
power of the elites. That's not high on their agenda." Apparently not.

Ultimately, what drove him to put his job on the line was the failure 
of the banks and US Treasury to change course when confronted with 
the crises - failures and suffering perpetrated by their four-step 
monetarist mambo. Every time their free market solutions failed, the 
IMF simply demanded more free market policies.

"It's a little like the Middle Ages," the insider told me, "When the 
patient died they would say, 'well, he stopped the bloodletting too 
soon, he still had a little blood in him.'"

I took away from my talks with the professor that the solution to 
world poverty and crisis is simple: remove the bloodsuckers.

*
A version of this was first published as "The IMF's Four Steps to 
Damnation" in The Observer (London) in April and another version in 
The Big Issue - that's the magazine that the homeless flog on 
platforms in the London Underground. Big Issue offered equal space to 
the IMF, whose "deputy chief media officer" wrote:

"... I find it impossible to respond given the depth and breadth of 
hearsay and misinformation in [Palast's] report."
Of course it was difficult for the Deputy Chief to respond. The 
information (and documents) came from the unhappy lot inside his 
agency and the World Bank.


Award-winning reporter Palast writes Inside Corporate America for the 
London Observer. To read other Palast reports, to contact the author 
or to subscribe to his column, go to GregPalast.Com