Bolivia Under Evo Morales: 13 Years of Reclaiming Sovereignty

Source:  TeleSUR
January 23 2019

evo morales may 2018 2.png

Even the IMF has had to admit that Bolivia is a clear cut success story

“Mr. Evo Morales, it’s easy to make speeches about sovereignty and independence….come and govern, then you’ll see what it’s really like to administer the state” – Carlos Mesa, former president, and current opposition candidate said in 2005 in his resignation speech.

Bolivia

Bolivia has lived 13 years of the ‘process of change’ under the leadership of Evo Morales and the MAS (Movement Towards Socialism). Morales and the MAS were forged in a climate of radical street movements against privatization of natural resources. The MAS grouped together Indigenous social movements, with self-organized movements of the urban slums and what remained of the traditional Marxist left in the trade unions and the academy.

RELATED:  Bolivia Becomes Natural Gas Powerhouse, Expands Exports To Peru

By 2005 this coalition came to represent the crystallization of the deep-seated resentment, not just at privatization, but of 500 years of colonialism, social exclusion and a neoliberal democracy that wasn’t able or willing to meet people’s basic needs.

Bolivia’s social movements and non-sectarian left grouped around the MAS and won at the ballot box in 2005. In January of this year, they face primary elections than presidential elections in November of this year. They’ve won every election since 2005 with larger majorities each time, this despite a constant manipulation of public information from private media, and right-wing attempts at destabilization.

Why? What has 13 years of the ‘process of change’ meant for the country beyond greater representation for the Indigenous? On the questions of economic development, health and education, foreign policy the critics of the MAS have predicted disaster but instead been met by the undeniable policy success.

Economy 

“These actions against foreign investors really dampen the investment climate in Bolivia”  – U.S. State Department said in 2012.

Markets were jittery as the left took power in Bolivia. The Washington Consensus stated that only free markets, ‘flexible’ labor markets and monetarist policies could pave a path to economic development. Bolivia’s political class was determined to follow this religiously. Over 200 public companies were privatized, sold to foreign corporations at knockdown prices, this alone is thought to have damaged the economy to the tune of $22bn. What followed was a catastrophic fall in GDP and hyperinflation running at over 8000% by the end of 1985.

Despite this clear policy failure, many investors left the country as the left took power in 2005, fearing that “socialism” would bring economic ruin.

RELATED:  Bolivia: Historic Economic Levels Led by President Evo Morales

Though, over 13 years the left has presided over an economic miracle that even the IMF has had to admit that Bolivia is a clear cut success story. The economy has more than tripled in size, Bolivia is on course to be South America’s fastest growing economy for yet another year despite falls in the price of key exports.

Annual Inflation is running at a paltry 1.5 percent, whilst their neighbor Argentina sinks further into hyperinflation since adopting the neoliberal model that earned them praise from successive U.S. administrations.

Most important of all, the reduction in poverty has been the most impressive achievement of the MAS. When Morales took office, Bolivia was facing a humanitarian crisis with 60 percent of the total population living below the poverty line, that figure has been slashed in half by the MAS government.

This economic model that has produced these results is defined as a rejection of IMF recipes. Instead, Morales proceeded to nationalize Bolivia’s large strategic industries. Now that profits of those industries provided revenue for the state, those profits were used on capital spending, most notably on a massive integrated infrastructure plan that has been a crucial factor stimulating wider growth. State transport and manufacturing initiatives have also kick-started economic development in areas the free-market had never reached.

Health & Education

“[The government] neglects health and education, while ignoring calls for austerity”- Monsignor Gualberti, Catholic Church

A common refrain amongst Morales’ critics is that they’ve made little progress on health and education and that those vital services continue in state disrepair. One can expect this line to continue in the right wing media, even as the government is registering citizens for free universal healthcare.

It is true that Bolivia still until recently had lacked a comprehensive and public health system, as exists in Cuba. However, the situation in health and education has vastly improved, it’s just that it has mostly benefited the rural poor whose voices are not and have never been represented in the mainstream urban press.

RELATED:  Evo Morales Will Host ‘Year of Indigenous Languages’: UN

Between 2006 and 2018, the ‘Mi Salud’ program, operating with the help of Cuban doctors, has provided 16.4 million free health appointments, including 700,000 free eye surgeries in what’s known as ‘operation miracle’. These programmes involve reaching the poorest and most isolated, often going to their homes in far out areas of the Amazonian and Andean regions.

In education, the changes have been transformative too, not that it garners much coverage in private media. In the year 2000, amidst the firesale privatizations, just 35,73 percent of primary school age children were enrolled in school, after 10 years of the MAS in power, that number more than doubled, and continues to grow.

Again, those benefiting are mostly the rural poor, an inauguration ceremony for a public school in isolated communities is an almost weekly occurrence, though only covered by state media outlets.

Implementing the universal health care system will nevertheless be a serious challenge in Bolivia. The Doctors Association is vehemently opposed and already protested and gone on strike against the plan for free health. Most doctors would stand to lose as business for their private clinics dries up.

Sovereignty   

“In our view this was a grave error. Blaming others for your internal problems is not the way to cultivate bilateral relations.” – Former U.S. ambassador Philip Goldberg on being expelled from the country

The year 2003 was one of Bolivia’s worst years in recent history, not only was it the year of the ‘Black October’ massacre, but it was also one of the most brazen transfers of sovereignty to the U.S.. In 2003 an agreement was signed to give legal immunity to all U.S. soldiers and citizens in Bolivian territory, they had free reign to violate national laws and would not have to face justice unless it was at the request of the U.S. government.

The U.S. presence in Bolivia, through military advisors and bases, was part of Washington’s “War on Drugs” policy in the region that has historically allowed it access and interference in the internal affairs of Latin American countries.

In a rejection to such practices by the United States and in a clear signal that the people and their representatives will have full sovereignty over their country’s affairs and resources, Morales expelled the U.S. military bases in Bolivia, as well as the presence of the DEA and USAID along with the U.S. ambassador.

RELATED:  Bolivia Rejects US Threats of International Intervention: Pary

The country’s strategic industries were nationalized, therefore bringing back key decisions over development. Conventional wisdom would dictate that the size of U.S. investments in Bolivia mean that good relations must be maintained despite abuses and violations of sovereignty. Though, Bolivia has thrived since clawing back its independence.

The reactions in Bolivia to Brazil’s far-right President Jair Bolsonaro gives a glimpse of how the country risks slipping back into a foreign policy of dependency. Bolivia sells large amounts of natural gas to Brazil and needs cooperation with them to combat trafficking and other issues on the border. Morales will have to maintain relations and has done so. However, he has been quick to stand up for Bolivia’s interests when there has been a lack of respect, like when one of Bolsonaro’s deputies made racists comments about Indigenous communities.

Evo publicly denounced the attack and demanded an apology. Whereas opposition candidates and activists claimed ‘we have to get on with our neighbors’. The deputy Rafael Quispe, an Indigenous deputy for the right-wing opposition claims to ‘not be offended’ by anti-Indigenous racism because ‘we have to get on with Brazil’. Opposition candidate to the presidency, Victor Hugo Cardenas (also Indigenous), actively celebrated Bolsonaro’s victory and seeks to replicate his ultra-conservative populism.

Submission to unequal foreign relations, whether that’s the U.S. or Brazil, does not represent ‘good relations’, it represents a defeat and humiliation of a government’s foreign policy.

Since taking power at the ballot box, the MAS has made profound changes to a country that had been in a state of ruin for a number of years following ‘structural adjustment’ (neoliberalism), and if Morales wins again this year then the process will have to deepen to overcome the challenges Bolivia still faces.

The role of the social movements and Morales’ government in recuperating a sense of cultural pride is recognized all over the world, as is the achievements on greater social inclusion for the country’s historically excluded communities.

Though, as the ‘process of change’ enters its 13th year, wider changes are worth analyzing. The process of recuperating economic and political sovereignty, together with the economic success that’s been sustained despite the crisis across the region and the low prices of its key exports.

The model of nationalizing strategic sectors and using its revenues for big capital spending for the common good can serve as a model for the rising left globally. Whether for Jeremy Corbyn in Britain, or Jean Luc-Melenchon in France, studying the Bolivian model will be crucial in building post-neoliberal economies.

MLK: “Capitalism has out-lived its usefulness”

Source:  People’s World
January 18 2018

MLK: “There’s something wrong with capitalism”

Racist violence and economic injustice were among the problems Dr. Martin Luther King laid at capitalism’s doorstep. Here, King looks at a glass door of his rented beach cottage in St. Augustine, Fla. that was shot into by someone unknown on June 5, 1964. | Jim Kerlin / AP

 

Throughout his life, Rev. Martin Luther King, Jr. spoke often and with vision about the nature of capitalism and the kind of changes needed to replace it. The following quotes reflect some of King’s key thoughts on the subject. The power of his words speaks as much to the present day as they did to the turbulent times he witnessed.

“I imagine you already know that I am much more socialistic in my economic theory than capitalistic… [Capitalism] started out with a noble and high motive… but like most human systems it fell victim to the very thing it was revolting against. So today, capitalism has out-lived its usefulness.” – Letter to Coretta Scott, July 18, 1952.

“In a sense, you could say we’re involved in the class struggle.” – Quote to New York Times reporter, José Igelsias, 1968.

“And one day we must ask the question, ‘Why are there forty million poor people in America?’ And when you begin to ask that question, you are raising questions about the economic system, about a broader distribution of wealth. When you ask that question, you begin to question the capitalistic economy. And I’m simply saying that more and more, we’ve got to begin to ask questions about the whole society…” – Speech to Southern Christian Leadership Conference Atlanta, Georgia, August 16, 1967.

“Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children.” – Speech to the Negro American Labor Council, 1961.

“We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power…. This means a revolution of values and other things. We must see now that the evils of racism, economic exploitation, and militarism are all tied together… you can’t really get rid of one without getting rid of the others… the whole structure of American life must be changed. America is a hypocritical nation and [we] must put [our] own house in order.”- Report to SCLC Staff, May 1967.

“The evils of capitalism are as real as the evils of militarism and evils of racism.” – Speech to SCLC Board, March 30, 1967.

Dr. King speaks in Atlanta in 1960. | AP

“I am now convinced that the simplest approach will prove to be the most effective—the solution to poverty is to abolish it directly by a now widely discussed matter: the guaranteed income… The curse of poverty has no justification in our age. It is socially as cruel and blind as the practice of cannibalism at the dawn of civilization when men ate each other because they had not yet learned to take food from the soil or to consume the abundant animal life around them. The time has come for us to civilize ourselves by the total, direct and immediate abolition of poverty.” – Where do We Go from Here?, 1967.

“You can’t talk about solving the economic problem of the Negro without talking about billions of dollars. You can’t talk about ending the slums without first saying profit must be taken out of slums. You’re really tampering and getting on dangerous ground because you are messing with folk then. You are messing with captains of industry. Now this means that we are treading in difficult water because it really means that we are saying that something is wrong with capitalism.” – Speech to his staff, 1966.

“[W]e are saying that something is wrong … with capitalism…. There must be better distribution of wealth and maybe America must move toward a democratic socialism.” – Speech to his staff, 1966.

“If America does not use her vast resources of wealth to end poverty and make it possible for all of God’s children to have the basic necessities of life, she too will go to hell.” –  Speech at Bishop Charles Mason Temple of the Church of God in Christ in support of the Memphis sanitation workers’ strike on March 18, 1968, two weeks before he was assassinated.

MLK Global

Bolivia Closes 2018 Among The Highest Economic Growth Rates

Source:  TeleSUR
December 8 2018

evo morales dec 2018 telesurThe Bolivian economy, directed by Evo Morales and Alvaro Garcia Linera,
has one of the highest economic growth rates in Latin America.

Bolivia’s economy is among the greatest regional expansion, with  the economic policies of Evo Morales and Alvaro Garcia Linera leading to a growth of 4.7 percent of the Gross Domestic Product.

Bolivia will close 2018 with one of the highest economic growth rates in Latin America, with a growth of 4.7 percent of the Gross Domestic Product (GDP), according to official data. And in a surprising move, The International Monetary Fund (IMF) has congratulated the South American country on its growth.

RELATED:  Evo Morales: US ‘Blackmailing’ Presidential Bid

Alvaro Garcia Linera, vice president of Bolivia, stated that the IMF “is an external source that checks our data and is proving that we are growing more than last year, but we have never paid attention to its recommendations nor are we going to pay attention to it, because our economic model is different from the economic model they are driving.”

The economic model followed by Bolivia is based on the Social Community Production, supported by a strong participation of the State in strategic sectors, which goes against the recommendations made by the IMF, which looks for the suppression of subsidies and the reduction of public investments.

The multilateral body recognized that in the last 15 years Bolivia has achieved a “strong growth and poverty reduction,” adding that the country has a considerable accumulation of international reserves. “Since the fall in the price of commodities in 2014, the authorities have carried out accommodative fiscal and credit policies to support growth. This approach has been successful in maintaining solid growth,” the IMF said.

“The IMF improved its #Bolivia growth forecasts to 4.5% by 2018,and estimates that the continent will grow only 1.2%. The IMF itself highlighted the reduction of extreme poverty in the country. Thanks to our Revolution, we are still the first in economic growth in South America.”  Evo Morales

The Bolivian economy registered on average a growth of 4.9 percent in the period 2006-2017, where more than three million people left poverty. The GDP registered a growth of 4.2 percent last year, according to the 2017 Bolivian Economy Report.

The Bolivian economy “goes up,” Garcia Linera stated, before adding that the IMF “had given us a 4 percent growth at the beginning of the year, 4.2 percent in June, and in December it is going to grow at 4.5 percent, ratifying what we had announced in advance and the Fund did not.”

US Report: US Sanctions on Cuba Hurting the Pockets of Americans

Source:  Cubadebate
November 29, 2017

US opportunities for export to Cuba white paper.jpgCuba Trade magazine and the United States Agricultural Coalition for Cuba released on Wednesday a report on the Opportunities for US Agriculture Exports to Cuba: a white paper, which explains how 16 US territories could benefit if Washington eliminates restrictions on the sale of food to Cuba. island.

The text is based on current and historical data from national and state offices, federal agencies, academic analysts and information from the Cuban government to illustrate the potential net benefits of agricultural trade with the neighboring country.

Richard Roffman, editor of Cuba Trade , said the white paper provides some of the most convincing evidence to date of the damaging effects that US sanctions are having on the pockets of the Americans themselves.

The negative impact that these trade barriers continue to impose on agriculture can be multiplied in all industrial sectors of the United States, Roffman added, who said that lawmakers will soon see the great value that ending such limitations would have for countries.

A major barrier to trade with Cuba

According to the document, published on the magazine’s digital page, there are several reasons why US agricultural products only account for a small percentage of Cuba’s imports, and among the main ones is the requirement that all shipments be paid. in cash, in advance.

In the breakdown by state, the report found that Alabama, for example, made sales to the island for $ 45 million in 2016, but has the potential to reach $ 98 million to lift existing restrictions at present.

Other territories that reported some type of trade with the largest of the Antilles last year, and that would see multiplied transactions, are Illinois, Georgia, Louisiana, North Carolina and Virginia.

At the same time, places that did not report any type of sale in those 12 months could trade products for millions of dollars, including Arkansas – with a potential of 51 to 60 million – Iowa, Kansas, Minnesota, Missouri, Nebraska and Dakota. North.

Obsolete trade restrictions

For Arkansas Republican Representative Rick Crawford, this report highlights how much American agricultural businesses can earn if “obsolete trade restrictions, such as a credit ban, are removed.”

The congressman, the main sponsor of the Agricultural Exports Law to Cuba, pointed out that the requirement that only cash be used makes export transactions almost impossible, because foreign importers do business almost exclusively with financing and credit.

In turn, Senator John Boozman, also a Republican from Arkansas, said he will continue to advocate opening that market and breaking down the barriers faced by producers to send “safe and high quality food to Cuba . 

A press release on the document noted that the white paper is sent to all members of Congress, to members of the legislatures in each of the 16 states covered in the report and to senior executives of the largest agricultural companies in this country, among other readers.

Venezuela Defies Western Attempts at Debt Strangulation

President Maduro: “We have reached an agreement to refinance and restructure the debt with Russia”

Venezuelan President Nicolás Maduro announced this Sunday that the government had reached an agreement to refinance and restructure the Venezuelan debt with Russia.

“We have reached an agreement with Russia, this week will be signing an agreement where refinancing is established,” the president said.

“We have complied with all our international commitments,” the Venezuelan leader recalled.

Maduro Tweeted: “This Monday, the first round of renegotiation of the Venezuelan external debt will take place, we are overcoming the economic war, they will not be able to beat us.”  It is worth noting that 91 percent of all holders of the Venezuelan debt will participate tomorrow in the first stage of debt renegotiation and refinance.

Nicolas Maduro Nov 2017 1.jpg

Gold Trade Between Russia and China – A Step Closer Towards De-Dollarization?

Source:   Information Clearing House
September 8 2017

By Peter Koenig

Transcript of Sputnik – SKYPE Interview

sberbank russia.jpg

Background for the Interview:

September 08, 2017 “- MOSCOW (Sputnik) — The largest Russian bank Sberbank is planning to increase the supply of gold to China up to 10-15 tons in 2018, the head of Sberbank CIB, the bank’s investment department, told Sputnik.

Igor Bulantsev“In July, our subsidiary bank in Switzerland started trading in gold in the Shanghai stock market. Under the pilot deal, we delivered 200 kilograms [440 pounds] of bars of gold to Chinese financial institutions. This year we are planning to additionally deliver about 3-5 tons of gold to China. Next year we expect the increase in deliveries to China of up to 10-15 tons. Perhaps we will even exceed this figure,” Igor Bulantsev said ahead of the third Eastern Economic Forum (EEF) in Vladivostok.

Sputnik
Could you, please, enlighten us about what could possibly stand behind Sberbank’s plans to increase the supply of gold to China?

PK
This is just a continuation of the economic and trade agreements between Russia and China; the first such official deal was the 2014 currency swap agreement of about US$ 25 billion equivalent, or rather 150 billion Yuan.

Let’s not forget, both currencies the ruble and the Yuan are 100% covered by gold; actually, the ruble is backed about twice by gold.

Both, the China – Russia economic cooperation and trade agreements, as well as their currencies being covered by gold is part of a larger already fairly advanced scheme of de-dollarization of their economies. In other words, Russia and China as well as the entire Shanghai Cooperation Organization (SCO), are rapidly moving out of the US dollar hegemony.

Let’s face it, the entire western monetary system is basically a fraud. It is privately made and privately owned, with the entire international payment system being controlled by the FED – which is totally privately owned – and the BIS (Bank for International Settlement, in Basle, Switzerland – also called the central bank of centrals banks). All international transfers and payments have to transit through Wall Street banks. This is the only reason why the US can “sanction” countries that do not behave according to Washington’s dictate. It is illegal, and would not stand up before any international law.

But since international courts are also controlled by Washington – there is no chance that the US will be called to account for their criminal economic actions around the world – at least not for now; at least not as long as the western dollar-based monetary system has supremacy on the world markets. But this may change rapidly. And China and Russia are moving fast towards complete independence from the western economy.

The BRICS summit that just ended in Xiamen, gave other clear signs that their enhanced economic cooperation among themselves and with the other SCO countries will be a further blow to the western monetary hegemony.

Already now, The SCO and BRICS countries contain about half of the world’s population and control one third of the world’s GDP. They truly do not need the west for survival. To the contrary. They can easily break this fraudulent dollar based ‘monopoly’. But – it has to happen prudently and gradually, because all the emerging economies that would like to join the BRICS and the SCO are still to a large degree dependent on the US-dollar; their reserves are still largely dollar-denominated. And if the western system collapses rapidly, they would tend to lose out dramatically.

Sputnik
Follow-up: What is the reason behind China’s active enlargement of the national gold reserves? 

PK
In my opinion, this may be a temporary measure to protect their currencies – I’m talking specially about China and Russia – from a drastic last minute “dollar-rescue” action by Washington.

For example, I could imagine that as a last-ditch effort, the FED or the US Treasury could instruct the IMF to go back to some kind of a ‘gold standard’ – which may come in the form of a massive devaluation of the dollar, where all those countries who do not have gold reserves or otherwise gold-convertible currencies would end up paying the enormous US dollar debt – becoming once again slaves to a new dollar-dependence.

By increasing gold reserves, Russia and China would be protected. Also, China and Russia, the world’s largest gold producers, accounting for almost a quarter of annual gold production (3,100 tons in 2016), will be instrumental in making the international gold price.

The problem with gold today is that it is completely beholden to the western monetary system – the price of gold on the international market is quoted in US dollars.

In the medium to long run, I believe gold is no viable indicator or back-up for a monetary system. Gold is just a step better than fiat money, because the price of gold is vulnerable and can be manipulated, as we see time and again.

For example, on 25 August, Blomberg reports a mysterious 2 million-ounce gold trade. It says – In a span of one minute, gold futures contracts equaling more than 2 million ounces traded — about 20 minutes before Federal Reserve Chair Janet Yellen was to address a gathering of policy makers in Jackson Hole, Wyoming.

The episode jolted the market after a measure of 60-day volatility on the metal touched the lowest since 2005. Gold had been in quiet mode even amid political discord in Washington, concerns about rising U.S. interest rates and tensions between the U.S. and North Korea.”

One wonders whether this clear manipulation of the price of gold has anything to do with the increased gold trade between Russia and China…..?

Sputnik
Now, China is soon expected to launch a crude oil futures contract priced in yuan and convertible into gold. How could this initiative change the rules of the global oil game? How soon do you think this landmark transition would happen? Who will profit from this initiative? 

PK
It will change everything.

Already now – since about three to five years – China and Russia and other members of the SCO are trading hydrocarbons no longer in US dollars, but in their local currencies or gold.

An oil futures contract in yuan and gold is about the equivalent of an ‘oil bourse’ – or a hydrocarbon exchange in yuan and gold – where every oil producer or trader can deal in hydrocarbons in non-dollar denominated contracts.

This will be an enormous blow to the US dollar hegemony. One of the key reasons the US dollar has maintained its hegemonic nature around the globe, is that according to an unwritten agreement between the US and Saudi Arabia of the early 1970s, Saudi Arabia, the head of OPEC, was to make sure that petrol and gas are traded only in US dollars. In return, the Saudis received “US protection” – lots of US bases, from which the wars in the Middle East are directed and carried out.

Those who wanted to depart from that unwritten and completely unlawful rule had to pay dearly – i.e. Saddam Hussein, when he announced that he would trade his oil in euros instead of dollars when the ten-years sanctions regime came to an end in 2000… we know what happened to him. We also know what happened to Gaddafi, who had similar ideas – and Iran was suddenly faced with accusations of having a nuclear weapons program, when they announced in 2007 the Teheran Oil Bourse – where all hydrocarbons could be traded in other currencies than the US dollar.

This US imposed ‘rule’ – totally illegal – allowed the US Treasury to print dollars indiscriminately, because the world needed dollars to pay for their energy.

The other reason for unlimited US Dollar printing was when the Nixon Administration abandoned the gold standard in 1971, and the dollar became de facto the world’s reserve currency. – It’s time that this fraud comes to an end. China and Russia offer an alternative.

Sputnik
Experts say that China’s decision to launch a crude oil futures contract will allow exporters such as Russia to circumvent U.S. sanctions by trading in yuan. What implications would yuan-denominated gold contracts have for Russia, in your view?

PK
Up to about 5 to 10 years ago, most international trading contracts were denominated in US- dollars, regardless whether they involved the US or not. This was also an unwritten, WTO-imposed rule. This is no longer the case.

Therefore, yes, detaching from the dollar-based western monetary system, and instead trading in Yuan, rubles or gold, or any other local currencies for that matter, will make ‘sanctions’ completely ineffective. This is already largely the case today, since Russia and China and many of the SCO countries are already trading in other than US-dollar denominated contracts.

It is through non-dollar international trade contracts that the western dollar-based monetary system will be gradually dethroned and dismantled.

Sputnik
How would these developments affect the dollar as a global reserve currency? What implications will it have on its hegemony?

PK
By dealing in other currencies than the US dollar, including in gold, world demand for the dollar will rapidly decline and so will the dollar’s significance as a world reserve currency.

Some 20 years ago, about 90% of all reserves were established in US dollar denominated assets. Today, this figure is less than 60% and shrinking. Once dollar-denominated reserves fall below 50%, abandoning the dollar as reserve currency worldwide may progress rapidly. That’s when a last-ditch effort by Washington to save the dollar hegemony may come in the form of a new gold-standard – at the cost of the countries that hold dollar reserves.

The western economy today and for the last at least 100 years has been based on a fraudulent, debt-driven privately-owned and manipulated monetary system – on fiat money. When in reality, it should be the economy of a nation or a region that makes and backs the monetary system.

If I may, I predict that in the foreseeable future, it will not be gold or other minerals that back a monetary system, but the economy itself; the strength of a country’s – or association of countries’ – socioeconomy that determines the monetary system. The strength of an economy will be determined by indicators well beyond the linear GDP; they will include societal values, such as education, health services, and behavioral values, like how a society deals with the environment, natural resources and conflict resolutions.

This is what I believe the new Eastern Economy, based on China and Russia – the Economy of Peace – will offer to the world as an alternative.

Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research, ICH, RT, Sputnik, PressTV, The 4th Media (China), TeleSUR, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around th

 

Nicaragua’s Sandinista Achievements Baffle World Bank, IMF

Source: TeleSUR
August 31 2017

By: Tortilla Con Sal

sandinistas supporters aug 2017.jpgSupporters of the Sandinista government in Nicaragua. | Photo: EFE

Reading the report, it is impossible to ignore the tension between latent ideological and political imperatives and the obligation to report the facts.

No one can take at face value any report, governmental or quasi non-governmental, coming out of the imperialist bureaucracy in Washington. Ideological bias and institutional self-justification prevent these reports from giving a true account of virtually anything.

RELATED:New Investigation Exposes US Support for 2009 Honduras Coup

The latest World Bank report on Nicaragua is no exception.

The implicit but unstated truth in this report is that President Daniel Ortega and the Sandinista National Liberation Front have achieved an unprecedented economic turnaround in just seven years, starting in 2010.

Reading the report, it is impossible to ignore the tension between latent ideological and political imperatives and the obligation to report the facts. Put another way, mild conflict clearly prevails between the World Bank’s Washington head office and its reality based local officials. From Washington, the tendency is both to minimize Ortega’s achievement and also to cover up the World Bank’s own lamentable history in Nicaragua. On the other hand, in Nicaragua, local World Bank staff dutifully report the facts as they see them.

A total of 71 people contributed to the report. Supposing those 71 people each worked for a month to prepare the research and say their average salary was about US$80,000, then pro rata a month’s work by that team cost over US$500,000, a very conservative guess. Even so, in summary, that money bought policy recommendations for Nicaragua’s development amounting to little more than better infrastructure; better basic services; more private business investment; more efficient government; better targeted social policies. That’s it, for US$500,000 or more.

Recognizing Nicaragua’s achievements

In general, the report recognizes Nicaragua’s achievements in reducing poverty and inequality, raising productivity, diversifying economic activity and promoting security and stability. The report’s 130 or so pages include, among the economic and sociological analysis, many self-confessed guesses to fill in “knowledge gaps” and much gerrymandered history to cover up what Harold Pinter in his 2005 Nobel prize winning address justly called “the tragedy of Nicaragua.”

Pinter himself might have remarked the report is almost witty in its audacious, glib omissions. It acknowledges the catastrophic destructive effects of the 1980s war in Nicaragua, but carefully omits the U.S. government’s deliberate role in that destruction, now repeated against Syria and Venezuela.

The report talks about a “democratic transition” starting in 1990. In fact, the Sandinistas organized the first free and fair democratic elections ever in Nicaragua in 1984, but the U.S. government ordered the main Nicaraguan opposition to boycott them. Despite the war, Ortega and the Sandinistas won with 67 percent of the vote, very similar to the most recent presidential elections in 2016.

The heavy ideological bias also explains the World Bank’s curious dating of when Nicaragua’s economic turnaround began, placing it firmly in the neoliberal era prior to 2007. But at just that time, the World Bank was cutting back the public sector as much as they could, pushing, for example, to privatize Nicaragua’s public water utility and its education system.

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Nicaragua before the Sandinistas’ victory in January 2007

Back then, Nicaragua’s neglected electrical system collapsed through 2005 and 2006, incapable of generating even 400 megawatts a day, plunging swathes of Nicaragua back into 19th-century darkness for 10 to 12 hours at a time, day after day. That was the World Bank and IMF’s gift to Nicaragua after 17 years of so-called “democratic transition.” That period included Hurricane Mitch, devastating Nicaragua to the tune of 20 percent of its GDP, only for the corrupt neoliberal government at the time to misuse hundreds of millions of dollars in disaster relief. The only structurally significant economic achievement of the neoliberal era in Nicaragua was substantial foreign debt relief.

When Ortega took office in January 2007, he faced four years of domestic crisis with an opposition controlled legislature persistently sabotaging his government’s programs. From 2007 to 2008, Nicaragua and the whole region struggled in vain to contain a balance of payment deficits against oil prices reaching US$147 a barrel in 2008.

That disaster was compounded by the collapse of the Western financial system in late 2008 to 2009, a year when Nicaragua’s economy suffered a 3 percent contraction. Only in 2010, did the Nicaraguan government finally enjoy domestic and international conditions stable enough to be able to consolidate and improve its social programs, improve infrastructure investment, democratize and diversify the economy, extend basic services, and attract foreign investment, among other things.

The World Bank’s development recipe

If that sounds suddenly familiar, it should. It is exactly the development recipe offered up by this latest World Bank report, essentially an embellished review of policies the Nicaraguan government has already been implementing for a decade. Put positively, the government’s National Human Development Plan and other relevant documents suggest that the World Bank’s engagement with the Nicaraguan government has been one of mutual learning. So much so, that the current country program is likely to continue and may even expand.

The political opposition in Nicaragua has seized on parts of the report to try and discredit the Sandinista government’s outstanding achievements. In fact, for 17 years under neoliberal governments implementing World Bank and IMF policies, areas criticized like, for example, access to drinking water and adequate sanitation, or education, suffered chronic lack of investment, compounded by egregious waste and corruption. Now, the World Bank hypocritically criticizes Nicaragua’s government for intractable policy difficulties the IMF and the World Bank themselves originally provoked.

Similarly, when the World Bank report criticizes the targeting of social programs, they omit the unquestionable success of the government’s Zero Usury micro credit program and the Zero Hunger rural family support program, both prioritizing women. These programs have lifted tens of thousands of families out of poverty and, along with unprecedented support for Nicaragua’s cooperative sector, radically democratized Nicaragua’s economy, especially for previously excluded rural families and women. That supremely important national process is entirely absent from the World Bank report.

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The legacy of neoliberal governments

In its discussions of almost all these issues, the report makes more or less detailed contributions, mostly already identified by the government itself. In every case, the underlying cause of problems or lack of progress, for example, on land titling or social security, has been the legacy of neoliberal governments between 1990 and 2007, that reinstated elite privilege, rolled back the revolutionary gains of the 1980s and failed to guarantee necessary investment.

The World Bank and the IMF were enthusiastic ideological partners in that endeavor. They would have continued their ideological offensive had not Ortega and his government dug in their heels in 2007 and 2008, backed by investment support for social and productive programs from Venezuela as part of the Bolivarian Alliance of the Americas.

Since then, the World Bank, as this report suggests, seems, at least for the moment, to have learned two key lessons from the Sandinistas. In a world dominated by corporate elite globalization, their report implicitly recognizes the importance, firstly, of a mixed economy under a strong central government and, secondly, the crucial role of broad dialogue and consensus, across all sectors of society, to promote and sustain national stability. Essentially, the World Bank has acknowledged the undeniable success of the Sandinista Revolution’s socialist inspired, solidarity based policies, decisively prioritizing the needs of people over corporate profit and demonstrating the systemic inability of capitalism to meet those needs.